Employment Law Update – Fall 2018
|Solomon Ward is pleased to provide this review of recent employment law updates that may be of interest to you and your Company. Of course, this is not an exhaustive list. We encourage you to ask specific questions about laws that may apply to your Company. Our team is prepared to help.
“Quarter Hour Rounding:” AHMC Healthcare, Inc. v. Superior Court
This summer, a California Court of Appeal upheld the practice of quarter hour rounding — rounding an employee’s time up or down to the nearest quarter hour, at least under the facts of the case. Previously, Courts have held that employers are allowed to use a tenth of an hour rounding policy, as long as it is fair and neutral and if “it is used in such a manner that it will not result, over a period of time, in the failure to compensate the employees properly for all the time they have actually worked.”
In the class action AHMC Healthcare, Inc. v. Superior Court, hourly employees sued the hospital defendants because the hospitals had rounded their clock-in time up or down to the nearest quarter hour. A slight majority of employees at one hospital, including the named plaintiffs, lost a slight amount of time due to the policy, but overall the employees had a net gain in time.
The employees argued that the hospitals’ policy “was unlawful because it resulted in under-compensation for a slight majority of” employees. The employees further argued that “a rounding policy that resulted in any loss to any employee, no matter how minimal, violates California employment law.” Based on the evidence, the court found the hospitals’ rounding practice lawful.
This case was a good reminder that a rounding policy – particularly to a quarter hour – makes an employer an easy target for class actions. The hospitals here had to establish through expensive expert analysis that the rounding policy did not have a net effect of under-compensating employees. Had the evidence shown a net effect of under-compensation, however slight, this case could have come out differently.
California’s National Origin Regulations Took Effect July 1, 2018
California’s Fair Employment and Housing Council regulations clarifying prohibitions on national origin discrimination under the Fair Employment and Housing Act (“FEHA”) went into effect July 1, 2018.
Previously, “national origin” was narrowly defined as “the individual’s or ancestors’ actual or perceived place of birth or geographic origin, national origin group or ethnicity.” The definition of “national origin” as defined by the new regulations includes an individual’s actual or perceived:
“(1) physical, cultural, or linguistic characteristics associated with a national origin group;
(2) marriage to or association with persons of a national origin group;
(3) tribal affiliation;
(4) membership in or association with an organization identified with or seeking to promote the interests of a national origin group;
(5) attendance or participation in schools, churches, temples, mosques, or other religious institutions generally used by persons of a national origin group; and
(6) name that is associated with a national origin group.”
The new regulation greatly broadens the scope of the protected class. Additionally, the new regulation expressly applies to undocumented applicants and employees. Moreover, employers are not allowed to inquire into an applicant’s or employee’s immigration status, unless the employer can show by “clear and convincing evidence that such inquiry is necessary to comply with federal immigration law.” This likely means that only the immigration status inquiries within the I-9 process are allowed.
The new regulations provide that policies that limit or prohibit the use of any language, especially policies that require an “English-Only” rule, are presumed to be illegal, unless:
(A) The language restriction is justified by business necessity;
(B) The language restriction is narrowly tailored; and
(C) The employer has effectively notified its employees of the circumstances and time when the language restriction is required to be observed and of the consequence for violating the language restriction.
Under the regulations, it is not sufficient that a language restriction “merely promotes business convenience or is due to customer or co-worker preference.” The restrictions must meet all three requirements above. An employer must show that the language restriction is necessary for the safe and efficient operation of the business, that the restriction effectively fulfills the business purpose it is supposed to serve, and that there is no alternative practice to the language restriction that would accomplish the business purpose equally well with a lesser discriminatory impact.
Additionally, discrimination based on an employee’s accent is unlawful unless the employer proves that the individual’s accent interferes materially with his or her ability to perform the job. Discrimination based on English proficiency is also unlawful unless it is justified by business necessity. An employer may request from an employee or applicant information regarding his or her proficiency in any language, if justified by business necessity.
In light of these new regulations, California employers should carefully review, with legal counsel, any language restriction or policies .
No “de minimis” in California: Douglas Troester v. Starbucks Corporation
The Supreme Court of California held in Troester v. Starbucks that the “de minimis” doctrine does not apply to California wage and hour statutes and regulations. In other words, even small bits of working time must be compensated in California.
This case sets California apart from federal wage and hour laws. At times, federal courts have applied a “de minimis” doctrine to excuse payment of compensation for small bits of working time that are difficult to track, based on the long-standing maxim that the law does not concern itself with “trifles.” However, the Supreme Court of California ruled in July that the de minimis doctrine does not generally apply to California wage and hour statutes and regulations. The Court left only one possible exception: “circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.”
In this case, Starbucks required a shift supervisor to perform closing tasks after clocking out that took him four to ten minutes per day, including activating the alarm, exiting the store, locking the front door, and walking co-workers to their cars.
Starbucks argued that its failure to pay the supervisor for this time was excused as “de minimis,” because it was short and difficult to administratively track. The Supreme Court of California was highly critical of the argument that regularly occurring, but short, work time is “a trifle not requiring compensation if too inconvenient to record,” observing that California’s wage and hour “regulatory scheme … is indeed concerned with small things.” The Court called the reasoning behind the application of the de minimis doctrine even to federal wage and hour laws “questionable.”
The Court held that: “An employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine.”
The Court provided suggestions that California employers would be wise to heed, including: (1) restructure work so that employees do not have to work before or after clocking out, (2) utilize technological advances to customize and adapt time tracking tools to capture all reasonably trackable work time, and/or (3) reasonably estimate work time that is otherwise not trackable, such as through surveys, time studies, or a reasonable rounding policy.
Minimum Wages Increase In Many California Local Jurisdictions
Many California local jurisdictions increased their minimum hourly wages this summer. Here is a list of local minimum wages, as of July 1, 2018:
***The information provided in this article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.***