California Supreme Court Adds Fuels to Meal and Rest Break Litigation by Adopting Cumulative Penalties

By Andrew J. Sommer and Samuel S. Rose

For the last couple of years, we have been keeping an eye on Naranjo v. Spectrum Security Services, Inc. as it’s made its way through the California state courts. Now, the California Supreme Court has issued its unanimous decision with wide-ranging ramifications over meal and rest break violations. As a result of the Court concluding that premium pay for meal and rest break violations are “wages,” it has paved the way to award as well waiting time and wage statement penalties based on meal/rest period violations. The practical impact of this decision is to encourage class action and PAGA (Labor Code Private Attorneys General Act) litigation within the state, providing plaintiffs’ attorneys further remedies in meal and rest period litigation and inflating the settlement value of these cases.

Meal and Rest Break Premiums Are Considered “Wages”

The first issue that the Court considered in Naranjo was whether premium pay available pursuant to Labor Code section 226.7 for meal/rest period violations is considered “wages.” Section 226.7 provides that an “employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that [a] meal or rest period is not provided.”

The Supreme Court found that “[a]lthough the extra pay is designed to compensate for the unlawful deprivation of a guaranteed break, it also compensates for the work the employee performed during the break period.” Therefore, the Court concluded, “[t]he extra pay…constitutes wages subject to the same timing and reporting rules as other forms of compensation for work.”

In reversing the Court of Appeal, which held that meal/rest period premium pay did not constitute wages, the Supreme Court noted that the reasoning rested on a “false dichotomy,” namely that the payment must be either a legal remedy or wages. The Court held, for purposes of Section 226.7, premium pay is both a legal remedy and wages, which leads us to the next holding in the case.

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Paid COVID-19 Supplemental Sick Leave Returns to California, Again

California Governor Newsom has signed legislation extending a new allotment of up to 80 hours of COVID-19 supplemental paid sick leave to California workers through new Labor Code Sections 248.6 and 248.7.  The leave is retroactive to January 1, 2022, and continues through September 30, 2022.  Small businesses that employ 25 or fewer workers are not covered by the legislation.   

Use of Sick Leave for Reasons Related to COVID-19

The legislation provides for up to 40 hours of COVID-19 supplemental paid sick leave for employees who are unable to work or telework for certain reasons related to COVID-19, including:

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[Webinar] 2022 California Employment Law Update 

On Wednesday, Feb. 16, 2022 at 1 p.m. ET / 10 a.m. PT, join Andrew J. Sommer and Megan S. Shaked for a webinar regarding 2022 California Employment Law Updates: New Legal Requirements and Practical Compliance Strategies Every HR Professional and Manager Should Know.

2022 brings changes for California employers to a range of topics touching on traditional employment law matters as well as health and safety concerns, including related to COVID-19. This webinar will review compliance obligations for companies doing business in California, as well as discuss the practical impact of these new laws and best practices for avoiding potential employment-related claims.

Participants in this webinar will learn about: Continue reading

Conn Maciel Carey’s 2022 Labor and Employment Webinar Series

2022 LE Webinar Series

Announcing Conn Maciel Carey’s 2022 Labor and Employment Webinar Series

The legal landscape facing employers seems as difficult to navigate as it has ever been.  Keeping track of the ever-changing patchwork of federal, state and local laws governing the workplace may often seem like a full-time job whether you are a human resources professional, in-house attorney or  business owner.  Change appears to be the one constant.  As we enter Year 2 of President Biden’s Administration, employers will continue to closely track the changes taking place at the NLRB, the DOL and the EEOC.  At the same time, a number of states will continue introducing new laws and regulations governing workplaces across the country, making it more important than ever for employers to pay attention to the bills pending in the legislatures of the states where they operate.

​Conn Maciel Carey’s complimentary 2022 Labor and Employment Webinar Series, which includes monthly programs (sometimes more often, if events warrant) put on by attorneys in the firm’s national Labor and Employment Practice, will focus on a host of the most challenging and timely issues facing employers, examining past trends and looking ahead at the issues most likely to arise.

To register for an individual webinar in the series, click on the link in the program description below. To register for the entire 2022 series, click here to send us an email request, and we will register you.  If you missed any of our programs from the past seven years of our annual Labor and Employment Webinar Series, here is a link to an archive of recordings of those webinars. 

2022 Labor and Employment Webinar Series – Program Schedule

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OSHA Issues Its COVID-19 Vaccination, Testing, and Face Coverings Emergency Temporary Standard

By Conn Maciel Carey LLP’s COVID-19 Task Force

At long last, OSHA has revealed its COVID-19 Vaccination and Testing emergency regulation.  The Federal Register site has updated to show the pre-publication package, which is set to run officially in the Federal Register tomorrow, November 5th.  The 490-page package includes the Preamble and economic analysis of the regulation, as well as the regulatory text.  The regulatory text begins on PDF page 473.  Also here is a Fact Sheet about the ETS issued simultaneously by the White House.

We are extremely pleased to report that the rule aligns very well with positions for which CMC’s Employers COVID-19 Prevention Coalition advocated to OSHA and OMB on the most significant topics, like the responsibility for the cost of COVID-19 testing and a delayed implementation date, as well as very narrow record-preservation requirements, grandfathering of prior vaccine-verification efforts, and other elements. OSHA and the White House clearly listened to our views and the compelling rational we put forward for these positions, making the rule a much better, more effective and less burdensome one for employers.

Conn Maciel Carey’s COVID-19 Task Force will be conducting a webinar about the ETS on Wednesday, November 10th at 1:00 PM ET.Here is a link to register for that program.

In the meantime, below is a detailed summary of the rule:

What is the stated purpose of the regulation?

The ETS is “intended to establish minimum vaccination, vaccination verification, face covering, and testing requirements to address the grave danger of COVID-19 in the workplace, and to preempt inconsistent state and local requirements relating to these issues, including requirements that ban or limit employers’ authority to require vaccination, face covering, or testing, regardless of the number of employees.”

Who is covered?

As the president signaled in his announcement and action plan from September 9, the ETS applies only to employers with 100 or more employees, and the rule does make it explicit that the way you count those employees is on a company–wide basis, not establishment-by-establishment.

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California Adds Increased Meal/Rest Period and Workplace Safety Protections for Warehouse Employees Subject to Production Quotas

On September 22, 2021, California became even more labor friendly when Governor Newsom signed AB 701 which adds additional requirements to California’s existing meal and rest breaks rules for non-exempt warehouse employees. Effective January 1, 2022, employers covered by AB 701 must disclose all quotas to warehouse employees that the employee may be subject to.  Employers are subject to a rebuttable presumption of retaliation against employees who are subject to an adverse employment action within 90 days of engaging in protected activity under AB 701.  Employers must make the disclosure to each employee upon hire or within 30 days of the law going into effect.

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California Supreme Court Boosts Premium Pay For Meal, Rest and Recovery Break Violations

On the heels of Donohue v. AMN Services, LLC recognizing a rebuttal presumption of meal period violations based on the employer’s time records alone – as discussed in our prior blog post – the California Supreme Court has, in another blow to employers, ruled that the premium pay required where the employer does not provide meal, rest or recovery periods is not based on the hourly rate of pay (as had previously been understood).  In essence, the California Supreme Court has found that the “rate of compensation” for the purpose of determining the additional hour of pay due to employees who are not provided meal, rest or recovery periods is synonymous with the overtime rate of pay and must include all nondiscretionary payments, not just hourly rates.

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New DOL Proposed Rule Reverses Course on Treatment of Tipped Employees

On Monday, June 21st, the Department of Labor (“DOL”) issued a Notice of Proposed Rulemaking (“NPRM”) that would alter regulations interpreting who is considered a “tipped employee” under the Fair Labor Standards Act (“FLSA”) yet again.  Specifically, the NPRM proposes (1) to withdraw the dual jobs Picture1portion of the Final Rule promulgated in December 2020; and (2) a new regulatory framework by which to determine whether an employee is performing work that meets the definition of a tipped occupation and allows the employer to take a tip credit under the FLSA.  Specifically, the FLSA allows an employer to pay a tipped employee less than the minimum wage – specifically $2.13 per hour under Federal law – only when the worker is engaged in a tipped occupation because the tips the employee receives should make up for the rest of minimum wage hourly rate.  The NPRM creates a revised standard by which an employer would determine who is a “tipped employee” and for what portion of that employee’s work hours the employer can take a tip credit and pay the employee at the lower rate.  The standard the DOL proposes to adopt generally reflects the interpretive guidance it maintained for decades before a new standard was established during the Trump Administration – the “80/20 Rule” – along with some other changes that the DOL asserts better define tipped work. 

Background of the Dual Jobs Standard for Tipped Employees

Under the FLSA, “tipped employees” are defined as those employees who customarily and regularly receive more than $30 a month in tips.  As stated, employers can pay tipped employees a reduced cash wage and claim a “tip credit” to make up the difference between the reduced cash wage and hourly minimum wage.  When the DOL first published its regulations on application of the tip credit, it directly addressed the scenario where an employee has “dual jobs” under 29 C.F.R. 531.56(e) – two jobs for the same employer.  In that situation, employers can take the tip credit only for the tipped job (i.e., the one routinely satisfying the $30-a-month provision).  Later, the DOL revised its Field Operations Handbook (FOH), vastly broadening the scope of its “dual jobs” distinction by applying it to dual tasks.  It stated that when “tipped employees spend a substantial amount of time (in excess of 20%) performing preparation work or maintenance, no tip credit may be taken for the time spent in such duties.”  This is what’s known as the “80/20 rule.”

The DOL enforced this interpretation until 2018 when Continue reading

Return of California’s COVID-19 Supplemental Paid Sick Leave

By Andrew J. Sommer and Ashley D. Mitchell

California has just reinstated the COVID-19 specific paid sick leave law that expired at the end of 2020 but this time with a twist.  As we discussed in a blog post last year, California enacted the 2020 COVID-19 Supplemental Paid Sick Leave law to extend benefits to employees not covered by the paid benefits provision of the Families First Coronavirus Response Act (FFCRA).  While the FFCRA’s paid sick leave provision lapsed on December 31, 2020 along with California’s 2020 COVID-19 Supplemental Paid Sick Leave law, California has just passed, effective March 29, 2021, the 2021 COVID-19 Supplemental Paid Sick Leave law extending benefits again with significantly expanded eligibility.

Eligibility Requirements

The 2021 COVID-19 Supplemental Paid Sick Leave law requires all California employers with more than 25 employees to provide COVID-19 related paid sick leave (up to 80 hours) to employees who cannot work or telework due to the reasons discussed below.  This paid leave is in addition to any payment that was provided under the previous COVID-19 Supplemental Paid Sick Leave law expiring on December 31, 2020.  The 2021 COVID-19 Supplemental Paid Sick Leave law does not apply to independent contractors, unlike the previous law, and expands upon the eligibility criteria.  The California Department of Industrial Relations (DIR) has issued 2021 COVID-19 Supplemental Paid Sick Leave FAQs offering detailed guidance on this new law.

Covered employees are now eligible under the 2021 COVID-19 Supplemental Paid Sick Leave law if they are unable to work or telework due to any of the following reasons: 

  • The covered employee is subject to a quarantine or isolation period related to COVID-19, as defined by an order or guidelines of the State Department of Public Health, the federal Centers for Disease Control and Prevention, or a local health officer who has jurisdiction over the workplace
  • The covered employee has been advised by a healthcare provider to quarantine due to COVID-19, or is experiencing symptoms of COVID-19 and is seeking a medical diagnosis
  • The covered employee is caring for a family member (as defined) who is either subject to a quarantine or isolation period or has been advised by a healthcare provider to quarantine due to COVID-19
  • The covered employee is caring for a child whose school or place of care is closed or unavailable due to COVID-19 on the premises
  • The covered employee is attending a vaccine appointment or cannot work or telework due to vaccine-related symptoms
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Employment Law Update in D.C., Maryland, Virginia, and Illinois [Webinar Recording]

On March 24th, Daniel C. Deacon and Ashley D. Mitchell presented a webinar regarding an Employment Law Update in D.C., Maryland, Virginia, and Illinois.

CaptureThe District of Columbia, Maryland, and Virginia have enacted or are considering a host of changes that employers need to keep track of in 2021, such as revisions to discrimination laws, wage and hour laws, labor laws, and workplace safety and health regulations.

Illinois employers should be aware of an already existing minimum wage increase that takes effect in 2021, and there are a host of laws that took effect at various points in 2020. Indeed, in 2020, employers were faced with an expanded Illinois Human Rights Act that applies beyond the physical workplace, covers non-employee contractors and protects against discrimination based on perceived (in addition to actual) protected status. There were also special new rules enacted that apply to restaurants, bars and coffee shops, as well as disclosure requirements that will necessitate notifying the Department of Human Rights of adverse judgments in employment discrimination or harassment matters. Finally, the Victims’ Economic Security and Safety Act was amended and the signed “trailer bill” has clarified what employers should do if they wish to prohibit the use of marijuana as part of their workplace drug and alcohol policy.

Participants in this webinar learned: Continue reading