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Unless otherwise stated, the laws take effect on January 1, 2019.

In addition to these and other mandates, under the new laws:

  • a contract or settlement agreement entered into on or after January 1, 2019, generally may not contain a waiver of the right to testify concerning criminal conduct or sexual harassment;
  • employers may generally not require current employees to waive the right to sue for harassment or discrimination or agree not to disclose information about unlawful workplace conduct as part of a release obtained in exchange for a raise or bonus, or as a condition of continued employment;
  • employers now expressly may be liable for any type of harassment (not just sexual harassment) committed by nonemployees;
  • talent agencies must provide educational materials to their artists on sexual harassment prevention and other matters;
  • legislative “guidance” significantly relaxes the requirement that harassment be “severe or pervasive” to be unlawful, and instructs courts to view harassment cases as “rarely appropriate” for dismissal before trial;
  • provisions of existing laws on “ban the box,” salary history inquiries and lactation accommodation are clarified; and
  • employees now have the right to receive a copy of their wage records, in addition to their existing right to inspect such records.


Sexual harassment prevention training for nonsupervisory employees. Currently, employers with 50 or more employees are required to provide anti-sexual harassment prevention training to their California supervisors every two years. SB 1343 broadly expands these requirements. First, the new law mandates that nonsupervisory employees in California receive such training. Second, the law expands training requirements to now include employers with five or more employees wherever located (including temporary or seasonal employees).

Employers will be required to provide at least two hours of anti-sexual harassment training to all supervisory employees and at least one hour of anti-sexual harassment training to all nonsupervisory employees by January 1, 2020. Initial training must be completed within six months of hire or promotion to a supervisory position, and once every two years thereafter. Starting in 2020, employees hired to work less than six months (for example, seasonal and temporary employees) need to receive training within the first 30 days of hire or before they work 100 hours, whichever occurs first. The California Department of Fair Employment and Housing (“DFEH”) will develop a compliant online training program.[1]

Confidentiality clauses in sexual harassment settlements. SB 820 prohibits a provision in a settlement agreement (such as a confidentiality or non-disclosure clause) that prevents the disclosure of factual information related to a civil or administrative action that includes claims of sexual assault, sexual harassment, harassment or discrimination based on sex, the failure to prevent an act of workplace harassment or discrimination based on sex, or an act of retaliation against a person for reporting harassment or discrimination based on sex. In accordance with the law, any provision that prevents the disclosure of “factual information related to the claim” is void as a matter of law and against public policy. The law, however, does create an exception for a provision that shields the identity of the claimant, including all facts that could lead to the discovery of his or her identity. Such non-disclosure clauses may be included but only if the claimant requests the provisions. Finally, the law does not prohibit provisions making confidential the amount paid in settlement of a claim.

Waiver of right to testify concerning criminal conduct or sexual harassment. SB 3109 makes any provision in a contract or settlement agreement entered into on or after January 1, 2019, void and unenforceable if it waives a party’s right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or sexual harassment. The law applies only to official or written requests to testify (i.e., by court order, subpoena, or written request from an administrative agency or the legislature).

Protection against defamation lawsuits by accused harassers.  AB 2770 was signed earlier this year to protect victims of sexual harassment and employers from defamation claims brought by alleged harassers. California Civil Code section 47(c) treats certain communications as privileged and therefore protected from civil action, including certain communications concerning job performance. AB 2770 amends Civil Code section 47(c) to include three types of communications related to sexual harassment in the workplace:

  1. A complaint of sexual harassment, based on credible evidence and made without malice, by an employee to an employer;
  2. Communications between an employer and “interested persons,” made without malice, regarding a complaint of sexual harassment; and
  3. An employer’s answer, given without malice, to an inquiry about whether or not it would rehire a current or former employee, and whether the decision not to rehire is based on the employer’s determination that the former employee engaged in sexual harassment.

Malicious statements, i.e., statements motivated by hatred or ill will or where the speaker lacks reasonable grounds for believing the truth of the statement, are not protected.

Sexual harassment education by talent agencies. AB 2338 requires talent agencies to provide educational materials (in a language the artist understands) on sexual harassment prevention, retaliation, and reporting resources, and nutrition and eating disorders to its artists. The information must be provided within 90 days of agreeing to representation by the licensee, or agency procurement of an engagement, meeting, or interview, whichever comes first. The law also requires a talent agency, as part of its application for license renewal, to confirm that it has provided, and will continue to provide, the required educational materials.

Sexual harassment in business, service, or professional relationships. While this bill is not necessarily related directly to the employment relationship, employers, should also be aware that SB 224 amends California Civil Code section 51, which currently prohibits sexual harassment in the context of a business relationship with certain professionals and service providers, including physicians, psychotherapists, dentists, attorneys, real estate agents, accountants, bankers, trustees, landlords, and teachers, among others. SB 224 (1) expands that list to include investors, elected officials, lobbyists, directors, and producers; (2) extends liability to those who hold themselves out as able to help a plaintiff establish such a relationship with the defendant or a third party; and (3) eliminates the previous requirement that the plaintiff prove that the relationship could not be easily terminated.


SB 1300 makes several adjustments to California’s Fair Employment and Housing Act (“FEHA”), the law that, among other things, prohibits the harassment of employees, interns, volunteers, applicants, or persons providing services pursuant to a contract based on protected categories, including race, religious creed, disability, medical condition, sex, gender, sexual orientation, age, marital status, and military status.  The amendments and additions seek to prevent harassment in the workplace, and to provide guidance to California courts on the appropriate legal standard they should apply in workplace harassment cases.

Key Provisions:

  1. Employer Liability for Any Type of Harassment (Not Just Sexual Harassment) Committed by Nonemployees. Under existing law, an employer may be held responsible for sexual harassment committed by third parties if the employer knew (or should have known) of the conduct and failed to take immediate and appropriate corrective action. The law previously did not expressly extend liability due to nonemployee harassment based on other protected categories, such as age, disability, or race. SB 1300 expressly extends employer liability for harassment by a nonemployee based on any protected classification, not just sexual harassment, if the employer knew (or should have known) of the conduct and failed to take immediate and appropriate corrective action.
  2. Limitations on Releases and Nondisparagement Provisions During Employment.The new law makes it unlawful for an employer, in exchange for a raise or bonus, or as a condition of continued employment, to require an employee to:
    1. sign a release of any discrimination, harassment, or retaliation claim under FEHA, or sign a statement that the individual will not bring a claim under FEHA, and/or
    2. sign a non-disparagement agreement or other document that prohibits the employee from disclosing information about unlawful acts in the workplace, including, but not limited to, sexual harassment.

However, such release and nondisparagement agreements are permissible as part of a negotiated settlement agreement to resolve a claim. To qualify for this exception, the settlement agreement must be voluntary, deliberate, and informed and provide consideration of value to the employee, and the employee must be given notice and an opportunity to retain an attorney or be represented by an attorney in the negotiation of the agreement.

  1. “Legislative Intent” and Guidance to Courts in Harassment Lawsuits.In sexual harassment litigation, in order for acts of workplace sexual harassment to be unlawful, the alleged harassment must be “severe or pervasive.” AB 1300 weakens the “severe or pervasive” standard in the following ways:
  2. A Single Incident Is Sufficient.A single incident of harassing conduct can be enough to create a hostile work environment if the harassing conduct has unreasonably interfered with a plaintiff’s work performance or created an intimidating, hostile, or offensive working environment. This is perhaps the most significant modification of the “severe or pervasive” standard.
  3. A “Stray Remark” May Be Evidence of Harassment.A discriminatory remark, even if not made directly in the context of an employment decision, or even if made by an employee who is not responsible for making decisions about a plaintiff’s employment, may be relevant, circumstantial evidence of discrimination and harassment.
  4. An Effect on “Tangible Productivity” Is Not Necessary.A plaintiff does not need to prove that his or her tangible work productivity actually declined as a result of the harassment—only that the harassment made it “more difficult to do the job.” The law is expressly amended to state that this standard was set forth by the U.S. Supreme Court Justice Ruth Bader Ginsburg, in Harris v. Forklift Systems, and that the California Legislature approves of and affirms this standard.

The California Legislature further decreed the following:

  1. All Workplaces Should Be Held to the Same Standard.The fact that a particular occupation or industry may have been characterized by a greater frequency of sexually related commentary or conduct in the past is irrelevant. The nature of the workplace is only a consideration if it is integral to the performance of the employees’ job duties.
  2. Summary Judgment Is Disfavored.SB 1300 declares that “harassment cases are rarely appropriate for disposition on summary judgment” (a motion brought by a party requesting that the court dismiss a case before trial on the ground that, even if all the evidentiary facts supported by the opposing party are true, those facts nevertheless fail to support an actionable claim). This decree will make it even more difficult for employers to obtain summary adjudication of harassment claims.
  3. Limitation on Fee Awards to Prevailing Defendants.Defendants (employers and/or individuals) who prevail in FEHA lawsuits can only recover fees and costs for defending the lawsuit if the court finds that the lawsuit was “frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so.” This bill codifies existing case law.
  4. Optional Bystander Intervention Training.Employers are encouraged to train employees (bystanders) on identifying problematic conduct. An employer may, but is not required to, provide bystander intervention training that includes information and practical guidance on how bystanders can recognize potentially problematic behavior, and to motivate bystanders to take action when they observe problematic behavior.

A related bill that did not pass (SB 1038) would have created individual liability for retaliation by employees accused of harassment.


Criminal history of applicants for employment. SB 1412 modifies California’s “ban the box” law to clarify that employers may ask an applicant (or seek information about certain convictions) if (1) the employer is required by law to obtain information regarding the particular conviction, even if it has been expunged, sealed, or dismissed following probation; (2) the applicant would be required to possess or use a firearm in the course of employment; or (3) an individual with a particular conviction is prohibited by law from holding the position sought (or the employer is prohibited by law from hiring such a person) even though the conviction has been expunged, sealed, or dismissed following probation. Further, the statute expressly permits criminal background checks required or authorized pursuant to the rules of a “self-regulatory organization,” as defined by the Securities Exchange Act of 1934.

Requesting salary history information from applicants for employment. AB 2282 clarifies California’s Fair Pay Act, which requires an employer, upon “reasonable request,” to provide the “pay scale” for a position to an “applicant” applying for employment. The law defines (1) “applicant” to exclude current employees, (2) “pay scale” as the salary or hourly wage range (which does not include bonuses or equity ranges), and (3) “reasonable request” as a request made after the applicant has completed an initial interview. The law also makes clear that employers may ask an applicant about his or her “salary expectations” for the position. Finally, the law clarifies that an employer may make compensation decisions based on an employee’s current salary, as long as any wage differential resulting from that decision is based on a bona fide factor other than sex, race, or ethnicity.

Lactation accommodation. Current law requires employers to make reasonable efforts to provide an employee with a room or another location, which may include a bathroom (but not a toilet stall) to express breast milk for the employee’s infant child. AB 1976 amends existing law to require employers to make reasonable efforts to provide an employee with the use of a room or other location, other than a bathroom, to express breast milk. The law clarifies that employers may make available a temporary lactation location, so long as that location is used only for lactation purposes while the employee expresses milk. A more detailed bill (SB 937) that would have imposed additional requirements, such as a nearby sink and refrigerator, and a flat surface to place a breast pump and personal items, did not pass.


Expansion of Paid Family Leave. SB 1123 expands the Paid Family Leave (“PFL”) wage replacement benefits provided by the State of California beginning January 1, 2021, to cover otherwise unpaid military-related leaves of absence. Under the amended law, employees will be able to collect PFL benefits if they take time off for “qualifying exigencies” related to the covered active duty status of their spouse, registered domestic partner, child, or parent who is a member of the U.S. Armed Forces, such as military ceremonies, changes to child care, counseling, or spending time with the covered service member during rest and recuperation leave. Note that PFL is only a wage replacement benefit; it does not provide an employee the independent right to take a leave of absence. Employees must qualify for military exigency leave under the Family and Medical Leave Act or their employer’s policy in order to be eligible for these benefits.


Inspection and copying of wage records. SB 1252 provides that employees have the right to receive a copy of their wage records. (The law previously gave employees only the right to inspect their wage records.)


Female members on boards of directors. SB 826 requires that a foreign or domestic publicly held corporation whose principal executive offices are located in California have a minimum number of female board members. Specifically, by the end of 2019, California-based corporations are required to have at least one female director. By the end of 2021, corporations with five directors must have at least two female members, and corporations with six or more directors must have at least three female members. Corporations are specifically permitted to increase the number of board members in order to achieve this goal. The law permits the California Secretary of State to fine corporations found in violation of the law $100,000 for an initial violation and $300,000 for subsequent violations.


California’s new laws affect a wide range of policies and procedures throughout the employment relationship. Accordingly, employers with a California workforce should do the following:

  • Review your hiring processes and train supervisors on how to handle pay scale requests and how to question applicants properly concerning their salary expectations.
  • Review, and revise if applicable, any separation or other agreements that purport to require employees to waive their rights to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or sexual harassment. Consider including a provision affirmatively advising employees that nothing in the agreement would preclude such testimony.
  • Review your employment applications and processes to ensure compliance with California’s “ban the box” law.
  • Gear up to ensure that nonsupervisory employees will receive one hour of sexual harassment training by January 1, 2020.
  • Consider adding education on bystander intervention to supervisory and non-supervisory anti-sexual harassment training.
  • Ensure harassment training accurately reflects newly enacted legal standards regarding sexual harassment, e.g., explains that single acts and single remarks can be harassing and that sexually harassing behavior that makes it difficult for an individual to do his or her job can rise to the level of illegal harassment.
  • When applicable, ensure that there is a room or another location, other than a bathroom, for an employee to express breast milk for the employee’s infant child.
  • Review your new-hire packets, severance agreements, and other personnel forms to ensure that they do not contain release and nondisparagement agreements prohibited by law, and revise agreements and forms to delete any prohibited release and nondisparagement provisions.
  • Review and revise, if necessary, your employee handbooks to ensure that they are up to date and not in conflict with any of the new laws.
  • For foreign and domestic publicly held corporations whose principal executive offices are located in California, ensure that board recruitment, selection, and appointment processes encourage diversity and guarantee that the corporation will have at least the minimum number of required female board members.

Additionally, going into 2019, California employers should do the following:

  • Ensure compliance with applicable state and local minimum wage laws. The state minimum wage goes up to $12 an hour for employers with 26 or more employees ($11 an hour for employers with fewer than 26 employees). Local minimum wages may be higher.
  • Consider implementing or revising arbitration agreements. The U.S. Supreme Court ruled this year in Epic Systems Corp. v. Lewis that employers may include class action waivers in arbitration agreements. Such agreements should be drafted carefully to comply with California and federal law.


Employment Law Update For California Employers 2019

California has required employers with 50 or more employees to provide supervisors with two hours of sexual harassment training within six months of assuming a supervisory role or every two years. In 2017, California added harassment training based on gender identity, gender expression and sexual orientation. Jerry Brown signed SB 1343, which provides for even greater requirements for anti-harassment training. Sexual harassment training now applies to employers with five or more employees. Small employers, who may or may not have employment counsel, will be held to the same standard as larger employers. The most noteworthy part of this bill requires employers with five or more employees to provide at least one hour of training to all nonsupervisory employees by Jan. 1, 2020 and every two years thereafter. The training of nonsupervisory employees is a first. Since anti-harassment training became a requirement in the California employment world, it has only applied to supervisory positions. Now, it applies to every employee if you have five or more employees. In fact, even temporary or seasonal workers are required to have this training.California had a rash of new employment laws enacted in 2018. Employers will have to learn to complying with the new laws most of which take effect January 1, 2019.

New Diversity Mandates and Anti-Harassment Legislation

Multiple bills were signed dealing with sexual harassment as well as equalizing the rights between men and women. SB 826 requires publicly held corporations who have their principal executive in California to include women directors on their boards. This is a novel approach designed to increase diversity and equality. The law has a two-tiered system. The first tier requires corporations to have at least one female director by the end of the 2019 calendar year. The second (and third) tier requires corporations that have five or more directors on the board to include at least two female members by the end of 2021 and corporations with six or more board seats to have at least three women by the end of 2021. The penalties are steep. First time offenders are penalized at $100,000 and penalties rise to $300,000 for subsequent violations.

The expansion of the harassment training is likely to create additional burdens for small employers as well as for employers who hire on a seasonal or temporary basis. It appears the Legislature realized this possibility as the state has tapped the Department of Fair Employment and Housing to develop one- and two-hour online training courses to be posted on their website for employers to utilize at what appears to be no cost.

Lactation laws: AB 1976 requires employers to make reasonable efforts to provide a room, other than a bathroom, to accommodate employees expressing breast milk. Previously, the law required an employer to provide a room other than a toilet stall. Now, a community bathroom with a private area for lactation is insufficient and an employer cannot simply provide a bathroom for lactation use. Employers should note that under AB 1976 they are allowed to make a temporary private location if the employer is unable to provide a permanent location due to operational, financial or space limitations. There is also a narrow undue hardship exception to take into account the employer’s nature of business and size. Employers should be reminded that they are still required to grant a reasonable amount of break time to accommodate any employee desiring to express breast milk for a child.

SB 820. This law prohibits the terms of a settlement agreement to prevent the disclosure of factual information relating to claims of sexual assault, sexual harassment, harassment, or discrimination based on sex, or retaliation for filing a claim of sexual harassment. It also precludes courts from restricting the disclosure of such facts in civil proceedings. The one notable exception is that the amount of the settlement is allowed to be confidential.  If an employer settles a litigated sexual harassment or discrimination claim, the facts/allegations are free to be discussed and disseminated and an employer cannot require the employee to keep the facts, other than the amount of the settlement, confidential. This applies to all settlement agreements entered into after Jan. 1, 2019. However, SB 820 does not apply to settlement agreements entered into before litigation. In addition, a claimant may request confidentiality on his/her identity, which is allowed, unless a governmental entity or person is involved and a party to the agreement.

SB 3109 makes any provision that waives a party’s right to testify in a legal proceeding regarding criminal conduct or sexual harassment on the part of the other contracting party void and unenforceable. This law applies to all contract or settlement agreements entered into on Jan. 1, 2019 and thereafter.

New Restrictions on FEHA Claim Waivers

SB 1300: An employer cannot require an employee to sign a release covering claims against an employer, for the right to file and/or pursue a civil action or the ability to notify any court, law enforcement or governmental agency in exchange for a raise or a bonus or as a condition of employment or continued employment. It further prohibits any other agreement that would deny the employee the right to disclose information about unlawful acts in the workplace.

Under the Fair Employment and Housing Act (FEHA), an employer may also be responsible for the acts of non-employees, with respect to sexual harassment of employees, if the employer knows or should have known of the conduct and fails to take immediate and corrective action. SB 1300 imposes this responsibility and applies this provision to any type of harassment prohibited under the FEHA not just sexual harassment.

SB 1300 provides that a prevailing defendant is prohibited from being awarded fees and costs (even if there was a CCP 998 settlement offer) unless the court finds the action to be frivolous, unreasonable or groundless when brought or if the plaintiff continued to litigate after it clearly became so.

Wage and Hour Changes, Plus New Human Trafficking Training Requirement

California’s salary history ban took effect on Jan. 1, 2018. It prohibited employers from asking job applicants for salary history information and required employers to provide applicants with a pay scale for the position being sought upon reasonable request.

AB 2282 clarified certain terminology. An applicant refers to an individual who is seeking employment and not a current employee. Pay scale is defined as a salary or hourly rate range exclusive of bonuses or equity-based compensation. A reasonable request means a request after applicant has completed an initial interview. AB 2282 establishes that an employer may inquire regarding an applicant’s salary expectation and that employers are not prohibited from making a compensation decision based on a current employee’s existing salary so long as any wage differential result can be justified by one of the Equal Pay Act factors.

Last year, California passed a human trafficking law requiring certain types of employers to post notices regarding slavery and human trafficking. Human trafficking laws have now been expanded to include training for certain types of industries under SB 970. Pursuant to SB 970, all hotel and motel employers must provide at least 20 minutes of classroom or interactive training and education regarding human trafficking awareness, which must be completed by Jan. 1, 2020. The idea is to provide training to the people who may come into contact with victims of human trafficking. This could include a hotel/motel receptionist, housekeeper, a bell person or luggage assistance employees, or shuttle drivers. Similar to anti-harassment training, training must be done every two years.

AB 2034 mandates the same human trafficking training requirements as SB 970 for mass transit employers including those who operate inner-city passenger, rail, light rail or bus facilities. Training would be required for employees who interact with victims. This training must be completed by Jan. 1, 2020 and be done every two years as well.

In 2017, AB 1701 was passed making direct contractors liable under certain situations for unpaid wages, benefits or contributions that a subcontractor owed for labor connected to a contract. It also required subcontractors to provide required payroll records upon a direct contractor’s request. AB 1565 struck down language providing that the direct contractor’s liability for unpaid wages or benefits was in addition to any other existing rights or remedies. The bill noted that in order for a direct contractor or a higher-tiered subcontractor to withhold disputed sums for a subcontractor’s failure to provide information, the contractor must specify in the relevant contract the documents and information that must be provided on request. This law went into effect immediately and is already enforceable.

An employee is entitled to a lunch break within five hours of beginning work. SB 2610 creates a small exception to this requirement. SB 2610 applies to commercial drivers who are employed by a motor carrier transporting nutrients and byproducts from a commercial feed manufacturer subject to Section 15051 of the Food and Agricultural Code to a customer located in remote rural location. If this exception is met, the driver may begin his/her meal period within the sixth hour of work. If this is allowed, the employee’s regular rate of pay must be no less than 1.5 times the state minimum wage rate and the driver must receive overtime compensation.

Random Law for 2019

The Private Attorneys General Act does not apply to construction workers (AB 1654). Talent agencies must provide educational materials regarding sexual harassment to their clients (AB 2338). Attorneys must obtain written acknowledgment from their client before the client agrees to mediation (SB 954).

The California Consumer Privacy Act will take effect on Jan. 1, 2020 (AB 375; SB 1121).

  1. the right to know, through a general privacy policy and with more specifics available upon request, what personal information a business has collected about them, where it was sourced from, what it is being used for, whether it is being disclosed or sold, and to whom it is being disclosed or sold;
  2. the right to “opt out” of allowing a business to sell their personal information to third parties (or, for consumers who are under 16 years old, the right not to have their personal information sold absent their, or their parent’s, opt-in);
  3. the right to have a business delete their personal information, with some exceptions; and
  4. the right to receive equal service and pricing from a business, even if they exercise their privacy rights under the Act.

That’s it —Have a wonderful, healthy and happy 2019.


Dear Clients and Friends,

With the California legislative session wrapped up for 2017, I want to make you all aware of some relevant bills that were passed and will become law as of January 1, 2018:

It will become unlawful in California for employers to ask applicants about their prior salary, compensation, and benefits (although employers may consider prior salary information in determining an offered rate of pay if an applicant voluntarily discloses it). In addition, employers will be required to provide applicants with a particular position’s pay scale upon request. For this reason, if you have standard application forms that request salary information, such questions must be removed prior to the new year, and cannot be asked in interviews or in reference checks, either.

Applicants who have been denied employment because of their conviction history (in situations where the employer is unable to justify why the conviction history was relevant to denying employment for the position at issue) will be entitled to sue employers for discrimination under the Fair Employment and Housing Act (“FEHA”). As such, employers who are covered by FEHA cannot ask questions seeking disclosure of an applicant’s criminal history on any employment application, inquire or consider the conviction history of an applicant before extending a conditional offer employment, or consider specified criminal history information in conducting a conviction history background check. If you would like your application materials reviewed to ensure compliance with this new law, please feel free to call my office.

California law now provides protection for baby bonding to employers with at least 20 employees within 75 miles, and prohibits those employers from refusing to allow eligible employees to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. Prior law only allowed this benefit for employers with 50 or more employees, so this will impact a significant number of employers and employees throughout the state. In addition, if an employee chooses not to return to work at the conclusion of his or her leave, an employer can recover the costs of maintaining the health plan for employees during the leave (subject to certain exceptions).

Employers with 50 or more employees have been obligated to provide supervisory training to prevent sexual harassment and bullying. Starting this January, this training must also include practical examples to address harassment based on gender identity, gender expression, and sexual orientation. A new, mandatory poster regarding transgender rights will be available on the Department of Fair and Employment and Housing’s website by January 1, 2018.

The minimum wage in California will increase on January 1, 2018:
  • Employers with 26 or more employees must pay at least $11.00 per hour
  • Employers with up to 25 employees must pay at least $10.50 per hour
With the increase in the minimum wage, the salary basis for exempt employees will also increase. This means that for employers with 26 or more employees, all exempt employees must be paid a salary of at least $45,760, and the salary basis for smaller employees will increase to $43,680.Please note that many California cities have higher minimum wages, with which employers must comply.

For more recent cases check our the Blog which is where I’ve been posting.

Here are a few short updates on important decisions affecting California employees:

Salas v. Sierra Chemical Co. (California Supreme Court, June 26, 2014) 2014 DJDAR 8334. Employees who are undocumented immigrants may recover all relief available under FEHA other than reinstatement and earnings lost after their employers discover they were undocumented.

Iskanian v. CLC Transportation Los Angeles, LLC (California Supreme Court, June 23, 2014) 2014 DJDAR 8037. Employees who entered into an arbitration agreement prohibiting class and collective actions may not pursue class actions in any forum, but may still prosecute PAGA actions in court.

Ayala v. Antelope Valley Newspapers, Inc. (California Supreme Court, June 30, 2014) 2014 DJDAR 8620. When deciding whether to certify class actions alleging misclassification of employees as independent contractors, courts should consider if there are common questions about the employer’s right to exercise control, and disregard individual variations in how that right was exercised.

Paratransit, Inc. V. Unemployment Insurance Appeals Board (California Supreme Court, July 3, 2014) 2014 DJDAR 8796. An employee who disobeys a lawful reasonable order because of a good faith error has not engaged in misconduct disqualifying the employee from getting unemployment insurance.

June 14, 2014
Dear Clients and Friends,

On July 1, 2014, the minimum wage in California will increase from $8.00 to $9.00 per hour. This wage hike will have a wide-ranging impact on all California employers. For example:

Non-exempt employees paid less than $9.00 per hour must receive an increase in pay.

Certain exempt employees (executive, administrative, professional) must receive a monthly salary of at least twice minimum wage on a salaried basis (as well as meet other exemption requirements). Effective July 1, 2014, the minimum monthly salary for exempt employees increases to $3,120. Employees paid less will no longer meet the exemption.

Inside sales employees under Wage Orders 4 and 7 must earn more than 1½ times minimum wage for all hours worked (they must also receive more than 50% of their compensation from commissions). As of July 1, 2014, to qualify as exempt, such employees must be paid at least $13.50 per hour.

If you email our office we will send you a revised California Minimum Wage Official Notice. This should be posted next to your IWC Wage Order and other required workplace postings.

Since 2012, California employers have been required to provide written notice to non-exempt employees containing certain information, including rate of pay. Attached is a Notice to Employee, which can be used for this purpose. Employers who have already issued this wage notice do not have to reissue as a result of the minimum wage increase provided the new wage rate is shown on the employee’s pay stub (itemized wage statement) with the next payment of wages.
Now is a good time for employers to audit their pay practices to ensure compliance with wage and hour laws. If you have questions or need assistance with an audit, please contact me at: 415-457-2668
Best regards,

PAGA Claims are not Class Actions for Removal to District Court

March 2014

Last week, in Baumann vs. Chase Investment Services Corporation the Ninth Circuit Court of Appeals held that representative actions brought under the California Labor Code Private Attorneys General Act (PAGA) are not sufficiently similar to Rule 23 class actions for removal to federal court under the Class Action Fairness Act.  The Ninth Circuit held that civil penalties in a PAGA  action could not be aggregated to establish diversity jurisdiction, removing that question from the appeal. The California Supreme Court held, in Arias vs. Superior Court, that a PAGA claim is essentially a law enforcement action, not a class action.

The court found that PAGA actions also do not have notice requirements or opt-out procedures like Rule 23. PAGA representative actions expressly allow employees to pursue their legal rights under state or federal law even after a judgment or settlement, unlike class actions under Rule 23 in which a final judgment precludes any other lawsuits.

New California Employment Laws for 2014

Wage & Hour

A.B. 10 — Increases the state minimum wage in stages.

$9 per hour on July 1, 2014

$10 per hour on January 1, 2016

Impacts split-shift premiums, meal and rest period penalties and other payments based on the state minimum wage.  Impacts minimum salary for exempt employees (pegged to two-times state minimum wage)

A.B. 241 — Requires employers to pay “personal attendants” for overtime.

Overtime applies to over 9 hours in a work day or 45 hours in a work week

“Personal attendant” = employed by a household or third-party recognized in the health care industry, to work in households supervising, feeding or dressing elderly, disabled individuals and/or children.  Known as the “Domestic Workers Bill of Rights”

A.B. 442 — Adds liquidated damages provision for minimum wage violations equal to amount

of wages that should have been paid.

S.B. 390 — Makes it a crime for an employer to fail to remit employee withholdings from an employee’s wages that were made pursuant to state, local or federal law.

S.B. 435 — Expands the one hour of pay “penalty” under Labor Code section 226.7 to missed“recovery periods required to prevent heat illness.

S.B. 462 — Restricts attorneys’ fee awards to prevailing defendants-employers in actions for nonpayment of wages.

Employer now must prove that action was brought in bad faith before it can recover defense costs.


A.B. 556 — Adds “military and veteran status” to list of categories protected from employment discrimination under the FEHA.

Also provides an exemption for an inquiry by an employer regarding military or veteran status for the

purpose of awarding a veteran’s preference as permitted by law

S.B. 292 — Clarifies that an employer can prevail on a claim of sexual harassment without a showing that the harasser was motivated by sexual desire.

In response to Kelley v. Conoco Companies, 196 Cal. App. 4th 191 (2011) (same-sex harassment case) –the new law realigns California law with the principles set forth by the U.S. Supreme Court in Oncale.


A.B. 11 — Expands law requiring temporary leave of absence for voluntary firefighters to reserve peace officers and emergency rescue personnel, for purposes of engaging in fire, law enforcement or emergency rescue training. Applies to employers with 50 or more employees

S.B. 400 — Extends to victims of stalking the existing retaliation protections for domestic violence victims and sexual assault victims who:

Take time off for court appearances or to obtain other relief for the victim or the victim’s child (applies to all employers)

Take time off to obtain medical care, counseling or services (applies to employers with 25 or more employees)

Adds that an employer must provide reasonable accommodation, if requested, for the victim’s safety (applies to all employers).

S.B. 288 — Prohibits discrimination and retaliation against victims of certain serious crimes under Labor Code sections 230 and 230.2 for taking time off work to appear in court or for another related proceeding. The law requires reasonable advance notice of the need for time off, and the employee may use vacation or other PTO for the absence.

S.B. 770 — Expands scope of California’s Paid Family Leave benefits program to cover time off to care for seriously ill grandparent, grandchild, sibling or parent-in-law.  Effective July 1, 2014

S.B. 530 — Amends Labor Code section 432.7, which restricts asking about arrests, to prohibit asking an applicant to disclose, or using as a factor in determining any condition of employment, information regarding a conviction that has been judicially dismissed or ordered sealed.

A.B. 218 — State and local public employers cannot request information regarding criminal convictions until after the employer determines the applicant meets the minimum qualification standards for the position. Known as the “ban the box” law.  Effective July 1, 2014


A.B. 263 and S. B. 666 — Bills expanding grounds for a finding of retaliation, increasing penalties for retaliation and broadening protections for whistle blowers.

The bills create the following new retaliation protections:

Prohibit retaliating against an employee or applicant for making a bona fide complaint or claim, including written or oral complaints for unpaid wages, and provides for awards of reinstatement, back pay, and civil penalties up to $10,000

Prohibit any person acting on behalf of an employer from stopping an employee from disclosing information to the government, and includes civil penalties up to $10,000

Prohibit taking adverse action against employees for updating their personal information, unless the changes are directly related to the job

S.B. 496 — Expands existing law that prohibits retaliation against an employee for reporting suspected violations to a government or law enforcement agency to include employee reports regarding violations of local rules and regulations, and disclosures “to a person of authority over the employee or to another employee who has authority to investigate, discover or correct the violation.” Also prohibits retaliation based on belief that the employee disclosed or “may disclose” information


A.B. 60 — Authorizes DMV to issue special driver’s licenses to undocumented individuals.

Merely having a drivers license will not satisfy work eligibility requirements for I-9 purposes!

A.B.263 — Prohibits engaging in unfair “immigration-related practices” intended to retaliatefor exercising rights protected under the Labor Code or local ordinances.

An unfair immigration-related practice is:

Requesting more or different documents than required under I-9 rules, or refusing to honor

documents that appear to be genuine

Using E-Verify when not required to do so by federal law

Threatening to file or filing a false police report

Threatening to contact or contacting immigration authorities

A.B. 524 — Subjects employer to liability for extortion for threatening to report an employee’s actual or suspected immigration status.

S.B. 666 — Prohibits employers from reporting or threatening to report an employee’s or employee’s family member’s suspected immigration status because that person has exercised a right protected under the Labor Code, Government Code or Civil Code.

Also provides for suspension/revocation of business license and a $10,000 fine for retaliation against employees on basis of citizenship or immigration status.

Laws Specific to San Francisco Employers

Minimum Wage Ordinance — $10.74 per hour (effective January 1, 2014).

Health Care Security Ordinance — Increase in required health care expenditure to $2.44 for large employers and $1.63 for medium employers (effective January 1, 2014).

Family Friendly Workplace Ordinance — Permits requests for flexible work arrangements to assist with child care (under age 18), elder care or caring for family members with a serious health condition. Employers have 21 days to respond — denials must be in writing, must explain bona-fide business reason for the denial, and must provide employee with notice of the right to request reconsideration.  Effective January 1, 2014

Applies to employers with 20 or more employees

Eligible employees must work in San Francisco, have been employed six months or more and work at least eight hours per week.

New poster —




Ten years ago I attended a luncheon sponsored by the Marin County Bar Association. The guest speaker was then former Governor Jerry Brown. Governor Brown made many astute observations during his speech, but one item stands out in my memory. He said that since leaving his position as Governor of California, the State of California had added in excess of 25,000 new laws. As you can see, the pace of new legislation hasn’t abated in the ten years since Governor Brown addressed the Marin County Bar.

Happy holidays and best wishes for a healthy and prosperous new year.



Commission Agreements Deadline

Employers must put all commission agreements in writing by January 1, 2013. Any employee hired to perform work for payment of a commission in California must receive a written contract that includes the method for calculating and paying the commissions.

Passed in 2011, this mandate of AB 1396 applies to employers located inside and outside California. It amended Labor Code Section 2751, which previously applied only to employers with no fixed California location. In 2012, the law was further clarified with respect to what types of plans are excluded from the written commission agreement requirement.

The new law appears simple and straightforward. However, with respect to employees that are paid both an hourly wage and a commission, a number of potential pitfalls within the law could result in wage-and-hour claims filed against employers.

Pregnancy Disability

The Office of Administrative Law (OAL) approved amendments to California’s pregnancy regulations proposed by the Fair Employment and Housing Commission (FEHC). The amendments take effect December 30, 2012.

The approved pregnancy disability regulations make significant changes to state law, including:

A change to the definition of “four months” An expanded definition of when a woman is “disabled by pregnancy” Clarification of an employer’s responsibilities regarding reasonable accommodation or transfer of employees affected by pregnancy, childbirth or related medical conditions

An expansion of protections to include that it is unlawful to discriminate against or harass an applicant or employee based on “perceived pregnancy”

Necessary changes to Notices “A” and “B,” which provide information for employees about their rights and responsibilities under pregnancy disability leave (Notice “A”) and the California Family Rights Act (Notice “B”). You will need to purchase new posters for each of your locations.

Workers’ Compensation Reform Requires Updates to Notice and Pamphlet

This year, California’s Legislature passed Senate Bill 863, containing wide-ranging workers’ compensation reform measures. SB 863 takes effect on Jan. 1, 2013.

Some of its provisions will be effective immediately, requiring changes to notices that explain employee rights and employer obligations. California employers must post a notice explaining employee rights and employer obligations under the state workers’ compensation system and must provide all employees with a workers’ compensation pamphlet at the time of hire.

Supreme Court Hears Harassment Case

The U.S. Supreme Court will hear an important case that is expected to determine who is a “supervisor” for purposes of employer liability in harassment cases.

The case, Vance v. Ball State University, is significant because, under previous decisions, an employer will be “strictly” liable when a supervisor harasses a subordinate.

Vance, the employee, argued that she was repeatedly harassed by her supervisor, Davis, on the basis of race. The lower court found there was not enough evidence that Davis was Vance’s supervisor and dismissed the case before trial.

Although Davis directed Vance’s daily activities, the lower court adopted a narrow reading of who constitutes a “supervisor” for liability purposes and refused to extend the definition to cover Davis.

The Supreme Court’s decision in Vance will either expand or limit the extent of employer liability in harassment cases. This is the time to evaluate who is and who is not a “supervisor” in your organization. If you have a problem employee in a supervisory position, it may be time to take action.

IRS Announces 2013 Mileage Reimbursement Rates

The Internal Revenue Service today issued the 2013 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rates take effect on January 1, 2013. According to the IRS, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

56.5 cents per mile for business miles driven 24 cents per mile driven for medical or moving purposes 14 cents per mile driven in service of charitable organizations

The rates for business miles driven and for medical and moving purposes during 2013 increase 1 cent from the 2012 rate. A taxpayer always has the option of calculating the actual costs of using his/her vehicle rather than using the standard mileage rates, the IRS said in its statement.

Under California Labor Code section 2802, employers must fully reimburse employees for all expenses actually and necessarily incurred. Many employers typically choose to use the IRS mileage reimbursement rate, but its use is optional.

The Division of Labor Standards Enforcement has stated that using the IRS mileage rate will generally satisfy an employer’s obligation to reimburse for business related vehicle expenses, absent evidence to the contrary. However, if an employee can show that the chosen mileage reimbursement rate, even the IRS rate, does not cover all actual expenses the employee has incurred, the employer must pay the difference.

Business vehicle expenses do not include only gasoline, but also wear and tear (depreciation), repairs, oil, insurance and other costs.

New 2013 Exempt Classification Rates

California’s Department of Industrial Relations (DIR) announced rate changes for the computer software employee exemption and the licensed physician or surgeon exemption.

The new rates take effect January 1, 2013.

For the computer software employees exemption:

The minimum hourly rate of pay exemption increased to $39.90 from its previous rate of $38.89

The minimum monthly salary increased to $6,927.75 from its previous rate of $6,752.19

The minimum annual salary exemption increased to $83,132.93 from its previous rate of $81,026.25.

For the licensed physician or surgeon exemption:

The minimum hourly pay for licensed physicians and surgeons increased to$72.70 from $70.86

These rates are tied to the California Consumer Price Index (CCPI) for Urban Wage Earners and Clerical Workers. The 2013 rate changes reflect the 2.6 percent increase in the CCPI. Appellate Court Agrees With See’s Candy: Rounding Policies OK in California

Last month, the Fourth District Court of Appeal issued an employer-friendly opinion by concluding that, under California law, employers may round employee timecard entries to the nearest-tenth of an hour.

This ruling is particularly important because there is no statute or prior case law that explicitly authorizes this common practice, a practice that is permissible under federal law and followed by California’s labor agency.

In the case, Silva v. See’s Candy Shops, Inc., See’s utilized a timekeeping software system to keep track of its employee’s working hours. The software system required employees to “punch” into the system at the beginning and end of their shift. Adjustments to the timecards were made only in accordance with two See’s policies:

The nearest-tenth rounding policy; and The grace period policy.

A class action lawsuit was brought by a former employee challenging these two policies. See’s was able to demonstrate that its nearest-tenth rounding policy went up and down and, that the policy, over time, did not result in a loss to the employee. Additionally, See’s was able to present evidence that employees knew about the rounding and grace period policies.

San Francisco Minimum Wage Increases in January

The minimum wage in San Francisco will increase to $10.55 per hour, effective January 1, 2013:

This increase applies to all employers that have employees who perform work in San Francisco, even of you aren’t based on San Francisco.

Any person who performs at least two hours of work in a particular week for an employer within the city of San Francisco’s geographic boundaries is entitled to be paid the San Francisco minimum wage.

This applies to all workers, regardless of whether they are legally authorized to work in the United States.

Two New Discrimination Laws Mean Changes for Policies, Posters

Employers will need to change notices, postings and employee handbook policies related to discrimination and harassment prevention to reflect two recently signed bills, AB 1964 and AB 2386.

Religious Dress/Grooming AB 1964 amends Government Code sections 12926 and 12940 and clarifies that the Fair Employment and Housing Act’s (FEHA) discrimination protections and reasonable accommodation requirements cover religious dress practices and religious grooming practices.

As stated in the analysis of the bill, the intent is to “provide clarity and ensure that all religions receive equal protection under the law.”

Importantly, the law specifies that an accommodation is “not reasonable” if the accommodation requires segregation of the individual from other employees or the public.

Breastfeeding AB 2386 amends California Government Code Section 12926 and makes it clear that breastfeeding is protected by law and discrimination on that basis is illegal.

The new legislation was enacted, in part, to reflect a decision by the Fair Employment and Housing Commission (FEHC) in 2009 in which an employee was terminated because she was nursing her baby during her lunchtime break. Because the FEHC’s decision was designated as having precedential authority, such discrimination is a violation of FEHA. California’s Anti-Discrimination Laws are Broadened to Expressly Prohibit Discrimination Based on “Gender Identity” and “Gender Expression” Various California laws have long outlawed discrimination based on a person’s “sex,” a term of art that includes a person’s “gender.” For example, the FEHA prohibits an employer from discriminating against an employee in the terms, conditions or privileges of employment based on that employee’s “sex.” (Gov. Code, § 12940, subd. (a).) In turn, the FEHA defines the term “sex” to include “pregnancy, childbirth” or “gender.” (Gov. Code, § 12926, subd. (p).) Recently, the California Legislature enacted AB 887, which makes broad across-the-board amendments to several California statutes, including FEHA, to address “gender” discrimination. AB 887 provides that “gender” includes a “person’s gender identity and gender expression.” Further, “gender expression” means a “persons gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.” Although AB 887 does not define the term “gender identity,” legislative history reveals that the term “refers to a person’s deeply felt internal sense of being male or female.” (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 887 (2010-2011 Reg. Sess.) Aug. 17, 2011, p. 3.) California laws, including the FEHA, will now expressly prohibit discrimination based on a person’s “gender identity” and “gender expression.” Social Media Privacy Legislation Signed Gov. Edmund G. Brown signed a bill in September prohibiting employers from requiring or requesting employees or job applicants to provide user names or passwords for personal social media accounts so employers can gain access to the accounts. The new law, AB 1844, also prohibits employers from discharging or disciplining employees who refuse to divulge user names or passwords associated with their personal social media accounts. The bill is not intended to infringe on an employer’s existing rights and obligations to investigate workplace misconduct. IRS Releases Guidance on Tip Withholding The Internal Revenue Service released a questions and answers document (Rev. Rule 2012-18) that provides guidance on how taxes are imposed on tips under the Federal Insurance Contributions Act (FICA). The guidance includes an explanation of employer and employee obligations. It is the employer’s obligation to withhold “the employee share of FICA taxes on the reported tips from the wages of the employee (other than tips) or from other funds made available by the employee for this purpose.” The guidance also includes information on: The difference between a tip and a service charge for FICA purposes What tips must be reported to an employer How tips are reported by the employee to the employer Liability for unreported tips Inspection of Personnel Records AB 2674 amends Labor Code 1198.5 relating to inspection and retention of employee personnel records. The new law changes who has access; deadlines for providing access, and penalties for failure to comply. The new Section 1198.5(b)(1) specifies that the personnel records must be made available no later than 30 calendar days from the date the employer receives a written request from a current or former employee (or his or her representative) unless the employee and employer agree to extend the deadline to 35 days. The employer must also provide a copy of the personnel records by this deadline. Under a new Section 1198.5(b)(2)(A), all requests to inspect or receive a copy of personnel records must now be in writing. Under the current law, employers have the option of (1) keeping a copy of personnel records at the place the employee reports to work, (2) making the records available at the place the employee reports to work within a reasonable time of the request for inspection, or (3) permitting inspection at the location where the employer stores the records. Under the amendments, employers must: Maintain a copy of each employee’s personnel records for no less than three years after termination. Make personnel records of current employees available for inspection (and provide a copy thereof) at the place where the employee reports to work, or another location if agreed upon. Make personnel records of former employees available for inspection (and provide a copy thereof) at the location is where the employer stores the records, unless the parties mutually agree in writing to a different location. (A requesting employee may receive the copy by mail if he or she reimburses the employer’s postal expenses.) If a former employee was terminated for a violation of law or employment-related policy involving harassment or workplace violence, the employer may instead (1) make the records available at a location other than the workplace that is within reasonable driving distance of the employee’s residence; or (2) provide a copy of the records by mail 1/14/12

What should we make of what Mike Daisey saw in China? Our staff did weeks of fact checking to corroborate Daisey’s findings. Ira talks with Ian Spaulding, founder and managing director of INFACT Global Partners, which goes into Chinese factories and helps them meet social responsibility standards set by Western companies (Apple’s Supplier Responsibility page is here), and with Nicholas Kristof, columnist for The New York Times who has reported in Asian factories. In the podcast and streaming versions of the program he also speaks with Debby Chan Sze Wan, a project manager at the advocacy group SACOM, Students and Scholars Against Corporate Misbehavior, based in Hong Kong. They’ve put out three reports investigating conditions at Foxconn (October 2010, May 2011, Sept 2011). Each report surveyed over 100 Foxconn workers, and they even had a researcher go undercover and take a job at the Shenzhen plant. (15 minutes)

Governor Jerry Brown has laid the groundwork for California to have the highest minimum wage in the country by 2016. The increase will occur in two phases. On July 1, 2014, the state minimum wage will increase from $8 to $9 per hour.   On January 1, 2016, California’s minimum wage will increase to $10 per hour.


California’s minimum wage increases will have a huge impact on California employers and businesses and employees. the increases will not only impact non-exempt hourly employees, they will also affect how exempt employees must be paid.

The bill to increase California’s minimum wage (AB 10) in two steps to $10 an hour by January 1, 2016 was passed overwhelmingly on straight party-line votes by the California state senate and assembly. Final passage was spurred by Governor Jerry Brown’s promise last month to sign the bill when passed. In addition, the leaders of both the state senate and assembly joined as co-sponsors. The bill would increase the current $8 an hour minimum wage to $9 an hour effective July 1, 2014, and to $10 an hour effective January 1, 2016.

The bill to increase California’s minimum wage (AB 10) in two steps to $10 an hour by January 1, 2016 was passed overwhelmingly on straight party-line votes by the California state senate and assembly. Final passage was spurred by Governor Jerry Brown’s promise last month to sign the bill when passed. In addition, the leaders of both the state senate and assembly joined as co-sponsors. The bill would increase the current $8 an hour minimum wage to $9 an hour effective July 1, 2014, and to $10 an hour effective January 1, 2016.

IRS Will Begin New Service Charge Rules Effective January 1, 2014

In June 2012 the IRS issued Revenue Ruling 2012-18, explaining the difference between a tip and service charge, and pointing out that services charges are wages. While both service charges and tips are subject to employment taxes, there are different reporting obligations associated with each category.  This is important because some catering companies charge a service charge, but do not share the service charge with wait staff.

The IRS also said that “mandatory tips” – often imposed by restaurants for parties larger than six or eight patrons – are service charges and are, therefore, wages rather than tips. This clarification has significant implications for businesses that had been treating “mandatory tips” as tips rather than wages. The designation of “mandatory tips” as wages may have not only employment tax implications, but also wage rate implications because, as wages, mandatory tips may impact the regular rate of pay for hourly employees and, therefore, impact how overtime is calculated.

In light of these changes, employers with tipped employees should review their treatment of all forms of tips and service charges and ensure they are properly reporting and classifying them for both tax and hourly rate-calculation purposes.

In June 2012 the IRS issued Revenue Ruling 2012-18, explaining the difference between a tip and service charge, and pointing out that services charges are wages. While both service charges and tips are subject to employment taxes, there are different reporting obligations associated with each category.  This is important because some catering companies charge a service charge, but do not share the service charge with wait staff.

The IRS also said that “mandatory tips” – often imposed by restaurants for parties larger than six or eight patrons – are service charges and are, therefore, wages rather than tips. This clarification has significant implications for businesses that had been treating “mandatory tips” as tips rather than wages. The designation of “mandatory tips” as wages may have not only employment tax implications, but also wage rate implications because, as wages, mandatory tips may impact the regular rate of pay for hourly employees and, therefore, impact how overtime is calculated.

In light of these changes, employers with tipped employees should review their treatment of all forms of tips and service charges and ensure they are properly reporting and classifying them for both tax and hourly rate-calculation purposes.

The bill to increase California’s minimum wage (AB 10) in two steps to $10 an hour by January 1, 2016 was passed overwhelmingly yesterday afternoon on straight party-line votes by the California state senate and assembly. Final passage was spurred by Governor Jerry Brown’s promise last Wednesday to sign the bill when passed. In addition, earlier this week the leaders of both the state senate and assembly joined as co-sponsors. The bill would increase the current $8 an hour minimum wage to $9 an hour effective July 1, 2014, and to $10 an hour effective January 1, 2016.

Research shows that 60-80% of all difficulties in organizations stem from strained relationships between employees, not from deficits in individual employee’s skill or motivation. Daniel Dana, Managing Differences: How to Build Better Relationships at Work and Home (2005, 4th ed.); Barbara J. Kreisman, Insights into Employee Motivation, Commitment and Retention (2002).

The typical manager spends 25-40% of his or her time dealing with workplace conflicts. That’s one to two days of every work week. Washington Business Journal, May 2005.

Ernst & Young reports that the cost of losing and replacing an employee may be as high as 150% of the departing employee’s annual salary.

In a 1990 survey, 78% of respondents indicated that they believe some, most or all employers engage in discrimination in hiring or promotion, and 51% stated that all or most employers engage in discriminatory practices. Workplace Conflict: Facts and Figures,

90% of harassment is never officially reported. Workplace Conflict: Facts and Figures,

More than 50% of employers report having been sued by an employee. Society for Human Resource Management survey, cited in USA Today (Workers win more lawsuits, awards, March 27, 2001).

Between 1970 and 1989, the general federal civil caseload increased by 125%. In contrast, employment discrimination cases increased 2,166%. Workplace Conflict: Facts and Figures,

The national average compensatory award in employment practice liability cases rose from $133,691 in 1997 to $250,000 in 2003., LRP Publications (2004).

Fortune 500 Senior Executives spend 20% of their time in litigation activities.

Organizations adopting conflict resolution processes, like mediation and arbitration, report 50-80% reductions in litigation costs. Thomas Stipanovvich, ADR and the “Vanishing Trial”: The Growth and Impact of Alternative Dispute Resolution (2004).

Workplace Conflict Statistics

When cooperation and collaboration are low, effects are seen in productivity, customer service, organizational stability, individual stress, unscheduled absences, sick leave use, medical claims, retention problems, and diminished recruitment ability.

Here are some statistics that reflect the cost of conflict in organizations:

  • 30-42% of managers’ time is spent reaching agreement with others when conflicts occur (Watson, C. and Hoffman, R., “Managers as Negotiators,” Leadership Quarterly 7 (1) 1996).
  • It is estimated that more than 65% of performance problems result from strained relationships between employees — not from deficits in individual employees’ skill or motivation.
  • It costs 1.5 times the position salary to replace the employee in it (Drake Beam Morin, 2000).
  • It is estimated that sexual harassment claims alone are costing each Fortune 500 company $6.7 million per year, with costs for smaller companies being proportionately burdensome.
  • Recent studies find that more than two-thirds of managers spend more than 10% of their time handling workplace conflict and 44% of managers spend more than 20% of their time in conflict-related issues.
  • A number of surveys indicate that people in all occupations report the most uncomfortable, stress-producing parts of their jobs are the interpersonal conflicts that they experience on a daily basis between themselves and co-workers or supervisors.
  • From 1990 to 1995, the number of charges with the EEOC alleging illegal discrimination in employment increased 46.75% (SHRM White Paper, 1995).  The trend has continued and even accelerated since 2007.

Labor Code Section 351 prohibits employers and their agents from sharing in or keeping any portion of a gratuity left for or given to one or more employees by a patron. Furthermore it is illegal for employers to make wage deductions from gratuities, or from using gratuities as direct or indirect credits against an employee’s wages. The law further states that gratuities are the sole property of the employee or employees to whom they are given. “Gratuity” is defined in the Labor Code as a tip, gratuity, or money that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due for services rendered or for goods, food, drink, articles sold or served to patrons. It also includes any amount paid directly by a patron to a dancer covered by IWC Wage Order 5 or 10.