Mark E. Terman, Pascal Benyamini, Author at Laborsphere

San Francisco’s Retail Workers Bill of Rights Has Passed: Are you ready?

Operative July 3, 2015, companies located in San Francisco who are “Formula Retail Establishments” must comply with additional wage and hour requirements under the Retail Workers Bill of Rights (a combination of two ordinances, Ordinance 236-14 and Ordinance 241-14), the country’s first-ever such legislation.

Supporters claim that this new law is intended to improve life for retail employees which, according to some accounts, include more than 40,000 workers at 1,250 locations in the City of San Francisco. In passing the bill, the San Francisco Board of Supervisors found that Formula Retail Establishments are a major employment base and stated that the City has a strong interest in ensuring that jobs at these establishments allow employees to meet their basic needs and achieve economic security. An overview of this onerous and extensive legislation follows.

Formula Retail Establishments

The new law applies to companies who employ 20 or more employees in 20 or more locations worldwide and who operate a Formula Retail Establishment in San Francisco. Other than the number of locations, “Formula Retail Establishments” borrow from the definition of “Formula Retail Use” in The San Francisco Planning Code and generally have standardized merchandise, facade, worker apparel, interior design, signage and/or trademarks. Of course retail stores are included, but so are many businesses that one would not commonly think of as retailers. For example, hotels, restaurants, bars, movie theatres, certain financial institutions, and “Property Services Contractors” such as janitorial and/or security services contractors. For a full listing, click here.

Part-Time Employee Preferences and Retention After Ownership Change

Under this new law, employers are generally required to: (a) offer additional hours of work to current part-time employees before hiring new employees or subcontractors; and (b) retain employees (i.e., by the successor employer) for 90 days upon change in ownership control of the business.

Initial Estimate of Minimum Hours

Prior to the start of employment, employers must provide new employees with a good faith estimate in writing of the employee’s expected minimum number of scheduled shifts per month, and the days and hours of those shifts. The estimate must not include on-call shifts. This is a non-binding estimate. It is not a contractual offer.

Two Weeks’ Notice of Work Schedules & Predictability Pay

Employers must give employees at least two weeks’ advance notice of employees’ work schedules. Changes on less notice requires employers to issue additional “predictability pay” for each previously scheduled shift that the employer moves to another date or time or cancels, or each previously unscheduled shift that the Employer requires the employee to come into work:

With less than seven days’ notice but 24 hours or more notice to the employee, one hour of pay at the employee’s regular hourly rate
With less than 24 hours’ notice to the employee, two hours of pay at the employee’s regular hourly rate for each shift of four hours or less
With less than 24 hours’ notice to the employee, four hours of pay at the employee’s regular hourly rate for each shift of more than four hours

There are exceptions to predictability pay requirements, such as an employer request that an employee work overtime or fill in for another employee who is out due to sickness or discipline.

Pay for On-Call Shifts

Employers must provide employees with the following compensation for each on-call shift for which the employee is required to be available but is not called in to work:

Two hours of pay at the employee’s regular hourly rate for each on-call shift of four hours or less
Four hours of pay at the employee’s regular hourly rate for each on-call shift of more than four hours

Equal Treatment to Part-Time Employees

Employers must generally provide part-time employees with equal treatment in the hourly wage, access to pro-rated time off, and eligibility for promotions.

Impact of Non-Compliance

The San Francisco Office of Labor Standards Enforcement (OLSE) is authorized to take appropriate steps to enforce and coordinate enforcement of this new law, including the investigation of any possible violations, and order any appropriate relief, including, but not limited to, requiring an employer to offer additional hours of work to part-time employees, reinstatement, penalties, payment of lost wages and the payment of an additional sum as an administrative penalty that does not exceed the amount of the award for lost wages. Further, to compensate the City for the costs of investigating and remedying the violation, the OLSE may also order the employer to pay the City’s enforcement costs.

Conclusion

While this new law will take effect in January 2015, it does not become operative until July 3, 2015. As such, employers affected by the Retail Workers Bill of Rights have some time to determine how to best comply. This is an opportune time to review with counsel your employment and hiring practices, including the manner in which your company schedules employee shifts and changes them to ensure compliance by July 2015.

Should you have questions about this alert, please contact the authors or any other member of Drinker Biddle’s Labor & Employment Group.

Proposed California Paid Sick Leave Law Will Require Employers to Provide Paid Sick Leave to Employees

Are you a California employer currently providing paid sick leave to your employees? You may soon have to! California Assemblywoman Lorena Gonzalez (D-San Diego) recently introduced legislation (Bill AB1522) approved by the Assembly Labor and Employment Committee requiring employers in the State of California to provide their employees with paid sick leave.

This bill would enact the Healthy Workplaces, Healthy Families Act of 2014 to provide, among other things, that an employee who works in California for 7 or more days in a calendar year is entitled to paid sick days to be accrued at a rate of no less than one hour for every 30 hours worked. An employee would be entitled to use accrued sick days beginning on the 90th calendar day of employment. And employers would be subject to statutory penalties as well as lawsuits, including the recovery of attorneys fees by the aggrieved employee against employers, for alleged violations.

It is important to note that this type of bill is not new in California, as the San Francisco Paid Sick Leave Ordinance became effective on February 5, 2007 and all employers must provide paid sick leave to each employee — including temporary and part-time employees — who performs work in San Francisco.

The California Chamber of Commerce as well as other employer groups are opposed to this bill and view it as a job killer.

Stay tuned….

Are You Ready For Your Company’s Holiday Party?

Many companies start planning their holiday party now. Employers need to know that an employer can be held liable for accidents and injuries caused by their employees who over indulge themselves with alcohol at the party, even if the employee initially made it home safely! You read that correctly. The California Court of Appeal, in Purton v. Marriott International, Inc., recently held that the company was potentially liable for a fatal motor vehicle accident caused by one of its employees who had attended the company’s hosted party. While the employee arrived home safely, the employee left about 20 minutes later to drive another co-worker home. The co-worker was also intoxicated. During this trip the employee struck another car, killing its driver. The trial court granted summary judgment for the employer on the ground that the employer’s potential liability under the doctrine of respondeat superior ended when the employee arrived home.

The court of appeal reversed and held that an employer may be found liable for its employee’s tortious conduct “as long as the proximate cause of the injury occurred within the scope of employment. It is irrelevant that foreseeable effects of the employee’s negligent conduct occurred at a time the employee was no longer acting within the scope of his or her employment.” The court explained that a jury could conclude that the proximate cause of the injury, i.e., the employee’s alcohol consumption, and the negligent conduct, i.e., the car accident, occurred within the scope of his employment. The court further found that the going and coming rule, which generally exempts an employer from liability for the torts of its employees committed while going to or coming home from their work, was an “analytical distraction” because the “thrust of [plaintiff’s] claim for vicarious liability was that [the employee] was an `instrumentality of danger’ because of what had happened to her at work.” As such, the court focused on the “act on which vicarious liability is based and not on when the act results in injury.” The court also stated that the record presented sufficient evidence for a finding that the employee in question breached a duty of due care he owed to the public once he became intoxicated and that the employer “created the risk of harm at its party by allowing an employee to consume alcohol to the point of intoxication.”

This case certainly gives the definition of “within the course and scope of employment” a broader meaning. That said, the moral of the story: (1) don’t drink and drive; (2) don’t let your employees do so either; and (3) limit your employees’ consumption of alcohol at company events.

Are Partners Protected by the Provisions of FEHA and/or Title VII?

According to the California Court of Appeal, a partner in a partnership is protected under the provisions of the California Fair Employment Housing Act (“FEHA”) if the partner complains that the partnership is retaliating against the partner because the partner complained about unlawful discrimination or harassment by the partnership against employees of the partnership. In Fitzsimons v. California Emergency Physicians Medical Group, the California Court of Appeal drew a distinction between a partner alleging discrimination, harassment or retaliation by the partnership against the partner versus the partner complaining that the partnership is retaliating against the partner because the partner complained about unlawful discrimination or harassment by the partnership against employees of the partnership. Say that again?

Here’s what happened in the Fitzsimons case. The plaintiff (a woman partner in the medical practice) claimed that she was retaliated against for reporting that certain male officers and agents of the partnership had sexually harassed female employees. So, the issue was not whether the plaintiff could sue the partnership for sexual harassment against herself as an employee, but whether plaintiff could sue the partnership as a non-employee based on retaliation for complaining that employees of the partnership were sexually harassed. The Court held that under the FEHA, the partner can maintain such an action, even though the partner is not deemed an employee of the partnership.

The Court drew a distinction between the provisions of Title VII and the FEHA by highlighting that Title VII and the FEHA differ significantly. The Court explained that Title VII prohibits employers from retaliating against employees or applicants for employment, whereas the FEHA prohibits employers from retaliating against any person who opposes or challenges unlawful employment practices, such as discrimination or harassment. In Fitzsimons, the plaintiff was regarded as “any person” who opposed harassment of female employees by the officers and agents of the partnership.

Moral of the story: just because a partner is not regarded as an employee of the partnership, the partner still can sue the partnership for retaliation under the FEHA. The case is attached here: Fitzsimons v. California Emergency Physicians Medical Group.

How ICE Can Freeze Your Business Operations!

ICE, the U.S. Immigration and Customs Enforcement, was formed in 2003 “as part of the federal government’s response to the 9/11 attacks and its mission is to protect the security of the American people and homeland by vigilantly enforcing the nation’s immigration and customs laws.” With an annual budget of more than $5 billion and more than 19,000 employees in over 400 offices in the U.S. and around the world, ICE is the largest investigative agency in the United States Department of Homeland Security. ICE may conduct raids or sweeps at a particular place of business. ICE can also send Notices of Inspections to employers to alert them that it will be inspecting their I-9s and hiring records to determine whether or not they are complying with employment eligibility verification laws and regulations. ICE’s increased focus is on holding employers accountable for their hiring practices and their efforts to ensure a legal workforce. ICE also seeks to ensure that employers are compliant with I-9 forms and hiring records.

In the event of audits or raids, employers’ non-compliance may result in civil penalties and lay the groundwork for criminal prosecution of employers who have knowingly violated the law. According to ICE’s Assistant Secretary John Morton, “ICE is focused on finding and penalizing employers who believe they can unfairly get ahead by cultivating illegal workplaces.” He added that ICE is “increasing criminal and civil enforcement of immigration-related employment laws and imposing smart, tough employer sanctions to even the playing field for employers who play by the rules.”

While the presence of illegal aliens at a business does not necessarily mean the employer is responsible, consulting with legal counsel is paramount to limiting your potential exposure in your hiring practices.