Summary Judgement

In state courts within California, any motion for a summary judgement has to be filed and served a minimum of 75 days prior to the date set for the hearing. Due to the fact that a motion needs to be heard one month before the scheduled date of the trial this essentially means that motions have to be filed and served 105 days ahead of the trial. It is also a requirement that cases should be tried no later than 12 months of being filed. This means that defendants (in our case employers) have little preparation time to request summary judgement as in order to obtain this the employer needs to provide evidence that they are not liable for the claim.

Choice of Law Provisions in Contracts

The California courts are able to validate choice of law provisions in contracts of employment ,but only as far as saying all of the other regulations are valid in accordance with state law. As an example, an ex-employee who has been let go because they refuse to sign any contract of employment which features an illegal clause such as a covenant not to compete could still raise a wrongful termination claim.

Class Actions for Wage & Hours Disputes

The regulations regarding wages and hours, which are set out by the federal Fair Labor Standards Act, or FLSA, tend not to be tried as a class action, instead they are enforced under collective action. However, collective action is only an option for employees who have opted in to the lawsuit.  California state law does however, allow either a single employee or a group of employees to file for class action as a spokesperson for all affected employees unless they request exclusion from the lawsuit. This enables even a single disgruntled employee to bring about costly litigation for your company regardless of whether other employees are unhappy. However, if the employer successfully defends the case then the cost can be recovered and this is often a hefty sum.

Unlawful Contracts

Under section 17200 of the Business and Professions Code, any business practices which are fraudulent, unfair or unlawful are strictly prohibited. Business practices may be considered as being unlawful if they violate state law in any way. One example might be where wage & hours regulations have been broken. It is this theory that is used by Californian courts, to allow employees to claim for unpaid wages, overtime and vacation time. This is the preferred method of suing for these types of claim as it allows the employee a much lengthier statute of limitations (four years) than a standard claim under the Labor Code (three years).

Private Attorney General Act

Under the Private Attorney General Act of 2004, any employee who claims that an employer has violated regulations regarding hours and wages against an employer can bring a civil action against the employer instead of relying on the state to raise action on their behalf.

At present, the following items must be included:

• Total gross earnings.
• Total of hours of work (this is not needed for salaried employees).
• Total units of piece rate earned where applicable.
• All deductions.
•  Total net earnings.
• Dates for which payment is being made.
• Employee’s name.
• The final 4 digits from the employee’s SSN.
• The employer’s name and registered address.
• All effective hourly rates and the total number of hours work completed at these rates.
• The details of at least one location in California where employer can cash their check as they must be available at banks which have one branch within the state

Deductions

There are heavy restrictions on employers deducting debt repayments or damages  from an employee’s wages. The employer is not permitted to deduct compensation from an employee’s wages to cover losses or damages due to the employee’s simple negligence. However, if gross negligence is proven then sufficient compensation can be deducted. The same applies to wilful misconduct or dishonesty. The employer must be able to proven that it is appropriate to make the deduction.  Employers cannot make deductions to recover unpaid debts such as loans or wage advances unless the deduction is agreed in writing by the employee.

Notice to Employees

All employees must be issued with a written notice stating the following:

• The applicable hourly rate(s) of pay.
• The way in which wages are calculated, which might include commission, hourly rate and  piece rate for example.
• The rate at which overtime is paid.
• The usual pay day.
• The employer’s name and address

If anything included in this written notice changes, then the employer must give notice to employees within one week of the changes.  This is part of the Wage Theft Employment Act.

Final Paychecks

When an employee departs a company, most state laws say that they should be given their final paycheck on the next usual pay date following their departure. Californian law states that this must include all wages owed and any accrued vacation time that remains unused. Rather than waiting until the next pay date, this is due on the day of termination provided that this is involuntary on the employees part. If the employee is the one to terminate, then the rules are a little different. If more than 3 days notice is given then they should be given on the final working day. If less than 3 days is given, then the employee should be paid with 3 days of giving notice.

Insurance

California based employers have no particular requirement to provide benefits to the domestic partners of their employees. However, the California Insurance Equality Act does require employers who offer health care plans and insurance policies to their employees to offer equal cover to registered domestic partners, just as they would with an employee’s spouse. It is appropriate for an employer to request proof of a domestic partnership before awarding the benefits, just as they might request proof of a marriage.

Additional Benefits

The provisions set out by the CFRA apply equally to domestic partners exactly as they would to spouses. An employee is entitle to leave under the CFRA to take care of their domestic partner. This doe not count towards FMLA leave entitlement and so that leave will remain available at a later date if the employee needs to take leave to take care of a close relative. This means that a domestic partner can actually take up to 6 months of leave whereas a spouse is limited to only 3 months. Properly registered domestic partners also qualify as  beneficiaries for Cal-Cobra.

Government Contracts

Any company in California which wishes to bid on government contracts worth in excess of $100,000 in a single fiscal year, including renewal of existing contracts, has to prove that they will not discriminate in terms of offering benefits to both married spouses and domestic partners.

Thanks to Dan Shulman from www.findtradeschools.com for contributing this article

Discrimination

California state law ensures that domestic partners are given equal rights, the same benefits and the same level of protection offered to spouses. FEHA forbids discrimination on the grounds of marital status and as a result no discrimination can be made based on a domestic partnership. This has not been tested in court, but in general terms a domestic partnership should be treated exactly the same as a marriage. It is acceptable for a company which employs both civil partners to decide not to put one partner under the other’s supervision or to employ both partners in the same team or department.

Protected Classes

Under the California Fair Employment and Housing Act, or FEHA, employers cannot discriminate against employees, or potential employees on the following grounds:

•   Age
•   AIDS or HIV
•   Disability
•   Genetic Characteristics
•   Marital Status
•   Medical Conditions
•   Pregnancy
•   Race or Nationality
•   Religion
•   Sex

In terms of discrimination on the grounds of sex, FEHA actually forbids differential treatment which is solely based on ‘actual or perceived gender or sexual orientation’. This essentially means  that employees cannot be discriminated against due to being, or suspicion of being, either gay, straight, bisexual or transgender. This also covers the fact that employees have a right to dress appropriately to their self-perceived gender provided that this meets company dress code and/or grooming. Therefore, as an example, a transgender male who identifies as female must be allowed to dress in female clothes within the company dress code.

FEHA also covers breastfeeding, in that employees should have unpaid breaks and a suitable location to breastfeed if required.

Harassment

California law requires that employers not only prohibit all forms of harassment, but that they also “take all reasonable steps necessary to prevent and correct harassment and discrimination.” This means that an employer can be held responsible in the event that a hostile working environment is created, perhaps by someone is a supervisory role. Liability for harassment covers all protected classes as listed above. Individual managers or supervisors can also be considered personally responsible depending on circumstances.

Employers can also be liable for harassment involving non-employees. For example, if a vendor or customer harasses an employee. If the employer knows of this harassment and fails to do enough prevent it then they must assume liability.

Policies and Training Regarding Harassment

Across the United States, employers can base defense against liability for harassment on an employee’s failure to use the correct procedure to register a complaint regarding the harassment. However, under California law, employers cannot escape all liability completely. If they took a  reasonable course of action to prevent or correct the harassment then they can reduce their level of liability, but they will still remain partly responsible. This is known as the ‘avoidable consequences doctrine’. As an example, a person who sustains injury by someone else’s inappropriate conduct cannot   be awarded compensation for damages if the injured party failed to avoid injury by reasonable means. This could be that the individual being harassed failed to inform the employer of the harassment meaning that corrective measures could not be taken. One way to ensure, as an employer, you have evidence of taking reasonable preventative steps is to carry out regular harassment training. Employers in California who have more than 50 employees are actually legally required to provide a minimum of 2 hours of interactive harassment training to supervisors every twenty four months, or no longer than 6 months after an employee takes on a supervisory role.

Types of Discrimination

There are many different types of discrimination, and it would be impossible to list them all here. The best course of action for any employer is to familiarize themselves with FEHA and ensure that you have a basic understanding of the policies which apply to you. Just a few of the various types of discrimination you may need to look at include:

•   Sexual favouritism
•   Age Discrimination
•   Disability Discrimination
•   Drug/Alcohol Rehabilitation

As an employer, you have a duty of care to ensure employees are safe and happy at work. With much stricter laws in California regarding discrimination, it is in your best interests to ensure that you are taking preventative measures and know how to react if any complaint arises.

Minimum Wage

California has the second highest minimum wage in all of the United States. As of 2012, this stands at $8 per hour which is slightly higher than the nationwide minimum hourly wage of $7.25. It is important to know this difference, especially if you are relocating your business from another state to California. You will need to factor in a wage increase for any employees working for minimum wage.

Thanks to Art Canebez from sell gold a local California business owner for his contribution

Overtime

Employees who work over 40 hours in a single working week must be paid overtime at 1.5 times their hourly rate. This also applies to employees who work more than 8 hours in a single work day. If they work more than 12 hours (or 8 hours on Sundays) then additional hours must be paid at ‘double time’ ie. Twice the regular hourly rate.

However, employees are able to choose an alternative weekly working schedule which will allow ten working hours each day within the usual 40 hours week without them earning overtime. However, employers have to get agreement from two thirds of the work force in order to implement and there are a number of criteria which must be met when using this schedule.

Employees Based Out of State

Since 2011, both the state and federal courts have been in agreement that any employee who is usually based out of state and comes to California to work for a complete day or longer must be paid overtime while working in California. It is not clear which other laws must be applied to these workers, but most businesses err on the side of caution and offer all benefits.

Meals & Rest Breaks

Employers in California are required by law to provide meal and rest breaks to all employees. The law only requires that employees have the opportunity to take these and to know that they have the opportunity. Meal breaks are an unpaid and uninterrupted period of at least half hour during which the employee is free to leave their place of work. The break must be offered before the employee works for more than five hours. Employees must also have a short, paid break from their duties for each period of four hours that they work. If these requirements are violated, the employer must pay an additional one hour wage to the employee.

This is not a comprehensive list of the legal requirements regarding wages and hours in California, but it should give you some idea of what is expected.

Let’s take a look at some of the main reasons why you should be seriously considering California as the new home for your business:

• Agricultural Prosperity
• Large Population
• Skilled Workforce

Agricultural Prosperity

It is well documented that central California is extremely prosperous when it comes to agriculture. This is one of the top reasons that a large number of businesses choose to relocate, or start up, in the state. It is expected that over the next decade, California will see a very impressive 85% growth in businesses making the state their home.  This steady growth rate is not only attractive to businesses, but also residents of the state making it a profitable scenario all around.

Large Population

There is a population of more than 35 million people across the state of California meaning that not only can businesses be guaranteed to find a varied work force, but also a strong customer base for most industries. The economy is able to support businesses of all sizes in a huge variety of niches and with the state government intent on assisting businesses wherever possible, there is a definite advantage over other states. California is in a constant state of growth and as a result the foreseeable future looks healthy for any businesses wishing to establish themselves here.

Skilled Workforce

As noted, the large population contributes to the availability of the workforce in the state, but in particular the skilled workforce is superior to that available in other states. California has some of the best colleges in the United States, producing highly skilled and motivated workers who are seeking long term employment with local businesses. There is also no shortage of unskilled workers, as California is popular among migrant workers.

These are just some of the many reasons why you should choose California for your business, many more can be found throughout the website. We can guide you through the various opportunities available to you and your business in the state of California.