Labor & Employment Law

MPC Legal can successfully represent it’s clients in all employment and workplace legal matters.  Employment Law covers a broad range of issues ranging from wage & hour disputes to discrimination and/or sexual harassment.  We’ve broken down the matters of employment law below to give you a better understanding of all that encompasses the area of practice and how it might relate to your matter or particular concern.  For a Free Case Evaluation, feel free to give us a call to discuss your matter in more detail at (818) 528-8700 or send us a message using our Free Consultation form.

Federal and state wage and hour laws and regulations are extremely complex and impact every employer and employee.  Employers and employees continually look to us to untangle and make sense of the maze of state and federal wage and hour rules and regulations that govern their conduct in the workplace.  Violations of these laws can result in significant liability for employers and entitle employees to recovery of damages.

WAGE & HOUR

• Failure to Pay Proper Wages

Employers must pay employees on time and at a proper rate for all hours worked by the employee.  California defines employer as any person, association, organization, partnership, business trust, limited liability company, or corporation who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person.  Wages are defined as all amounts paid for labor performed by employees of every description, whether amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation.  Wages also include benefits that an employee receives as a part of his or her compensation, including money, room, board, clothing, vacation pay and sick pay.  Rate of pay is the amount of compensation an employee normally earns for the work he/she performs.  The proper rate of pay includes minimum wage, overtime, or the agreed upon rate for the work to be performed.

Under California law, an employee who works over 8 hours a day must be compensated for that overtime at one-and-a-half (1.5) times the regular rate.  Where the employee works over twelve hours a day, the employee must be compensated at two (2) times his or her regular rate of pay.  If the employee works over forty (40) hours per week, then he/she must be compensated at one-and-a-half (1.5) times his/her regular rate of pay.  Finally, if an employee works on the seventh (7^th) consecutive day, then he/she must be paid one-and-a-half (1.5) times the regular rate of pay for the first eight (8) hours worked and two (2) times the regular rate of pay for any hours worked over the eight (8) hours.

Additionally, an employee is entitled to timely payment of wages (including his/her final paycheck).  Wages must be paid at least twice in each calendar month on designated days.  Wages must be paid immediately at the time of discharge, within seventy-two (72) hours if the employee quits (unless the employee has given notice seventy-two (72) hours in advance of quitting).

A corollary to paying proper wages is ensuring that an employer does not make improper payroll deductions from an employee’s wages.  Deductions to cover insurance premiums, benefit plan contributions or other deductions not amounting to a rebate on the employee’s wages must be made expressly and in writing.

Failure to pay proper and timely wages may subject the employer to a lawsuit and recovery of damages (including any outstanding wages, overtime premium, and penalties) for an employee.  For example, failure to pay the minimum wage entitles an employee to a claim for liquidated damages equal to the amount of the employee’s lost wages.  Moreover, an employee is entitled to waiting time penalties, which amounts to a full day of wages at the employee’s regular rate of pay for up to thirty (30) days.  Moreover, an employee is entitled to ten percent (10%) interest per annum for unpaid wages.  Finally, a successful wage claim can entitle an employee to attorneys’ fees.

• Failure to Provide Meal Breaks and Rest Breaks

Both state and federal laws mandate that employers provide employees with proper meal and rest breaks, during which they are prohibited from requiring employees to work.  While these rules may seem simple, complications arise because employers are only required to make breaks available; however, employees themselves are not required by law to take them.  Nonetheless, the onus is on employers to document employees’ times, including meal breaks taken, and not doing so properly can expose employers (and entitle employees) to damages.

Under California law, employers must provide on-the-clock ten (10) minute rest break for every four (4) hours worked or “major fraction” thereof.  Employers must also provide thirty (30) minute uninterrupted, duty-free meal break for every five (5) hours worked by an employee.  An employee can opt-out in writing and waive the thirty (30) minute meal break if employee will complete their work in six hours.  In limited circumstances, if nature of employee’s duties prevent employee from being relieved of all duty, employee may be authorized to take an “on-duty meal period.”

The penalties for failing to provide such breaks can be significant and include premium payments for each missed rest or meal break.  Violations may also implicate unpaid wage claim because the employee may actually be working more than eight (8) hours a day or forty (40) hours a week. Hence, the employee would be entitled to recover unpaid overtime wages.

• Failure to Provide Accurate Itemized Wage Statements and Paycheck Requirements

Employers are required by law to provide employees with accurate wage statements along with their paychecks.  Accurate itemized wages statements must reflect an employee’s: gross wages, total hours, all deductions, net wages, inclusive dates of pay period, employer’s full name and address, and all applicable hourly rates in effect during pay period and corresponding number of hours worked.  Moreover, an employer must retain an employee’s pay stubs and time records for at least three (3) years.

Failure to provide accurate itemized wage statements exposes employers to statutory penalties and entitles employees to recovery of damages.  For example, for wage statement violations, and employer may be liable: fifty dollars ($50) for the first violation and one hundred dollars ($100) for every subsequent violation, up to a maximum penalty of four thousand dollars ($4,000).

• Misclassification

Employee misclassification is another complex and nuanced area of wage and hour law that requires special expertise to navigate.  Often employers mistakenly misclassify a worker as an independent contractor.  However, legal determination of employment status is not based on whether the parties believe they have an employer-employee relationship.  The burden is on the employer to prove that the worker is an independent contractor.  The risk of misclassification is significant as it implicates other employment rights such as expense reimbursement, meal breaks and rest breaks.   On the employer’s end the risk of misclassification is significant because it exposes an employer to additional damages.  As to a misclassified employee, he/she may be entitled to a significant recovery of damages.

As explained further below, whether a worker is an employee or independent contractor is a fact intensive inquiry governed by a number of factors which must be balanced and considered together.

In California, pursuant to AB5, codified in Labor Code section 2775 et seq., a worker will be presumed to be an employee unless the employer can show that the work meets the requirements of Dynamex Operations West, Inc. v. Superior Court (Dynamex).  Dynamex established the ABC Test to be used to determine whether a worker in California is an employee or independent contractor for the purposes of the Labor Code, the unemployment Insurance Code, and the Industrial Welfare Commission (IWC) wage orders. The ABC Test asks: (A) Is the worker free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; (B) Does the worker’s “job” fall outside the hiring entity’s core business; and (C) Does the worker have an established independent trade, occupation, or business of the same nature as that involved in the work performed?  The more control an employer has over the individual, the more likely it is that they should be classified as an employee.

AB2257, also codified in Labor Code section 2775 et seq., carves out some exceptions to AB5.  AB2257 clarifies the business-to-business, referral agency, and professional services exemptions to the three-part ABC test for employment status and exempts additional occupations and business relationships.

• Private Attorneys General Act (PAGA)

The California’s Private Attorneys General Act (PAGA) (codified at Labor Code section 2698, et seq.) allows for an employee to act as a private attorney general.  In other words, PAGA allows for an “aggrieved employee” to pursue a civil lawsuit on behalf of himself/herself, other aggrieved employees, and the State of California, to collect civil penalties that would have been assessed and collected by the Labor and Workforce Development Agency (“LWDA”).  PAGA claims cannot be waived by an arbitration agreement.

A PAGA lawsuit is a “representative action” as opposed to a class action.  Therefore, an aggrieved employee does not have to meet the class action requirements.  If an employee intends to file a PAGA case, he/she must follow the requirements set for in Labor Code section 2698, et seq.  An employee who prevails in a PAGA action may recover damages and his or her reasonable attorneys’ fees and costs.

An employer with a substantial workforce facing a PAGA lawsuit may be susceptible to significant damages by way of PAGA penalties.  This is because for Labor Code violations that do not provide for a specific civil penalty, PAGA imposes a one hundred dollars ($100) fine for each aggrieved employee per pay period for the first violation and a two hundred dollars ($200) fine for each aggrieved employee per pay period for each subsequent violation.  Where a penalty is provided by the Labor Code, PAGA may still prescribe these penalty rates.

EMPLOYMENT LAW

• Discrimination Based on Protected Categories

California’s Fair Employment Housing Act (“FEHA”) applies to public and private employers, labor organizations, and employment agencies.  Under FEHA, an employer is any person regularly employing five or more employees, including part-time employees.  An employee is any individual under the direction and control of an employer “under any appointment or contract of hire or apprenticeship, express or implied, oral or written.”

FEHA prohibits an employer from discriminating against a protected individual based on: race, religious creed (including religious dress and grooming practices), color, national origin, ancestry, physical or mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, sexual orientation, military and veteran status, age (if 40 or over), or pregnancy, childbirth, breastfeeding or related medical conditions of any female employee.

Discrimination claims can arise out of: disparate treatment (treating some people less favorably than others because of a protected characteristic); (2) disparate impact (employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by a business necessity); and (3) failure to accommodate (which arises out of employers’ statutory duty to accommodate specified characteristics, including religious beliefs, physical and mental disabilities, and certain conditions related to pregnancy and childbirth).

To be actionable, discriminatory conduct must result in an adverse employment action.  The discrimination must adversely and materially affect the terms, conditions, or privileges of an employee’s employment.

Under FEHA, remedies an employee could be entitled to include any of the following: back pay (past lost earnings); front pay (future lost earnings); hiring/reinstatement; promotion; out-of-pocket expenses; policy changes; training; reasonable accommodation(s); damages for emotional distress; punitive damages; and/or attorney’s fees and costs.

In addition to state laws that govern discrimination in the workplace, numerous federal laws inform the issue of discrimination in the workplace.  For example, Title VII governs discrimination based on race, color, national origin, sex or religion.  The Americans with Disabilities Act (ADA) prohibits discrimination against employees and individuals who are disabled or regarded as having a disability.  The Pregnancy Discrimination Act covers discrimination based on pregnancy, childbirth and related medical conditions.

• Sexual Harassment

Our team of labor and employment experts regularly help clients address and resolve complex and highly sensitive issues presented by sexual misconduct and workplace harassment claims.  Sexual harassment can occur in several different ways.

FEHA prohibits “harassment” on the basis of “sex,” “gender,” “gender identity,” “gender expression” or “sexual orientation” (or race, religious creed, color, national origin, ancestry, physical or mental disability, medical condition, genetic information, marital status, age or military and veteran status).  Harassment may also qualify as “discrimination” under FEHA.  The California Supreme Court has defined FEHA “harassment” as “conduct outside the scope of necessary job performance, conduct presumably engaged in for personal gratification, because of meanness or bigotry, or for other personal motives.”

Under FEHA an employer has a duty to prevent harassment. In other words, the employer must take “all reasonable steps necessary to prevent discrimination and harassment from occurring.”  The laws protect: job applicants, independent contractors, unpaid interns, volunteers and employees.  These laws apply irrespective of the number of employees.

There are various types of harassment: (a) verbal harassment, which may include epithets, derogatory comments or slurs (or repeated romantic overtures, sexual comments and jokes or prying into one’s personal affairs); (2) physical harassment, consisting of unwanted touching, rubbing against someone, assault and physical interference with movement or work; and/or (3) visual harassment, such as derogatory cartoons, drawings, posters and/or lewd gestures.

Sexual harassment is generally broken down into two categories: quid pro quo harassment and hostile work environment. Quid pro quo harassment occurs where the employee is subjected to sexual conduct that is linked to the grant or denial of job benefits.  Hostile work environment is created where the sexual conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile or offensive working environment.

Persons whose conduct may be deemed to create a hostile environment are: supervisors, coworkers, or even non-employees, such as an employer’s customers or clients, who engage in inappropriate sexual conduct (verbal or otherwise).  An employer may be liable for the conduct of others if he/she/it knew or should have known of the harassment and did not promptly investigate and respond to the charge, and, if necessary, take remedial action to correct the harassment.

As of January 1, 2021, an employer having five or more employees must provide: (a) at least two hours of training regarding sexual harassment to all supervisory employees, and (b) one hour of training to all nonsupervisory employees within six months of their assumption of position and every two years after that.

Any training must explain:

• the definition of sexual harassment under FEHA;
• the statutes and case-law prohibiting and preventing sexual harassment;
• the types of conduct that can be sexual harassment;
• the remedies available for victims of sexual harassment; strategies to prevent sexual harassment;
• supervisors’ obligation to report harassment;
• practical examples of harassment;
• the limited confidentiality of the complaint process;
• resources for victims of sexual harassment, including to whom they should report it;
• how employers must correct harassing behavior;
• what to do if a supervisor is personally accused of harassment;
• the elements of an effective anti-harassment policy and how to use it;
• and “abusive conduct” under Gov. Code section 12950.1(g)(2).

Any training must discuss harassment based on gender identity, gender expression, and sexual orientation, which shall include practical examples inclusive of harassment based on gender identity, gender expression and sexual orientation.

FEHA regulations also provide that employers with five or more employees must develop a written harassment, discrimination and retaliation prevention policy.  The policy must contain the following:

• a list of all protected categories under the FEHA (race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, and military and veteran status);
• a statement that the law prohibits unlawful harassment, discrimination and retaliation by supervisors, managers, coworkers and third parties;
• a description of the complaint process;
• an instruction to all direct supervisors to report any complaints of violations to a designated company representative, such as human resources, so the company can try to resolve the complaint internally;
• a statement that if, at the end of the investigation, misconduct is found, appropriate remedial measures shall be taken; and
• a clear statement that employees shall not be retaliated against as a result of lodging a complaint or participating in any workplace investigation.

Employers must give employees a copy of the policy in a manner that ensures receipt.  Also, the policy must be translated into every language that is spoken by ten percent (10%) or more of the workforce.

• Retaliation Against Employee Whistleblowers

State and federal law prohibits employers from retaliating against employees who report or oppose illegal activity (or what the employee believes to be illegal activity) in the workplace.  In other words, the law protects what is termed as “whistleblower activities.”

Numerous California statutes protect “whistleblowers” from retaliation.  The first of these statutes is Labor Code section 1102.5, which:

• forbids retaliation if the employee disclosed, or the employer believes the employee disclosed or may disclose, information to certain government agencies, to those with authority over the employee or authority to investigate, discover, or correct the employer’s “violation or noncompliance,” or
• for providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry
• if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.

A whistleblower’s motivation for reporting is irrelevant, as all the law requires is that the whistleblower have a reasonable suspicion of a violation of a constitutional, statutory, or regulatory provision has occurred.  Furthermore, whether the employer is actually violating the law is irrelevant.  Finally, a whistleblower may be entitled to use confidential company documents to expose employer wrongdoing.

An employee who is subjected to an adverse employment action (e.g., termination, demotion, reassignment, reduced pay, benefits termination, negative performance reviews and declination of a promotion) by his/her employer for engaging in whistleblower activities may be entitled to several remedies, including compensatory damages, reinstatement with benefits, and statutory penalties assessed against the employer.

Another whistleblower statute is Health & Safety code section 1278.5.  It provides that health care facilities (e.g., hospitals, etc.) may not discriminate or retaliate against any employee (or patient or member of its medical staff) for presenting a grievance or complaint to an accrediting agency or other governmental entity, or for cooperating in an investigation or proceedings related to the quality of care, services, or conditions at the facility.  The statute also prohibits retaliation against an employee who complains to an employer or to a government agency about unsafe patient care or conditions.  Persons protected against discrimination or reprisal include: “patients, nurses, members of the medical staff, and other health care workers” who “notify government entities of suspected unsafe patient care and conditions.”

Federal whistleblower statutes such as the  Federal False Claims Act (31 U.S.C. § 3729, et seq., California counterpart is California False Claims Act codified at Cal. Gov. Code § 12650, et seq.) allows employees to bring a Qui Tam action against any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” and any person who “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.”

Specifically, a private party called a Relator brings an action on the government’s behalf.  The government is considered the real plaintiff.  If the government succeeds, the Relator takes a portion of the award.  The False Claims Act provides for a civil penalty of not less than five thousand dollars ($5,000) for each “false claim” made to the government plus three (3) times the amount of damages which the Government sustains because of the act of that person and costs of the civil action.

• Wrongful Termination in Violation of Public Policy (“Tameny” Claim)

In California, employment relationships are presumed to be “at-will” unless expressly stated otherwise by contract (written or verbal).  At-will employment means that the employer may terminate an employee without any cause, whereas an employment based on specific contractual terms can only be terminated for (a) willful breach of duty, (b) habitual neglect of duty, and (c) continued incapacity to perform duty.  Furthermore, both employers and employees should be aware that in the absence of express agreement of “at-will” employment, there may exist a rebuttable presumption of an implied-in-fact promise not to discharge without good cause.  Implied-in-fact terms can be developed over the course of the employment relationship and are not necessarily fixed by the parties’ understanding at the time of employment.

An exception to the presumption of “at-will” employment may be a tort cause of action for wrongful termination in violation of public policy (aka Tameny Claim).  Under this claim, an employee has a common law right to sue for wrongful termination if he/she is fired or subjected to other adverse action for unlawful reason(s) or a purpose that violates public policy.  A Tameny claim allows employee to collect tort damages; in other words, it is not limited to the remedies provided in the underlying statute(s) supporting these claims.

Any of the following activities by an employee will support a Tameny claim if the employee was subjected to an adverse employment action as a result: refusing to violate a statute, performing a statutory obligation, exercising a statutory right, and/or reporting a statutory violation.

• Leave Laws

The types of leaves guaranteed by statute include: (a) illness or injury-based leaves, such as the California Family Rights Act (CFRA) and California Pregnancy Disability Leave Law (PDLL) and (b) leaves to care for family members, such as the California Family Rights Act (CFRA), New Parent Leave Act (NPLA) and California Paid Family Leave (PFL).

The California Family Rights Act (CFRA) applies to those employers who employ fifty (50) or more persons.  CFRA leave is allowed for any combination of the following reasons:

• a serious health condition of employee;
• a serious health condition of a child, spouse, registered domestic partner or parent;
• the birth of a son or daughter;
• the adoption and placement of a son or daughter for foster care;

“Serious health condition” means “an illness, injury, impairment, or physical or mental condition of the employee or a child, parent, or spouse of the employee that involves either inpatient care or continuing treatment, including, but not limited to, treatment for substance abuse.”

To be eligible for CFRA leave, an employee must be: employed at least 12 months as of the date leave commences; employed at least 1250 hours of service during 12-month period commencing before the leave; and employed at a worksite where the employer employs at least 50 employees within 75 miles.  An employer must notify employees of their family and medical leave rights via posting requirements. It is an unlawful employment practice for a covered employer to interfere with, restrain, or deny the exercise of any rights under the CFRA.

The California Pregnancy Disability Leave Law (PDLL) applies to employers with five (5) or more employees.  Under the PDLL an employer is required to provide:

• leaves of up to four months due to pregnancy, childbirth or related medical condition;
• transfer affected employees under appropriate circumstances; and
• reasonably accommodate employees for conditions related to pregnancy, childbirth, or related medical condition

• Following PDLL leave, an employee may have a full 12 workweeks of CFRA leave available (e.g., for childcare leave) less any CFRA leave taken for reasons other than pregnancy disability during the leave year in question.

The New Parent Leave Act (NPLA) covers employees working for employers with twenty (20) or more employees within seventy-five (75) miles of the employee wishing to take up to twelve (12) weeks for baby-bonding leave within one year of the employee’s child’s birth, adoption, or foster care placement.  Employees are eligible to take NPLA leave if they have worked for an employer for twelve (12) months, have at least one thousand two hundred fifty (1,250) hours of service with the employer in the prior twelve (12) month period, and who work at a worksite in which the employer employs at least twenty (20) employees within (75) miles of the employee.  If employee eligible to take CFRA leave, cannot take NPLA leave.

California Paid Family Leave (PFL) provides for payments from the State Disability Fund for wage loss of employees who take time off work to care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling or domestic partner, or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.  PFL leave applies regardless of whether employee qualifies for CFRA leave.