California Employer Alert: Proskauer Partner Offers Insights on Recent Developments

Author: David B. Weisenfeld, XpertHR Legal Editor

November 27, 2013

California has long been among the most active states when it comes to employment law. That reputation held true in 2013. Anthony Oncidi, head of the labor and employment law group at the Los Angeles office of Proskauer Rose, recently appeared on an XpertHR podcast to discuss recent changes in the law plus other key challenges affecting California employers.

What is the biggest challenge facing HR in California today?

Without hesitation, Oncidi says disability accommodations present HR departments with one of their most daunting tasks. "Reasonable accommodations become particularly complicated when an employee exhausts his or her leave under the Family and Medical Leave Act or the California Family Rights Act, but then requires additional time off," he explains. "This becomes even more challenging when the employee seeks to extend a leave of absence with successive medical certifications."

Oncidi warns that HR employees must tread carefully in these situations when trying to determine the appropriate course of action. To illustrate his point, he cites a California case where an employer was successfully sued for disability discrimination and wrongful discharge after firing an employee following numerous extensions of her almost nine-month medical leave - despite the fact that the employee had submitted a doctor's note stating she was "unable to peform work of any kind." Nadaf-Rahrov v. Neiman Marcus Group, 2008 Cal. App. LEXIS 1418.

"This is the world of 20-20 hindsight," Oncidi notes. "No matter what it is that the employer does, an employee and/or counsel can say something more should have been done, or could have been done, that wasn't done."

The Los Angeles employment attorney also calls wage-and-hour compliance an area with countless hazards waiting to trip up HR professionals in the Golden State. "Failure to comply to the letter with each and every one of California's nine specific itemized wage statement requirements can spawn costly class action lawsuits against an employer."

Have there been any notable new California laws or high court rulings in the last nine months that will have a big impact on the workplace?

Oncidi cites California's expansion of paid family leave in 2013, with SB 770 as an especially significant development. "What the legislature has done is expanded the list of relatives that an employee may take time off to care for if that relative is seriously ill," said Oncidi. "Now the expanded list will include grandparents, grandchildren, siblings and parents-in-law." Previously, eligible workers could obtain paid family leave benefits to care for seriously ill spouses, domestic partners, children and parents.

Also of note, California is now set to become the first state in the nation to increase its minimum wage to $10 per hour. The state's minimum wage currently stands at $8 an hour. That figure will increase to $9 per hour on July 1, 2014 and again to $10 per hour on January 1, 2016. That means there will be a 25 percent hike as a result of a new law.

Other key legislative developments include:

  • A new law preventing private employers from asking job applicants about expunged convictions after January 1, 2014.
  • The California Fair Employment and Housing Act now protects active military members or veterans from discrimination, harassment and retaliation.
  • A new requirement that employers to pay "personal attendant" employees time-and-a-half for each hour worked beyond nine hours in one day, or 45 hours in one week, effective January 1, 2014. "Personal attendant" is defined as anyone "employed by a private householder, or a third-party employer recognized in the health care industry, to work in a private household to supervise, feed or dress a child, or a person who by reason of advanced age, physical disability or mental deficiency needs supervision."
  • A new law providing that employees need not exhaust their administrative remedies before bringing a whistleblower lawsuit.
  • A new San Francisco "family-friendly workplace ordinance" that requires employers to provide a bona fide business reason for rejecting an employee's request for a flexible work arrangement.

Meanwhile, Oncidi says the California Supreme Court's ruling in Sonic-Calabasas A v. Moreno, 2013 Cal. LEXIS 6340 (Cal. Oct. 17, 2013), upholding an arbitration agreement, will have a meaningful impact on employers. In that case, the state high court held that an arbitration agreement imposed as a condition of employment is not rendered unconscionable (i.e. illegal) just because an employee waived the right to a hearing before the California Labor Commissioner to assess a wage claim.

Are there any bills and/or proposed rules currently pending in California (or Congress) that are likely to pass and that would have a big effect on HR?

The California Senate and Assembly have bills pending regarding flexible working hours. According to Oncidi, if either bill passes, employees would be permitted to request a flexible workweek, such as a four-day workweek where the employee works 10 hours per day. He calls the bills a "win-win for employees and employers" because they would provide the flexibility that many employees seek, while also garnering support from HR groups.

On the federal level, the legislative landscape is murkier. The Employment Non-Discrimination Act (ENDA) has passed the Senate. It would add sexual orientation and gender identity to the list of protected categories under federal law. President Obama supports the legislation, but Oncidi notes that ENDA faces an uncertain future in the House of Representatives.

Are there any notable labor and employment enforcement trends to watch in California?

Independent contractor misclassification heads the list. "In the past few years, the US Department of Labor and the IRS have added more than 200 investigators who are dedicated to independent contractor misclassification," says Oncidi. "Meanwhile, in California the legislature increased the penalties for improper classification in 2012, imposing civil penalties from $5,000 to $25,000 per violation and requiring businesses to publicize violations on their company websites."

The Proskauer Rose employment attorney adds that government agencies are not the only ones focused on this issue. The plaintiffs' lawyers have "increased the number of class action lawsuits that allege misclassification of employees, a number of which have resulted in seven-figure settlements," he says.

What is the number one mistake you see employers making today?

In terms of mistakes, Oncidi reiterates the way employers deal with disability accommodations once other leaves have been exhausted. Stressing the point, he says "This is an area that can create serious liability for the employer." That's why, Oncidi adds, it is crucial that employers engage in the interactive process with the employee and consider providing more leave as a reasonable accommodation before making any termination decisions.