Almost one year ago, the voters in this state elected Governor Jerry Brown to serve his THIRD term as Governor of California.  This was after his prior stint as Governor from 1975-1983 – a gap of almost thirty years between service.  Since his re-election, businesses have been on edge wondering what type of anti-business measures he would sign into law.  The California Chamber of Commerce was also on edge and immediately started monitoring the laws that could be classified as “Job Killers.”  The Chamber did an excellent job opposing these identified bills and were successful on most counts.

At the start of the busy bill-signing cycle in October, 2011, the Governor appeared to have seen the light and was briefly characterized as being diplomatic in his approach to businesses – particularly in this economic climate.  He vetoed several of the laws that he reviewed first.  Most critics and the Chamber were pleased by the early victories.  However, towards the end of the cycle, Governor Brown did stay true to his roots and sign into law a few very terrible and expensive laws for employers that on one end, limits the ability of an employer to select a qualified candidate, and on the other end, increases the costs of doing business in this state.  This Jekyll & Hyde behavior should be a call to all California businesses to stay on guard throughout the legislative process.

The following are a sampling of provisions enacted by Governor Brown:

AB 22 – Mendoza (D-Artesia) – Credit Checks

California has now decided to follow a growing trend in other states by barring employers from obtaining credit reports during the application process for many job positions.  Currently, employers are required to inform the prospective employee that a credit check might be performed, and get written consent.  But now, thanks to AB 22, employers cannot obtain or use the credit reports of its prospective employees for many positions.

The new law prohibits employers from using a consumer credit report for “employment purposes” except for certain types of job classifications.  The positions for which a credit report can be obtained during the hiring process include:

•  a managerial position;
• a position for which credit information is required by law;
• a position that requires regular access to bank or credit card account information, social security numbers, and date of birth;
• a position in which the employee would be a signatory on the employer’s bank account, or authorized to transfer money on behalf of the employer, or authorized to enter into financial contracts on behalf of the employer;
• a position that involves access to confidential or proprietary information, including trade secrets;
• a position that involves regular access to cash totaling ten thousand dollars ($10,000) or more of the employer, a customer, or client, during the workday; or
• certain financial institutions.

When an employer does intend to obtain a credit report during the hiring process, the employer must inform the applicant of the specific reason the employer is obtaining the report, meaning the provision set forth above that applies to the position.  This new requirement is in addition to the other requirements already imposed on employers under the Fair Credit Reporting Act and other similar laws.

SB 299 – Evans (D – Santa Rosa) – Health Insurance Coverage for Pregnancy Disability Leaves

Currently, employers with 50 or more employees are subject to the federal Family & Medical Leave Act as well as California’s Family Rights Act.  Both laws require that a covered employer continue to provide health insurance coverage to employee who must take a leave of absence for a serious health condition.  The right to have continued health insurance coverage extended for a period of three months for certain employees who have 1250 hours and 12 months of service.  Employers who were not covered by FMLA/CFRA, but had employees who needed to take a pregnancy disability leave, were required to provide up to four months of leave – but were not required to continue health insurance coverage because the costs to employers was previously consider too burdensome to impose on the smaller business.  Now, this new law requires that companies with 5 or more employees (no tenure requirement) provide continued health insurance costs for up to four (4) months – longer than what is required by FMLA or CFRA.

The financial burden on smaller employers is blatantly evident.  Employers with just a handful of employees must continue to provide health insurance coverage during a PDL leave, when one was not required before.  My fear is that this will cause some smaller employers to reconsider providing health insurance at all to their employees.  Accordingly, effective January 1, 2012, employers will have to revise their leave policies.

SB 459 – Corbett (D – San Leandro) – Independent Contractor Misclassification

This bill has now created an entire administrative scheme and additional causes of action for companies that engage the services of individual independent contractors.  If the individual is subsequently found to have been improperly classified as an independent contractor and that individual should have been classified as an employee, the contracting entity may be fined anywhere from $5,000 to $25,000 for EACH violation!

This new law is going to be difficult to comply with as differing state agencies utilize differing determinations of who is an independent contractor.  I have not seen clear guidance yet, but it would be my recommendation to comply with all of the tests concerning determining independent contractor status, in particular, the 11-point test utilized by the California Labor Commissioner.  If in doubt, classify any individual contracting worker as employee.  By all means, seek legal advice if you have any individuals who are currently being 1099’d for work.

SB 272 – DeSaulnier (D – Concord) Organ Donor/Bone Marrow Leave of Absence

Last year SB 1304 was enacted with relatively little fanfare.  This law added sections 1508-1513 to the California Labor Code.  SB 1304 created an additional leave of absence for employees of private organizations which entitled that employee up to 30 days of leave to donate an organ, and up to 5 days for someone to donate bone marrow.  This new law brings renewed attention to this new law and clarifies that the 30 days are business days and not calendar days.  This new law also clarifies that the time off cannot be seen as a break in service for pay increases or the accrual of benefits, including vacation and seniority.

AB 469 – Swanson (D – Oakland) California Wage Theft Prevention Act

Among the flurry of bills Governor Jerry Brown signed recently, the Wage Theft Prevention Act of 2011 (“Act”) imposes new requirements on California employers.  One significant provision now requires employers to provide non-exempt employees with a written notice, at the time they are hired, of various compensation information and information on the company.

In particular, Labor Code Section 2810.5 (as of January 1, 2012) will require that at the time of hiring, an employer shall provide each employee a written notice, in the language the employer normally uses to communicate employment-related information to the employee, containing the following information:

1. The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable.
2. Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances.
3. The regular payday designated by the employer in accordance with the requirements of this code.
4. The name of the employer, including any “doing business as” names used by the employer.
5. The physical address of the employer’s main office or principal place of business, and a mailing address, if different.
6. The telephone number of the employer.
7. The name, address, and telephone number of the employer’s workers’ compensation insurance carrier.
8. Any other information the Labor Commissioner deems material and necessary.
9. The Labor Commissioner is in the process of preparing a template that complies with the above requirements and estimates that the template shall be made available to employers by mid-December.

If an employer changes any of the eight items, it shall notify the impacted employees in writing of any changes within seven calendar days after the time of the changes, unless all changes are reflected on a timely wage statement furnished in accordance with Section 226; or notice of all changes is provided in another writing required by law within seven days of the changes.

This “New Hire Statement” applies to private, non-exempt employees but does not apply to public employees; exempt employees; or employees who are covered by a valid collective bargaining agreement.

The Act also requires employers to maintain records itemized wage statements and records of deductions for three years.  The Act also dramatically strengthens certain penalties and the enforcement powers of the California Labor Commissioner.  One particular provision now allows the Labor Commissioner to collect penalties and fees for up to three (3) years whereas the prior limit was one (1) year.

AB 1369 – Assembly Committee on Labor & Employment – Written Commission Agreement

The new law requires all employers doing business in California to draft written contracts for any agreements with employees that involve commissions as a method of payment for services. Commission wages are defined as compensation paid to any person for services rendered in the sale of an employer’s property or services and based proportionately upon the amount or value thereof.

The deadline for employers to reduce all commission agreements to writing is January 1, 2013.  In addition to outlining the commission plan in writing, employers must provide a signed copy of the contract to every employee covered by the commission agreement and obtain a signed receipt for the contract from each employee.  There are no penalties associated with a violation of the new statute but presumably it could be a basis for suit under California’s Private Attorneys General Act (PAGA) and Unfair Competition Law.  Accordingly we recommend commencing with the implementation as soon as possible.

Other laws have gone into effect, and we will attempt to provide guidance on more as the impact on businesses become clearer.  In conclusion, the start of Governor Brown’s tenure does not bode well for California businesses.   It is important to stay diligent in any and all advocacy efforts and work with your local, state and federal Chambers of Commerce or industry associations to protect the interests of businesses.

Dear Clients & Friends:
As you know we have a strategic relationship with the national employment law firm

Constangy Brooks & Smith (CBS). We would like to share CBS’s most recent Client Bulletin surrounding the implementation of Executive Order 13496, which requires government contractors to inform employees of their rights to form, join and support a union and to bargain collectively with their employer.

Please read the full article below and contact our office with any questions or concerns regarding how this regulation affects your company.

DOL ISSUES FINAL REGULATIONS REQUIRING FEDERAL CONTRACTORS TO POST “LABOR FRIENDLY” NOTICE

By Angelique Lyons
Port St. Lucie Office

May 25, 2010

The Department of Labor has issued Final Regulations implementing President Obama’s Executive Order 13496. The regulations impose two requirements on government contractors and subcontractors: (1) to post a specified notice of employees’ rights to join a union and engage in organizing activity; and (2) to include certain language in covered contracts and subcontracts. While the government calls the long-awaited Final Regulations “very, very balanced,” the required Employee Rights Notice is unquestionably “labor-friendly.” The new requirements go into effect on June 21, 2010.

The Employee Rights Notice

Under the new regulations, government contractors who have contracts that include the employee notice clause and are worth $100,000 or more must post the Employee Rights Notice. In addition, all subcontractors who have contracts that include the employee notice clause and are worth more than $10,000 must post the Employee Rights Notice at their worksites.

What does the Notice say?

The Notice specifically lists seven rights that employees have – six of those rights relate to joining unions and engaging in organizing activity. Only one of the enumerated rights states that an employee has the right not to join a union. Further, the Notice lists employer and union actions that are unlawful under the National Labor Relations Act, and tells employees how to report violations of the law.

Where can I get the Notice?

Employers must use the exact Notice as prescribed by the DOL. The Notice cannot be altered in size, color or content. The Notice can be obtained from the DOL website. Commercially available copies of the Notice in posters combined with other legal postings will be permitted, provided that the size, color and content of the Notice is not altered.

Where do I post the Notice?

The Notice must be posted conspicuously in and around the employer’s facility so that it is prominent and readily seen by employees. Specifically, the Final Regulations state that the Notice must be posted at each location where other notices to employees are posted and where employees covered by the NLRA perform activities relating to the performance of the government contract. Based upon this language, Constangy recommends that employers post the Notice in the following locations:

• Wherever other government postings are located.
• Wherever notices to employees of the terms and conditions of employment are located.

• Each separate and distinct part of the facility (e.g., manufacturing floor, packaging floor, warehouse, front office area).

What if I use electronic postings?

If an employer customarily posts notices to employees electronically, then the Employee Rights Notice must be posted electronically as well. To meet this obligation, the employer must prominently and conspicuously include the following language on its intranet or internet: “Important Notice about Employee Rights to Organize and Bargain Collectively with their Employers,” along with a link to the DOL website that contains the full text of the poster. This language and the link should be included on the employer’s intranet or internet in the same manner and location as other notices to employees.

What if my employees speak a language other than English?

If a “significant portion” of an employer’s workforce speaks a language other than English, then the Notice must be provided in that language as well. The term “significant portion” is not defined; however, if the employer has translated other policies and notices into a language other than English, this Notice should also be offered in that language. The DOL intends to offer the Notice in several languages so that contractors will be able to meet this obligation without too much trouble.

What about my old Beck Posting?

Neither E.O. 13496 nor the Final Regulations specifically state that an employer cannot continue to display its old Beck Posting, and therefore employers can continue to display it should they choose to do so.

Required Contract Language

In addition to posting the Employee Rights Notice, contractors with covered contracts must include the employee notice clause in all subcontracts greater than $10,000. The contract must contain either the entire language found in Appendix A to the Final Regulation or incorporate that language by specifically referring to 29 CFR Part 471, Appendix A to Subpart A.

Penalties for Non-Compliance

During an OFCCP review or upon receiving a complaint, the government will review a covered contractor’s compliance with both the posting and contract language requirements of EO 13496. If a contactor is found in violation of the Final Regulations, the government can initiate enforcement proceedings with penalties up to and including cancellation of the government contract(s) or debarment. Any substantive violations of the provisions of the Employee Rights Notice may constitute a violation of the NLRA and therefore will be referred to and adjudicated solely by the National Labor Relations Board.

Accordingly, Constangy urges all government contractors and subcontractors to review all contracts entered into after the effective date of the Final Regulations (June 21, 2010) and to immediately post the required Employee Rights Notice if they have any covered contracts. (Of course, contractors are free to post the Notice even if their contracts are not covered.) Contractors should also revise their covered subcontracts and purchase orders to include reference to the regulations. If you need assistance in implementing these requirements, please contact any member of Constangy’s Affirmative Action Practice Group or the Constangy attorney of your choice.

Constangy, Brooks & Smith, LLP has counseled employers on labor and employment law matters, exclusively, since 1946. A “Go To” Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by sources such as Chambers USA, Martindale-Hubbell, Super Lawyers, and Top One Hundred Labor Attorneys in the United States. More than 120 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Georgia, Florida, South Carolina, North Carolina, Tennessee, Alabama, Virginia, Missouri, Illinois, Wisconsin, Texas, California, Massachusetts and New Jersey. For more information, visit www.constangy.com.

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We are excited about the continued growth of our Firm.

You can find out more about Cliff here.

By Michael S. Lavenant.

For those of us who attended the Camarillo Economic Outlook Luncheon in November, 2009, we were reminded that Camarillo is a great place to work and live.  The local business economy is showing signs of rebounding and the real estate market is definitely looking bright.  The start of the new year typically brings with it some encouragement for businesses as they look forward to new opportunities for growth – coupled with a feeling of hope and optimism by consumers, customers, patrons and investors.

In addition to receiving positive news for Camarillo and our local economy, from a national perspective, there has also been some positive labor news.  In November, the US Department of Labor indicated that only 11,000 jobs were loss – 100,000 less than expected!  This report came on the heels of reports that the job loss estimates for September and October were too high – we loss 150,000 less jobs than anticipated

While the overall economic climate appears to be clearing on the horizon, the labor front always brings some clouds to employers.  In the past few years, we have had to deal with changes to the FMLA, ADA, workers’ compensation reforms, and sexual harassment prevention training.  This year, there are no big clear storms that we will have to weather.  However, that does not mean that it will always be sunny.  There are several storms brewing on the state and national level that could wreak havoc with our hopeful business growth and stabilization.  Here are few storms to consider in your forecast:

Health Care

The Obama administration and Congress are pushing for an overhaul of our present health care system.  As the plans stand at this early stage, employers may carry a large portion of the funding burden.

EFCA/Card Check

Traditionally, in order for an employer to face a union election, there has to be a secret-ballot election within 42 days only after the union has established a requisite percentage of interest by the employees.  Unions are pushing President Obama and the Democrat-majority Congress for major reforms that would eliminate the 42-day period and shorten the wait to 5-10 days.  It would also eliminate the need for a secret-ballot election.  If this law goes into effect, unions would be able to intimidate employees into signing authorization cards without giving them the complete story.  EFCA/Card Check is very bad for business.  The current systems works just fine.

Meal & Rest Periods:

The California Supreme Court is expected to reach its decision on a key case that will determine whether an employer must force an employee to take a lunch or rest break, or only make the break available.  The employers and employees desire flexibility, but plaintiffs’ attorneys are pushing for stringent rules that make it easier to file frivolous and expensive class actions for technical violations based on an employee’s voluntary decision to forego a lunch break for personal reasons, or to leave earlier in the day to spend time with their family.

FMLA/Leave Laws:

There are proposals to further amend the FMLA to require mandatory paid sick leave for up to 8 weeks, authorization for employee’s to take time off for a child’s extracurricular activities, and paid time off for doctor’s visits.

Hopefully the anticipated hurricanes of state and federal legislation fail to take fore, or at the most, become tropical depressions.  We will be updating the forecast as it develops.

Rev. Jan. 2010

We are pleased to announce that Corey A. Ingber has joined our firm as a partner effective May 1, 2009. Corey has been practicing workers’ compensation defense since 1981 and during the past 12 years has been active with the California Workers’ Compensation Institute and the Workers’ Compensation Research Institute.

Corey has extensive experience handling litigation for the defense side, including self-insured employers, third party administrators and insurers. From 1997 to 2009 Mr. Ingber was the Senior Vice President of Claims/Legal for the Zenith Insurance Company. There, he headed not only the Zenith legal operations in California and Florida, consisting of 12 offices, but he also developed litigation management systems, case management techniques and supervised the work of outside counsel, on a national basis. He is well known for his expertise in handling fraud-related issues, highly complex and difficult cases as well as his teaching, training and educational materials.

Our Firm can assist you with all your Employment, Labor & Workers’ Compensation matters including workers’ compensation claims if you are self insured or if your worker compensation carrier assigns the claims to our Firm.

We are excited about the future of our Firm. If you would like to know more about Corey, visit our website at http://www.landeggeresq.com/corey-ingber.htm The new name of the Firm is Landegger, Baron, Lavenant & Ingber, A Law Corporation.