Are Employers Required to Pay Interns?

Spring is in the air and summer is around the corner. You can see the signs everywhere. Flowers. Chirping birds. Increasing temperatures. And summer intern resumes. Experienced HR professionals know they will soon receive many resumes from eager students or recent graduates hoping to work as interns in order to gain valuable experience and networking opportunities. Often, intern candidates offer to work for free in exchange for the chance to gain experience in a job or industry.

Of course the idea, however enticing, of free labor should raise red flags. Many “for profit” business have run into trouble by failing to pay minimum wage and overtime pay to “unpaid interns” who the courts concluded were actually employees. Continue Reading

California Legislature Proposes Legislation Broadening Racial Discrimination Laws

On April 22, 2019, the California Senate voted unanimously to update California’s anti-discrimination laws to include within the definition of the term “race” “traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.”  If the bill ultimately becomes law, California would become one of the first states in the nation to prohibit racial discrimination because of hairstyles.

Both California and federal laws are replete with laws prohibiting discrimination on the basis of race and other protected characteristics.  While those laws have been extended to protect certain religious headwear, courts have generally been reluctant to broaden those laws to protect non-religious hairstyles due to the position that such hairstyles are voluntary and nonpermanent.  California Senator Holly Mitchell, a Los Angeles Democrat, introduced SB 188 out of a concern that this reluctance allowed the proliferation of employer grooming standards that disproportionally affect African Americans and equate acceptable workplace grooming with majority standards of beauty.

While the bill was introduced to address legitimate and reasonable concerns about discrimination and the existence of both explicit and implicit bias in the workplace, some employers and commentators have expressed concerns that this new law could lead to frivolous claims or restrict an employer’s ability to require workers to wear certain protective coverings in the workplace.

Regardless of where you may stand on this issue, SB 188’s unanimous passage in the Senate portends the passage of this bill into law.  If and when that happens, employers with operations in California should take steps to update their policies and handbooks to ensure compliance.  This would include rethinking any grooming polices requiring employees to alter the appearance of their hair to conform to traditional appearance standards.  As for non-California employers, they should also keep a careful eye on this bill’s progress due to California’s status as a trendsetter in the area of employee rights.

Modern Workforce Increasingly Challenges Employers to Offer Telework Option

A little over six years ago, Yahoo! CEO Marissa Mayer issued her edict (well, memo) kiboshing work-from-home arrangements, driving Yahoo! workers back to their desks and sending shock waves that reached far beyond affected employees.  Mayer’s mantra was that in order to be “one Yahoo!,” workers needed to be physically connected in the workplace.  Her ultimatum ground the notion of telecommuting at Yahoo! to a screeching halt:  Get back to the office or don’t let the door hit you on the way out.

With probably more fallout externally than internally, Mayer’s remote work ban generated much criticism (amid some praise) and has continued to draw scrutiny even years later.  Whether her move was brilliant or a fool’s errand, one universal lesson to be drawn is that companies need to think critically about whether and to what extent remote work arrangements make good business sense.  This is particularly true as the workforce continues to trend away from traditional employment concepts toward freelancing, consultants, and gig workers.  More and more workers expect, if not demand, flexibility, including the ability to telecommute for at least some portion of their workweek.  With limited exceptions, however, this is privilege not a right. Continue Reading

California Employers: Have You Complied with the New Training Requirements?

Effective January 1, 2019, employers that employ five or more employees in California must provide one hour of harassment and abusive conduct prevention training to all nonsupervisory employees, and two hours of such training to supervisory employees. This mandatory training must be provided by January 1, 2020, and once every two years thereafter.

Under the new law, “employee” includes migrant, temporary and seasonal employees. The training must be provided by trainers with knowledge and expertise in the prevention of harassment, discrimination and retaliation. It must cover specific topics, including abusive conduct, as well as harassment based on gender identity, gender expression and sexual orientation.

Now that this training is mandatory, failure to provide it as required will make an employer much more vulnerable to liability should an employee sue in court for sexual harassment. Where unlawful sexual harassment is found, ignoring the training mandates opens up an employer to punitive damages, which are often several times greater than the employee’s compensatory damages.

There may be a shortage of training programs available towards the end of the year as all employers rush to meet the deadline. We encourage you all to engage in a training program early to avoid the last minute scramble and the possible decline of resources.

Stoel Rives has developed a cost-effective training program that includes Spanish-language training. For more information on the training requirements and Stoel Rives’ employee training services, please contact Vida Thomas at (916) 319-4669 or vida.thomas@stoel.com.

Department of Labor Proposes Rule to Make More Employees Eligible for Overtime

On March 22, the Department of Labor (“DOL”) published a new proposed rule that would make several changes to current overtime law.  The proposed rule, which is not yet in effect, would require that:

  • Employees make at least $679 per week ($35,308 annually) to potentially be exempt from overtime. (The current requirement, which has been in place since 2004, is at least $455 per week or $23,660 annually.)
  • Employers be allowed to use nondiscretionary bonuses and incentive payments such as commissions that are paid at least annually to satisfy up to 10 percent of the salary threshold.
  • “Highly compensated employees” make at least $147,414 per year (compared with $100,000 under current law).
  • Going forward, the DOL commit to periodically reviewing and updating the minimum salary threshold (after a public notice and comment period).

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California Court of Appeal Significantly Broadens the Scope of Employees Entitled to Reporting Time Pay

Many classes of California workers are entitled to “reporting time pay,” which is partial compensation given to employees who go to work expecting to work a certain number of hours but are deprived of working the full time due to inadequate scheduling or lack of notice by the employer.  Prior to the California Court of Appeal’s decision in Skylar Ward v. Tilly’s, Inc. most employers understood that such pay was only required if the employee physically appears at the workplace.  In that decision, however, the Court of Appeal told those employers that they were wrong. Continue Reading

Washington Supreme Court Announces Zero-Tolerance Approach to Sexual Harassment in Places of Public Accommodation

The Washington Law Against Discrimination (WLAD) prohibits “places of public accommodation” from discriminating against their customers on the basis of several protected characteristics, including, without limitation, sex, race, national origin, and sexual orientation. Sexual harassment is one prohibited form of such sex-based discrimination.  Generally speaking, a place of public accommodation is any business that is open to the public.

On January 31, 2019, the Washington Supreme Court announced a new sexual harassment standard for places of public accommodation. In so ruling, the Court held that, under the WLAD, employers are “directly liable for the sexual harassment of members of the public by their employees, just as they would be if their employees turned customers away because of their race, religion, or sexual orientation.” Floeting v. Group Health, Inc., No. 95205-1. Continue Reading

California Employers: Ignore Piece-Rate Compensation Rules at Your Peril

A recent California Court of Appeal decision upheld the state’s complex rules for compensating piece-rate employees.  In Nisei Farmers League v. California Labor & Workforce Dev. Agency, 2019 Cal.App. LEXIS 10 (Cal.Ct.App. Jan. 4, 2019), the Court held that the Labor Code’s requirement that piece-rate employees be separately compensated for “nonproductive time” was not unconstitutionally vague.  With California’s “productive vs. non-productive time” rubric firmly in place, employers must take great care to track and compensate piece-rate employees’ time, or face stiff penalties.

What Does “Piece-Rate” Mean, And Why Might An Employer Choose It?

Piece-rate compensation plans are very popular in some industries.  They can incentivize employee productivity, while giving an employer greater control over labor costs. Under a piece-rate compensation system, the worker is paid a fixed amount of money for each unit produced or action performed, regardless of the number of hours worked. Industries that pay employees on a piece-rate basis include: Continue Reading

OSHA Web Alert: New Enforcement Policy Places Respiratory Hazards Under Employer’s “General Duty”

A new enforcement policy from the Occupational Safety and Health Administration (“OSHA”) states employers may face citations for subjecting their employees to hazardous air contaminants even if the levels are below or not covered by a permissible exposure limit.

This new enforcement policy comes from OSHA’s recent memorandum released to the public on December 7, 2018.  Prior to this memorandum, OSHA typically issued citations to employers when respiratory hazards exceeded permissible exposure limits at their places of employment.

With this new policy however, OSHA clarifies that it will also rely upon the “general duty clause” to issue citations against employers for respiratory hazards, even if the exposure levels are below legal limits. The “general duty clause” requires employers to provide their employees with “employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.”  29 U.S.C. § 654(a)(1).  To prove a violation of the “general duty clause,” an OSHA inspector must show:

  1. The employer failed to keep the workplace free of a hazard to which employees of that employer were exposed;
  2. The hazard was recognized;
  3. The hazard was causing or was likely to cause death or serious physical harm; and
  4. There was a feasible and useful method to correct the hazard.

If all four of those elements of the “general duty clause” are proven with sufficient evidence, OSHA may issue a citation against the employer for a respiratory hazard.

OSHA’s memorandum goes on to provide examples of what constitutes evidence for a respiratory hazard under each element of the “general duty clause” test.  Even if the elements of the “general duty clause” test are not proven and respiratory hazards exist, OSHA inspectors may issue a Hazard Alert Letter advising the employer that one or more employees are being exposed to a respiratory hazard.  The good news though is that a Hazard Alert Letter carries no fines or citations, offering the employer an opportunity to take remedial action.

While this change may place employers at additional risk for citations, it also signals OSHA’s desire to expand its enforcement methods beyond the decades-old permissible exposure limits mentioned in the memorandum.  These changes place more responsibility on employers to ensure their places of employment meet OSHA’s requirements.

Pay Equity: 10 Things for Oregon Employers to Do Before the End of the Year

Oregon’s new Equal Pay Act and “Pay Equity Analyses” are all the rage in Oregon right now. The majority of the Act’s new requirements go into effect January 1, 2019. Let’s talk about 10 things you should do before the end of the year to make sure you are in compliance with the law.

  1. If you haven’t already removed past compensation questions from your job applications, do so now. The Act makes it unlawful to ask job applicants (or their prior employers) about their current or past compensation until after a conditional job offer that includes the amount of compensation is made.
  2. Train your hiring managers not to ask applicants about current or past compensation. The Act requires employers to pay people based on the job they are (or will be) performing, not what they were paid by a previous employer. Employers must not ask applicants about their current compensation. You can, however, ask applicants about their salary and compensation expectations – but be careful to frame the inquiry to expectations, and be aware that a badly phrased question is a potential violation of this particular provision of the statute.
  3. Rethink salary negotiations – in Oregon, those might be a thing of the past (!). The Act requires employers to pay employees who are doing comparable work the same, unless there is “bona fide factor” to explain the difference such as a seniority system, a merit system, training or experience, or another factor expressly listed in the law. Unless tied to one of those listed factors, market demands or negotiating skills are not bona fide factors justifying a pay disparity.

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