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California is like every other state in that it does not require employers to provide employees with paid time off.  Unlike in most other states, however, if an employer does provide employees with paid time off, then employees have a vested right in such time.  What this means is that employers are prohibited from enacting “use it or lose it” paid time off policies.  It also means that upon separation, California employers must pay out employees for any unused paid time off.

Due to these requirements, and to remain competitive with other employers, some employers have instituted “unlimited” paid time off policies whereby employees do not accrue any specific amount of vacation time but, rather, are free to take (or not take) as much (or as little) vacation as they want.  The commonly held belief amongst most employers is that such unlimited paid time off policies benefit employees by providing them with flexible schedules while, at the same time, allowing employers to avoid the obligation to pay out any unused paid time off upon separation.  In McPherson v. EF Intercultural Foundation (McPherson), the California Court of Appeal issued a shot across the bow to employers adhering to this commonly held belief by holding that the unlimited paid time off policy at issue did obligate the employer to pay out unused paid time off upon termination.
Continue Reading California Court of Appeal Issues Warning to Employers with Unlimited Paid Time Off Policies

The U.S. Department of Labor announced today that an estimated 1.3 million workers will soon be eligible to receive overtime or be in line for a raise. Effective January 1, 2020, the minimum salary threshold for the “white-collar” exemptions under the Fair Labor Standards Act will be $684 per week or $35,568 per year, an…

SB 123, just passed by the legislature and signed by Governor Brown, makes several amendments to Oregon’s pay equity law. Most notable are the revisions to the limited affirmative defense available to employers in litigation. The law previously provided employers a “safe harbor” from emotional distress and punitive damages if a lawsuit is filed,…

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 Are Employers Required to Pay Interns?

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

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

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…

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

Almost six months ago, the California Supreme Court issued its decision in Dynamex, which dramatically altered the landscape pertaining to the classification of California workers as either employees or independent contractors.  This past Monday, the California Court of Appeal issued one of the first decisions interpreting that seminal case.

In Dynamex, the California Supreme Court issued a new, employee-friendly test for determining whether a worker is properly classified as an employee or independent contractor for the purposes of claims brought under California’s wage order – the “ABC” test.  Under the ABC test, the burden is on the hiring entity to establish that the worker is an independent contractor.  In order to satisfy this burden, the hiring entity must establish all of the following:  (1) that the worker is free from the control and direction of the hiring entity in connection with the performance of work; (2) that the worker performs work that is outside the usual course of the hiring entity’s business; and (3) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Continue Reading California Courts Slowly Interpret Dynamex

The 2017 Oregon legislature passed a “secure scheduling” or “fair work week” law that imposes significant requirements on certain categories of large employers.  The law, available here, goes into effect July 1, 2018.  We previously blogged about the law here.

Are You a Covered Employer? 

The law applies to retail, hospitality, and food services employers with 500 or more employees worldwide. …
Continue Reading Oregon’s Secure Scheduling Law Goes into Effect July 1: Are You Ready?