Way back on October 10, 2019, California Governor Newsom signed Assembly Bill 51 (“AB 51”), which essentially made it unlawful for California employers to require workers or job applicants to execute arbitration agreements requiring them to waive their rights to sue in court for violations of the California Fair Employment and Housing Act or the
In Ferra v. Loews Hollywood Hotel, LLC, the California Supreme Court determined that the phrases “regular rate of compensation” and “regular rate of pay” are synonymous for the purposes of California Labor Code section 226.7(c) and the California Industrial Wage Orders. With this seemingly innocuous ruling, however, the Supreme Court has handed a potentially…
The California Supreme Court’s 2011 decision in Sullivan v. Oracle Corp. (“Sullivan”) and its more recent decisions in Ward v. United Airlines (“Ward”) and Oman v. Delta Air Lines, Inc. (“Oman”) provided employers with a certain amount of clarity in regard to non-California residents working within the State on…
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
With its decision last year in Dynamex, the California Supreme Court fundamentally changed the test for determining whether workers are properly classified as either employees or independent contractors. Specifically, and as for claims brought under the California wage orders, the Supreme Court adopted the “ABC test,” which involves an analysis of the following three factors: (1) whether the worker is free from the control and direction of the hiring entity in connection with the performance of work, (2) whether the worker performs work that is outside the usual course of the hiring entity’s business, and (3) whether the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. Since that time, California employers and various industry groups have been lobbying the California legislature left and right to take steps to either limit the ruling’s application or expand it.
Continue Reading California Legislature Moves to Codify Dynamex
Earlier this month, Starbucks scored an important procedural victory from the California Court of Appeals, which ruled that a class of employees lacked standing to sue over questions the coffee chain asked on its employment applications about prior marijuana convictions. Click here to read the opinion in Starbucks v. Superior Court.
Despite the apparent…