Two court decisions provided a late 2016 lump of coal for employers in California who are sued over a failure to provide paid rest periods.
Governor Brown’s appointees to the California Supreme Court awarded plaintiffs’ attorneys and their clients a December 22 gift in the case of Augustus v. ABM Security. Plaintiffs were security guards who were allowed to take rest periods, but required to keep their portable radios turned on to respond to calls. The court held that keeping the radios on meant that the guards were still under the control of the employer. Because they were not relieved of all duties, the rest period requirement was violated, even if the guard received no calls during the break.
In another troubling rest period decision, a federal court has imposed a double penalty on a piece rate employer: The court ruled (no surprise) that the employer had to reimburse employees for all of their rest periods. In addition, the court held that, even though it was undisputed that all rest periods were provided, the employer was also liable for the one additional hour of pay, the rest period premium, for each day the employer did not adequately pay for the rest periods.
This court decision in Amaro v. Gerawan was responding to a motion for reconsideration on class certification. The court found that not paying for a rest break (assuming that the piece rate system covered rest periods) was the equivalent of not providing a rest break “in accordance with the Wage Order.”
It remains to be seen whether the defendant will appeal this unprecedented decision. Fortunately the window of opportunity for rest period litigation for piece rate employees has been closed by AB 1513 and its safe harbor.
Minimum Wage Rise
The minimum wage will rise to $10.50/hour for employers with 26 or more employees on January 1, 2017. Employers with 25 or fewer employees will see this increase in 2018. Both sizes of employers will see an annual $0.50 per hour increases until the rate reaches $15.00/hour.
The Department of Industrial Relations has issued FAQs on the new minimum wage laws at http://www.dir.ca.gov/dlseSB3_FAQ.htm. Employers whose workforce may rise above 25 including exempt employees will have to pay the higher rate and may consider implementing it right away to avoid future issues.
The DLSE also has this warning for small employers about using staffing agencies or labor contractors:
“…An employer who obtains workers through a staffing agency, [or] labor contractor … should aggregate such workers, along with other direct hire workers, as employees for determining the applicable minimum wage rate.”
The higher rate will also require an increase in the minimum salary for exempt employees to $840.00 per week (twice the minimum wage x 40 hours).
Overtime for Ag Employees
A number of prominent agricultural employment attorneys (including NHEH attorneys) have been discussing the coming loss of some ag exemptions in the Labor Code. Ventura County Ag Association’s General Counsel Rob Roy has summarized the consensus of this group in a bulletin to his members. The following is excerpted from Mr. Roy’s VCAA bulletin:
“AB 1066 (Overtime for Ag employees) will reduce the standard sixty hour work week in agriculture to forty hours over a four year period commencing July 1, 2019, phasing down the daily overtime requirement of overtime after ten hours to eight hours effective January 1, 2019. The foregoing provisions apply to only those employers who employ 26 or more employees. Employers who employ 25 or fewer will be subjected to these new requirements on January 1, 2022, with a four year phase-in period.
In addition to reducing the overtime requirements, the statute also repealed many exemptions enjoyed by agriculture from provisions of Chapter 500 of the California Labor Code under AB 60.
Seventh Day of Work
For example, Labor Code § 551, states that “every person employed in any occupation of labor is entitled to one days rest therefrom in seven”. Also, Labor Code § 552, states “no employer of labor shall cause his employees to work more than six days in seven”. Both of these sections which previously excluded agriculture are now in play as of January 1, 2017.
What does this mean for agricultural employers? It appears that agricultural employees as defined in IWC Wage Order 14-2001, Section 2, may not be “compelled” to work on the seventh consecutive work day in the work week. This is the current interpretation of Section 552 among most of the Ag Industry’s labor law attorneys (including NHEH attorneys).
It should be noted that the meaning of this language is currently before the California Supreme Court in the case of Mendoza v Nordstrom which will be argued on February 2, 2017. The California Supreme Court will interpret the meaning of the word “cause” as to whether it means “force, coerce, pressure, schedule, encourage, reward, permit, or something else.” Obviously, there is a great deal of difference between “force” and “permit.”
Until the California Supreme Court decides this question, the foremost issue in the minds of agricultural employers is what should they do with regard to work on the seventh consecutive day in the same work week?
To assist VCAA members until the case is decided, the VCAA General Counsel Rob Roy is recommending employers use a form in English and Spanish which allows employees to volunteer for 7th day work. Such an agreement may provide a plausible affirmative defense to any claim that workers were “caused” to work on the seventh consecutive work day in the same work week.
Do agricultural employers have other means of employing workers to work on the seventh consecutive work day in the work week period? The answer is “yes”. An exemption exists in Labor Code § 554 which states that an employee can accumulate rest days when “...the nature of the employment reasonably requires that the employee works seven or more consecutive days, if in each calendar month the employee receives days of rest equivalent to one days rest in seven...”. Furthermore, Labor Code § 554(b) also provides a “hardship” exemption when the DLSE determines that “...in her or his judgement hardship will result to the employer and employees.” Be aware that “hardship” will be interpreted in a way most beneficial to employees.
More importantly, the requirement for one day off in a seven day work week in Labor Code § 551 and 552, respectively, does not apply to “emergencies, work performed in the protection of life or property from loss or destruction, or when hours work do not exceed thirty in any work week or six hours in any work day”.
Irrigator Overtime Issues
A second and very important question arises as to whether current exemption from overtime for irrigator employees found at IWC Wage Order 14-2001, Section 3(C), has been abolished and, if so, when is the exemption lost: January 1, 2017 or January 1, 2019? To date, there has been no FAQ or public hearing notice by the DLSE or the LWDA on this issue and many others raised by the provisions of AB 1066.
Mr. Roy, and other Ag lawyers, believe that the new Labor Code § 861 may not apply to the existing overtime exemption for irrigators in section 3(C) of Wage Order 14-2001. As a result, employers may continue to avoid overtime payments to those agricultural workers who spend a majority of their weekly work time in irrigation-related duties. Mr. Roy notes, however, that a provision found in Labor Code § 510(a) could apply to all agricultural employees, including irrigation employees, effective January 1, 2017 for overtime on the seventh consecutive day of work in the work week. [New Labor Code § 861]. This interpretation would appear consistent with requirement of section 552 that “no employer of labor shall cause employees to work more than six days in seven”. Plus, overtime compensation for the seventh consecutive work day would appear as a deterrent to causing workers to work the seventh consecutive work day in the work week, unless overtime is paid. A final interpretation awaits DLSE action.
In short, barring contrary opinion or notification by the DLSE, irrigators are still exempt from overtime, except on the seventh consecutive work day in a week. Section 864 of AB 1066 requires the Department of Industrial Relations to update Wage Order 14 “to be consistent with this chapter...” which will require harmonizing the Wage Order with the new rules on overtime for irrigators as well as other ag employees. At this time, there has been no public notification by DLSE of a forth coming FAQ or public notification of a meeting on these important issues.
Mr. Roy is advising his members to either avoid working a seventh consecutive work day in a work week or rotate employees with a day off to avoid a seventh consecutive work day. Of course, other options do exist for a “hardship” exemption and nature of the work exemption found in Labor Code § 554 mentioned above.”
New I-9 Form must be used after January 22
U.S. Citizenship and Immigration Services announced on Nov. 21 the release of a new Form I-9, intended to be simpler than the current form. It will also be provided in an Adobe .pdf format that is intended to facilitate completing the form on a computer screen or tablet. Employers must start using the new form by Jan. 22. The form can be found online at https://www.uscis.gov/i-9.
© 2017 Noland, Hamerly, Etienne & Hoss