On April 7, 2020, the San Francisco Board of Supervisors passed the Public Health Emergency Leave Ordinance (PHELO) to expand paid sick leave and emergency family medical leave benefits in response to the COVID-19 pandemic. That ordinance was not signed and enacted by Mayor Breed, and the Board of Supervisors has now passed an amended version of the ordinance (Amended PHELO), on April 14, 2020, which is awaiting the mayor’s signature. Although the Amended PHELO is substantially similar to the previous version, it includes three key changes in that it (1) expands the definition of covered employees; (2) clarifies the calculation and availability of leave; and (3) modifies leave guaranteed to health care providers and emergency responders.
Continue Reading San Francisco Board of Supervisors approves amended paid sick leave ordinance in response to COVID-19 pandemic
Mark Phillips
California Court of Appeal addresses “unlimited” vacation policies
California law does not require employers to provide paid vacation. But if a California employer does choose to give paid vacation time, state legal requirements apply regarding accrual and compensation. For example, vacation may not be on a “use it or lose it” basis, and all vested but unused vacation is considered earned compensation that must be paid to the employee when their employment ends. Cal. Labor Code section 227.3. These rules apply to any unrestricted paid time off (PTO), including floating holidays and PTO plans that combine vacation and sick time into a single policy.
To avoid these restrictions and increase employee flexibility, many California employers have implemented what are colloquially referred to as “unlimited” vacation plans. In such plans, employees receive vacation time that does not accrue and is not subject to specified limits. Instead, an employee’s use of vacation is conditioned on management approval and business- or performance-related factors (for example, not interfering with business operations, completion of job duties, etc.). However, a recent decision from a California Court of Appeal, McPherson v. EF Intercultural Foundation, Inc. (April 1, 2020), calls into question the legal and practical viability of these “unlimited” vacation plans.
Continue Reading California Court of Appeal addresses “unlimited” vacation policies
California’s Judicial Council adopts emergency rules tolling statutes of limitations
On April 6, 2020, the California Judicial Council held its second emergency meeting to address issues arising in the California court system as a result of the COVID-19 pandemic. The Judicial Council, led by Chief Justice of the California Supreme Court Tani Cantil-Sakauye, is the rulemaking body of the California court system. California’s Government Code section 68070 authorizes the Judicial Council to adopt rules “to provide for uniformity” including, but not limited to, “rules relating to law and motion.”
The Judicial Council passed 11 emergency rules, two of which pertain to statutes of limitations and may affect potential and pending employment litigation. Emergency rule 9 tolls the statute of limitations for all civil causes of action, beginning on April 6, 2020 and ending 90 days after the governor declares the statewide state of emergency related to COVID-19 is lifted. Emergency rule 10 extends the time in which a case must be brought to trial from five years to five years and six months. This extension applies to all civil cases filed before April 6, 2020.Continue Reading California’s Judicial Council adopts emergency rules tolling statutes of limitations
Los Angeles emergency order mandates supplemental paid sick leave for large employers
On April 7, 2020, Los Angeles Mayor Eric Garcetti suspended a paid sick leave ordinance by the Los Angeles City Council and signed an emergency order providing for mandatory paid sick leave for many large employers with essential employees working in the City of Los Angeles (L.A. Supplemental PSL), effective immediately.
Existing Los Angeles City paid sick leave laws already surpassed California state law mandates by providing twice the minimum allotment under state law. Under the existing Los Angeles City paid sick leave ordinance, employers were already required to provide employees with at least 48 hours (six days) of paid sick leave or one hour for every 30 hours worked.
The recent enactment of the federal paid sick leave provision of the Families First Coronavirus Response Act (FFCRA) applies only to companies with fewer than 500 employees. The L.A. Supplemental PSL now seeks to “bridge the gap” by creating mandatory paid sick leave for the Los Angeles employees of many larger employers who are not bound by the FFCRA.
Continue Reading Los Angeles emergency order mandates supplemental paid sick leave for large employers
Updated COVID-19 FAQs for employers with U.S. employees
Please see an updated version of our FAQs as of April 18, 2020.
The worldwide COVID-19 pandemic has had, and will continue to have, a substantial impact on the U.S. workplace. Please click here for a series of FAQs we have compiled based on some of the more common questions that clients with U.S.-based employees…
California Supreme Court: Employees who settle their own wage and hour claims still have standing to pursue PAGA
The California Supreme Court ruled on March 12, 2020 that an individual plaintiff’s settlement of their claims against an employer for purported wage and hour violations does not deprive that plaintiff of standing as an authorized representative in a Private Attorney General’s Act (PAGA) action.
PAGA deputizes an employee to file a lawsuit for purported California Labor Code violations against their employer to recover civil penalties on behalf of themselves, other similarly situated employees and the State of California. To pursue a PAGA action, the plaintiff must have standing as an “aggrieved employee.” PAGA defines an “aggrieved employee” as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”
In Kim v. Reins International California, Inc., March 12, 2020, Case No. 5246911, Justin Kim, an employee of Reins International (Reins), brought a putative class action and PAGA representative action for Labor Code violations against his employer. While the case was pending, Reins moved to compel arbitration as to Kim’s individual claims and dismissed the class action claims based on the arbitration agreement. While the PAGA litigation remained in the trial court, the trial court stayed the action pending the arbitration of Kim’s individual claims. Kim ultimately settled his individual claims and dismissed them, leaving only the PAGA claim for resolution. Reins then moved for summary adjudication of the PAGA claim on the ground that Kim was no longer an aggrieved employee and his rights had been “completely redressed” by his own settlement and dismissal of his underlying claims. The trial court granted the dismissal and the Court of Appeals affirmed.Continue Reading California Supreme Court: Employees who settle their own wage and hour claims still have standing to pursue PAGA
Los Angeles implements additional paid sick leave for employers with 500 or more employees nationwide
On March 27, 2020, the Los Angeles City Council approved a new paid sick leave ordinance (L.A. Ordinance), to remain in effect until December 31, 2020, which supplements federal bill H.R. 6201, known as the Family First Coronavirus Response Act (FFCRA). The FFCRA provides for paid sick leave and paid family leave entitlements to companies with fewer than 500 employees.
Existing Los Angeles City paid sick leave laws already surpassed California state law mandates by providing twice the minimum allotment under state law. Under the existing Los Angeles City paid sick leave ordinance, employers were already required to provide employees with at least 48 hours (six days) of paid sick leave or one hour for every 30 hours worked.
The L.A. Ordinance now seeks to “bridge the gap” in the FFCRA, requiring employers in Los Angeles with 500 or more employees nationally to provide two weeks of additional paid sick leave to their employees who perform any work within the geographic boundaries of the city of Los Angeles. Employees who have been employed with the same employer from February 3, 2020, through March 4, 2020, are entitled to supplemental paid sick leave as follows.
Continue Reading Los Angeles implements additional paid sick leave for employers with 500 or more employees nationwide
COVID-19: Practical implications of March 19, 2020, state of California and Los Angeles County emergency orders
On March 19, 2020, governor of the state of California, Gavin Newsom, issued Executive Order N-33-20 (California Executive Order), effective immediately until further notice. This California Executive Order requires all individuals living in the state of California to stay home, except as needed to maintain continuity of operations of the federal critical infrastructure sectors, as outlined at https://www.cisa.gov/critical-infrastructure-sectors. These sectors include: (1) chemical; (2) commercial facilities; (3) communications; (4) critical manufacturing; (5) dams; (6) defense industrial base; (7) emergency services; (8) energy; (9) financial services; (10) food and agriculture; (11) government facilities; (12) health care and public health; (13) information technology; (14) nuclear reactors, materials, and waste; (15) transportation systems; and (16) water and wastewater systems. Each of those sectors, as outlined in the federal guidelines outlined on that website, includes numerous types of businesses, and employers should consult the guidelines with legal counsel in assessing whether their operations fall within one of the exceptions. The supply chain will continue to allow access to such necessities as food, prescriptions, and health care. People may leave their homes to obtain or perform the functions above, or to facilitate authorized necessary activities.Continue Reading COVID-19: Practical implications of March 19, 2020, state of California and Los Angeles County emergency orders
California executive order suspends and modifies California WARN requirements due to COVID-19 but employers contemplating furloughs are not yet in the clear
Employers are facing increasingly difficult business decisions as a result of COVID-19 and, in developing a plan of action, must take care to avoid the many risks for wage and hour litigation that may be asserted in the wake of those decisions, especially as they relate to the execution of temporary layoffs or furloughs. On March 17, 2020, Governor Newsom issued an unprecedented executive order significantly changing notice requirements for employers contemplating layoffs in California. This blog addresses two of the hidden risks that are potentially triggered at the outset of a furlough: (1) WARN notices under both Executive Order N-31-20 and federal WARN, and (2) the payment of wages, including accrued unused vacation or paid time off. Whether employers call it a furlough, a temporary layoff, or a shutdown, the legal analysis is largely the same.
Notification periods under WARN complicate furloughs, even with California’s executive order
In a mass layoff or plant closure situation, employers may be required to provide notice under the federal Worker Adjustment and Retraining Notification (WARN) Act and equivalent California WARN Act (collectively, the Acts). COVID-19 creates WARN compliance challenges for many employers. This is particularly true for employers who are required to quickly shut down operations by state or local mandate, such as bars and gyms in many California cities. These unique circumstances may create a tension with WARN obligations.
Both the federal WARN and California WARN require employers at a covered establishment to provide 60 days’ notice to covered employees prior to a closing or mass layoff, as defined in the Acts. The California WARN, modeled after the federal WARN, applies to a wider range of employees. There are a number of parameters, exceptions, and industry-specific guidelines under both the federal and California WARN. Of utmost importance here, however, is the fact that the California Court of Appeals has held in The International Brotherhood of Boilermakers v. NASSCO Holdings Inc. that California WARN applies to temporarily furloughed employees who have been furloughed for less than six months, even though the same furlough would not have triggered notice obligations under federal WARN which only applies to furloughs in excess of six months.Continue Reading California executive order suspends and modifies California WARN requirements due to COVID-19 but employers contemplating furloughs are not yet in the clear