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In a highly-anticipated decision, the U.S. Supreme Court issued its opinion in Viking River Cruises, Inc. v. Moriana (Case No. 20-1573) on June 15, 2022. The Court examined whether the Federal Arbitration Act (FAA) preempted California court precedent, which invalidated contractual waivers of representative claims under California’s Private Attorneys General Act of 2004 (PAGA).

Under PAGA, an employee may sue their current or former employer as a representative of the California Labor and Workforce Development Agency (“LWDA”). In such an action the employee can seek penalties for alleged violations of the Labor Code suffered by the employee themselves and other allegedly “aggrieved employees” if the employee was subjected to one or more violations of the California Labor Code.Continue Reading Supreme Court Rules in Favor of Arbitrability of PAGA Action

In a split 2-1 decision, the Ninth Circuit Court of Appeals reversed the district court’s order preliminarily enjoining enforcement of California’s Assembly Bill (AB) 5 in California Trucking Association et al. v. Bonta (CTA). If this ruling is not appealed, AB 5, which is chaptered in the California Labor Code under 2750.3, will no longer be enjoined from applying to companies in the trucking industry.

In 2019, the California legislature enacted AB 5 to codify the California Supreme Court’s decision in Dynamex West Operations, Inc. v. Superior Court (2018). In Dynamex, the Court judicially adopted the “ABC test” for employers to pass before classifying a worker as an independent contractor. Prior to the Dynamex ruling, courts applied the multi-factor Borello balancing test to determine the status of a worker.

Over 30 states now apply the ABC test. Subject to some statutory exemptions, in California, the law provides that a worker is presumed to be an employee unless: (a) the worker is free from control and direction of the hiring entity under both in practice and under contract; and (b) the worker performs work outside of the usual course of the hiring entity’s business; and (c) the worker is customarily engaged in an independently established trade, occupation or business of the same nature of the work performed.Continue Reading Ninth Circuit reverses preliminary injunction: California’s independent contractor law applies to motor carriers

As of January 2021, providing FFCRA paid leave is optional. Employers choosing to provide FFCRA Paid Leave to their employees on a voluntary basis can now receive a payroll tax credit to cover the wages paid through September 30, 2021 (subject to applicable caps). 

Last year, in response to the COVID-19 Pandemic, Congress passed the Families First Coronavirus Response Act (FFCRA), which mandated that most employers with fewer than 500 employees provide their workers with paid sick leave or expanded family and medical leave for COVID-19 related reasons. In doing so, employers received payroll tax credits for providing the paid leave. FFCRA’s mandate ended on December 31, 2020.

Congress extended the FFCRA through the Consolidated Appropriations Act of 2021 to March 31, 2021 on a voluntary basis to those employers who provided paid leave to qualified employees. Employers voluntarily providing paid leave could continue to receive a tax credit for the wages. On March 11, 2021, President Biden signed into law another COVID-19 federal stimulus package, the American Rescue Plan Act (ARPA). The ARPA extends the FFCRA and the employer tax credits through September 30, 2021 on a voluntary basis. The ARPA also adds qualifying reasons for paid leave.Continue Reading Congress extends payroll tax credits to employers voluntarily providing FFCRA paid leave and expands leave provisions

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

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

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

Beginning January 1, 2020, an individual’s deadline to exhaust their administrative remedies through advancing a charge of unlawful workplace discrimination, harassment, and retaliation with the California Department of Fair Housing and Employment (DFEH) will be extended from one year to three years.

Assembly Bill 9, known as the Stop Harassment and Reporting Extension (SHARE) Act, is a significant departure from California’s long-standing one-year statute of limitations and from the six-month statute of limitations period under federal law for claims made to the Employee Equal Opportunity Commission. In California, employment claims brought under the Fair Employment and Housing Act cannot be directly filed in court. Individuals must first exhaust their administrative remedies by filing a charge with the DFEH. Once the DFEH receives the charge, it can investigate the claim. If it determines that a violation of the FEHA has occurred, the DFEH may use its discretionary power to file a civil action on behalf of the aggrieved individual. If the DFEH is unable to determine whether a violation took place, or if an individual asks for an immediate right-to-sue letter (which is commonly the case, especially if the individual is represented by counsel), the DFEH closes its investigation and the individual has one year from the date of receipt of the right-to-sue letter to file a civil action against the employer.
Continue Reading California extends deadline to file employment claims from one year to three years