On September 15, 2021, a divided panel of the Ninth Circuit Court of Appeals decided…
Lawsuit Prevention for Employers
Changes in California Law Are So Frequent that Annual Revisions are Advisable
Many California employers have found that a properly-drafted employee handbook is their best first line of defense against employment-related lawsuits. Typically, the most potent handbooks optimize the employer’s compliance with the latest laws. The flip-side of this coin, however, is that state-of-the-art handbooks are the first to be rendered obsolete in the event of changes in law, which is a frequent occurrence in California.
In recent years, it has not been uncommon for between 10 and 20 new laws to take effect which directly impact the content of employee handbooks. Additional changes in law are due to court decisions and new or changed regulations.
In fact, employment laws change so frequently in California, due to new judicial, regulatory and legislative developments, that employers are now well-advised to consider updating their handbooks every year. Failure to do so subjects even the most comprehensive employee handbook to being inconsistent with applicable laws.
What follows will describe just a few of the recent changes that may make revising existing policies a good idea.
Day of Rest
In the 2017 case of Mendoza v. Nordstrom, the California Supreme Court examined Labor Code, sections 552-554 and the legal right of employees to a weekly day of rest. The Court explained that the day of rest standards are based on an employer’s “workweek.” It explained that the limited exception to the general rule, applicable to employees who work six or fewer hours in a day, applies only if an employee works six or fewer hours in each day of a given workweek. On a related subject, the Court specified that employees who are fully informed of their right to take a day of rest in each workweek may voluntarily choose to work all seven days in a workweek.
Accordingly, employers can opt to incorporate provisions in their employee handbook that explain every employee’s right to take one day off each workweek, specifying that the employer will not impede that right by requiring employees to work all seven days in a workweek, and explaining that employees may voluntarily elect to work all seven days.
In the 2016 California Supreme Court case of Augustus v. ABM Security Services, the Court concluded that an employer violated applicable law by enforcing on-call requirements for security employees during their rest periods. It emphasized the requirement that employers must relinquish control of employees and relieve employees of all duties during their rest periods. While recognizing the inherent difficulties, the Court suggested that employees must be allowed to leave the employer’s premises during their 10-minute rest periods, just as they may during much longer-duration meal periods.
Employers are well-advised to incorporate language in employee handbooks establishing policies consistent with this decision, for the reason that litigation, including class and representative actions, in the area of meal and rest breaks has exploded in recent years.
Employer Knowledge of Pay Obligations
Present law applicable to California employers provides that employees must be paid for all hours worked, specifically including all time that employees “are suffered or permitted” to work. This means that employers must compensate employees for all time the employer had actual or constructive knowledge (“knew or should have known”) that work was being performed. This includes unauthorized overtime work. Contrary to the perception of many employers, employees who perform unauthorized overtime work must be paid for all hours worked, including overtime compensation at the premium rate. The employer’s legal recourse for violating rules related to unauthorized overtime work is to administer discipline for violation of the prohibition, assuming that it was properly communicated.
Recent cases have held, however, that employees who fail to accurately report their working time may be precluded from recovering wages if they actively prevented the employer from discovering that the work was being performed. This authority is premised on the notion that the employer must have a reasonable opportunity to comply with the law, which means that employees who intentionally prevent an employer’s awareness that work was performed may be prohibited from recovering damages, in some situations.
Based on this evolving trend in the law, employers may elect to add language to handbooks which expressly prohibits off-the-clock work, while explaining procedures available for reporting all work time, as well as any missed, late or abbreviated meal and/or rest periods.
Jay G. Putnam is a Petaluma labor lawyer who has specialized in representing California employers for over three decades. His practice is devoted to preventing lawsuits against his clients, without sacrificing workplace authority or management prerogatives.
While no one can guarantee a future free of lawsuits, Putnam has compiled a remarkable record of success: Not one employer-client has been sued in 36 years with his system of precautions in place.
For those clients who have arrived with pending lawsuits, Putnam has established an excellent track record of success as well.
You are invited to visit Mr. Putnam’s website, where you will find in-depth discussion of the most common mistakes made by California employers, and how to avoid them. http://www.jaygputnam.com/newsletter/