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In light of the budget crisis, which consumed much of the 2009 legislative session, the California Legislature was relatively quiet on the employment law front. However, while the legislature was tending to other pressing needs, the courts and administrative agencies helped to change the landscape of employment law for business owners, especially in the area of wage and hour law. Here are a few of the changes employers should be aware of as we move forward into 2010:
EXEMPT EMPLOYEES AND WORK FURLOUGHS
Until August 2009, the California Division of Labor Standards Enforcement (aka California Labor Commissioner’s Office) had not addressed whether it was permissible for an employer facing “significant economic difficulties” to proportionally reduce an exempt employee’s salary as part of a work furlough, without violating the “salary basis test”, and thus destroying the exemption.
Prior to the DLSE ruling, employers were not permitted to adjust or fluctuate an exempt employee’s salary, based upon the number of hours the employee worked, without bearing a significant risk of losing the exemption.
However, the new ruling allows employers to proportionally reduce the salary of an exempt employee, as long as certain conditions are met. A review of those conditions are addressed in the opinion letter, which can be viewed at http://www.dir.ca.gov/dlse/DLSE_OpinionLetters.htm.
FEDERAL EQUAL PAY ACT
In February 2009, President Obama signed a bill titled “The Lilly Ledbetter Fair Pay Act of 2009” which amended federal laws to expand the definition of what is an “unlawful employment practice” for purposes of a claim of discriminatory pay practice. Under the new bill, every time an employee is subjected to a discriminatory pay practice, including every time he or she receives a paycheck, which is a new act of discrimination, which essentially re-starts the statute of limitations to bring a claim. The revisions to both Title VII and the Age Discrimination in Employment Act will allow an employee to recover up to two (2) years of back pay from the date a claim is filed.
WORK PERFORMED OUTSIDE OF REGULAR BUSINESS HOURS
As the use of Blackberry/iPhone/smart phones continue to proliferate in the business community, employers must be cautious about which employees are allowed (or even required) to carry such devices. The Ninth Circuit recently confirmed that non-exempt, hourly employees, who spend time outside of their regular business hours performing tasks which are considered “integral” to their primary work activities, and which go beyond a “de minimus” time investment, will be entitled to compensation for the time they are “suffered or permitted” to do work. Checking e-mails, confirming driving directions or submitting electronic data (including time records) may rise to the level of compensable time and the employer will be responsible for keeping track of, and paying the employee for those hours . . . or minutes, as the case may be.
MEAL AND REST PERIODS
The legal community is still anxiously awaiting the California Supreme Court’s decision in the Brinker Restaurant Corp. v. Superior Court (Hornbeam) and Brinkley v. Public Storage, Inc. cases, which should be issued in mid-summer 2010. These two decisions weigh in on the issue of whether an employer is required to “ensure” that an employee is taking his or her statutory meal and rest periods, or whether the employer must simply “make available” the opportunity for the employee to take his breaks.
The court’s decision will have a significant impact on those cases where an employee failed to take breaks, and later sued the employer claiming that the employer is liable for money damages for failing to allow the employee his statutory rest periods.
The impact of these new laws, requirements and administrative opinions vary from industry-to-industry, and occasionally from business-to-business. To learn more about how these laws apply to your business, contact your labor and employment attorney.
Winsome Taylor, Certified Paralegal
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