California Adopts Stricter Test for Independent Contractor Status

Q.  What is the standard for determining if an individual is an employee or an independent contractor in California?

A.  On April 30, the California Supreme Court adopted a new and more onerous test (the ABC test) for determining whether individuals are employees or independent contractors. In its decision in Dynamex Operations West, Inc. v. Los Angeles County Superior Court, 2018 Cal. LEXIS 3152 (Cal. 2018), the court abandoned the test that it had applied since 1989 from S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341 (1989). Although the Dynamex case arose from claims under California wage orders — which govern, among other things, the duty to pay the minimum wage and to compensate for overtime hours worked — the decision has broader implications.

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-Susan K. Lessack

Employees Should Not Be Working While on FMLA Leave

Q: Can I require an employee to do work while the employee is on FMLA leave?  What if the employee volunteers to work while on leave?

A: Under most circumstances, employees should not be required or permitted to perform work while on leave.  The Family and Medical Leave Act (FMLA) provides eligible employees a maximum of twelve weeks unpaid, job-protected leave for specified family and personal medical reasons in a twelve month period.  During that time, employers are prohibited from interfering with, restraining, or denying the exercise of or the attempt to exercise, any rights provided under the FMLA.

This does not mean that an employee must be left alone completely. While an employee is on leave, employers are permitted to inquire about the location of documents, the status of an assignment, and pass on institutional knowledge.  However, employers should keep communication with employees on leave to a minimum.  It is recommended that when communicating with an employee on leave, the employer should make it clear that it is not requiring or requesting the employee to work.

Some ways that employers may be found to have interfered with an employee’s leave include forcing an employee to complete an assignment, and denying or discouraging an employee from taking leave. Although interference is determined on a case-by-case basis, employers should be mindful that allowing an employee to work on leave may constitute impermissible interference.

Employers who pay for FMLA leave but allow or require employees to perform work while on paid leave also put themselves at risk of a claim for interference with leave. Although the employee is being paid, the basis for the leave is a medical necessity.  Thus, the employee would be entitled to the protections provided under the FMLA even though he or she is being paid.

As a general practice, employees on leave should not be asked or allowed to work on any assignments. If an employee does perform work while on FMLA leave, any hours spent completing assignments should not count towards the protected twelve week period.  To ensure compliance with the FMLA, employers should include a section in their personnel policies that discusses what conduct is appropriate while an employee is on leave.

Renee C. Manson

 

New Jersey Becomes Tenth State to Enact Paid Sick Leave

Q.  Do I need to provide paid sick leave to employees in New Jersey?

A.  Last week, New Jersey Governor Phil Murphy signed into law the New Jersey Paid Sick Leave Act, mandating paid sick leave for full and part-time workers in the Garden State. Similar to the laws in other states, the New Jersey law provides for employees to earn one hour of paid sick leave for every 30 hours worked. Employees may use up to 40 hours of earned sick leave in a benefit year.  They may also carry over up to 40 hours of earned sick leave from one year to the next.  Earned sick leave is not paid upon termination, unless a company policy or collective bargaining agreement provides otherwise.

Employees begin to accrue sick leave on their hire date, and are eligible to use them beginning on the 120th calendar day of employment. The employee may subsequently use earned sick leave as soon as it is accrued.  Employees must be paid for earned sick leave at the same rate of pay with the same benefits as the employee normally earns, so long as the pay rate is at least minimum wage.

Earned sick leave may be used for the employee’s own health condition and time off for preventative medical care, and to take care of or coordinate preventative medical care for family members. The term “family member” is defined broadly to include the employee’s child, grandchild, sibling, spouse, domestic or civil union partner, parent, grandparent, in-law, grandparent or sibling of the employee’s spouse, domestic or civil union partner, and “any other individual related by blood to the employee or whose close association with the employee is equivalent of a family relationship.”

Employees also may use earned sick leave for absences as a result of the employee or a family member being the victim of domestic or sexual violence.  In addition, employers must allow employees to use earned sick leave for school closures and to attend school conferences.  Employees may not be subject to discipline for using earned sick leave.

If the need to use earned sick leave is foreseeable, an employer may require up to seven days of advance notice before the leave is taken. Employers must make a reasonable effort to schedule the use of earned sick leave in a manner that does not unduly disrupt the company’s operations.  If the employee uses earned sick leave for three or more consecutive days, the employer may require a doctor’s note supporting the need for leave.

Companies may not require employees to find replacements as a condition of using earned sick leave. While the employer and the employee may mutually agree to allow the employee to work additional hours or shifts to make up the missed time, employees are not required to do so.

What Employers Should Do

The Paid Sick Leave Act goes into effect on November 2, 2018, and preempts all existing city and county sick leave laws in the state. To get ready for the new Act, employers should analyze their current paid time off policies or draft a new earned sick leave policy to ensure that time off is accrued and may be used in the manner provided by the Act.  New Jersey employers also should review their record-keeping policies to make sure that they retain records documenting hours worked and earned sick leave taken by employees for at least five years.

Tracey E. Diamond

Portion of Philadelphia Salary History Ban Ruled Unconstitutional

Q.  Am I permitted to ask about an applicant’s salary history in Philadelphia?

A.  In a ruling that could provide a roadmap for challenging salary history bans in other jurisdictions, a Philadelphia federal judge issued an opinion on April 30 invalidating a major element of the Philadelphia salary history ordinance enacted by the city in January 2017. Judge Mitchell S. Goldberg held that the portion of the ordinance prohibiting an employer from inquiring about a prospective employee’s wage history is unconstitutional because it violates the First Amendment’s free speech clause. However, Judge Goldberg also held that the portion of the law prohibiting employers from relying on wage history to determine a salary for an employee did not implicate constitutional concerns. Philadelphia employers now find themselves in a difficult position: They are permitted to ask about an applicant’s salary history but cannot rely on that information.

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Tracey E. Diamond and Lee E. Tankle

 

Confronting Racial Bias in the Workplace-How to Avoid Becoming the Next Hashtag Movement

Q.  How do I help my company avoid unconscious bias in the workplace?

A.  A bias is a prejudice in favor of or against one thing, person, or group as compared with another. We all have biases. Biases can be based on any number of stereotypes, whether it is race, gender, age, national origin, religion, etc.  In a perfect world, individuals would not act on their biases, however, our world is far from perfect and employees can and do bring their biases to work.

When employees bring biases into the workplace, whether they are overt or subtle, the consequences can be damaging for the employer, especially in this social media age, when racial biases can and will be caught on camera and “go viral” almost instantly. A recent example of such racial biases resulting in racial profiling occurred in a Starbucks in Philadelphia on April 12, 2018, when two black men were arrested while waiting for a friend.  The police arrested the two men who, nine hours later, were released without being charged.  The arrest was videotaped by a bystander, who commented that the men did nothing wrong.  The incident resulted in protests in Philadelphia and a #boycottStarbucks hashtag that took on a trending life of its own.  Starbucks however, took swift action by terminating the store manager, apologizing to the two men, and announcing plans to close 8,000 U.S. locations for a day in May to provide a racial-bias education program.

A similar incident occurred recently at an LA Fitness facility in Secaucus, New Jersey, when three LA Fitness employees called the police on a black man, who was an active, paying member of the fitness club for no apparent reason, than believing that he did not belong there. LA Fitness immediately terminated the employees involved, issued a public apology and stated that it is exploring potential training content and opportunities to better train the staff.

Stories like these are not new, however, the platform to raise awareness of racial bias and profiling has expanded with social media. So the question remains, what can and should employers do to confront racial biases and avoid becoming the next #boycott{insert Company name} hashtag?

First and foremost, companies must educate, train, and re-train their employees. In industries that are open to the public, such as retail, for example, employers should regularly conduct racial bias training upon hiring as well as on an annual basis.  This is particularly important in industries with high turnover to ensure that all employees are receiving training.  To be most effective, the training should include real life scenarios that are applicable to the industry where employees can openly talk through how to handle certain issues.  Next, employers should make sure they have clearly defined policies on hand.  These policies should be reviewed during the training and be accessible for reference to all employees.

Even more important than having fair policies, employees must be taught how to consistently enforce such policies. For example, if a coffee shop has a policy that requires patrons to order food/coffee in order to use the internet, bathroom or remain on the premises (which Starbucks does not), this must be enforced by all stores and applied to all patrons, regardless of race, gender, national origin, etc.  If the company has concerns as to whether certain policies will be applied consistently, the most prudent approach is to discard that policy altogether.  Additionally, if a company enforces policies/restrictions regarding entering or remaining in a location open to the public, it should be clearly posted.

Even with the best training programs and clearest policies, a company may still end up on the wrong side of the racial bias equation. So what now?  What should a company do if one or more of their employees exhibits racial bias or profiling towards a customer or member of the public?  Even assuming that the incident does not “go viral,” employers should investigate any incident of alleged racial profiling, including reviewing any video footage and witness accounts.  If the allegations are confirmed, the employer must take corrective action.  In today’s society, there is a low tolerance for racial, ethnic or religious profiling, and failing to do anything other than termination (assuming the profiling is confirmed), could result in public backlash.  The response must be quick.  However, employers must balance the need for speed with the need to conduct a proper investigation.  Companies must also offer the individual who was the victim of profiling a sincere apology and consider including some type of monetary award, depending on the circumstances.  Additionally, employers should review their policies and take the opportunity to re-train employees and redistribute applicable policies.

Kali T. Wellington-James