Shirley A. Gauvin
Shirley A. Gauvin
Senior Counsel, San Diego
Formerly: Bartender
  • B.S., Public and Environmental Affairs, Indiana University;
  • B.S., British & American Social Policy, University of Kent;
  • J.D., Maurer School of Law, Indiana University.

I am a graduate of the Stokes Wagner’s first summer associate class, where I ranked high by the partners in categories including “Most Likely to Pass the Bar on the First Try” and “Most Likely to Bring Midwestern Work Ethic to SoCal.” That was twenty-seven years ago.  Shortly after moving from Indiana (yes, I can tell you what a “Hoosier” is), I fell in love with the California shoreline, fish tacos and the indisputable truth that Californians share a strong work ethic with Midwesterners—they just dress more casually.

After several years juggling both trial and appellate litigation, I was certified by the State Bar of California Board of Legal Specialization as a Certified Specialist in Appellate Law. For the past twenty years, I’ve worked with trial lawyers to develop the most creative and effective means of sharing our client’s written story with the jury or court of appeal. I believe that the most persuasive writing is honest writing, and that there is no substitute for hard work and focused preparation. I am a firm believer that smart, reliable and friendly are a winning combination. My advocacy is direct, accurate and efficient – just because the court gives us 14,000 words doesn’t mean we have to use them all. I know the value of a dollar (including yours), am honest and forthright, and boldly defend our client’s cause as my own. In my legal practice as well as my life in general, I strive to always let my actions speak louder than my words.

In my free time, I hold leadership positions in several local athletic associations. My kids alone make up half a water polo team! I enjoy hiking, kayaking, SUPing and all kinds of water sports with my husband and three girls.  Whether we’re in the ocean, the mountains or the lake, my happiest place is being where they are when the sun sets.

As California and the U.S. enjoy a surge in the travel industry again, the newly codified Labor Code section 2810.8 sets forth the obligations of California employers with regard to the recall of laid-off employees in many hospitality positions. The new law took effect on April 16, 2021 and expires on December 31, 2024.

The Department of Labor recently published a list of FAQs concerning recall rights. With these clarifications, employers should be prepared to immediately identify qualifying laid-off employees (with contact information, prior positions, years of employment) and issue the necessary notices as soon as positions become available. Employers should also ensure the statute’s requirements are incorporated into written policies and prepare form notices to be sent to laid-off employees as positions become available.

One of the key provisions in the FAQs involves the continuous right to recall. This mandate provides that in the event someone is recalled and turns down a job, the employer must continue to offer subsequent job opportunities. In other words, as each new position(s) becomes available, the employer must notify and offer the job(s) to all qualified laid-off employees who worked at the same or a similar position, including laid-off employees who have previously declined an offer to be re-hired for a prior position. Simultaneous, conditional offers may be made to more than one laid-off employee, with the final decision concerning which employee will be hired for the position determined by seniority.

This provision underscores the importance of maintaining an up-to-date information and current form notices.

Important details related to the continuous right to recall include:

  • 5 days to offer. Within five business days of establishing a position, an employer shall offer laid-off employees in writing (either by hand or to their last known address) and by email and text message (when known) all job positions that become available for which the laid-off employees are qualified. Employees should be offered the positions in order of preference. If more than one employee is entitled to preference, employers can prioritize by length of service based on total length of service.
  • 5 days to accept/decline offer. A laid-off employee who is offered a recall position shall be given at least five business days from receipt of the offer to accept or decline. Saturdays, Sundays, and CA state holidays are not counted. An employer may make simultaneous, conditional offers to laid-off employees with a final offer conditioned on application of the preference system set forth above. If an employee turns down a job, the employer must offer the employee subsequent new positions as they become available.
  • Record retention. Employers must retain records for three years from the date of written notice for each laid-off employee, including employee’s full legal name, job classification, date of hire, last known residence address, email address, telephone number, a copy of written layoff notices, and all communications concerning employment offers made to the employee pursuant to this statute.
  • Notice of Hire. An employer that declines to recall a laid-off employee on the grounds of lack of qualifications and instead hires someone else shall provide the laid-off employee written notice within 30 days, including the length of service with the employer of those hired in lieu of that recall and all reasons for the decision.
  • Other applications. The right to recall also applies when employer ownership changes after layoff if the enterprise is conducting the same/similar operations, when the form of organization changes, when employer assets are acquired by another entity conducting the same/similar operations using the same assets, or when the employer relocates operations at which a laid-off employee was employed.
  • Enforcement. No employer may refuse to employ, terminate, reduce in compensation, or otherwise take any adverse action against any laid-off employee for seeking to enforce their rights under this section, including any employee who mistakenly alleges noncompliance with this section. The Division of Labor Standards Enforcement (DLSE) has exclusive jurisdiction to enforce this section. A laid-off employee may file a complaint with the DLSE for violations and may be awarded: (A) Hiring and reinstatement rights; (B) Front pay or back pay for each day during which the violation continues; (C) Value of the benefits the laid-off employee would have received under the employer’s benefit plan. Note that cities and counties may enact greater protections through local ordinances.
  • Civil Penalty. Any employer who violates this statute shall be subject to a civil penalty of one hundred dollars ($100) for each employee whose rights are violated, plus liquidated damages of $500 per employee for each day the rights of an employee are violated until the violation is cured, recovered by the Labor Commissioner. The Labor Commissioner shall enforce this section, including investigating an alleged violation and ordering appropriate temporary relief. In such action, the court may issue preliminary and permanent injunctive relief and interest on amounts due; remedies and penalties are cumulative. All of these provisions may be waived in a valid collective bargaining agreement if explicitly set forth in that agreement.

For a printable PDF of this article, click here.


Anyone who has considered filing a petition for writ of mandate from a superior court ruling knows the odds are not in favor of the court granting this extraordinary relief. Apart from clear error, the requirement of showing irreparable harm is a hurdle that derails even the strongest advocates, but some cases present such important questions of law, they warrant a writ. General Atomics v. Superior Court, filed May 28, 2021, was one such case.

Plaintiff Tracy Green sued General Atomics (“GA”) for failure to provide accurate, itemized wage statements showing “all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate” as required by Labor Code section 226, subd. (a). Rather than showing overtime hours in one entry paid at 1.5x the regular rate of pay, GA’s wage statements show all hours worked in one entry at the regular rate of pay and overtime hours at the 0.5x overtime premium rate. By combining non-overtime and overtime hours and listing the overtime hours a second time with the 0.5x overtime premium, the wage statements did not show the 1.5x overtime rate.

GA moved for summary judgment, arguing the wage statements complied because they showed total hours worked, with the standard rate, and overtime hours worked, with the additional premium rate. Asserting a class claim under Section 226 and a claim under the Private Attorneys General Act (PAGA), Plaintiff admitted that GA’s method accurately displayed total payments ultimately received but claimed it did not accurately show the 1.5x overtime rate or allow employees to easily calculate it. The trial court denied the motion, but the court of appeal issued a writ of mandate finding that GA’s method of calculation complied with the Labor Code and that the plaintiff’s proposed alternative “makes it more difficult for an employee to calculate the statutory regular rate of pay and the statutory overtime rate.” Citing multiple examples to illustrate the varying approaches, the court found that this was especially true in instances where employees had multiple standard hourly rates in the same pay period.

While other formats may also be acceptable, “given the complexities of determining overtime compensation in various contexts,” GA’s method adequately conveys the information required by section 226 and allows employees to readily determine whether their wages were calculated correctly, which is, after all, the “core purpose of section 226.” This case clarifies what California employers should do to avoid any unnecessary confusion: confirm that all compensation is fully documented and accurately and clearly reflected in wage statements. GA’s method, while perhaps not the only acceptable format available to employers, is now an effective way to comply with the law as determined by published case law.

For a printable PDF of this article, click here.


The American Rescue Plan Act (“ARPA”), signed into law on March 11, 2021, obligates employers to pay COBRA insurance premiums for individuals who suffer job loss. Under the plan, employers receive the subsidy, which they pass along to COBRA enrolled former employees, through a payroll tax credit on quarterly Medicare taxes. The subsidy period is April 1 to September 30, 2021, and both fully insured and self-insured group plans are eligible for the credit.

WHO QUALIFIES: Employers are required to provide the free coverage to employees/former employees identified as assistance-eligible individuals (“AEIs”) who experience involuntary termination (lay-off) or a reduction of hours (other than for gross misconduct) and their covered relatives. AEIs include: (1) those who become eligible for and elect COBRA during the subsidy period, and (2) those who became eligible for COBRA but either did not elect it or elected it but discontinued the coverage prior to April 1, 2021. The latter group is provided a second opportunity to elect COBRA coverage, which ends 60 days after notice of the election opportunity is provided to the AEI by the plan administrator. (Look for model language regarding this group from the Department of Labor soon.) If the COBRA event occurred before April 1, 2021, coverage will end 18 months after eligibility for COBRA.

WHAT IS COVERED: The subsidy covers premiums for group plans subject to COBRA mandates, including medical, dental and vision plans (and any other plans required by state law). Note that employers may allow AEIs to select a coverage different from the one in place when they first became eligible for COBRA, as long as:

  • the premium for the other coverage is equal or less than the premium for the prior coverage;
  • the alternate is also available to similarly situated employees; and
  • the alternate includes more than excepted benefits, such as dental and vision.

EXPIRATION: The subsidy will expire on whichever of the following dates is earliest:

  • September 30, 2021;
  • expiration of the AEI’s ordinary COBRA coverage (18 months after termination or reduction in hours); or
  • the date the AEI becomes eligible for coverage under another plan or Medicare.

If the AEI becomes eligible under another plan, they must notify the plan administrator or be subject to a fine.


  1. Identify those who were laid off or experienced a reduction in hours and are within the 18-month COBRA period. Determine whether other coverage options will be permitted at the same/lower cost. The notice should describe the subsidy and, if permitted, the opportunity to enroll in an alternative coverage. For AEIs who became eligible for COBRA prior to April 1, 2021, the notice must be given by May 31, 2021. For those who become eligible after April 1, 2021, employers should give notice at the time COBRA election notices are typically provided. The Department of Labor is set to issue a model election notice by April 12.
  2. Adjust payroll administration to show the COBRA subsidy, including AEIs and the amount of subsidy.
  3. Track premiums to claim the tax credit. If the credit amount exceeds the quarterly Medicare tax, the excess will be treated as a refundable overpayment. The premiums paid by the employer will be excluded from the former employee’s gross income.
  4. Plan to provide notice of expiration to AEIs at least 15 days and not more than 45 days before any COBRA premium payment subsidy ends, unless the AEI has obtained other group health plan coverage. Note that eligibility may end earlier if the qualified beneficiary’s maximum period of coverage ends before September 30, 2021, or if the beneficiary becomes eligible for coverage under another group health plan or Medicare.

For a printable PDF of this article, click here.


As the coronavirus vaccine becomes more widely available over the next few months, many employers grapple with the question of whether to mandate the vaccine. Following EEOC guidelines, some employers plan to require it as a condition to returning to the workplace (i.e., nursing homes). In contrast, others prefer to “encourage” vaccinations, leaving the ultimate decision to employees. In an effort to minimize health risks and provide peace of mind to employees returning to the workplace, some employers are asking whether they can offer incentives to encourage employees who get the vaccine.

Joining dozens of other companies, Target recently announced it will offer up to four hours of pay plus a Lyft ride ($15 each way) to its 350,000 full- and part-time employees who get the vaccine. Employees of Trader Joe’s will earn two hours of extra pay. Instacart will offer a $25 stipend. Kroger employees will receive $100. Yogurt maker Chobani will offer up to six hours of paid time off for its 2,200 employees to get vaccinated. McDonald’s, Olive Garden, Dollar General, and many others have employed similar incentives. Many employees report that a $100 incentive would persuade them to say yes to the vaccine.

However, there are limits to these types of incentives, and it remains unclear whether such vaccine incentives would be considered a part of a “wellness program” by the EEOC. Pursuant to the ADA, if the wellness program probes into disability-related matters, it must be voluntary. When employees get the vaccine, they often are asked health-related questions, which could be deemed disability-related. Therefore, a vaccine program encouraged by the employer could be considered a wellness program under the ADA. This means employers can likely offer de minimus gifts (e.g., a water bottle or gift card of modest value), but anything beyond that could appear coercive or involuntary and thus risk running afoul of the ADA.

With this in mind, employers who seek to incentivize employees should choose modest incentives that would not implicate the law, at least until further guidance is provided by the EEOC concerning incentives. In the meantime, if a more significant incentive is chosen, the employer should consider offering it to those who vaccinate and those who cannot vaccinate due to disability or religious reasons.

Those seeking to offer incentives beyond de minimus gifts should carefully consider the possible wage and hour implications of such benefits for non-exempt employees. For example, cash incentives might need to be included in employee compensation when calculating overtime premiums for non-exempt employees, so this type of gift could leave employers vulnerable to other, unanticipated claims.

For a printable PDF of this article, click here.


The recent guidance concerning OSHA’s record-keeping requirements will go into effect on May 26, 2020. Under the requirements, COVID-19 is a recordable illness, which means employers are duty-bound to record cases of COVID-19, if:

  1. There is a confirmed case of COVID-19 (meaning an individual with at least one respiratory specimen that tested positive for SARS-CoV-2, the virus that causes COVID-19);
  2. The case is work-related (work-relatedness is presumed for injuries and illnesses resulting from events or exposures occurring in the work environment, subject to specific exceptions); or
  3. The case involves one or more of the general recording criteria (meaning, if it results in any of the following: death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, or loss of consciousness; or if it involves a significant injury or illness diagnosed by a health care professional).

With shelter-at-home restrictions being lifted, employers are implementing processes to protect employees and adapt to new and changing best practices. While many states and counties have successfully slowed the spread of the virus, employers still have a lot of work ahead of them to protect employees, including determining whether employee COVID-19 illnesses are work-related and thus recordable. Given the evidence that the virus may be spread by the asymptomatic, presymptomatic and very mildly symptomatic, it can be difficult to determine whether a COVID-19 illness is work-related, especially considering most individuals will be at least potentially exposed both in and out of the workplace (e.g., at the grocery store, entering the workplace, etc.)

Simply recording a COVID-19 illness does not mean that the employer has violated any OSHA standard; this is a record-keeping requirement. Furthermore, employers with 10 or fewer employees and certain employers in low hazard industries have no recording obligations. These employers need only report work-related COVID-19 illnesses that result in a fatality or an employee’s in-patient hospitalization, amputation, or loss of an eye. (See 29 CFR §§ 1904.1(a)(1) and 1904.2 for a complete list of low hazard industries).

Recognizing this recording mandate may be difficult, OSHA is exercising enforcement discretion to assess an employer’s efforts in making work-related determinations. When evaluating whether an employer has complied and made a reasonable determination of work-relatedness, the following considerations will be considered:

  1. The reasonableness of the employer’s investigation into work-relatedness (e.g., after learning of an employee’s COVID-19 illness, asking the employee how they believe they contracted the illness; discussing with the employee their work and out-of-work activities that may have caused the illness; and reviewing the employee’s work environment for potential exposure, considering any other instances by coworkers).
  2. The presence of evidence reasonably available to the employer that a COVID-19 illness was contracted at work. For example, COVID-19 illnesses are likely work-related: when several cases develop among coworkers and there is no alternative explanation; if it is contracted shortly after lengthy, close exposure to a particular customer or coworker who has a confirmed case and there is no alternative explanation; if an employee’s job duties include having frequent, close exposure to the general public in a locality with ongoing community transmission and there is no alternative explanation. On the other hand, the illness is likely not work-related if the employee is the only worker in the vicinity to contract the virus and their job duties do not include having frequent contact with the general public; if they, outside the workplace, closely and frequently associate with someone who has the virus.

  3. OSHA will take into consideration any evidence of causation, pertaining to the employee illness, provided by medical providers, public health authorities, or the employee.

If the employer cannot determine whether it is likely that exposure in the workplace played a causal role with a particular employee, the employer need not record the illness. Note: COVID-19 should be coded as a respiratory illness, and if an employee voluntarily requests that their name not be entered on the record log, the employer must comply as specified under 29 CFR § 1904.29(b)(7)(vi).

Employers should be aware that some states have adopted specific rules regarding the causation of Covid-19 illnesses. For example, California Governor Gavin Newsom’s Executive Order N-62-20 creates a rebuttable presumption that employees who test positive for COVID-19 are presumed to have become infected while working for purposes of collecting workers’ compensation benefits (see also Alaska, Illinois, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Mexico, New York, Ohio, Pennsylvania, North Dakota, Utah, Vermont, and Washington). In California, this rebuttable presumption applies so long as the illness occurs between March 19 and July 5, 2020, and the following four requirements are met:

  1. The employee tests positive/is diagnosed with COVID-19 within 14 days after performing work at their place of employment at the employer’s direction;
  2. The work was performed on or after March 19, 2020;
  3. The place of employment was not the employee’s home/residence; and
  4. If the employee was diagnosed with COVID-19 (as opposed to testing positive), the diagnosis was “done by a physician who holds a physician and surgeon license with the California Medical Board, and the diagnosis is confirmed with further testing within 30 days of the diagnosis.” Unless the employer successfully disputes the presumption by offering other evidence, “the Workers’ Compensation Appeals Board is bound to find in accordance with it.”

If you have any further questions about the rapidly changing work environment, contact your Stokes Wagner representative. For a printable PDF of this article, click here.


Life has changed in ways most of us could never have imagined. Our homes have become our safe havens more than ever before, and our workplaces have spilled over into our home offices, kitchen tables, and family rooms. As we settle into our new normal, we find ourselves connecting to family, friends, and colleagues through Zoom meetings, livestream services, and quarantini virtual happy hours. Without a vaccine, the spread of COVID-19 is a concern that will not quickly disappear. Maintaining a healthy and productive workplace for employees will continue to be a top priority long after the days of walking from the bedroom to the home office have passed.

That leaves us with the question: What changes have and will occur with the Americans with Disabilities Act (ADA) and the Rehabilitation Act as we move forward post-COVID-19?

While the ADA and Rehabilitation Act rules still apply, they do not prevent employers from complying with the guidelines and suggestions made by the CDC or state/local public health authorities regarding COVID-19. During a pandemic, ADA-covered employers may ask employees who call in sick if they are experiencing symptoms of the pandemic virus (fever, chills, cough, shortness of breath, sore throat) and maintain this information in as a confidential record. Due to the community spread of COVID-19, employers may measure employees’ body temperature (note, however, that some people with COVID-19 do not have a fever). Employers may also screen applicants for symptoms and measure their temperature as part of a post-offer medical exam (and may delay the start date of an applicant with symptoms or withdraw an offer when they need the applicant to start immediately). Employers may require employees with symptoms to stay home. And when employees do return to work, employers may require a doctor’s note certifying their fitness. The EEOC provides an online guide, Pandemic Preparedness in the Workplace and the Americans With Disabilities Act, which builds on the publication issued during the H1N1 outbreak to help employers navigate the impact of COVID-19 in the workplace.

Naturally, employers can expect increased absenteeism caused as employees calling out sick or being called to assist sick family members. Some employees may retreat due to fear of possible exposure, and at-risk worker absences will likely increase, at least in for the short term. Employers should develop an infectious disease preparedness and response plan to provide protective actions against the virus. This can be accomplished by monitoring federal state and local recommendations as the situation changes and anticipating and preparing for occasional increases in absenteeism, the need for social distancing, staggering of work shifts if possible, downsizing, delivering remote services, interrupted supply chains and delayed deliveries. Employers should be vigilant about reinforcing infection prevention measures, such as good hygiene and infection control practices (handwashing, use of hand sanitizer for employees, customers and workplace visitors), encouraging ill workers to stay at home, physical distancing and discouraging sharing of devices, tools and equipment, and maintaining stringent housekeeping practices, all of which help to reduce exposure in the workplace. Finally, employers should develop procedures to identify and isolate sick employees, by encouraging workers to self-monitor for signs and symptoms of COVID-19 and by implementing procedures for employees to report when they are experiencing symptoms.

For a printable PDF of this article, click here.


On January 7, 2020, the U.S. Department of Labor published three new opinion letters that every employer should review.

The first involves an employer’s nondiscretionary bonus payment of $3,000 given to employees who completed ten weeks of training with a promise to complete eight more weeks. During the 10-week training period, employees only worked overtime in two weeks. The DOL concluded that because the employer paid the lump sum bonus for completing the ten-week training and agreeing to the additional training without having to finish it, the bonus must be allocated to the initial ten-week period. It was appropriate for the employer to allocate the $3,000 equally to each week.

In the second letter, the DOL determined that a per-project payment method satisfies the salary basis regulations for exemption under the FLSA. The inquiry provided two proposals for how the company would pay employees assigned to projects that lasted various periods of time. In the first proposal, when the employee receives a predetermined amount that does not vary from period to period based on the number of hours worked, the payment satisfies the salary basis requirements. In the second proposal, where the employee is paid a bona fide salary plus additional compensation, even in the form of a weekly lump sum, the payment also satisfies the salary basis and extra compensation requirements under the regulations. The DOL noted that where the fee for the project might be renegotiated during the course of the project, the salary basis test can still be met so long as the salary meets the minimum threshold and the changes to the weekly pay are not so frequent as to undermine the theory that the employee is actually being paid a salary, rather than being paid based upon quantity or quality of work performed.

The third letter addressed compliance under the Family Medical Leave Act (“FMLA”), with the DOL opining that a general health district is not required to consider all other county employees when determining whether one of its employees qualifies for FMLA leave as the health district and the county did not appear to be a single public agency employer. The DOL considered several factors in reaching this decision, including: whether the health district had its own payroll and retirement systems, whether it had its own funding sources and budget, whether it hired its employees separate from any other agency, whether it could sue and be sued, and whether state law provided any clarity as to the status of the entity.

For a printable PDF of this article, click here.

Typically used in offices, hotels, hospitals, etc., to provide multiple phone lines within one building, multi-line telephone systems (“MLTS”) are the subject of two new federal laws: (1) Kari’s Law and (2) the Ray Baum Act.

Kari’s Law ensures that guests can dial 911 and contact emergency services from any phone line in a hotel without dialing another digit to dial out. The law applies to MLTS “manufactured, imported, offered for sale or lease, or installed” after February 16, 2020, and mandates that those “in the business of installing, managing, or operating” MLTS cannot continue to work on or with systems that require a dial-out prefix. It also requires MLTS to provide notification to the front desk or security office at the same time the 911 call is made. The notification must include:

  • The fact that a 911 call has been made;
  • A callback number (unless technically unfeasible); and
  • Information about the caller’s location, relayed by the MLTS to 911 (can route to internal offices if a direct line is technically unfeasible).

Entities upgrading existing systems may be required to comply with these regulations. The FCC will provide clarification on a case-by-case basis.

The Ray Baum’s Act is a broad piece of legislation designed to increase safety and access to digital services. The Act establishes new rules for phone systems installed after or in use as of late 2021. Section 506 of the Ray Baum Act requires phone service providers to provide the street address of the calling party and information such as room number, floor number, or similar information to adequately identify the calling party’s location. For off-premises 911 calls, the MLTS operator or manager must provide:

  • A dispatchable location (if technically feasible),
  • Manually-updated dispatchable location (if technically feasible), or
  • Enhanced location information consisting of the best available location that can be obtained from any available technology or combination of technologies at reasonable cost.

The FCC’s MLTS guidelines can shed further light on these systems. As always, contact your Stokes Wagner attorney with any questions, and click here for a printable PDF of this update.

The Right Talent, Right Now

October 31, 2019  •  Shirley A. Gauvin

Category: Legal Updates

Employers throughout the U.S. are wrapping up October by participating in National Disability Employment Awareness Month (NDEAM), a tradition that can be traced back to 1945. The purpose of NDEAM is to raise awareness about disability employment issues and celebrate the significant contributions of America’s workers with disabilities. The theme of this year’s outreach effort emphasizes the importance of the subject today: “The Right Talent, Right Now.” “Every day, individuals with disabilities add significant value and talent to our workforce and economy,” said U.S. Secretary of Labor Alexander Acosta. “Individuals with disabilities offer employers diverse perspectives on how to tackle challenges and achieve success. Individuals with disabilities have the right talent, right now.”

Hiring the right talent means enlarging the participation of Americans with disabilities and promoting a workplace that is welcoming and inclusive. By providing individuals with disabilities an opportunity to excel, employers strengthen workplaces, economies, communities, and families. Informed employers no longer view diversity efforts as separate from their other business practices. They recognize that a diverse workforce differentiates them from the competition, attracts new clients, and increases their market share. They appreciate that diverse perspectives encourage innovation and new ideas. Hiring, mentoring, and retaining employees with a wide array of experiences is also key for fostering a workplace that attracts top talent. Building a diverse place inside the office attracts a diverse following outside. Indeed, Inclusion@Work reports that the third-largest market segment in the U.S. is not a particular race, gender, or age cohort; it is people with disabilities.

What can employers do to recognize their commitment to NDEAM and an inclusive workplace?

  • Review your policies: This is a great time to review company policies to ensure they are aligned with a commitment to inclusion. Consider Inclusion@Work (“Lead the Way: Inclusive Business Culture”).
  • Establish an employee resource group: Consider launching a disability Employee Resource Group to provide employees an opportunity to connect with others with similar interests and experiences.
  • Create a display: Refresh break room bulletin boards with positive messages about your commitment to a disability-inclusive workforce (see NDEAM poster or the “What Can YOU Do?” poster series).
  • Train managers and supervisors: Train the individuals who are closest to employees to reinforce the culture you seek to create (see Building an Inclusive Workforce tabletop desk guide.)
  • Inform employees: Highlight your commitment to employees by providing informal educational events such as lunchtime discussions to review the process for requesting reasonable accommodations (many accommodations are low cost yet yield considerable benefits through increased retention and productivity), or to recognizing the contributions of employees with disabilities.
  • Inform the Public: Plan your NDEAM Press Release for next year, modeled after this press release developed by the Department of Labor.

If your business is dedicated to including employees with disabilities, there is no time like the present. The Right Talent, Right Now. Resources on this subject are abundant. Employers may find these helpful:

For a printable PDF of this article, click here.

It’s no secret that California is typically viewed as the most employee-friendly state in the country. New employee-favored laws are passed so quickly that employee handbooks can be rendered outdated before they go to print. Employers who have found themselves on the wrong end of a wage and hour case can attest to the fact that one alleged error, when applied to each employee, can be devastating. On top of that, one Labor Code violation often leads to another violation, and so on and so on.

At issue in Naranjo v. Spectrum Security Services, Inc., a decision issued on September 26, 2019, was the question of whether employees who are entitled to a meal or rest break premium (after denial of a meal or rest period in violation of Labor Code § 226.7) may also recover derivative penalties under Labor Code § 203 (waiting time penalties) and § 226 (inaccurate wage statements).

In Naranjo, Spectrum paid employees for their on-duty meal break but did not pay the one-hour premium for a noncompliant meal break policy which did not include a revocation clause. The court explained that § 203 “penalizes an employer that willfully fails ‘to pay… any wages’ owed to a fired or voluntarily separating employee.” The penalty is paid for the employer’s recalcitrance, not for labor, work, or service performed by the employee. Thus, the employer’s failure to pay the penalty, no matter how willful, does not trigger section 203’s derivative penalty provisions for untimely wage payments.

The court held the same concerning § 226, which entitles an employee to minimum fixed penalties or actual damages not to exceed $4,000 if a wage statement omits “wages earned.” The court reasoned that § “226.7’s premium wage is a statutory remedy for an employer’s conduct, not an amount ‘earned’ for ‘labor, work, or service … performed by the {employee}.” Thus, “section 226.7 actions do not entitle employees to pursue the derivative penalties in section 203 and 226.” This significant win for employers means the penalties available via these derivative claims (which also allow for the recovery of attorney fees) will no longer be available in section 226.7 actions.

For a printable PDF of this article, click here.

The EEOC collects workforce data from employers with more than 100 employees (a lower threshold applies to federal contractors). The data collected is used for several purposes, including enforcement, employers’ self-assessment, and for research. Historically, such employers have been required to file annual Employer Information Reports (“EEO-1 Component 1 Reports”) disclosing the number of employees by job category, race, and gender.

By September 30, 2019, employers must file Component 2 data, including compensation and hours worked, as detailed below. Component 2 requires employers to report employees’ hours worked and pay information from their W‑2 forms, according to the same categories. The Online Filing System data collection portal for Component 2 is now open. System login information was scheduled to be sent to employers via USPS letter and email on July 15, 2019. Component 2 Upload File Layout Specifications and an accompanying Excel File for 2017 and 2018 are now available in the “More Info and Additional References” section. The secure file upload function and validation process is expected to be available by mid-August 2019.

This new pay and hours worked data will give the EEOC an extraordinary look at employers’ compensation practices and may trigger EEOC investigations or charges. Employers should take the opportunity now to ensure their organization’s pay practices are equitable and not vulnerable to attack, for example, by having a pay equity audit performed. Even if the pay data submitted passes muster with the EEOC, it is possible that the data could be disclosed to third parties pursuant to federal statutes.

Being proactive now in identifying any disparities with a business’ pay structure and developing a plan to address them could help prevent future problems. An audit is a valuable option to employers seeking to confirm the absence of pay inequity.

The details surrounding Component 2 (available in full here) are as follows:

  • By September 30, 2019, employers including federal contractors are required to submit Component 2 compensation data for 2017 and 2018 if they had 100 or more (full and part-time) employees during the workforce snapshot period. (Note that federal contractors with 50-99 employees are not required to report Component 2 compensation data, and that federal contractors with 1-49 employees, and other private employers with 1-99 employees, are not required to file either EEO-1 Component 1 data or Component 2 data.)
  • The “workforce snapshot” period for the 2017 EEO-1 report would be an employer-selected pay period between October 1 and December 31, 2017; the snapshot period for the 2018 report would be an employer-selected pay period between October 1 and December 31, 2018 (the snapshot periods need not be the same year to year.)
  • Employees are tallied in each compensation band by category categories including: Executive/Senior Level Officials and Managers; First/Mid-Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; and Service Workers. This data is then entered in the appropriate columns of the report based on sex and ethnicity or race.
  • Employers use W-2’s Box 1 income as the measure of compensation for each employee, even if they did not work a full calendar year; then they tally the total number of employees in each compensation band by job category.
  • Component 2 has a second matrix to report hours-worked data for all full and part-time employees, with each cell on the hours-worked matrix corresponding to a cell on the summary compensation data matrix. The hours worked during the reporting year by all the employees counted in the cell on the summary compensation data matrix should be totaled and then recorded in the corresponding cell on the hours-worked matrix.
  • For FLSA-exempt employees, employers may either report actual hours worked if the employer maintains accurate records of this information, or report a proxy of 40 hours/week for full-time employees and 20 hours/week for part-time employees, multiplied by the number of weeks of employment during the reporting year.
  • Component 2 instructions adopt the FLSA definition of hours worked; thus, hours worked do not include paid leave, such as sick leave, vacation leave, or paid holidays. For an employee who is exempt from the FLSA, employers have the option to report the designated proxy hours of 40 or 20 hours/week or actual hours worked.
  • If an employer has multiple establishments and some have fewer than 100 employees, the employer reports Component 2 data for all establishments. The 100 employee-threshold is for the employer as a whole after totaling employees based at headquarters and all locations.
  • If an employer has establishments with fewer than 50 employees, it may choose to file a Type 6 (Establishment List) or a Type 8 (Establishment Report) for those establishments, in addition to the Consolidated Report (Type 2) and Headquarters Report (Type 3).
  • Component 2 data is reported under “Section D – Employment Data.” Employers will report this data through the Component 2 EEO-1 Online Filing System or by creating a data file and inputting their data in the appropriate fields per the data file specifications. When submitting a data file, the file layout must match the data file specifications exactly. (Note that historical data from previously filed 2017 and 2018 EEO-1 Reports will not pre-populate in the new online application for the reporting of Component 2 data.)

For a printable PDF of this article, click here.

If there is one thing worse than sexual harassment in the workplace, it’s retaliation against a victim of harassment as a result of reporting harassment. Existing law in California prohibits an employer from terminating, discriminating or retaliating against an employee because of the employee’s status as a victim of sexual harassment, domestic violence, sexual assault or stalking (Labor Code, Section 230). Assembly Bill-171 (presented by Gonzalez, D-San Diego) seeks to broaden the protections for such victims by providing a “rebuttable presumption” of unlawful retaliation if an employer within 90 days following either the date when the victim provides notice to the employer or when the employer has actual knowledge of the status, discharges, threatens to discharge, demotes, suspends, or takes any other adverse action against the victim-employee. “Harassment” in this context means sexual harassment, gender harassment, and harassment based on pregnancy, childbirth, or related medical conditions.

A 2016 report by the EEOC Select Task Force on the Study of Harassment in the Workplace found that 3 out of 4 victims of harassment never even talked to a supervisor, manager, or union representative about the harassing conduct. Victims of harassing behavior fear they won’t be believed or will be blamed or subject to social and/or professional retaliation, such as being terminated. These concerns are well-founded. A 2003 study found that 75% of employees who complained of workplace mistreatment experienced retaliation in some form.

The statistics may improve given the recent public support for victims of harassment in the workplace through such movements as #metoo and Times Up, but employers must take the lead in their organizations by clarifying and identifying all forms of harassment and retaliation, not only out of moral and legal duties, but because doing so is just good business. Many employees on both the giving and receiving end of harassment do not understand what words and/or actions cross the line; all employees will be protected the more they know. To be sure, the reach of harassment and retaliation extend far beyond the obvious direct victims. Coworkers and others interested in the organization who see, hear or otherwise witness harassment and/or retaliation are all part of the cost. As training and effective harassment prevention efforts continue, workplace harassment and retaliation will not be tolerated. Businesses will be proactive and take specific steps to ensure that is the case, or legislation such as AB-171 will determine the outcome for them.

AB-171 has passed in the State Assembly and is headed to the Senate for review with the full legislature vote expected by mid-September.

For a printable PDF of this article, click here.

With the popularity of Facebook and the widespread use of social media by employees, it probably comes as no surprise that experts believe a person’s Facebook status update offers interesting (and usually obvious) insight about his or her personality. Some people tend to share photos of their travel adventures or culinary skills while others post primarily about the political issues of the day or their kid’s latest athletic competition. For the reader, status updates can be interesting, fun and educational. They can also be dangerous traps for the unwary when they consist of unrestrained rants targeting an employer. Certainly, “concerted activities” for the purpose of mutual aid or protection are permitted and protected by the National Labor Relations Act; therefore, posts consisting of complaints concerning working conditions or worker’s rights will typically not support termination of the employee. However, before “going off” on an employer on social media, or tolerating the same by your employees, remember that such posts may be viewed as offensive and unprotected, supporting a legal termination.

Last week, the Texas attorney general filed a motion to dismiss a wrongful termination claim brought by a former executive assistant to a judge. The assistant’s public Facebook posts called the judge’s political affiliates “assholes”, and otherwise disparaged the judge and other members of the court. The assistant argued her posts were constitutionally protected free speech, while the judge claimed that the posts went beyond partisan insults and included salacious commentary and images that the judge considered “totally inappropriate” and disruptive to maintaining the credibility and professionalism of the court and its employees. The motion is yet to be heard and involves unique issues given the workplace in question, but the case serves as a good reminder that if employee comments are general bad-mouthing of a boss and are unrelated to working conditions or collective action with coworkers, an employer can discipline an employee for these comments.

In determining whether the risk of being fired is worth the momentary thrill of bashing the boss or supervisor, thoughtful employees will exercise restraint. If a real discussion-worthy issue is involved, employees will want to choose their words and their method of delivery carefully, to ensure the message is not lost in the emotion. And by all means, check your privacy settings regularly.

For a printable PDF of this article, click here.

Joint employer status has long been a hot topic and is seemingly a moving target depending on which agency or jurisdiction is evaluating the status. In a move to reduce uncertainty over joint employer status, promote greater uniformity among court decisions, reduce litigation, and encourage innovation in the economy, on April 1, 2019, the U.S. Department of Labor (“DOL”) proposed a four-part test to replace existing regulations that determine joint employer status under the Fair Labor Standards Act (“FLSA”). While the proposal was favorably received by managers/employers, it sparked criticism from the plaintiffs’ attorneys, who accused the DOL of ignoring precedent that interpreted joint employment broadly.

The DOL’s proposal represents the first significant change of joint employer rules since the 1950’s, seeking to apply a rule consistent with the test adopted by the Ninth Circuit in Bonnette v. California Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983). The proposed test would consider four factors in determining whether joint employer status is found: (1) does the business (alleged employer) hire or fire employees; (2) does it control employee schedules and working conditions; (3) does it determine employee pay and method of payment; and (4) does it maintain employee’s employment records.

Unlike Bonnette, under the DOL’s proposal, only actions actually taken with respect to the employee’s terms and conditions of employment are relevant to the joint employer determination. Significantly, the proposed rule would eliminate any risk of a business being deemed a joint employer based only on the possibility that they could exercise control over an employee’s working conditions.

The new proposal also leaves room for consideration of additional factors if it appears that the alleged joint employer is either exercising significant control over employees’ work or otherwise exercising action directly or indirectly in the interest of the employer in relation to the employee. Particularly, the proposal notes that an employee’s purported economic dependence on the business is not a valid consideration in the joint employer analysis. Nor do specific business models (e.g., franchises) or business arrangements/agreements (e.g., requiring a partner to adopt workplace-safety or sexual-harassment-prevention policies) make joint employer status more or less likely.

While this rule change is good news for employers, keep in mind this is currently only a proposal. There may be many rewrites and legal challenges to overcome before a final version is presented. Also, this proposal, if adopted, is limited to joint employment determinations under the FLSA; it does not apply under other federal or state statutes.

For a printable PDF of this article, Joint Employer Proposal.

The #MeToo movement has prompted many state and local governments to expand protections prohibiting discrimination. Two months ago, the Illinois General Assembly passed a series of amendments to the Illinois Human Rights Act, which forbids discrimination in connection with any protected class. If signed into law, the amendments could significantly impact employers.

Currently, the Act applies to those who employ 15 or more employees within Illinois for at least 20 weeks per year. House Bill 4572 would apply to employers with one or more employee for at least 20 weeks per year. Senate Bill 20 makes several changes to the procedures of the Illinois Department of Human Rights and the Human Rights Commission, including:

  1. Extending the charge-filing period from 180 days after an incident giving rise to a claim to 300 days after the incident;
  2. Requiring the Department of Human Rights to notify all parties that the complainant may “opt out” of participating in the Department process within 60 days and commence a lawsuit in state court;
  3. Changing the makeup of the Commission from 13 part-time Commissioners to 7 full-time Commissioners, all of whom must either be licensed to practice law in Illinois or have relevant professional experience;
  4. Creating a temporary panel of three Commissioners to manage the backlog of requests for review; and
  5. Requiring the publication of Commission decisions within 180 days.

In addition to these bills currently awaiting Governor Bruce Rauner’s signature, a proposed amendment to Senate Bill 577, pending before a senate committee, would make changes to the Human Rights Act and the Victims’ Economic Security and Safety Act (VESSA), including (1) expanding the definition of “employee” in the Act to include independent contractors, vendors, consultants, and any “other person providing services pursuant to a contract,” expanding the class of individuals who can file a discrimination or harassment charge; (2) extending VESSA to include sexual harassment claims made by employees (currently, VESSA provides any employee who is the victim of domestic or sexual violence up to 12 weeks unpaid leave from work); (3) prohibiting any employer from including a non-disclosure provision in any settlement agreements related to sexual harassment claims, and permitting such a provision only at the employee’s request.

For a printable PDF of this article, click here - and be sure to check out more updates in our Stokes Wagner Quarterly Legal Update!

Just last month, the General Data Protection Regulation (“GDPR”) came into existence. GDPR is the legal framework establishing the guidelines for collection and processing of personal data of individuals in the European Union (“EU”) and the rights of the individuals with regard to such data. The GDPR requires businesses to be much more explicit about the information they maintain on people and to provide them with more control over that information. While European businesses may have been planning for the GDPR for some time, many U.S. companies are unprepared with no plans in place to comply. However, the long arm of the GDPR might apply to them.

Even if a business has no direct EU operations, it may still be required to comply with the GDPR if it, or its customers acting on its behalf, process information on people in the EU. This means that for many U.S. businesses, such as hotels and restaurants, the rules affect how they operate in other countries, because their users are globally connected. Consumers will be able to ask for the information that businesses maintain on them, and businesses will be required to provide such information in short order at no charge to the consumer. Consumers will also have the right to erasure of personal data (the “right to be forgotten”) when certain grounds apply, and the right to ask that their data be restricted.

What does this mean for you?

For businesses that have not begun compliance efforts, there is much to consider, including:

  • adopting a GDPR compliance policy;
  • creating a proper consent to use the data;
  • identifying someone to advise them regarding compliance (is there a need in the organization for a data protection officer);
  • determining whether/how to reach out to obtain re-consents;
  • reviewing data management procedures;
  • finding out where the information is located; and
  • developing procedures in the event of a security breach.

While fines for violations are severe and becoming compliant takes time, businesses must start somewhere. They would be well-served to put plans in place to demonstrate their efforts at working towards compliance.

For a printable PDF of this article, click here.

On Aril 6, 2018, the U.S. Department of Labor announced amendments to the Fair Labor Standards Act (“FLSA”) § 3(m).

One amendment rescinds portions of regulations regarding tip pooling when tipped employees earn at least the full FLSA minimum wage and do not claim a tip credit. In light of this amendment, the Department of Labor provided guidance and announced that employers who pay the full FLSA minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools.

Another amendment prohibits employers from keeping tips received by their employees, regardless of whether the employer takes a tip credit. This means that managers and supervisors are still prohibited from participating in tip pools as their participation would deemed as though the employer is unlawfully keeping the tips, which is still prohibited under the FLSA.

What does this mean for you? The FLSA effectively allows back-of-house staff who earn at least minimum wage and are employed in states without mandated tip credits (California, Nevada, Washington, Alaska, Minnesota, Montana) to participate in tip pools. The Dept. of Labor’s Wage & Hour Division expects to proceed with finalized rulemaking in the near future to fully address the impact of these 2018 amendments.

For more legal news, check out our quarterly newsletter for April 2018!

The 2nd Circuit, covering Connecticut, New York, and Vermont, has revived a sex bias claim brought on behalf of Donald Zarda, a deceased skydiving instructor who was allegedly fired for telling a client he was gay. As an instructor at Altitude Express, Zarda sometimes mentioned his orientation in order to help female clients feel more comfortable when jumping, as they would be tied physically close to him during jumps. Zarda was fired after a boyfriend of one female client complained to Zarda’s boss that Zarda had inappropriately touched his girlfriend and mentioned he was gay. Zarda denied anything inappropriate and alleged that his dismissal was entirely because he said he was gay.

Zarda’s estate tried to get a trial court to reinstate the sex bias claim after the EEOC held that the prohibition against gender discrimination in Title VII of the Civil Rights Act of 1964 extended to sexual orientation. The question of whether Title VII encompasses sexual orientation discrimination has led to inconsistent results, with the 7th Circuit ruling that the statute does in fact prohibit orientation bias and an 11th Circuit panel deciding that it does not. Now the 2nd Circuit has aligned itself with the 7th Circuit and the EEOC.

The 7th Circuit held that “Title VII’s prohibition on sex discrimination applies to any practice in which sex is a motivating factor,” and that “[s]{:target=”blank”}exual orientation discrimination is a subset of sex discrimination because sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted, making it impossible for an employer to discriminate on the basis of sexual orientation without taking sex into account.”

The court explained that the reach of law has expanded, and this ruling reflects that evolution. The court concluded that stereotypes around sex are the foundation of discrimination on the basis of sexual orientation, and their shared roots mean they warrant shared Title VII protection. The court viewed sexual orientation as being protected through “the lens of associational discrimination,” the same principle that protects an employee who marries someone of a different race.

For more legal news, check out our quarterly newsletter for April 2018!

Ever wonder if you can recover litigation costs in employment cases? On August 15, 2017, in Sviridov v. City of San Diego, the court made it clearer for employers.

Two years ago, in Williams v. Chino Valley Independent Fire Dist., the Supreme Court explained that prevailing employers in employment cases can generally only recover costs if the employee’s action was objectively without foundation – an extraordinarily high standard. However, Williams was not asked to consider and did not answer the question of whether costs may properly be awarded in a FEHA action pursuant to a Section 998 offer. That issue was before the court in Sviridov.

Sviridov holds that a Section 998 offer creates economic incentives for both parties to settle rather than try lawsuits. Litigation costs are awarded to an employer if a plaintiff is not awarded damages more than the Section 998 offer, even if the case objectively had foundation.

What does this mean for you? Majority of employment cases are brought under FEHA. In these cases, it can be beneficial for employers to make reasonable Section 998 offers during litigation. Contact Stokes Wagner if you have any questions.

For more legal updates, check out our update for September 2017!