San Francisco Employment Law Firm Blog

August 8, 2008

The rules for employee reimbursement for mileage expenses

In 2007, the California Supreme Court addressed the issue of reimbursement of mileage expenses incurred by traveling employees under California Labor Code 2802 in the case of Gattuso v. Harte-Hanks Shoppers, Inc. The court held that when calculating costs that an employee incurred using his or her automobile, for purpose of statute requiring employers to indemnify employees for costs necessarily incurred in discharge of their duties, use of mileage is permissible, even though it is less accurate than calculating actual expenses incurred. But if employee can show that reimbursement by mileage is less than actual expenses, the employer must make up the difference.

In calculating reimbursement amount due to employee under the labor code section 2802, the employer may consider not only actual expenses that employee incurred, but also whether each of those expenses was “necessary,” which in turn depends on the reasonableness of employee’s choices.

Thus, the employer will probably not be obligated to reimburse employee for lavish or extravagant expenses such as five-star hotels, extravagant dinners, etc.

August 7, 2008

Is negative job performance evaluation a defamation?

by Arkady Itkin

Negative job performance evaluations are usually held to be statement of opinion rather than fact, and hence not properly the subject of a defamation action, unless an employer’s performance evaluation falsely accuses an employee of criminal conduct, lack of integrity, dishonesty, incompetence or reprehensible personal characteristics of behavior. Thus, in one case the court held that no defamation action lies even when the employer’s opinions about the employee’s performance are objectively wrong and cannot be supported by reference to concrete, provable facts. (Jensen v. Hewlett Packard, Co.) Even calling a teacher at a particular school a “babbler” and the “worst teacher” was found to be a subjective judgment and again – not grounds for defamation. (Moyer v. Amador Valley J. Union High School Dist.)

As stated above, while a statement of opinion is not grounds for defamation, a publication of false fact may be actionable. Thus, while a statement accusing plaintiff of poor performance is clearly a statement of opinion, a statement that an employee made a $100,000 mistake in estimating a business bid is a statement of fact and therefore, if false and published to third parties, is actionable (Gould v. Maryland Sound Industries, Inc.)

August 6, 2008

Can employer take paid wages back (chargebacks and California non-forfeiture law)

by Arkady Itkin

Under California Labor Code section 221, an employer may not take back any wages from an employee after they are earned. The statute provides: “It shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee.” The labor code section 200 defines wages broadly to include “all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation. The statute illustrated California’s strong public policy favoring the protection of employee’s wages.

Some employers and especially retailers have the “chargeback” policy under which the employees’ incentive that is to be paid, is charged back if the consumer of the products/services returns the purchased product to the store. It is important to note that such a policy is only valid and legal if agreed upon by an employee in writing. If the worker does not expressly agree to the chargeback policy in writing, it will likely be found to be unlawful.

August 4, 2008

Overtime and commission based wages in California

by Arkady Itkin

Under California Labor Code section 510(a), all employees who work in excess of 40 hours in one workday or in excess of 8 hours per day must receive overtime pay. This provision, however, doesn’t apply to any employee “whose earnings exceed one and a half time of the minimum wage if more than half of that employee’s compensation represents commissions.” (California Code of Regulations, title 8, section 11040, subdivision 3(D)).

It is important to understand which compensation exactly is considered commissions for the purposes of the issue in question. A commission is a compensation paid for services rendered in the sale of property and services, and based proportionately upon the amount of the value of the services rendered. Under the Supreme Court definition, the compensation is commissions if (1) the employee receiving compensation is involved in selling a product or a service; (2) the amount of compensation in question is a percent of the price of the product or service.” (Ramirez v. Yosemite Water Co. (1999)).

Thus, if, for instance, the employer’s “bonus” or “incentive” pay does not depend on the volume of products/services sold by an employee, the overtime protections laws probably apply to that employee.

August 2, 2008

Interplay of FEHA and Tort Claims Act in California

by Arkady Itkin

It is common for an employee who charges the public employer (government office) with discrimination and harassment claims to receive a response from the government attorney, claiming that the employee’s claims are rejected for non compliance with the Tort Claims Act. This legal argument, however, has no merit, when it comes to claims made under the Fair Employment and Housing Act (“FEHA”). It is well established that actions seeking redress for employment discrimination and harassment pursuant to the FEHA are not subject to the claim presentation requirements of the Tort Claims Act. Snipes v. City of Bakersfield 145 Cal.App.3d 861 (1983). A local government entity may not impose a claims requirement where, because of special procedural provisions of the FEHA, the California Tort Claims Act provisions do not apply. Pasadena Hotel Development Venture v. City of Pasadena 119 Cal.App.3d 412, 414-415 (1981). Thus, the compliance with the Tort Claims Act is not necessary in order to purse legal action under FEHA.

August 1, 2008

Alternative workweek schedule and overtime

by Arkady Itkin

Under California law (California labor code section 501), an employer can authorize alternative workweeks of workdays exceeding eight hours without overtime pay if specified criteria are met. Such flexible scheduling requires full disclosure to affected employees and the affirmative vote of at least two-thirds of the employees in the affected workplace voting in a secret ballot election before performance of the week.

Any type of alternative schedule that is authorized by Cal. labor code section 501 may be repealed by the affected employees. An employer shall not reduce an employee’s regular rate of hourly pay as a result of the adoption repeal or nullification of an alternative week schedule.

However, the employer must pay overtime at one-and-a-half times the regular rate after 10 hours per day in a 40 hour workweek, and a double the regular rate after 12 hour per days and for any work in excess of eight hours on those days worked beyond the regularly scheduled alternative workweek days.

July 30, 2008

Who is liable for harassment at workplace in California?

by Arkady Itkin

Many workers who are subjected to sexual or other forms or harassment prefer not to disclose this to their supervisor or human resources department. This reluctance to speak up is usually motivated by fear of retaliatory termination in response to a complaint about harassment.

However, choosing not to complain about harassment at your workplace is hardly ever a good idea. First, the harassment which is not addressed usually only gets worse as the harasser sees how much he can get away with without being punished. More importantly, under California law, while the employer is strictly liable for the harassment by a victim’s supervisor, the employer is liable for harassment by a co-worker only if the employer knew or had a reason to know of the harassment. Thus, by not complaining about harassment, the victim virtually forecloses the future opportunity to seek legal redress for hostile work environment and harassment, as it’s hard to blame someone for preventing harassment if that entity wasn’t even aware of misconduct which the victim of harassment was subjected to.

July 28, 2008

Discrimination under FEHA at California workplace

by Arkady Itkin

The California Fair Employment and Housing Act (“FEHA”) prohibits an employer from taking any adverse action (such as refusing to hire or employ, refusing to select for a training program leading to employment, demoting or discharging from employment or training program leading to employment, discrimination in compensation or terms or conditions of employment) based on his or her: race, religious creed, color, national origin, ancestry, physical or mental disability, medical condition, marital status, sex, sexual orientation, age (if 40 or over), or pregnancy, childbirth or related medical conditions of any female employee.

It is also unlawful for employer to act upon the perception that the aggrieved individual has one of the above protected characteristics, even if he or she does not. Thus, if an employee discriminated or harassed based on his perceived homosexuality, he is protected under FEHA and the employer will be likely liable for discrimination and harassment even if that employee is not gay.

July 26, 2008

Meal and rest breaks at California workplace

by Arkady Itkin

There are numerous exemptions and exceptions that relieve California employers from the some legal duties with regards to providing their employee with rest and meal breaks. These exception usually apply to employees of such professions and in such environment where complying with the general rules would be unduly burdensome impracticable for the employer.

In the absence of an applicable exception, the following general rules apply to meal and rest breaks in California. An employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of at least 30 minutes. However, if the total work day of the employee is sex hours or less, the meal period may be waived by mutual consent of both the employer and employee. It is very prudent for an employer to obtain such consent in writing in order to avoid subsequent claims for unpaid meal breaks, as the employer would normally have a burden of proving that he/she complied with the law.

Under California Labor Code 512, an employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of at least 30 minutes. However, if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee, but only if the first meal period was not waived. Further, under labor code section 226.7(a), no employer shall require any employee to work during any meal or rest period.

July 25, 2008

Good Cause Employee Termination in California

by Arkady Itkin

Many employment contracts and the majority of the union collective bargaining agreements provide that the employee should not be terminated unless for good cause. It is important to understand what the “good cause” standard exactly means, as the meaning of “good cause” in this instance is quite different from the ordinary meaning of the words “good cause.”

In the context of express or implied contracts not to discharge without good cause, “good cause” means “fair and honest reasons, regulated by good faith on the part of the employer, that are not trivial, arbitrary, or capricious, unrelated to business needs or goals, or pretextual. A reasoned conclusion supported by substantial evidence gathered through an adequate investigation that includes notice of the claimed misconduct and a chance for the employee to respond.

Employee misconduct on the job is, of course, good cause for termination. But employers do not need to prove that the alleged misconduct actually took place. “Good cause” exists if the employer reasonably believed the alleged misconduct took place and otherwise acted fairly.