San Francisco Employment Law Firm Blog

July 18, 2008

Is “use it or lose it” policy regarding employee vacation time legal?

Under a “use it or lose it” policy, an individual who does not use all of his or her accrued vacation pay by a particular time forfeits the right to be paid fro those days at a later date. The California Supreme Court held, however, that vacation pay vests as it is earned, and any vacation earned cannot be taken away. Vacation pay is, in effect, additional wages for services performed, the receipt of which is postponed. Thus, this “use it or lose it” policy is generally unlawful. Thus, upon termination, for instance, the employer must compensate the terminating employee for unused vested vacation time.

Vacation time is in many ways treated like wages under California law and is actually considered wages for the purposes of compensation. Thus, when vacation is earned during a period of employment (for example, two weeks of paid vacation annually) and the employee does not complete the period, California Labor Code section 227.3 requires compensation for a pro rata share of the unused vacation based on the percentage of the period completed.

Further, an employer may not force an employee to use accrued vacation time rather than serve out the term of his employment. Vacation pay that is not used continues to accumulate unless the vacation policy contains a “cap” on accruals. A “cap” precludes the employee from accruing additional vacation time after a specified amount has been accumulated.

July 17, 2008

Advantages / Disadvantages of Being An Independent Contractor

by Arkady Itkin

In recent years, it has become increasingly popular for businesses to use the services of independent contractors for both short and long-term projects rather than to hire new career employees. Business can retain the services of independent contractors directly, or through a temporary employment agency.

The potential advantages of suing independent contractors include:

1. Cost savings from mandated contributions. The employer does not have to pay the usual employer contributions – state unemployment tax, social security tax or federal unemployment tax.

July 13, 2008

Constructive Discharge in California

by Arkady Itkin

Constructive discharge occurs when an employer engages in conduct that effectively forces the employee to resign or retire. Although the employee may say “I quit,” the employer relationship is actually terminated by the employer’s acts against the employee’s will. As a result, a constructive discharge is legally considered as a firing by the employer rather than a voluntary resignation or retirement by the employee.

To establish a constructive discharge claim, an employee must prove that the employer either intentionally created or knowingly permitted working conditions that were so intolerable or aggravated that a reasonable employer would realize that a reasonable person in the employee’s position would be compelled to resign. In determining whether a reasonable employee would feel compelled to resign, courts consider such factors as demotion, reduction in salary, reduction in job responsibilities, reassignment to degrading work, badgering, harassment or humiliation by the employer intended to encourage the employee to resign, offers of early retirement or continued employment on terms less favorable than the employee’s former status. The employee must further notify someone in a position of authority of intolerable conditions before he may prevail on a constructive discharge claim. Such notice prevents employers from closing their eyes to wrongdoing and permits employers who are unaware of any wrongdoing to correct a potentially destructive situation.

It is important to remember that this standard is objective, and employee’s subjective feeling of disappointment is not enough to claim constructive discharge. An employee is not permitted to quit and sue simply because he doesn’t like something at his workplace.

July 12, 2008

Sexual Harassment Claim Does Not Have to Be “Sexual”

by Arkady Itkin

It is commonly known that sexual harassment at workplace involves unwelcome acts of sexual nature by a co-workers or a supervisor, such as unwelcome touching, repeated unwanted propositioning, conditioning employment or promotion on sexual favors, etc.

Offensive conduct, however, need not be sexual in nature to create a hostile work environment in the workplace. Hostile non-sexual conduct (or language) directed at an employee because of his or her gender may create an actionable hostile environment. A pervasive pattern of abuse violates Title VII even if not motivated by sexual desire to drive women out of the organization. Rude overbearing, loud, vulgar and generally unpleasant comments by a male supervisor toward female subordinates, coupled with physically aggressive (though non-sexual) actions, may constitute sexual harassment if male subordinates were treated with proper respect. Interestingly enough, the fact that there were more women than men in the office does not make a difference.

A non-sexual conduct that singles out an employee based on gender may also be actionable and constitute sexual harassment/hostile work environment . In one California case, a hostile work environment was shown by evidence that male police officers engaged in overtly hostile acts toward female police officer, including stuffing her shotgun barrel with paper so that the weapon would explode if fired, spreading untrue rumors about her abilities, singling her out for unfavorable work assignments and shifts, making false complaints about her performance, and even threatening to disrupt her wedding.

July 11, 2008

An Employer’s Duty to Conduct Workplace Investigation

by Arkady Itkin

Under California law, an employer is required to promptly and thoroughly investigate any claim of harassment, discrimination, or retaliation through a formal workplace investigation. The obligation to investigate arises out of the affirmative duty under the Fair Employment and Housing Act, Cal. Gov. Code section 12940(j) and (k) to take all reasonable steps necessary to prevent discrimination and harassment from occurring. The duty to investigate a harassment claim promptly and throughly exists whether or not the claimant consents to an investigation or cooperates with one. Further, neither an employee’s failure to report harassment nor the fact that the harassment stopped before the investigation began conclusively absolve an employer from liability for discrimination and harassment. Moreover, it is not enough for an employer to conduct an investigation without also taking measure to protect the employee from retaliation.

Employer’s failure to investigate an employee’s complaint adequately may violate California anti-discrimination laws. To be adequate, the investigations should be commenced immediately or as soon as practicable, and be completed as soon as circumstances reasonably allow. Investigations commenced within a day or days of a complaint and completed within a two-week period have been routinely upheld as timely. Waiting until after the complainant has filed an administrative charge with DFEH or EEOC will be presumed inadequate.

While the complaint is undergoing investigation, the employer should take steps to prevent contact between the complaining employee and the alleged harasser, such as rescheduling or placing the alleged harasser on leave.

July 10, 2008

California Pregnancy Discrimination Laws at Workplace

by Arkady Itkin

Several laws protect California women from pregnancy discrimination at workplace. These laws interact with each other in complex ways. Each law and protection may or may not apply depending on the size of the employer, the employee’s length of service, and other facts. Some leaves run concurrently, while others don’t.

There are three statutes that directly related to leave during and after pregnancy: California Pregnancy Disability Leave Law (PDLL), California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA)

California’s Pregnancy Disability Leave Law is the most inclusive and should be looked at first in determining a woman’s entitled to protected leave. All California employers with at least five employees are covered. Pregnancy disability leave is available regardless of a woman’s length of service with a covered employer, and it is available to both full and part-time employees.