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computer professional exemption

Under California Labor Code section 515.5, certain software industry employees are exempt from overtime pay requirements, if they perform specific, exempt duties and receive a rate of pay not less than the statutorily-specified rate.

Effective January 1, 2020, the computer software employee’s minimum hourly rate of pay, in order to be subject to this exemption, increases from $45.41 / hour to $46.55 / hour, the minimum monthly salary exemption will increase from $7,883.62 to $8,080.71, and the minimum annual salary exemption will increase from $94,603.25 to $96,968.33.

In order to be correctly classified as exempt from overtime under the California computer professional exemption, all of the requirements of section 515.5 must be met. Thus, for instance, an employee how is paid more than the above referenced minimum, but who performs work that lacks in creativity and independent judgment required by this law, as it’s often the case with IT administrators, will not qualify for this exemption and should be eligible for overtime pay, like any other non-exempt, hourly employee.

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paycheck relocation deductionsIn most cases, it’s not a good idea for an employer to refuse to issue an employee his final paycheck until he repays his relocation bonus. Likewise, it’s a bad idea to unilaterally deduct the relocation bonus amount from that employee’s final paycheck.  Here is why:

First, an employee’s failure to repay his relocation bonus or his failure to honor some other part of your employment agreement is legally not a defense to the legal requirement of paying all wages. A number of laws mandate upon employers to promptly pay all wages due to employees and prohibit taking improper deductions from paychecks except as authorized by law. Further, it has been held that an employer may not set off debts a terminated employee owes the employer against wages due to that employee. Barnhill v Robert Sunders & Co. (1981).

Secondly, when you don’t pay the wages due to an employee, you may be liable not only for the wages unpaid, but also for penalties, interest, and possibly – that employee’s legal fees, if he decides to pursue his claim for unpaid wages in court as a single claim or along with other claims (i.e. wrongful termination, discrimination, retaliation, etc…). This can be especially costly and not worth the risk in a situation where an employee is a high-wage earner, who received a relatively modest relocation bonus, as it may result in much greater liability for waiting time penalties (up to 30 days of that employee’s ordinary wages). To illustrate, imagine the following scenario: you hire a worker at a rate of pay of $800/day after issuing him $10,000 as a relocation bonus to be repaid, if the employee quits or is fired for cause before his one-year anniversary of employment with you. That employee resigns three months later.  You refuse to issue his final paycheck until he repays his relocation bonus. That employee waits for a month and then files a claim for unpaid wage with the Department of Labor. He will then be entitled to his unpaid wages for two weeks plus up to $24,000(!) in waiting time penalties ($800 x 30 days as per California Labor Code 203). That employee then repays you relocation bonus, ending up receiving a total of $14,000 more from you than he should have and otherwise would have.

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dual employment under FEHA contracting employ8erMany employers use temporary staffing agencies and recruiting agencies for hiring workers, in part, in order to insulate themselves from liability for potential discrimination, retaliation, and wrongful termination claims. They believe and are often advised that if their workers are hired through and are paid by an outside agency, then they will be off the hook for any such claims. However, this is not necessarily the case, as California law often finds “dual employment” relationship in these types of situations.

California FEHA (Fair Employment and Housing Act) that governs state discrimination and retaliation claims does not define “employee,” but the administrative agency charged with interpreting FEHA—the Fair Employment and Housing Council (FEHC)—does define the term in Gov. Code section 12935. The FEHC defines “employee” as  “any individual under the

direction and control of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written.” FEHA thus requires an employment relationship, but that relationship need not be direct. Instead, the employment relationship must show the employer’s exercise of direction and control over the employee. Direction and control may be shown by, among other factors, whether the employee must obey instructions from the employer and whether “there was a right to terminate the service at any time.”

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In order to decide whether to file a case for wage violation or harassment / discrimination against the employer that you are still working for, you should take into account not only the legal aspects of your potential case but also the practical factors. In the short audio recording below, I talk about three key questions you should ask yourself when deciding whether to bring a case against your present employer. I also bring examples of two different situations to illustrate the point:

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foreign accent discriminationDiscrimination on the basis of an employee’s foreign accent is a sufficient basis for finding national origin discrimination. Fragante v. Honolulu (9th Cir. 1989) Indeed, the Equal Employment Opportunity Commission Guidelines currently define national origin discrimination broadly as including, but not limited to, the denial of equal employment opportunity because of an individual’s, or his or her ancestor’s, place of origin; or because an individual has the physical, cultural or linguistic characteristics of a national origin group. 29 C.F.R. § 1606.1 (2019).  Thus, in Ortiz v Dameron Hospital Association (2019), the court referred to a manager’s statements with regard to Filipino workers that she “could not understand what they were saying’ and “did not know how they got their jobs speaking the way they do”, and that they “did not speak English” as significant evidence of national origin discrimination in violation of California FEHA. In Ortiz, this type of egregious evidence was also as sufficient basis for claims for constructive discharge, as well as hostile work environment.

On a practical level, it is a good idea for managers to avoid a situation where they lose patience with an employee’s accent an make derogatory comments about it, as this alone can lead to a lawsuit. And, if an employee with an accent complains that his co-worker/s mock his accent, the employer has the same obligation under the law to address and remedy that situation, as he would in any other situation where allegations of discrimination or harassment are made.

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bereavement leave CaliforniaCalifornia law on bereavement leave at work can be divided into two categories: private and public employment.

If you are an employee at a private company, as of this date, your employer has no obligation to provide any bereavement leave, although the employer may choose to include time off for bereavement as one of the benefits of employment with them. Employers who provide this benefits generally have a full discretion on how long that leave might be, and they can also choose when to grant and when to deny it. Even if the employer violates his own policy and doesn’t provide any bereavement leave when the employee handbook states that the company does, this cannot form a basis for any type of legal claim against the employer, because violating company’s own policies, is not the same as violating the law and it’s not actionable in court.

If you are a state worker (with limited exceptions) you have the right to bereavement leave that’s governed by Government Code 19859.3. That sections provide, among other things:

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medical test protected disability under FEHAThe California Court of Appeal has recently issued a decision in the Ross v County of Riverside case, which is quite helpful to those employees who take time off to be tested for a serious illness, whether they end up being actually diagnosed with it or not. The court took a very analytical approach to analyzing that cases’ scenario, arriving to a conclusion that employees tho take time off for medical appointment to determine whether they have certain illness should be treated as if they had a protected disability a workplace.

The court noted as follows: A physical disability under the FEHA includes any physical impairment that affects the neurological or immunological systems and limits a major life activity. (Gov. Code, § 12926, subd. (m)(1).) A physical disability “limits a major life activity if it makes the achievement of the major life activity difficult.” (Gov. Code, § 12926, subd. (m)(1)(B)(ii); Cal. Code Regs., tit. 2, § 11065, subd. (l)(3).) ” W]orking is a major life activity, regardless of whether the actual or perceived working limitation implicates a particular employment or a class or broad 19 range of employments.” (Gov. Code, § 12926.1, subd. (c), § 12926, subd. (m)(1)(B)(iii); Cal. Code Regs., tit. 2, § 11065, subd. (l)(1)&(3)(D).) Repeated or extended absences from work for medical appointments constitute a limitation on the major life activity of working. Soria v. Univision Radio Los Angeles, Inc. (2016).

A physical disability may be temporary or short term (Diaz v. Federal Express Corp. (C.D. Cal, 2005) and includes not only physical impairments that are actually disabling, but also physical impairments that are potentially disabling or are perceived as disabling or potentially disabling. (Gov. Code, § 12926.1, subd. (b) [“It is the intent of the Legislature that the definitions of physical disability and mental disability be construed so that applicants and employees are protected from discrimination due to an actual or perceived physical or mental impairment that is disabling, potentially disabling, or perceived as disabling or potentially disabling”].) A physical disability is perceived as potentially disabling when an employer regards or treats an employee as having a physical impairment that has no present disabling effect but may become a disabling in the future. (Cal. Code Regs., tit. 2, § 11065, subd. (d)(6); American National Ins. Co. v. Fair Employment & Housing Com. (1982).

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If you are bringing a lawsuit against your employer for violating your medical leave rights, there are a number of possible important reasons why you should consider including only FMLA, only CFRA or both claims in your lawsuit, even if they appear to be in many ways similar:

  • Avoiding removal of your case to federal court. If you include the federal FMLA claim, in some cases you employer will have the right to remove your case from State to Federal Court. While this is not the end of the world, there are a number of important advantages to pursuing your case in State court, and if there is a way to prevent removal, you should consider suing the employer only under CFRA. If removal is not an issue, however, then including both FMLA and CFRA claim might be advantageous to maximizing your right to recover damages, as mentioned below.
  • Individual liability under FMLA. Interestingly, under FMLA (but not CFRA), individual managers may be held liable for violating your FMLA rights if you can show that a specific individual exercised control over your employment and the decision to terminate.  Nardodetsky v Cardone Industries, Inc. (E.D. Pa. Feb. 24, 2010). However, no individual liability exists under CFRA and only the organization can be held liable.  While you might not necessarily want to go after the personal pockets of the manager who terminated you, including individual defendants in the lawsuit can be strategically advantageous by applying additional pressure on the employer to spend more money on defending the case, providing access to broader discovery in the case, and therefore – “encouraging” the employer-defendant to consider settling the case sooner than later.
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proving retaliation case for reporting tax fraud in CaliforniaA accountant, auditor or any other finance professional needs to know a few critical things about proving retaliation case for reporting tax fraud. In those types of cases, you may want to obtain through discovery copies of the relevant tax returns to show fraud. However, the company can avoid producing these tax returns by claiming taxpayer privilege. This privilege precludes the forced disclosure of tax returns and of the information contained in those returns. (See
Schnabel v. Superior Court (1993) 5 Cal.4th 704, 719-721; Sav-On Drugs, Inc. v. Superior Court (1975) 15 Cal.3d 1, 6-7; Brown v. Superior Court (1977) 71 Cal.App.3d 141.) However this does not prevent a claimant from speaking up when he discovers that employer is filing incorrect or fraudulent returns. This privilege also doesn’t preclude a wrongful termination claim if the employee is discharged for this type of activity.

Proving this type of retaliation case doesn’t require that the employer be forced to produce such tax returns or their content. The reporting employee’s ability to prove his retaliation case only turns on whether he was discharged for communicating his reasonable belief that the employer was not properly reporting its tax obligation. Haney v. Aramark Uniform Services, Inc. (2004) 121 Cal.App.4th 623, 641.) The elements of the case can be proved without violating the implied taxpayer privilege. Although it would of course strengthen his case, the employee doesn’t have to present the contents of tax returns in order to prove this retaliation case. After all, the crux of this type of case is not in whether the tax impropriety took place, but whether the employee was retaliated or fired for reporting this issue in good faith.

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