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State Labor Laws

Labor Law Attorneys

We continue to monitor state statutory changes along with Appellate Court, 9th Circuit and Supreme Court decisions impacting workers in California and Nevada.  Here’s a sampling of what has happened recently.


NEW 2020 LABOR LAWS & UPDATES


Here is our annual round-up of California and Nevada labor and employment law changes.  We view this as a mostly positive counterpoint to the disappointing news you will find under the NLRB tab.

CALIFORNIA LABOR LAWS

Minimum Wage Increases

On January 1, 2020, the minimum wage for the State of California increased to $13 an hour for employers with more than 26 employees and to $12 an hour for employers with 26 or fewer employees. As you know, the State minimum wage is a floor.  Many local municipalities and counties have established higher minimums.  In the City and County of Los Angeles (unincorporated areas) the minimum wage increases to $15 an hour for employees with more than 26 employees and $14.25 an hour for employers with 26 or fewer employees on July 1, 2020.

Preliminary Injunction Granted to Stop AB 5, an Act to add Section 2750.3 to the Labor Code

On January 16, 2020, a US District Court Judge granted a preliminary injunction order in favor of the California Trucking Association to temporarily stop enforcement of AB 5 against motor carriers. Until this case is decided, the trucking industry will not have to comply with AB 5.

The landmark Dynamex decision became statutory law on January 1, 2020 when Section 2750.3 was added to the Labor Code. AB 5 requires the Dynamex “ABC test” be applied to prove a worker is an independent contractor and not an employee. The burden of proof is now on the hiring entity to show the following:  A) The worker is free from the control of the hiring entity in connection with work performance; B) The worker performs work outside the hiring entity’s usual business; and C) The worker is engaged in an independent business of the same nature as the work performed. Further, AB 5 provides that if the ABC test cannot be applied due to a statutory exception, the “economic realities test” adopted in Borello shall apply.

Uber and Lyft have obtained a Temporary Restraining Order (“TRO”) which will also exempt them for the time being, with no plans to reclassify its workers as employees.

We expect other litigation over this measure as employers maintain their fight to deprive their workers of decent wages and benefits.  Hopefully, this will be a fight they will lose.

Extension of FEHA Statute of Limitations – AB 9, Amends Sections 12960 & 12965 of the Government Code

AB 9 amends the Government codes to extend the amount of time an employee has to file a charge of employment discrimination, harassment or retaliation with the Department of Fair Employment and Housing (“DFEH”) from one to three years. This gives more time to victims who may be recovering from a traumatizing event.

Temporary Retraining Order issued on AB 51, an Act to add Section 12953 to the Government Code & Section 432.6 to the Labor Code

AB 51 makes it a criminal misdemeanor for employers to require arbitration as a condition of employment and prohibits firing or threatening employees who refuse to sign. It was set to go into effect on January 1, until a TRO was entered by the Court in a lawsuit filed by the California Chamber of Commerce. The TRO will remain in effect until the Court decides on whether to grant permanent injunctive relief. A preliminary hearing will be held on January 31, 2020.  

The Court entered the TRO on December 30, 2019 stating, “plaintiffs have raised serious questions regarding whether the challenged statute is preempted by the Federal Arbitration Act as construed by the United States Supreme Court.” add Section 12953 to the Government Code, and to add Section 432.6 to the Labor Code, relating to employment.

Expansion of Bargaining Rights:AB 378, amends Sections 8430 – 8439.8 of the Education Code

AB 378 allows a certain group of child care workers — in-home daycare providers paid by the state to provide care and education to low-income families — to collectively bargain with the state over the reimbursement rates they receive among other issues. SEIU California helped organize the workers and co-sponsored the bill.  This bill amends the Education Code to give around 40,000 private day-care providers the right to choose a provider organization to act as their unit’s representative and bargain collectively. 

“No Rehire” Settlements: AB 749, adds Section 1002.5 to the Code of Civil Procedure

AB 749 states in pertinent part that “an agreement to settle an employment dispute shall not contain a provision prohibiting, preventing, or otherwise restricting a settling party that is an aggrieved person from obtaining future employment with the employer against which the aggrieved person has filed a claim, or any parent company, subsidiary, division, affiliate, or contractor of the employer.”  It makes any provision within a settlement agreement that contains a “no rehire” clause void. This bill was enacted to protect victims of harassment.  Exceptions apply in cases where the employee engaged in assault, sexual harassment, or other legitimate, non-discriminatory reasons.

Increasing Corporate Diversity:  SB 826, adds Sections 301.3 & 2115.5 to the Corporations Code

Effective January 1, 2020, publicly traded companies headquartered in California must have at least one woman on their board of directors.  Non-compliant companies can be fined up to $100,000.  Further details regarding requirements and compliance can be found in Sections 301.3 and 2115.5 of the Corporations Code.


NEVADA LABOR LAWS

Briefly, the following are areas in which Nevada labor law has changed:

Mandatory Paid Leave

For full-time workers (e.g., 40 or more hours a week), the statute now provides up to forty (40) hours of paid leave a year. The Paid Leave Act ("PLA") created Section 608 of the Nevada Revised Statutes ("NRS"). The PLA applies only to employers with fifty (50) or more employees. Next, the PLA prescribes an automatic accrual rate of .01923 hours for every hour of work performed by a covered employee. Accrued paid leave may be used commencing the 90th day of employment and the employee can utilize the paid leave for any reason. Employers must (a) account for accrued leave on each paycheck and (b) allow an employee to carry-forward to the next year up to forty (40) hours of accrued/unused paid leave. Employers are allowed to establish PLA policies on usage of accrued paid leave; however, an employer may not require an employee to use more than four (4) hours of paid leave per incident.

The PLA contains a safe harbor for collective bargaining agreements (“CBA”). However, the safe harbor applies only where the paid leave provisions in the CBA result in a paid leave accrual rate of not less than .01932 hours per hour per employee (The PLA does not distinguish between vacation leave, paid sick leave, etc.)

We recommend you review all of your CBAs covering Nevada bargaining units to determine if they comply with the PLA. Should any CBA fail to comply with the PLA, we recommend you immediately demand effects bargaining with the impacted employer so that the CBA can be brought into compliance with the PLA's safe harbor provisions.

Pre-Employment Drug Testing

Employers are now barred from using pre-employment drug screening to deny employment – with certain exceptions - to individuals with valid prescriptions for Medical Marijuana.  Under AB 132, most Nevada employers will be prohibited from refusing to employ an applicant who tested positive for marijuana metabolites. That is, an employer may still lawfully implement a pre-employment drug screening, but AB 132 prohibits the employer from refusing to hire any individual who tests positive for marijuana metabolites (e.g., THC).  However, AB 132 does not apply to on-the-job testing. AB 132 has several safe harbors. The first is for safety, sensitive positions, and any classification covered by DOT or other federal regulations. Another safe harbor provides that a refusal-to-hire for a positive test does not violate AB 132 where the position is covered by a CBA that provides for pre-employment screening.

Nevada Equal Rights Commission

The Nevada Equal Rights Commission ("NERC") will now have the authority to issue back-pay orders and assess civil fines as part of a remedial order. Prior to this change, NERC had very limited "cease and desist" powers with regard to violations of Nevada's state anti-discrimination statutes.

Additionally, and effective January 1st, Nevada has adopted a statute which forbids the "private settlement" of certain sexual harassment claims. Primarily, this statute is aimed at publicly traded companies that are settling harassment claims against principal officers or shareholders (think Steve Wynn).  However, this statute would be pre-empted by federal law to the extent it applies to CBA grievance settlements.      

Minimum Wage

The Nevada Minimum Wage will increase in 2020 and, interestingly, the applicable increase is tied to whether the employer provides "affordable health insurance" to its employees. Under the Nevada State Constitution, Nevada's state minimum wage is bifurcated between one rate for employer's that offer "qualifying health benefits" to its employees, while those employers that do not pay a higher rate. For 2020, the qualifying minimum wage is $7.25 an hour, while the higher tier is $8.25 an hour.

Further, SB 192 defines "qualifying health benefits" as those health plans/benefits which comply with the Affordable Care Act ("ACA"). In addition to importing the coverage/benefit requirements of the ACA into the Nevada Minimum Wage Act, SB 192 also requires that a "qualifying health benefit" meet the ACA's affordability test.

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STATE COURT DECISIONS


Classification of Employees - Dynamex

May 21, 2019

From 1947 until 2018, litigation involving the misclassification of workers under California Industrial Wage Commission matters required workers to prove they were employees. Since this was quite onerous for most workers, in 2004 our Partner Lewis N. Levy and Mark Pope of Pope, Berger, Williams & Reynolds in San Diego believed the facts here presented an excellent test case to demonstrate how unfair this was to workers. As a result, Lewis and Mark initiated litigation on behalf of the Dynamex drivers to change the law.

After the California Supreme Court decision in Dynamex Operations West v. Superior Court, California employers bear the burden of proof when they allege independent contractor status. As most of our readers know, employees are eligible to receive overtime, minimum wage, sick leave, Worker’s Compensation protections, and other benefits.

In April of 2018, through Dynamex Operations West v. Superior Court (Dynamex), the “ABC Test” was adopted by the California Supreme Court as a method to determine whether a worker is an employee as opposed to an independent contractor.  The test requires the hiring entity to show the following to disprove employment: A) The worker is free from the control of the hiring entity in connection with work performance; B) The worker performs work outside the hiring entity’s usual business; and C) The worker is engaged in an independent business of the same nature as the work performed.

Dynamex can be Applied Retroactively

In December of 2018, the Plaintiffs in a decade old case called Vasquez v. Jan-Pro Franchising International (Jan-Pro) appealed their dismissal in light of Dynamex and the adoption of the ABC Test.

On May 2, 2019, the Ninth Circuit Court of Appeals held Dynamex applied retroactively to Jan-Pro.  The case’s dismissal was vacated, and it was remanded back to the District Court to be considered on its merits.

If you or someone who know believes they have been misclassified as an independent contractor, please contact our office for further assistance.

Melendez v. San Francisco Baseball Associates LLC 

May 21, 2019

On, April 25, 2019, the Supreme Court of California held in Melendez v. San Francisco Baseball Associates LLC (Giants) that, “It is up to state courts, not an arbitrator, to interpret state labor law standards applicable to all workers.”

In this matter, the word “discharge” under California Labor Code §201(a) was the center point of contention. California Labor Code §201(a) provides, in pertinent part, as follows: “(a) If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.”  Melendez asked, what does it mean to be discharged? -- and is it up to State law to interpret it’s meaning or does the preemption doctrine require it to be submitted for arbitration?

The California Supreme Court held that, “Allowing a state court to interpret California Labor Code §201 does not threaten the policies of promoting the arbitration of labor contract disputes, but importantly it does protect the states’ authority to enact minimum labor standards.”

This decision will allow for broader protections for unionized workers under State law by limiting the application of the preemption doctrine, which makes arbitration the primary means of resolving disputes over interpretations of a collective bargaining agreement.  The Court recognized that the interpretation of a statute is not within an arbitrator’s purview. 




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