Answer:
Generally, leave taken for bonding with a child, whether after birth, adoption, or foster care placement of a child with the employee, needs to be concluded within one year of the birth or placement of the child.

Question:
I have recently been doing freelance HR/recruiting functions for companies on my own without the benefit of a staffing service as my employer.  Should I be carrying insurance for myself in case a situation should arise on a contract job?

Answer:
With a few exceptions for certain specific industries, there is no legal requirement that self-employed, sole proprietors carry insurance in California, including workers’ compensation insurance.  However, it may be advisable to do so.  Your insurance broker can best advise you on what types of insurance may be right for your business.  Depending on your work arrangements with the companies you perform work for, it is possible you may be covered by some of their insurance policies as well, especially if they would be considered your employer under California law. 

Question:
Is there a “minimum” cap amount when placing a cap on vacation or PTO banks?

Answer:
Unfortunately, California law is not clear on exactly what the minimum allowable cap on vacation or PTO is.  Earned vacation and paid time off (“PTO”) cannot be forfeited once earned by an employee.  Consequently, “use-it or lose-it” policies are illegal in California.  However, an employer may cap the amount of vacation and/or PTO an employee can accrue, provided the cap is “reasonable.”  The California Division of Labor Standards Enforcement (“DLSE”) years ago opined that a worker must have at least nine months after the vacation accrues before a cap will be deemed effective.  Following this line of reasoning, a cap of at least 1.75 times the annual accrual rate would be consistent with the DLSE’s old opinion letter.

In March 2006, the Labor Commissioner issued a revised Manual and withdrew prior opinion letters on the issue.  Although there is no clear guidance on the issue, a cap close to 1 times the annual accrual is likely to be challenged and found unlawful, whereas a cap closer to 1.75 or 2 times the annual accrual is less likely to be challenged and found unlawful. 

It should be noted, however, that no statute or regulation specifies a limit on the accrual rate cap, and no court decision has specifically ruled on what constitutes an acceptable minimum cap.  Even following the Labor Commissioner’s withdrawn opinion letter is not a guarantee because, while California courts give a degree of deference to the Labor Commissioner’s opinion, they are free to disregard it when they conclude it does not correctly interpret California law.

Question:
Can you just do background checks on full-time employees and not on seasonal employees?

Answer:
Although there is no requirement for employers to conduct background checks, many employers choose to do so for a variety of reasons, including avoiding claims for negligent hiring.  Employers who conduct background and/or credit checks must comply with a variety of laws including, but not limited to, the federal Fair Credit Reporting Act, the California Consumer Credit Reporting Agencies Act, and the California Investigative Consumer Reporting Agencies Act.  If an employer chooses to perform background checks on full-time employees, nothing in the law similarly requires the employer to conduct background checks on seasonal or part-time employees.  However, any time an employer chooses to implement a practice or policy for one group of employees and not another, the practice or policy should be carefully scrutinized to ensure it does not have an unintended disparate impact on employees in any class protected by anti-discrimination or other laws. 

Question:
If a nonexempt employee is asked to make a trip to the bank to make deposits (which is not part of his normal job), do we have to pay him mileage reimbursement for driving to and from the bank?  Does it matter if it's part of his normal job?

Answer:
Mileage reimbursements are the same for both nonexempt and exempt employees.  Labor Code section 2802 requires employers to reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.”  Thus, if an employee is required to incur costs -- either as part of the employee's regular job duties or simply while performing a task he/she was directed to perform -- the employer must reimburse the employee for those costs, including mileage.

Question:
Regarding the mileage question.  We have an hourly employee do the same thing, but rather than pay him mileage, we pay him his regular rate of pay based on the time it takes him to drive to and from the bank.  Is that ok?

Answer:
Under California law, employer-required travel time generally must be compensated as “hours worked” and counted in determining eligibility for overtime premium pay and meal and rest periods. This obligation is independent of any obligation an employer may have to pay an employee’s travel expenses.  Consequently, an employee’s time spent traveling in the performance of his or her job duties must be compensated for time spent traveling in addition to being reimbursed for travel expenses.

These answers are provided for informational purposes only.  They are not intended as legal advice nor do they create an attorney-client relationship between Jackson Lewis LLP and any readers or recipients.  Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances.  Furthermore, prior results do not guarantee a similar outcome.

Question:
Our company is considering switching to PTO. I understand the financial downside to the employer and the upside for more control to the employee, but I would like to know if there are other advantages/disadvantages we should review before deciding to switch.

Answer:
The specific advantages/disadvantages that can flow from switching to PTO depend on your situation, and it probably makes sense to speak to an employment and labor lawyer with regard to your specific circumstances before deciding to switch.

That being said, in general switching to PTO provides a number of specific advantages in terms of being able to manage employee vacations and leaves. With PTO, it really does not matter what the purpose of the missed time is (vacation time versus sick days, etc.), they are all treated the same. On that front, it reduces some management headaches.

It also makes it easier to track how much time employees have accrued, how much they have used in a given period, and how much accrued time they are carrying over from year to year. This simplifies the calculations necessary for paying out individual employee's accrued time either at the end of employment, or at the end of the year if you do not allow employees to carry over time from one year to the next.

In terms of disadvantages associated with PTO, there are only a few, the most important is the fact that employees have greater flexibility to decide specific hours they will take off in a particular day or week. For instance, employees can take two hours in the middle of the day. This can make tracking the hours employees actually work in a given week difficult depending on the system you are using. Inaccurate tracking of employee hours can lead to wage and hour claims.

Many companies are making the switch to PTO, and it will likely become the norm among companies that offer paid time off as an employee benefit in the near future, if that is not already the case.

Question:
We have an employee seeking treatment under our workers compensation insurance. They have been declared permanent and stationary. The employees work restrictions, which we cannot accommodate, are permanent (life long). We have explored a reasonable accommodation transfer to a vacant position which they could perform with restrictions, which does not exist. In other words, they are no longer able to perform the essential functions of the position. Are we legally entitled to terminate this employees employment based upon the fact that we will never be able to accommodate their permanent work restrictions and a reasonable accommodation does not exist?

Answer:
A disabled employee who is "qualified" under the Americans with Disability Act (ADA) or California’s Fair Employment and Housing Act (FEHA) may have a right to reinstatement with the employer if the employee can perform the essential functions of the position, with or without a reasonable accommodation. If the disabled employee is not qualified, or is qualified but accommodation would cause an undue hardship or direct threat to the health and safety of co-workers or the employee, then an employer may deny reinstatement, provided there is also proper supporting documentation from the authorized healthcare provider.

However, if the disability is related to a Workers’ Compensation claim, then the employer is sometimes required to consider permanent modified duty or alternative assignment if the disabled worker is not expected to recover from disability enough to return to the employee’s original job. (City of Moorpark v. The Superior Court, 18 Cal. 4th 1143; Labor Code 132(a))

Note: the party making inquiry should seek the advice of legal counsel before deciding to terminate the employee, as opposed to merely putting the employee on indefinite leave of absence, to carefully review individual circumstances. (This is recommended due to the risk of a discrimination claim, and due to the complexity and technical nature of disability benefits.)

Question:
Is there an agency or a type of "subject matter expert" out there that can help us help a terminally ill employee understand and apply for all of the various types of benefits that he/she might be entitled to receive?  For example: Social Security disability, the company's LTD coverage, SDI, COBRA, Medicare, etc.  All of these various programs seem to overlap each other.  Some questions are:

1. What are the different waiting periods?

2. If the employee qualifies to receive all three, are they allowed to collect money from all three or is that considered double dipping - >really triple dipping?

3. Age and income restrictions?

4. How much does each pay?

5. Eligibility requirements (medical diagnosis) Which do you have to report as income (for tax purposes)?

These are just a few of many questions we will need answered.  We want to help this employee navigate this complex web, as they are not able to do so on their own (due to the illness) and they do not have any family or friends to help them.  I am not necessarily looking for a labor law attorney, rather someone that specializes in this specific area. Please let me know of any consultants or agencies that we can retain on behalf of this employee.

Answer:
The following are answers to the five general questions relating to a "terminally ill" employee:

1. Depending upon the nature of the illness, there are several sources that may provide help in assisting the employee. For example, Social Security (SSDI) has specialists that provide online assistance starting at http://www.ssa.gov/pgm/reach.htm and http://www.ssa.gov/pgm/links_disability.htm; Long Term Disability insurance carriers have representatives that are required to answer questions and provide assistance through the application process, and to fully explain benefits. Rep contacts are shown in the LTD insurance contract; Visit http://www.edd.ca.gov/Disability to obtain guidance on SDI benefits; One of the better sources for information and assistance relating to COBRA/CAL-COBRA is at: http://www.opa.ca.gov/healthcare/health-plan/keeping-coverage.aspx ; Medicare information and assistance may be obtained from: http://www.medicare.gov/

2. The applicable eligibility waiting period and offset provisions, if any, depend upon the disability benefit plan.

3. Age and income restrictions, if any, depend upon the disability plan.

4. The amount of benefits depend upon the nature of the illness and disability plan.

5. Taxability of benefits, if any, depend upon the disability plan.

There may also be discretionary employer-provided sick leave benefits, as well as pension plan disability benefits, that would have to be explained to the employee.

There is an informative comprehensive material, The Leave & Disability Coordination Handbook, published by Thompson Publishing Group. Lastly, you may also request a free copy of a helpful comprehensive "leave management checklist" at profdan@ssctv.net

Note: the party making inquiry may want to seek the advice of legal counsel, due to the complexity and technical nature of disability benefits, to review individual circumstances before providing assistance to the employee.

Question:
We have an employee who has been temporarily working out of another state for a few months but his place of residence is still California. Should the employee be taxed at the California state rate or the new state where they are temporarily residing and working?

Answer:
Income received from sources in California by a nonresident or part-year resident (non-military) is subject to California individual income tax (California Revenue and Taxation Code section 17041, subdivision (b); Also, see Appeal of Dennis L. Boone, 93-SBE-015, October 28, 1993). Conversely, income received from sources outside of California (non-California source income) by a nonresident or part-year resident is not subject to California individual income tax.

The specific method used to determine the tax liability of a nonresident or part-year resident taxpayer is illustrated at www.ftb.ca.gov/law/summaries/NonResTxCA_2002S.pdf , and is reported on Form 540NR California Nonresident or Part-Year Resident Income Tax Return.

The state income tax, if any, of the state in which the employee currently resides depends upon such state’s tax laws. For example, there are some states that do not have an individual income tax, i.e. Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington and Wyoming.

Note: the party making inquiry may want to seek the advice of a qualified tax professional or legal counsel to review individual circumstances before making tax filing decisions.

Question:
We are looking to host some "healthy" classes (yoga, exercise) for the employees during lunch. Aside from emphasizing the classes are voluntary and having employees sign an exercise waiver, is there anything else we should be concerned with?

Answer:
An employer that "hosts some healthy classes (yoga, exercise)" effectively takes on a responsibility as the sponsor of a wellness program for its employees. Depending upon the nature of the wellness program, the employer will owe certain duties to participants and potential employee/participants. For example, the employer/sponsor may have a duty to provide a safe exercise environment to avoid potential injuries otherwise due to negligence.

If the wellness program is mandatory and connected with health insurance premium discount incentives, rebates, and/or cash rewards, the employer/sponsor must be careful to offer the program to all employees. Such programs may not discriminate against older workers who are covered under the Age Discrimination in Employment Act or who are considered disabled under the Americans with Disabilities Act, and equivalent California statutes, e.g. Fair Employment and Housing Act, 29 CFR sec. 1630, et al.

More elaborate wellness programs, e.g. weight management, body mass index (BMI) and biometric screening, may also present practical issues, such as needed shower and dressing facilities. (See HR magazine, February, 2010 (pages 59-61) for an informative related article, "Getting Paid for Staying Well".)

Note: the party making inquiry may want to seek the advice of legal counsel to review surrounding circumstances before deciding to implement a wellness program, particularly regarding the text of the waiver and release agreement.

Question:
If we are a covered employer under the PDL/FMLA/CFRA, are we required to grant these rights to temporary employees employed through a staffing agency working at our location?

Answer:
It is difficult to answer this question with the limited information provided.  In general, under the FMLA/CFRA, where two employers exercise some control over the work of an employee, they may be considered joint employers.  This is a fact specific determination and the court will not look at any one criteria, but instead will look at the totality of the employment relationship. For example under certain circumstances, employees from staffing agencies are considered contract workers exempt from most leaves of absence, whereas others are considered employees. 

Typically however, the staffing agency recruits, screens, hires, fires and sets the wages, benefits and payroll of the employee.  Whereas the staffing agency’s client will control the employee’s working conditions, supervise the employee and determine the length of the assignment.  Thus both entities are generally considered “employers” under FMLA.

Only the “primary employer” is required to provide notices of FMLA grant FMLA leave and benefits.  Factors that determine whether an joint employer is the “primary employer” include, but are not limited to, authority/responsibility to hire and fire, assign/place the employee, make payroll, and provide employment benefits. Generally the placement agency is considered to be the primary employer for purposes of FMLA. 

The secondary employer, generally the client of the staffing agency, is responsible for accepting the employee upon return from leave if it continues to use an employee from the staffing agency in that position.  It is also important to remember that the FMLA prohibits an employer from interfering with an employee’s attempt to exercise FMLA rights, and retaliating or discriminating against an employee for exercising such rights. This is so, whether or not the employer is covered under FMLA/CFRA.

In summary, if you are obtaining employees from a staffing agency who is responsible for screening, recruiting, hiring, setting wages and benefits and terminating the employee and you are responsible for supervising the employee while on your worksite and controlling how they perform their duties, the staffing agency would be the primary employer responsible for granting leaves of absence. However, given the fact-specific nature of the inquiry, I would recommend that you consult an experienced employment law attorney and share the details of your employment contract to determine the most appropriate approach.

Question:
Where can I find a guide on the time frame requirements for record keeping of employment records?

Answer:
This is a great question! There are various requirements under state and federal law. Both SHRM (www.shrm.org) and the California Chamber of Commerce (www.hrcalifornia.com) have charts on their websites that detail the requirements.

Question:
If an employer offers 2 weeks of vacation/PTO at the beginning of each year (not on an accrual system, just gives 2 weeks each year), does the employer have to let the employee roll it over or can the employer require they use it all before the year is over since the vacation/PTO is not "accrued"? Also, if it's not "accrued", does the employer have to pay it out when the employee terminates?

Answer:
Employers in California cannot impose "use it or lose it" vacation/PTO policies. You can "require" employees to take their accrued vacation/PTO each year, but if for some reason an employee does not do so, you must either pay out the unused portion, or impose a "reasonable" cap on the accrual (generally, 1.25 times the annual accrual). Regarding payment upon separation, once an employee receives vacation, it is vested. So, if you decide to give a lump sum of vacation/PTO at the beginning of the year, then the vacation/PTO becomes vested and the unused portion must be paid out on separation. The issue is not whether the vacation/PTO "accrued" but rather whether is vested.

Question:
We have an employee who has given their resignation with 1 months notice of intent to leave the firm. In their resignation they state that they would like to use their PTO time for the last two weeks of the year, which then makes them eligible to receive a bonus since our bonus plan states that you need to be employed with the company as of 12/31/09. Is it illegal to accept an employees resignation earlier so that we do not have to pay out a bonus?

Answer:
Employers may "accelerate" a voluntary resignation. So, in this case, you could tell the employee that you appreciate the one month notice, but you will be accepting the resignation immediately. Now, that means you are effectively terminating the employee, so you need to have the final paycheck, including all accrued but unused PTO, available at the time of this conversation. Many employers take this approach because of potential conflicts of interest and other issues that may arise when an employee remains working after resigning employment. One thing to keep in mind is that the employee would be eligible for unemployment insurance benefits (after the waiting period) for the time between the final day of work and the original resignation date. Finally, the employee may still be entitled to a pro-rated bonus depending on how your bonus policy is drafted. That is an important legal issue you should discuss with counsel.

Question:
Is an employer required to reimburse its employees for the cost of mandatory flu shots where those employees work in a health care setting and have contact with patients?

Answer:
Labor Code Section 2802 generally requires employers to reimburse employees for necessary expenses incurred for work. So, if an employer requires employees to get a flu shot, it is very likely that Labor Code Section 2802 requires the employer to reimburse its employees for the cost of the shot. That said, you may consider contacting an attorney that specializes in health care issues to determine if the unique status of health care employees allows employers in this area to forego reimbursement.

Question:
If an employee requests to take a class that is related to employment and the company does not agree to pay for the class, is the company still obligated to allow the employee time off with pay?

Answer:
Generally, Labor Code section 2802 requires an employer to reimburse an employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.  Under California law it is only necessary that the worker be subject to the “control of the employer” in order to be entitled to compensation.  California courts have also stated that hours spent by a employee of his own volition in obtaining instruction in his particular field of endeavors cannot be considered hours devoted to his employment. 

The question here is whether the employer has required the employee to take the training or coursework.  California law does not specifically address the question of whether work-related training is compensable work hours. 

However, the Division of Labor Standards Enforcement (DLSE) has adopted the federal standard which states that time spent by employees attending training programs are not counted as hours worked if the attendance is voluntary and all the following criteria are met:

          1) Attendance is outside the regular working hours;

          2) Attendance is voluntary (attendance is not voluntary if the employee is led to believe that present working conditions or the continuation of employment would be adversely affected by their failure to attend the training);

          3) The training is not directly related to the employee’s job (training is  directly related to an employee’s job if it is designed to make the employee handle his job more effectively as distinguished from training him for another job or to a new or additional skill; and

          4) The employee does not perform any productive work during such attendance. 

If all four of these criteria are not met, the employee must compensate the employee for the time used to take the course.

Question:
If a full-time employee resigns and at termination discusses the possibility of working “on call” or “part-time”, is there a minimum number of work hours required to be considered a part-time employee?

Answer:
No.

Question: Can a California employer terminate an employee at-will if the employee is on a probationary status?

Answer: It depends.  Pursuant to California Labor Code section 2922, all employees are presumed to be at-will employees.  To overcome this presumption, an employee must point to an express or implied-in-fact agreement limiting the employer’s ability to terminate at-will.  This is true whether or not the employee is on a probationary status.  Even if there is no express agreement limiting the presumption of at-will employment, employers must consider whether their conduct may have created an implied-in-fact agreement.  In doing so, employers should look to the parties’ entire relationship, including but not limited to: the terms of any relevant application for employment, employee handbook or manual; the personnel policies and practices of the employer; the employee’s longevity of service; actions or communications by the employer constituting assurances of continued employment; and the practices of the industry in which the employee is engaged.

Question: I have heard that the Employment Development Department has a work share program that provides for some unemployment insurance benefits.  Where can I obtain more information about the program?

Answer: The Employment Development Program allows for the payment of work sharing unemployment insurance benefits to individuals whose wages and hours have been reduced, e.g., in lieu of a layoff.  More information can be obtained regarding the program at http://www.edd.ca.gov/pdf_pub_ctr/de8714bb.pdf.

Question:
Can we pay an employee "commissions only" if they work in the office and their job is sales? 

Answer:
The answer to your question depends on the Wage Order applicable to your business.  Under California law, the "commissioned sales exemption" does not apply unless (i) the employee is an "outside" salesperson, who spends more than half of their time engaging in sales activities outside the employer's place of business; or (ii) the salesperson makes more than one and one-half times the minimum wage, and more than half of that employee’s compensation represents commissions. More importantly to your question, the "commissioned inside sales exemption" only applies to workers who are employed in the mercantile industry (covered by Wage Order 7) or in professional, technical, clerical, mechanical and similar occupations (covered by Wage Order 4). Because this can be a very tricky area of the law, we suggest you consult legal counsel for further guidance.

Question:
Can we discipline a employee who is pregnant who does not request time off ahead of time , such as for doctor's appointments, or calls in sick often? 

Answer:
You should consistently apply your attendance policy to all employees. However, you should also be aware that with respect to calling in sick, the employee has up to four months of pregnancy disability leave for time off associated with a medical condition caused or related to her pregnancy. Therefore, you should not be disciplining her for the time off. That said, you can certainly hold her accountable for providing appropriate notice of doctor's appointments. Being pregnant does not give her the ability to come and go as she pleases. The best approach at this point is to sit down with the employee and explain your expectations regarding calling to sick, scheduling appointments, etc.

Question:
I am aware of the 2 hour Supervisor Training requirements every two years for California AB 1825. However, is there a law that states all employees should be receiving harassment training also? Our Employment Practices Insurance company recently questioned us on our training practices for all employees regarding harassment and employment discrimination. The questions gave me the impression that we were out of compliance if we were not training all employees (not just supervisors) regarding both topics. Is this correct??? (Or are they just trying to encourage a "best practices" approach) Please advise...I do not want to be out of compliance. Thanks!

Answer:
There is no California law like AB 1825 that requires non-supervisors to receive equal employment opportunity training (i.e., harassment, discrimination and retaliation prevention). Most EPLI carriers require it, however, because this type of training tends to reduce future claims.  Because California's Fair Employment and Housing Act requires that employers take appropriate action to prevent equal employment opportunity issues, training all employees in these areas is definitely a "best practice."