The turkey is done, the tree is up, the lights are hung. Time to turn to that other year-end festivity: revising your employee handbooks to track new laws. And the stockings are pretty full for California employers this year. So pull the policies off the shelf, dust them off, and get them updated. Pronto.

Here’s the rundown:

• EEO policies need to be updated to include gender expression, the latest protected class added to California’s Fair Employment and Housing Act.
• Pregnancy leave policies need to be amended to ensure continuation of health benefits for employees taking leaves for pregnancy related disabilities. This one is particularly important for small employers not subject to FMLA or its California analog CFRA.
• Make sure you’ve got the latest changes to California’s latest leave benefit — for organ and bone marrow donors — in the handbooks and procedures manuals.
• Payroll policies for out-of-state employees working in California must be changed to ensure that the employees are being paid overtime under California’s rules.
• Any employees paid commission? If so, the commission agreements need to be written down, acknowledged by the applicable employees, and properly kept.
• Policies governing the use of credit checks in employment applications need to be significantly revised, given that California now prohibits the practice in most circumstances.
• New hire packets for non-exempt employees must henceforth include specific information about rates of pay, how the rates are applied, non-cash allowances (like food or lodging), payday particulars, and the proper name and contact information of the defendant, er, employer.
• Any independent contractors working for you? Make sure they are properly classified, at the risk of potential criminal sanction and substantial penalty. HR consultants, this applies to you, too, if you’re advising your clients on the independent contractor/employee distinction. (Unless you get a law license, that is. Hey, I don’t make ‘em, I just report ‘em.)
• Do you offer your employees sabbaticals (and if so, can I please work for you)? Make sure it’s not just disguised vacation, or you’ll get a surprise when your employees leave.

Most of these changes are effective January 1, 2012. Some have already happened. The clock is ticking, and I’m not talking about the ball dropping in Times Square.

While you’re doing all these revisions, give some serious thought to training, too. A handbook or procedure manual is useless if your supervisors and HR personnel don’t know what’s in it and how to apply it properly. In fact, one of the things the plaintiffs’ bar likes best is pointing out how the real-world practice in the workplace differs from the policies the employer has imposed. An investment in an annual refresher course would be money well spent. Or better yet, hire someone (like, ahem, your humble author), who includes a training session with each handbook or policy revision project. Heck, while we’re plugging, might as well point out the risk management benefits of an annual employment practices audit, to confirm what you’ve got right and improve what you could do better — hopefully before the class action gets filed and you’ve got two sets of lawyers (yours and the plaintiffs’) to pay.

Give your business the year-end gift that keeps on giving — employment liability mitigation. (Sure, jewelry sounds better, but believe me, the exposure is much more expensive if you don’t keep a lid on it.) Get your policies updated, and your managers trained on the changes, as soon as possible.

Visit christensenlawgrp.com for more information.

The law, which by its terms becomes effective on January 1, 2013, states “whenever an employer enters into a contract of employment with an employee for services to be rendered within this state and the contemplated method of payment of the employee involves commissions, the contract shall be in writing and shall set forth the method by which the commissions shall be computed and paid.” An executed copy of the agreement must be provided to each affected employee, and the employer must get a signed receipt from the employee. “Commission” is broadly defined as “compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof.”

What happens to employers who don’t comply? No penalties are specified in the law for violations. But not so fast. Labor Code violations can result in penalties under California’s Private Attorneys General Act (PAGA, aka “Sue Your Boss Act”). They may also constitute unfair business practices. Either way, a non-compliant employer can be looking down a pretty unattractive road.

For most cautious employers, complying with AB 1396 should be relatively easy. That’s because most cautious employers’ even more cautious employment counsel have been telling them to use written commission agreements for years. This is a law most likely to trip up smaller or mid-sized businesses without dedicated HR staff. In other words, the ones least likely to be able to afford a regulatory audit or a class action from the plaintiff’s bar.

So make your first New Years resolution for 2013 today. Get those commission agreements in writing.

Just in time for Thanksgiving, here comes the latest smorgasbord of entertaining, informative, insightful, and densely nutritious tidbits from the best er, cooks in the employment law blogosphere. And best of all, it’s all pot luck, so the only thing your humble host has to do is line ‘em up on the buffet and ring the dinner bell. Come on in, pull up your chair, crack open your favorite beverage, unbutton your pants, and dig right in! (Don’t forget to save room for pie.)

Appetizers, to whet the appetite. Go on, take a few!

From Robert Fitzpatrick, Fitzpatrick on Employment Law, a delicious morsel on why an NLRB ALJ can conclude evidence is not privileged, but only a real judge can order it produced.

A tasty reality check on sexual harassment (yes, Virginia, there is — oh, wait, that story is for next month), courtesy of Donna Ballman at Screw You Guys, I’m Going Home.

Andrea Paris, of Andrea Paris Law, serves up some unpaid internship do’s and don’ts for the California employer crowd. Good stuff!

Turkey, ham, tofurkey, turducken — whatever is your pleasure — and all the trimmings. Mom says you have to try at least a bit of everything.

Robin Shea, of Employment and Labor Insider, dishes on some common, and big, problems with sexual harassment suits.

Eric Meyer, of The Employer Handbook, brings a steaming plate of hostile work environment gospel — it ain’t all about motive — get it while it’s hot!

From Heather Travar, a spicy melange of American Jobs Act legislative info. Try it all together, or piece by piece, like they do it in DC.

This year’s newest recipe, from George Lenard at George’s Employment Blawg: All about the Occupy movement through the labor law lens. Bound to be a new fave!

Grab a slice or two of this delicious number on firing shareholder/employees — it’s not as easy as you think, prepared by Adam Whitney, of Damned If. Don’t miss the gravy.

And Heather Bussing of HRExaminer reminds us that it just wouldn’t be Thanksgiving without a little bit of family (or employee) drama.

Did I mention pie?

A sweet entry from Jon Hyman, of Ohio Employer’s Law Blog, about the fine legal distinction between a “d*ck” and a “f***tard.” I’d say don’t forget the whipped cream, but I’m already worried what the search engines are going to do with that one.

From Daniel Schwartz, the Connecticut Employment Law Blog, get some how anger spices up employment suits. Prepared without power, no less! That’s some good cookin’, folks!

Ari Rosenstein of CPEhr’s Small Biz HR Blog serves up this fresh dish on California’s crackdown on fake independent contractors – with a graham cracker crust, natch.

Man, I’m stuffed! Nap time. Who’s doing the dishes?

The case is Haligowski v. Superior Court. Lieutenant Mario Pantuso was employed by Safway Services when he was called to active duty with the Navy. When he returned from his six-month tour of duty, he asked Safway for his job back. The employer’s response, communicated by Pantuso’s supervisor Mike Haligowski and regional manager Greg Chomenko, seemed to imply that Lt. Pantuso should go pound some of the sand he saw while serving in Iraq. Pantuso sued Safway, Haligowski, and Chomenko for discrimination and retaliation under section 394. The individuals argued the case should be dismissed as against them because section 394 proivded no basis for individual — as opposed to employer — liability

Here’s what section 394 says:

No person shall discriminate against any officer, warrant officer or enlisted member of the military or naval forces of the state or of the United States because of that membership. No member of the military forces shall be prejudiced or injured by any person, employer, or officer or agent of any corporation, company, or firm with respect to that member’s employment, position or status or be denied or disqualified for employment by virtue of membership or service in the military forces of this state or of the United States. . . .

No employer or officer or agent of any corporation, company, or firm, or other person, shall discharge any person from employment because of the performance of any ordered military duty or training or by reason of being an officer, warrant officer, or enlisted member of the military or naval forces of this state. . . .

The trial court judge, a literalist, held that “based on the plain language of California Military and Veterans’ Code [section] 394, the individual defendants are subject to liability” because “person means person.”

The slightly more nuanced court of appeal disagreed.

[W]e perceive two possible constructions of the use of the words “person” and “agent” in section 394. The first, as Pantuso argues and as the trial court ruled, is that the Legislature intended to hold individual supervisors personally liable for discrimination under this statute. The second possible construction is that, as is generally accepted in other employment discrimination contexts such as the FEHA, that the use of the word “agent” and “other person” was “ ‘intended only to ensure that employers will be held liable if their supervisory employees take actions later found discriminatory, and that employers cannot avoid liability by arguing that a supervisor failed to follow instructions or deviated from the employer’s policy.’” (Reno v. Baird (1998) 18 Cal.4th 640, 647 (Reno), quoting Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, 66 (Janken).)

The court went on to hold that “person” does not mean “individually liable person” within the meaning of section 394. Strongly supporting the court’s holding were the California Supreme Court’s pair of decisions interpreting similar statutory language from FEHA, and holding individual supervisors were not liable for discrimination or retaliation. (The cases are Reno v. Baird and Jones v. Torrey Pines Partnership.) In addition, the court noted that, because discrimination claims often arise from “necessary personnel management duties,”

holding a supervisor individually liable for personnel management decisions which are facially common and unremarkable, but which may in hindsight be considered discriminatory would place a supervisory employee in a direct conflict of interest with his or her employer every time that supervisory employee was faced with a personnel decision. The [supervisor] would be placed in the position of choosing between loyalty to the employer’s lawful interests at severe risk to his or her own interests and family, versus abandoning the employer’s lawful interests and protecting his or her own personal interests. We believe that if the Legislature intended to place all supervisory employees in California in such a conflict of interest, the Legislature would have done so by language much clearer than that used here.

Supervisors and HR personnel can breathe a small sigh of relief with this decision — but even so, as the Haligowski court noted, supervisors may be personally liable for discrimination against military personnel under federal law. Employers, however, remain “the plaintiff employee’s target” (as the Haligowski court put it) for discrimination and retaliation. Employers should be aware of section 394, and USERRA and other protections for military personnel, and the potential liability for stiffing returning service members.

Credit reports:  AB 22 prohibits employers from using employee or applicant credit reports for most purposes. Exceptions apply to certain jobs, generally limited to those which (1) are managers; (2) have access to the employer’s or clients’ money; (3) have access to personal information of others; or (4) have access to proprietary information. The law specifies that employers who request credit reports must tell the candidate or employee the specific reason the report was requested. Employers who rely on credit inquiries in hiring or promotion will need to revise their policies accordingly.

Wage order compliance, penalties, and information for employees:  AB 469, aka the Wage Theft Prevention Act of 2011, does a number of things, none pleasant for employers. First, it imposes a restitution obligation on an employer (in addition to already existing civil penalties) who pays less than required under any commission order, and criminalizes (as a misdemeanor) willful violation of the commissioner’s orders. Second, it extends from one year to three years the statute of limitations on claims by the Labor Commissioner for statutory penalties. (Can a similar extension of private litigants’ claims be far behind?) Third, it requires employers to provide specific wage-related information to non-exempt employees at the time of hire, including the rate and the basis (i.e., hourly, salary, commission, piecework, etc.) of the employee’s wages, and to provide written notice of any changes to that information within 7 days of the change occurring. Employers will need to work fast to come up with new procedures to comply with these notice requirements for new hires as well as existing hourly employees whose rates change.

Gender expression a protected class:  AB 887 expands the definition of “gender” in California’s anti-discrimination laws to include “gender expression,” a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth. This new law adds to the already long list of protected classes under California law, and expands the potential victims of unlawful discrimination and harassment accordingly. Employers will need to include this new class in anti-discrimination and anti-harassment policies, and train supervisors and HR accordingly.

No mandatory E-Verify:  AB 1236 prohibits the state or any city or county from mandating use of federal E-Verify program, except when federal law requires its use.  California employers may still use E-Verify voluntarily.

Benefits during pregnancy leave:  SB 299 requires employers to maintain health plan coverage for an employee who takes pregnancy disability leave.  Women disabled as a result of pregnancy are entitled to up to four months of unpaid leave. (It’s California; we do things different here.) The new law makes clear employers will need to keep paying premiums during this period. Employers will need to amend their policies to include this new provision in their handbooks’ (mandatory) description of pregnancy disability leave, and ensure compliance through appropriate internal procedures.

Misclassification of employees as independent contractors:  SB 459 prohibits willful misclassification (“avoiding employee status . . . by voluntarily and knowingly misclassifying [an] individual as an independent contractor” — not much help in that definition) of individuals as independent contractors (ICs). It also prohibits deducting from a misclassified individual’s compensation deductions that couldn’t be taken from an employee’s wages. The law authorizes civil penalties between $10,000 and $25,000 for each violation. Finally, it imposes joint and several liability with the employer of anyone who knowingly advises the employer to misclassify an employee as an IC. (Wait a minute — what?! Oh, whew, lawyers are exempt.) Call it another reason for employers — and now their payroll and HR consultants — to err on the side of caution in the IC/employee debate.

The governor did nix a few troublesome bills (including one attempting to mandate bereavement leave described here), but by and large this session was a pretty employee- and labor-friendly affair.

All of these laws become effective on January 1, 2012. That’s a lot of handbook revision, policy and procedure review, and training in the next two and a half months. And with Harris v. Superior Court under submission and Brinker Restaurant Corp. v. Superior Court set for hearing in early November, it’s going to be Easter before anyone in HR or the employment bar gets any rest.

So mark your calendars — B-day (get it?) is January 8, 2012, just about the time that all those new employment laws (part 1, part 2) take effect. That’s the last day by which the opinion should be filed. But then again, I guess another delay wouldn’t be too surprising, would it?

The specific question presented in Harris is whether insurance claims adjusters are exempt from overtime requirements under the administrative exemption. The administrative exemption generally applies to employees who perform “non-manual work directly related to management policies or general business operations” of the employer or the employer’s customers. The court of appeal held that that claims adjusters did not perform “general business operations,” but instead did the “production” work involved in running an insurance company:

[W]ork performed at the level of policy or general operations can qualify as “directly related to management policies or general business operations.” In contrast, work that merely carries out the particular, day-to-day operations of the business is production, not administrative, work. That is the administrative/production worker dichotomy, properly understood. . . .

The undisputed facts show that plaintiffs are primarily engaged in work that falls on the production side of the dichotomy, namely, the day-to-day tasks involved in adjusting individual claims. They investigate and estimate claims, make coverage determinations, set reserves, negotiate settlements, make settlement recommendations for claims beyond their settlement authority, identify potential fraud, and so forth. None of that work is carried on at the level of management policy or general operations. Rather, it is  all part of the day-to-day operation of defendants’ business.

Since the Supreme Court granted review of that decision, there have been additional cases addressing the administrative exemption, and the administrative/production worker dichotomy. Some of these cases stepped back from the rigid position the court of appeal took in Harris.

Oral argument in Harris is going forward on October 3. So soon, after a four year wait, we will know at last what the Supreme Court’s take on the subject is — and perhaps where the emerging Cantil-Sakauye Supreme Court stands on employment issues. (See here and here for other thoughts on where the Court seems to be going with employment cases.)

Hey, it’s not Brinker, but at least it’s something!

AB 240 amends Labor Code section 98 to permit the Labor Commissioner to award liquidated damages in an administrative complaint for failure to pay the minimum wage. The amount of liquidated damages is equal to the amount of unpaid wages — so in essence the successful employee would recover double wages owed. Employees were previously able to obtain liquidated damages in such cases only if brought in court. Now they are available through an administrative complaint as well.

AB 587 extends until 2017 a sunset provision permitting true “volunteers” to work on what would otherwise be prevailing wage public works projects. So real volunteers, paid volunteer coordinators, and members of the California Conservation Corps or a community conservation corps can continue to work on these kinds of projects for another five years without running into prevailing wage issues.

SB 117 prohibits state agencies from dealing with contractors who discriminate against employees with same-sex spouses or domestic partners. Or, as the law puts it, contractors who “discriminate between employees with spouses and employees with domestic partners, or discriminate between employees with spouses or domestic partners of a different sex and employees with spouses or domestic partners of the same sex, or discriminate between same-sex and different-sex domestic partners of employees or between same-sex and different-sex spouses of employees.” Huh? The legislative process. Gotta love it.

SB 559 adds discrimination on the grounds of genetic information to the list of protected classed under California’s Fair Employment and Housing Act. “Genetic information” is broadly defined, and includes information about a person’s genetic tests, the genetic tests of a person’s family members, and the manifestation of a disease in a person’s family. It also includes any request for or receipt of genetic services by a person or family member. “Genetic information” does not, however, include a person’s sex (but don’t go discriminating on that ground, because the law has already got that one covered.

SB 609 affects appeals of the state Public Employee Relations Board decisions regarding employee organizations (i.e., unions). Disputes about recognition of a union are submitted to an administrative law judge appointed by the PERB, and can be appealed by the aggrieved party to the full board. The new law simply states that if the board doesn’t act on the appeal within 6 months of its filing, the ALJ decision is deemed to be affirmed.

Employers, take note — particularly of SB 559, which will require amendments to anti-discrimination policies and procedures. And note that there are other bills pending that may become law before long.

Here’s how the court funding crisis is really crippling California citizens’ ability to get disputes resolved.

• Alameda County: The court has for some time closed its doors at 4:00 p.m., but for the foreseeable future will close at 2:30 p.m., five days a week. Court reporters will not generally be available (except for law and motion) in most civil departments — but feel free to hire your own (if you can afford it).
• San Mateo County: Will be closing a civil courtroom for two days a week.
• San Francisco County: SF was hit particularly hard, including a 41% reduction in staff (almost 200 jobs), closure of 15 of 18 civil trial departments (including both complex case departments), closure of case management departments, and closure of one of two law and motion departments. Breaking news is somewhat better, but still grim. A recent compromise will keep the lights on in 11 civil trial departments (including both complex case departments) and will require a layoff of “only” 75 full time staff employees.
• San Joaquin County: Is closing one branch entirely and another partially. That’s three fewer civil departments to hear disputes.
• Yolo County: Clerks offices will be closing at 3:00 every day.
• Los Angeles County: The state’s largest trial court has predictably seen the largest impact, with three-year plans calling for elimination of 1,800 jobs, closure of more than 180 courtrooms or effectively 9 complete courthouses, closure of half of all civil courtrooms one-third of the family and children’s courtrooms, and drastic cuts to traffic operations, all leading to a prospective tripling of the length of civil cases (from 16 months to 4 1/2 years).
• Merced County: Clerks offices will close at 3:00 every day, and virtually the entire court will be closed on seven “limited service” days between now and the end of 2011.
• Mendocino County: Clerks offices will close at 3:00 every day.
• Marin County: Clerks offices will close at 3:00 every day.

The bottom line is longer wait times for litigants to get disputes resolved. And as the aphorism goes, justice delayed is justice denied. It also costs more. That is no doubt of concern to well-heeled corporate litigants, but for individuals it may well mean that wrongs go unredressed — or get redressed in other, less civilized methods. Those able to pay can also opt for private justice in the form of arbitration, further dividing the courthouse haves from the have-nots.

All is not lost. The courts are continuing to discuss the crisis with the other branches of government, and many private firms and bar associations have come up with ideas worth pursuing. But whether the glass is half full or half empty, the status quo is clearly not acceptable for anyone who believes in equal and meaningful access to the services of California’s courts — as the state constitution promises, and as the state should make sure it delivers.

Maybe next year it really will be different in California. Judges, lawyers, and civil litigants sure hope so.

Maybe, and maybe not.

The case is Rogers v. County of Los Angeles. Plaintiff Katrina Rogers was the personnel officer in the executive office of Los Angeles County, and provided support directly to the County’s board of supervisors. In early April, 2006, Rogers took a stress-related leave of absence from work. In a letter to Rogers, the County characterized the leave as “family/medical/CFRA” leave.

A week later, the County appointed Sachi Hamai as the new executive officer — i.e., Rogers’s boss. Hamai reorganized the office, moving some functions, including Rogers’s, under a new administrative deputy. Hamai also decided to bring in a new personnel officer in place of Rogers because she “felt that somebody outside the organization would come in and would be independent, objective, maybe perhaps could provide some fresh eyes into the organization.” Hamai viewed her decision to transfer Rogers to another position as “a business decision.”  She testified that the fact Rogers was on leave when she made her decision had “absolutely” nothing to do with her decision. Hamai located another allegedly “comparable” position for Rogers in a different department. All of these changes happened during the first 12 weeks of Rogers’s leave.

Rogers did not return to work until August, 2006, 19 weeks after beginning her leave. When told of the change in her job, Rogers was irate. She said she did not consider the new position comparable to her old position, because she was no longer be supervising or managing anyone, but instead was doing high-level staff work.  Her new boss apparently agreed (or at least that’s what he said at trial). Rogers left early on her first day back, called in sick for the rest of the week, then abruptly retired.

But instead of spending more time with her grandson as she had intended, she decided to spend more time with lawyers, and quickly sued the County for violation of her rights under CFRA. Rogers claimed the County interfered with her rights under CFRA by not reinstating her to the same or a comparable position.  She also contended the County retaliated against her for taking her leave of absence. The case was tried to a  jury, which returned a $350,000 verdict in Rogers’s favor. The County appealed the judgment, asserting there was insufficient evidence to support her claims — mostly because, the County said, she hadn’t returned to work when her leave entitlement ran out, and thus she had virtually no rights under CFRA.

The court of appeal agreed with the County, and reversed the judgment. The court began by dismissing the interference claim due to Rogers’s untimely return to work:

Here, the following is undisputed—the County accorded Rogers the full 12 workweeks of leave to which she was entitled under the CFRA; Rogers did not return to work at the end of this period, but instead remained on leave for 19 weeks; and the decision to transfer her was made within the 12-week leave period, but never communicated to Rogers during her leave. Rogers nevertheless argues that she suffered interference with her CFRA rights because the transfer decision was made during her protected CFRA leave. But she cites no authority to support her position, which we therefore disregard. Based on the foregoing, we conclude that Rogers’s right to reinstatement expired when the 12-week protected CFRA leave expired. Her CFRA interference claim therefore fails as a matter of law, and should never have been submitted to the jury.

The court also threw out the retaliation verdict, holding that the County had submitted “undisputed evidence” that Hamai’s decisions were “motivated only to further her plan to reorganize the Executive Office,” and thus “Rogers failed to establish the requisite causal connection between her protected actions in taking a CFRA medical leave and the decision to transfer her to another position.”

The decision is obviously favorable to employers, and appears to establish a bright line for claims under CFRA — come back on time or you have no rights at all.

But employers’ elation should be tempered somewhat by what the decision did not say. There was absolutely no discussion about the impact of the ADA or analogous provisions under California’s Fair Employment and Housing Act. It’s not entirely clear why the court, or the plaintiff, ignored the possibility that an employee might be entitled to additional leave under the ADA as a reasonable accommodation of a disabling health condition. But both the California courts and the EEOC have been quite clear that inflexible leave policies — those that end for everyone after a certain period of time, regardless of individual circumstance — may violate the ADA and its California cousin.

Employers, this is a good decision for you, but it is likely to be somewhat limited to its facts. Smart plaintiffs lawyers will probably be much more inclined to append an ADA claim to such lawsuits in the future. And employers should be ready in all cases where an employee seeks additional leave to discuss individual issues and potential accommodations — including extra leave.

So perhaps the best takeaway from the case is this:  12 weeks is 12 weeks.  Except when it isn’t.