Your 2025 Action Plan: Legal Updates & New PAGA

[Chantelle Egan] (0:05 - 16:25)
Hello and welcome to our annual webinar at Medina McKelvey for legal updates for the following year. This year we're going to be talking about some updates that have happened in 2024 as well as what's on deck for 2025. I'm Chantelle Egan, I am the advice and counsel leader here at Medina McKelvey and I'm joined by two of our new partners who joined this year, Eric Lloyd who is part of our wage and hour department and in addition to being an expert in that area he also is a subject matter expert in independent contractors which we're going to learn a little bit about today as well as my other partner Melissa Whitehead who joins us who splits her practice between advice and counsel as well as employee litigation such as single plaintiff discrimination harassment. She's an expert in all the questions that you have that come across your HR desk. So we're so happy that you all are joining us today. I want to talk a little bit about logistics before we get started. Maybe it's because I was a former teacher but I love questions and so do the rest of our panel. So if you have any questions feel free to put them in the Q&A box that's going to be something that we'll be monitoring throughout the webinar. We'll also be a chance at the end to do Q&A and then of course if there's any open questions that we don't get to we'll circle back after the webinar and send you folks an email that have open questions. Additionally I just want to just kind of preface about why we have this training when we do. So in the normal course at the end of September early October the governor has a chance here in California to sign or reject laws that are put on the governor's desk and typically those laws then become effective January 1st. So it's at this time of year when we now have a solid understanding of what these new laws are going to be and that we can prepare to make adjustments in our workplace to make sure that we are ready to implement these new laws with our workforce come January 1st. But this year we have a little bit of a you know outside of our typical cadence and so with that I'm going to pass it over to Melissa who can share with us a little bit about how OSHA is turning up the heat on some laws when it comes to temperature. Love it. Thanks. Hi everyone. Thanks for having me. Very excited to be here this year. So we're gonna kick off with Cal OSHA and before you panic this has nothing to do with COVID. We are not going back to talking about COVID regulations hopefully ever. Instead what I wanted to talk to you about briefly before we get into some of the frankly more exciting new legislation if you're legal nerds like those of us on the panel is this new indoor heat illness requirements that Cal OSHA put out. This actually went out in July so it's already in effect. What I have found is a number of clients who thought Cal OSHA heat illness doesn't apply to me and sort of moved on and frankly no judgment there because I sort of did that at first too until we started talking to clients who said hey somebody from Cal OSHA literally showed up and asked us for our indoor heat illness prevention plan. What's that? And I said that's a great question. Let me look and find out for you. So I want to make sure everyone's aware of this. If you are not an employer who traditionally worries about these things this law does apply to indoor workplaces where the temperatures reach 82 degrees and there's some exceptions if that's you know incidental. It happened once five years ago on the hottest day ever recorded. You know that's not going to count but it is pretty broad. It applies to you know indoor is pretty broadly defined and I think if I recall it's like if it lasts the 82 degrees is 15 minutes or longer or something to that effect. And then there's a variety of requirements and steps that you need to do to protect your workers from heat illness such as providing water, giving them rest breaks, cool down areas, trying different things to cool down their work area like maybe a portable air conditioner or something like that. But then there's also training requirements and there are also you have to have a heat illness prevention plan. Now CalOSHA has already put out models. I will say I have not vetted those models for actual compliance. Any of us who went through the COVID era, the workplace violence prevention plan situation last year knows that those models are not guaranteed to be compliant and in my humble opinion often are not. So I usually say use those as a starting point but don't just blindly trust them. Similarly they do have a video training out there. It's like eight minutes long and I have not looked to see candidly if it complies with all the requirements but just be critically thinking if you look at those things as well. But do know that there is a training requirement and you need a plan and CalOSHA is out there looking for When you think about a plan and you start from the CalOSHA kind of how I've always handled it is it's really nice to start with the CalOSHA form and template so that if someone does pop by they're going to recognize it but then you can't rest on your laurels. Like if it's not compliant it's not compliant so it sounds like this one is probably in need of some revision. One of the things I was hoping you could touch on Melissa is just the issue of indoor. I mean one of the things that I was kind of struggling with when I was first looking at this law is like well what about if you are a car mechanic or you're you know the oil change bays where they're technically indoors but they have huge open spaces in order for the cars to go in and out. Are that is that kind of is that considered indoors? That is considered indoors. So the law defines it as you know any space that has a ceiling and four walls but included in that definition are the perimeter can be walls, doors, windows, dividers, any kind of physical barrier whether and the law specifically says whether open or closed. So yeah those types of shops or warehouses where they have the big doors that slide open and maybe they leave them open most of the day those are going to fall into the indoor requirements. I would also note that a lot of employers are likely now going to fall under indoor and outdoor because don't forget there are outdoor heat illness requirements as well but that's sort of old news but just don't think to yourself if you already have the outdoor heat illness you're good. In fact the client that I'm thinking of who asked that question Cal OSHA was looking for both from them. All right moving on then this is the always fun topic of the minimum wage increase. It's a little juicier this year than usual. Based on the minimum wage order as of January 1 the state minimum wage will go up to $16.50 per hour. You'll see there's an asterisk there which says that if you're aware of it Prop 32 this year on the ballot proposed increasing minimum wage to $18 per hour. I just checked that right before we went on this morning and that is still too close to call. They still have not called the outcome of that vote. It is as of this morning 51% against and 49% for so it is leaning against it but just keep an eye on that because that's sort of a weird one in that if it passes it goes into effect immediately. It doesn't wait till January 1 so there's going to be a scramble there but otherwise if it doesn't pass then as of January 1 the state minimum wage will be $16.50. Fast food workers that minimum wage this happened in April so it's a little bit old news but it's still $20 per hour. There is the possibility that it could go up in the next year if the fast food council makes that decision but I have not heard any rumblings about that just yet. Then health care workers finally went into effect on October 16th after many delays. If you remember I'm not going to get into the weeds of it but there's a sort of schedule of increases by type of health care facility basically and worker and so as of October 16th that ranges from $18 to $23 per hour. It will increase in June 2025. Not every facility but most will have some level of increase ranging from $18.63 to $24 per hour. Just a reminder too that you need to keep an eye on local ordinances. If a local ordinance has a higher minimum wage that will apply. For example if you have employees anywhere in the Bay Area I would say the closer you get to San Francisco the more likely you are to have a local ordinance with increased minimum wage not to mention paid sick leave and all of that. Keep an eye on that and then the other thing to keep in mind when it comes to minimum wage is that this of course does not only apply to your minimum wage workers. If you are as I've had many clients say to me in the past looking at this slide and thinking this is not relevant to me. I don't pay any of my employees minimum wage. I'm going to take a quick look at my emails and make sure nothing's on fire in my workplace. Tune back in because it's important to remember that your exempt employees must be paid twice minimum wage and so therefore when minimum wage goes up that exempt analysis that threshold threshold goes up as well. So you want to make sure you're checking on all of that. So that is a mouthful about minimum wage. Yeah if you have any questions about the health care tiers we actually wrote a post on that and just reach out and there'll be an email at the end of the at the end of the webinar. We're happy to push you push you that content if you want if you want to get into the weeds and you know it was interesting that you mentioned about Prop 32 being too close to call because you know one of the other new laws that are in place is this captive audience ban. You know it's obviously it's at top of mind for a lot of employers right now. You know we had major elections last week and you know I'm sure you know the employers and employees that are joining this call today have you know a diverse range of opinions on the issues on the outcomes and just really curious you know how has the law responded to you know political discourse in the workplace? Yeah that's a great question and it's of course interesting that this new law comes up. It's something that those of us who do advice and counsel work I would say since at least 2016 I've been getting lots of questions and calls about just this you know what what hats can people wear in their workplace? Can we tell people not to wear them in their workplace and things like that? So it's a hot topic for sure and this is an interesting one. So the new law here goes into effect January 1 and I you know it's interesting I don't actually think it's as much a response to those political issues as we might be inclined to think it is. What this law does is it says employers cannot have mandatory meetings that their employees must go to even if they're paying them to be there where they talk about the employer's opinion about religious or political matters. So I mean in theory what that would mean is is that I should I shouldn't even say in theory because I literally have worked for somebody before who did this but an employer could not have a working lunch that everybody has to go to where they share who they think everyone should vote for right? That would not be I don't think this day and age many folks would do that anymore anyway. Well Melissa we actually got a question in the chat and as a quick as a quick reminder if everyone can put their questions in the Q&A not the chat I'm monitoring both but I'm definitely going to see it if it's in the Q&A but we actually got a question about that to say you know not just who to vote for but what to vote for. So the question was does this law also apply to propositions? So can you you know require employees to attend a meeting where you tell them okay this is a good proposition to support or this is not a good one to support? Does that get folded into this law? I would say it does. I will say this political matters is defined pretty broadly. It obviously does not address that specific question but I would have a hard I mean that's something you're voting on that's got to be just I know common sense is not always the guiding factor in understanding California employment laws but I think that that has to be looped into that definition of political matters and I should say too there are some exceptions to this for example political organizations religious organizations you know if there's a position that requires that knowledge it's pretty limited. The real we've seen this is another I'm trying to think how many states there's been a number of states who have passed this rule this law and essentially what the consensus is is that this is really geared towards union situations where and that doesn't mean that it only applies if you are a unionized workforce but what we've seen is you know it's not that uncommon where there's some talk about unionizing amongst the employees and the employer says hey let's have a meeting hey guys we don't need to unionize just tell us what your concerns are and here's why it's better if you work with us directly that would now be banned under this law and in light of where we've seen this pop up it seems you know this is my little editorializing but it seems like that's the real intent behind the law but it would encompass religious views political matters of other types interestingly just today a decision came out from the national labor relations board which you know makes rulings on the NLRA again which does not only apply to unionized workforces saying essentially saying that these captive audience meetings are banned under the NLRA as well I could go off on a whole employment law nerd tangent about how much change we're about to see from the NLRB over the next four years but for now you know that that's sort of being backed up on a federal level there's a lot of discussion about whether there's going to be litigation over this whether it's preempted by the NLRA but for now it's important to as a practical matter keep this in mind if you do have situations where these discussions are happening at employer sponsored meetings where that's the purpose of the meeting I would also recommend that you're putting things you're documenting the voluntariness of any of these types of meetings where you cover any of these issues so you could prove that you did not make employees attend these things do we have other questions on that that's all we have from the from the chat for now perfect all right well I will kick this one over as Chantelle said Eric is our independent contractor expert so Eric tell us about some of the latest developments here sure thanks Melissa

[Eric Lloyd] (16:25 - 19:09)
freelance worker protection act let's dive in a little bit as every business in California knows California is very strict about requirements for properly classifying a worker as an independent contractor long story short it's very difficult to justify an independent contractor classification and this new law the free worker freelance worker protection act does not change classification requirements so bad news is it doesn't make it easier to classify somebody as an independent contractor what the law instead does is provide a new set of protections for a barely limited subset of independent contractors so it doesn't apply to all independent contractors across the board it only applies to folks who fall within certain parameters I'm going to briefly discuss those parameters they're far too detailed for me to get too long this webinar I could probably have an hour-long webinar on the parameters themselves so I'll keep it kind of brief this new law is only going to apply to the following types of independent contractors first off they have to be a one-person operation it's not going to apply to multi-person or a business entity that's comprised of multiple persons second of all the work has to be valued at at least 250 dollars whether based on a single contract for 250 dollars or in the aggregate over the prior 120 days of work so in other words if you have a contract that's for 250 dollars of work or within the past 120 days you've contracted out for 250 dollars of work to the same contractor then this law is going to apply third it's only going to apply to freelancers that provide quote-unquote professional services and professional services have a particular definition in the labor code it only applies to folks who work in certain occupations I'm going to list a few of them but there are quite a few more that I'm not listing here so make sure to consult council before deciding whether or not this law is going to apply in broad strokes some of the occupations would include marketing human resources administrator certain travel agents graphic designers grant writers fine artists certain types of photographers or videographers freelance writers translators illustrators or newspaper cartoonists and then certain folks who work in personal care professions such as licensed barbers or manicurists I'm leaving a lot out there's a lot in there so you'll you'll definitely want to review the list that's in the statute and consult council to determine whether or not one of your freelancers falls into this category of professional services so Eric when you when you're talking about this

[Chantelle Egan] (19:09 - 19:20)
laundry list of freelancers if I'm sitting here and I'm an employer should I start thinking this is a win for us and I can start having a lot more independent contractors here in California

[Eric Lloyd] (19:20 - 19:47)
nope doesn't do that at all unfortunately what it what the law is going to do is if you have one of your freelancers fall within this category of again it's a fairly narrow category if you're talking about the entire universe of potential independent contractors the contractors are going to get some additional rights that other types of contractors who don't provide professional services do so it is not going to enhance your ability to expand your independent contractor workforce

[Chantelle Egan] (19:47 - 19:57)
unfortunately got it one of the questions that just came through is as professional services do you know off the top of your head whether janitorial or construction contractors are

[Eric Lloyd] (19:57 - 22:22)
included in that they're not all right well why don't we dive in a little bit to what the contract has to contain this is one of the protections that freelance workers will get if the law applies to them their contract must be in writing and it has to contain certain details some of those details are as follows first off the contract has to specify the names and addresses of each party it has to have an itemized list of services the contractor will perform it has to have an itemized list of rates and methods of compensation for the contractor services it also has to have a pay date for the contractor or a mechanism for determining the pay date and it also has to have a deadline for the contractor to submit an invoice to the company so that the contractor's paid on time payment is general payment time and i should say it must be paid within the time frame specified in the contract or if the contract doesn't specify a payment time frame you'll have 30 days to pay your contractors and practically speaking here's the here are the ramifications of this law if you do not comply with these required protections contractors now have again within this narrow sliver of freelancers who provide professional services they now have the ability to bring a retaliation claim for exercising their rights under this act some of the rights under this act would be not only entitlement to payment on time but things like requesting a copy of their contract that's one of the rights they've been granted by this law any company that doesn't comply with the protections under this law can be subject to a lawsuit brought by either the freelancer themselves or by potentially by a district attorney district attorneys local prosecutors now have the ability to bring a behalf of a freelancer whose rights have been violated under this act and if a jury finds in favor of a freelancer on one in one of these lawsuits penalties can be pretty steep not only could you be subject to contract damages the law actually provides that you could be subject to penalties and attorney's fees incurred by the freelancer in pursuing the claim so again it's not applicable to all of your independent contractors but if it is you'll want to ensure that you are in compliance with this law going forward so we

[Chantelle Egan] (22:22 - 22:39)
had a couple more questions this is a hot topic we had a couple more questions that came in while you were um giving that information uh the two questions that came in is what about um accounting temporary accounting staff as well as independent truck drivers are they part of this list don't

[Eric Lloyd] (22:39 - 22:44)
know about accounting i'd have to check that truck drivers i know for a fact or not got it and then

[Chantelle Egan] (22:44 - 23:13)
the other question is that in terms of when we think about this definition for you know what a freelancer would a freelancer is and the professional services how is the law structured is it structured so it actually lists the professions or the professional services that it covers or does it really focus on job categories how's it organized so that someone can figure out okay this is a professional services that may be applicable under this law there is a statute

[Eric Lloyd] (23:13 - 24:13)
in the labor code and it has a pretty lengthy list of the occupations that would be covered or contemplated by the term professional services unfortunately it's not a simple bullet point list that identifies occupations and goes from there it it has certain criteria attached to a lot of these occupations so a moment ago i said that this law is only going to apply to certain types of photographers and videographers and so you can't get a professional services doesn't have a blanket coverage over all types of videographers for instance it's only going to be some who are engaged in certain aspects of videography and for certain purposes so it is not as simple as saying videographers and photographers are covered it's only going to be some subset of them as defined by the law so the first resource would be the statute itself and then you have to make sure that even if a certain occupation is less than that statute that the criteria attached to that

[Chantelle Egan] (24:13 - 24:37)
occupation are also met so needless to say it is not straightforward so this may be a good time to just call your attorney um so with that um melissa i'm hoping that you can share with us um some information that's changed um for uh driver's license i think first we're going to talk about but i just spoiler we're going to talk about driver's licenses next thank you

[Melissa Whitehead] (~24:37 - ~27:01)
okay no problem uh yeah it would not be a legislative session in california if there was not a change to leave policies so this is where we are for this year um ab2499 it actually is a pretty comprehensive bill uh the most practical application we're going to talk about today is this victim of violence leave i will just flag for you that it does it doesn't change what you have to offer in jury and witness leave but it does move that to feha which means that now the failure to provide jury and witness leave will be enforced by the civil rights department formerly department of fair employment housing but it doesn't you don't need to change any policies what you have to offer is still the same uh this however is a fairly juicy kind of meaty change uh what this will do before just so you can sort of flag a context as i get into the details this will likely replace what most of you have in your handbook as your domestic violence uh your lead for victims of domestic violence stalking and sexual assault uh that is certainly the changes we've made on on our end as we're applying this in handbooks now uh so that's likely where it's going to go it's still separate from that kind of weird broad crime victims leave but so this leave now requires employers to provide unpaid leave to employees who are victims of and it used to say domestic violence sexual assault and stalking and there were specific definitions now it says qualified acts of uh which includes those three those three violent acts but is much broader um it is not dependent on relationship anymore it is you know the the first definition for example is any act of violence in which an individual causes bodily injury or death to another individual um it also includes threats so it's pretty broad for the reasons that employees can take this leave now and they can take this leave to uh try to get any kind of relief such as getting a restraining order temporary restraining order those types of things so this at this point is primarily getting legal relief is what we're talking about here um you can require reasonable advanced notice uh where it's feasible you can get written certification um that can include things like a police report court order um it's a pretty broad list to be honest with you of what you're going to accept here um

[Chantelle Egan] (~27:01 - ~27:03)
can i ask you a couple questions

[Melissa Whitehead] (~27:03 - ~27:05)
most of that of course

[Chantelle Egan] (~27:05 - ~27:26)
so one question is it's like okay my i'm here in california i'm the employer we're headquartered here but we happen to have some employees in another state um if that employee is in the other state the violence happens in another state everything else happens in another state um then do we have does this law apply to that particular employee

[Melissa Whitehead] (~27:26 - ~28:36)
i'm going to give you an annoying lawyer answer of it depends i will say probably not but i really hesitated to even phrase it that strongly and i'll tell you why if that employee is in another state for example and they're a remote worker but they report back to california so that they're getting assignments from california their supervision is out of california um technically their office location if they had one would be california for example then california law is almost always going to apply to that employee even though they're in a different state um which is different than for example an employee for a nationwide organization and you actually have operations in that state and they work at your office or your facility in that other state they report there um then usually the laws of that state will apply so and even within that there's caveats but so this and i would also want to flag for you that this specific law may not apply but there are other leaves under federal law uh sometimes some depending on what they're looking for leave for it might fall under fmla for example um so keep that in mind but that's long rambling answer

[Chantelle Egan] (~28:36 - ~29:39)
i get what i hear you're saying just to summarize is that it is a case specific inquiry um and that while typically you know you have if you are an employee and you are sitting in florida and all your work done's in florida florida law is going to apply but it's worth it to do that extra step of inquiry to say is this a situation where we want to apply california law because of other factors such as everything else being in california so once again shocker not not able to do a straightforward answer um but i wanted everyone to kind of have that as top of mind for one of the questions that that came through um also you know i'm just curious we talk about a reasonable advance notice but when you're talking about these acts of violence i mean if somebody you know unexpectedly it's not like you plan to you know be a be a victim of domestic violence or you planned or have a sexual assault or you plan to be stock like how does that even work

[Melissa Whitehead] (~29:39 - ~34:32)
so the reasonable advance notice is going to come into play where you have like in this example court proceedings right where you know that there's going to be a hearing on this date it is reasonable to expect advance notice of that it may be less so for a temporary restraining order where you're literally this happened last night i need to go to the courthouse today um and so this and this will apply on the next slide i'll talk about what larger employers have to do but it applies across the board here that in addition to so reasonable advance notice we're feasible and to your point chantelle sometimes it's just not going to be feasible because that's the nature of these types of need for leave right so the law also says if there's an unscheduled absence uh you can't discipline the employee you have to grant them leave under this under this law so long as within a reasonable time after that absence they give you certification of the need for the leave um you also can ask for leave if they're or excuse me for certification if they're requesting accommodations but the reasonable advance notice i think is really going to be for those court appearances and then for larger employers because you also have to give leave for medical care mental health care safety planning there could be there could be more reasons that advance notice would be possible they're not always right i mean if you have to go to the er you're not going to have advance notice but if it's a counseling appointment that you have scheduled or something to that effect then you will have that advance notice so which is a great segue into this that employers with if you have 25 or more employees in addition to the reasons i just said you have to give leave for the legal proceedings you also have to provide unpaid leave for not only employees and this is a big change in the law uh that you also have to grant leave to those whose family members are victims of qualified acts of violence and again remember that's a very broad broadly defined term um and so there's more there's more people that they get leave for as well as more reasons so it includes legal proceedings um as well as medical mental health safety planning um relocation or planning to relocate it's a again it's a pretty broad list um that if you have if you're a larger employer you must provide leave for and remember just like i just covered again you can require certification advanced if possible or within a reasonable time after an unplanned absence um the law also requires employers not just with 25 or more employees but but all employers to provide reasonable accommodations um in this type of situation to employees who are victims of qualified acts of violence there's limitations to that that you can you still have an obligation for example to create a health and safety workplace for all your employees so you don't have to make accommodations that would put everyone at risk but um you know when i was working through the workplace violence plans with with a lot of clients this was something that came up a lot and so some common accommodations you would see in this in this uh circumstance might be temporarily allowing someone to work remotely or moving their if they're for example it's a front desk employee maybe you let them work in the back for a while um those types of things it's uh maybe it's if you have security on site you walk them to their car you know it's those types of things that that you do need to um you need to provide and you can ask for some type of certification for those things uh this was a question that i actually had a client ask recently so i was glad that the law kind of cleared this up for us um you have to provide at least 10 days of unpaid leave of course please notice that it says at least it still does not give you a cap other than because that's usually the way the question is phrased right how much leave do i have to provide um at least 10 days although there are a couple exceptions here if the employee um or their family member die as a result of the crime that doesn't make any sense if the employee dies then you're not giving them leave but anyway i certainly the family members um i think that's what that means the employee whose family members die as a result of a crime um you have to give them up to 12 weeks of leave and for purposes related to relocating uh and so again that's going to be those with the larger employers the 25 or more you only have to give them five days for that so we get a little bit more clarity but still probably a lot more questions than clarity honestly yeah

[Chantelle Egan] (~34:32 - ~34:54)
so some of the questions that have come in here this and and some of them you'll notice that i've if i didn't respond to your question internally it's because i knew melissa was already going to cover it um but one of the questions is just to clarify that this impacts not only the victims of violence but employees who are related to a victim of violence

[Melissa Whitehead] (~34:54 - ~35:09)
correct okay correct well for employers who have 25 or more the smaller employers is just for employees who are victims but if you have 25 or more then you're providing that leave for employees whose family members are victims yeah not it

[Chantelle Egan] (~35:09 - ~35:25)
and then what about is there some type of you know qualification meaning like you know like fmla where you have to be with the company a short amount of time or is this like pregnancy discrimination and leave where it's you know day one this starts

[Melissa Whitehead] (~35:25 - ~36:18)
it's day one this starts yep yep um i should also know for the family member question that there is a definition of family member uh just like there is for a lot of these types of laws uh so it is going to include child parent grandparent grandchild sibling spouse domestic partner or designated person our favorite well just keep in mind the designated person though is something is a person that truly does need to be designated um and you know the way i kind of look at it is that it really makes sense to have that be a part of your handbook rollout reminding everyone that you're allowed to have a designated person it lasts for a year and uh having that conversation so that um you don't all of a sudden have like oh i have 10 you know designated people um over the course of year because you're not tracking it

[Chantelle Egan] (~36:18 - ~36:46)
is there anything about limits on how much can be used or is any clarity at this point regarding the for example like the limits on the acts of violence meaning for example let's say an employee unfortunately experiences two separate instances of violence um does the clock start running or are we talking about when we say 10 at least 10 days of leave is that focused more about you know an annual you have 10 days of leave versus per incident

[Melissa Whitehead] (~36:46 - ~37:11)
the law is not i mean shocker but the law is not super clear on that but in the context the way it's written i will say i'm interpreting that as an annual um allotment but i wouldn't be surprised if we see clarification on that to the contrary that they actually intended per incident but that's not it's not super clear it's sort of the short answer there i know shocking right and

[Chantelle Egan] (~37:11 - ~37:14)
and this applies to all employees not just full-time employees

[Melissa Whitehead] (~37:14 - ~37:16)
correct correct correct yep

[Chantelle Egan] (~37:16 - ~37:25)
and one clarification question that i think you may have covered but just to to make sure we're answering these questions is i mean can you ask for documentation

[Melissa Whitehead] (~37:25 - ~37:48)
you can um you can ask for documentation but it's only it's only going to sometimes right you can ask for it for that reasonable advance notice where they can and then you can ask for if it's an unexcused absence you can ask them to show you documentation of what that was for if they need accommodations um then you can also ask for certifications yeah

[Chantelle Egan] (~37:48 - ~38:38)
and someone popped in a question too just about documentation like okay if you're doing an accommodation like for example walking you know having the security guard walk someone to their car in the evening the question is you know does that need to be documented you know my take on that is that it's always a best practice if you're doing something um you know unique for an employee and while this is not the same as an interactive process when we talk about you know somebody who is um you know need some type of medical accommodation or things like that the the spirit should be the same in terms of the interactive process and making sure that you're having a dialogue with the employee making sure that they also agree that it's reasonable um and and having that all documented always the best practice

[Melissa Whitehead] (~38:38 - ~39:47)
yeah and i would say you know in these types of situations don't get so caught up to in the sort of documentation of it that you lose sight of you know we're humans and we care about our employees as well so i agree with which one tell completely i mean as a lawyer i'm almost never going to tell you not to have documentation of something um but i will say i wouldn't suggest for example telling that employee we would love to have someone walk you to your car but we're not going to do it until you give us documentation right if you're going to say sure let's do that but i need the documentation as well i mean that seems fairly common sense but i do know there's so many of these hoops that california makes employers jump through that it can get kind of tricky sometimes so it could be it could be as simple as an email that is like per our discussion today um i just i'm a big fan of then ultimately putting things in writing so that you can show when you made the decision and why it was made and what the decision was um

[Chantelle Egan] (~39:47 - ~39:54)
agreed so with that now i feel like we are finally where i want to go which was the driver's license

[Melissa Whitehead] (~39:54 - ~40:52)
yeah i know super exciting topic on this one shifting gears a little bit but this is fairly short and simple uh this new sb 1100 says that um you cannot require an employee to have a driver's license and therefore put it on your job ads your postings applications whatever it might be unless you reasonably expect uh driving to be one of the positions functions it doesn't have to be an essential function just one of the functions and that using an alternate form of transportation to achieve whatever that function is maybe it's deliveries or something like that wouldn't be comparable in terms of um travel time and cost to the business and so if those two things are not there you can't require the driver's license you can't put it in your job ads etc so this is you know me being the the lawyer here i noticed in the top corner of our slides we have you know required handbook updates so on and so forth

[Chantelle Egan] (~40:52 - ~40:58)
this seems like a pretty lawyerly response of may require so why don't you speak to that melissa

[Melissa Whitehead] (~40:58 - ~41:39)
sure other than as i said before we get paid by the word so we just threw an extra one in uh no it's because a lot of handbooks have a policy that will say uh for example the handbooks we work on often have a policy that that includes uh employees may be required to drive and may be required to have a driver's license it'll kind of incorporate that requirement in and so if you do have that type of language in for example a driving policy in your handbook you're going to want to revise it to be clear that you're only requiring driver's licenses if these two tests are met basically or two prongs of the test

[Chantelle Egan] (~41:39 - ~42:05)
yeah yeah it's that catch-all other material that's going to get you through time so you know we're looking at job descriptions and you know like melissa said that like if you have policies regarding driving and it being required it seems that this would be prudent to to um input it the question that came through is um uh uh does this change at all employer's ability to use driver's licenses as verification for an i9

[Melissa Whitehead] (~42:05 - ~46:32)
no because in that situation you are not requiring an employee to have a driver's license you're just saying this could be one form of documentation you use to satisfy the i9 so no that that doesn't affect that that's still something that you can do you just couldn't require them to use a driver's license when they could for example bring a passport or something like that yeah all right okay and much like leave it definitely wouldn't be a new year if we weren't changing our protected characteristics list um so this is a couple new laws uh one of them now adds to when i talk about your protected characteristic lists i'm talking about um you know where you say we do not discriminate on the basis of age race etc etc so adding to that now is specifically intersectionality and what that means is a combination of the listed protected characteristics that you now have to include that in your protected list you cannot discriminate on that basis and so for example an example of this sort of combination of would be a um for example an example that comes to mind because i did an investigation on this not that long ago would be an african-american woman so for example in in the case i was investigating the woman was claiming not that she was discriminated against for being a woman not that she was discriminated against on her race at least not alone but that because there is what she said was that there is this stereotype of the quote angry black woman that every time she voiced a disagreement she was treated really harshly really negatively because they were discriminating against her based on her combination of these protected classes of being a black woman so that is what that's what that means when we're talking about the combination of the characteristics um also the ab 1815 this is i don't know this is legislature just trying to prove that they have a reason to exist but they have for those of you who again you have in your handbooks that um the protection of race in that classification list includes historically protective hairstyles the law has now taken out the word historically so i am probably giving you the easiest handbook update that that i can say in clear language take out the word historically um and otherwise it again is saying that those hairstyles are protected under the definition of race but the only change you likely need to make if you've updated your handbook in the last five to seven years is taking out the word historically all right moving along because i want to make sure we get plenty of time for eric to talk about paga this is another super sort of short and sweet one um a new law came through saying that employers can no longer require employees to use up to two weeks of their uh accrued vacation before they receive the paid family leave benefits paid family leave is as most of you probably know is a wage replacement program through the state for people out on uh mostly family medical leave and it was a common practice to say hey employees you must use your vacation for the first two weeks and then you can start getting those benefits you can't require them to do that anymore okay and then the last thing i'm just going to say is sort of our little um you know rally flag for please make sure that you are updating your handbooks and policies and things like that at least annually you know i've been practicing employment law for i think over 15 years and i don't think there has been a single year that there's not been a law or multiple that has changed requiring an update to your policies and handbooks uh if you it's just like anything right if you do it annually it's not nearly as big of a task as if you wait every five years to do it um these policies are also of course uh often either evidence for you or against you in litigation so if you are updating it annually you increase the chances that it is evidence for you um and you know don't just rely as much as this is a sort of high level here's the new laws please keep in mind that there are local ordinances that have changed there's industry specific regulations that have come out there's case law that changes things so it's important that you're doing a thorough sort of just review and refresh of your policies um annually at least

[Chantelle Egan] (~46:32 - 47:27)
so i'm going to interject really quick here because it's something i feel really passionate about um so this is something as melissa said this should just be part of your this is part of your hr calendar every year you're doing a check making sure and like and really it is at least once a year where you're doing a check making sure that you're nothing needs to be changed in your policies making sure there's no new laws but this type of you know i think if this is like a wellness check is that you know you're going in every year you're you're hoping that you know there's there's no news everything is you know status quo or improving um but it isn't just about the handbook um it really is about all your processes and all your compliance and you know with that eric's going to share with us about how that responsibility is now codified in california

[Eric Lloyd] (47:27 - 49:55)
thanks jota so some of you may be aware because this came down um several months back but paga has been reformed the private attorney's general act a quick thumbnail overview paga is a statute that allows plaintiffs private plaintiffs to pursue a claim for penalties um on behalf of the state of california uh premised on labor code violations it's kind of like a class action in some respects in that the person bringing the lawsuit represents other employees in addition to themselves but very different from a class action procedurally we saw a real explosion in the number of paga claims over the last 10 to 15 years and the business community was up in arms about it because paga claims are very difficult to defend like i said they're they're procedurally very different than class actions and don't have as many safeguards for the defendant as a class action does and that resulted in essentially employers having no choice but to settle these cases before they get out of hand so there was actually a ballot initiative about paga that was set to go before the voters until the business community and labor reached a compromise that resulted in the ballot initiative being withdrawn and that manifested in the paga reform that was rolled out effective june 19th of this year the reform is not retroactive it only applies where a plaintiff has given notice to the state of california that they intend to bring a paga claim as of or after june 19 2024 so unfortunately it doesn't have any impact on cases that were filed before then and it the reform has some bells and whistles that benefit frankly both both businesses and employees alike some of them include penalty caps as i mentioned a moment ago paga is a premise on the recovery of penalties it's not it's not a law like you would see in a class action where people are recovering the sum of their lost wages there's a fixed amount of penalties per type of violation and what the new law says is that even if the employee proves that violations took place such that penalties should be awarded employers have the ability to cap these penalties at a certain amount depending on whether or not they took quote-unquote reasonable steps to ensure compliance and we'll talk about what reasonable steps might be in a moment

[Chantelle Egan] (49:55 - 50:05)
so reasonable steps that was going to be my question eric like what are reasonable steps i mean us lawyers love the word reasonable um but do we actually have some guidance here

[Eric Lloyd] (50:05 - 52:16)
we do uh it's clear as mud as usual um the statute says that reasonable steps may include but are not limited to several things so we we know what those several things are because they're laid out in the statute and here they are conducting audits and taking action in response to the results of the audit so what that would entail would be for instance reviewing your wage and hour policies and practices going through your payroll records making sure you're doing things like calculating overtime correctly paying meal and rest premiums when they're required things of that sort but it's not enough to just conduct that review you actually have to take actions to correct any soft spots from a compliance perspective in order for the definition of quote unquote reasonable steps to be met another thing the statute tells us can be done is distributing lawful policies so if you have wage and hour policies take a look at them make sure they're compliant make sure they're updated roll them out as soon as you can if they are not roll out new ones as soon as you can if they are not and then finally train supervisors and take appropriate corrective action if they're not complying with your policies or with the law or both those are the things that you tell us can constitute reasonable steps but it also makes clear there may be other things that are not named in the statute that could constitute reasonable steps we're kind of in a holding pattern on that front because we haven't seen any court decisions interpreting what reasonable steps means poverty cases move very slow and this law has only been on the books for a shade under five months at this point so we'll have to wait and see if there are other things that courts determine could constitute reasonable steps and then one other thing keep in mind is that what's reasonable for one type of business may not be reasonable for another the statute tells us that reasonableness is going to be based on the size and the resources available to the employer and the nature and severity and duration of any violations so long story short what's a what constitutes a reasonable step for a large multinational conglomerate it's probably not going to be the same as it would be for a mom-and-pop business

[Chantelle Egan] (52:16 - 55:38)
with several employees but never fear when you see this you may be like i i have no idea how to take these first steps um and this is where you know we can help um actually we've been doing this for years uh back when the law changed a couple years ago and when wage and hour issues were defined as health and safety issues our firm developed what we call the wage and hour compliance plan and what it does is it helps you through that audit process that is mentioned in the statute and more importantly it also helps you determine not just what is wrong but how to fix it and how to prioritize it um so that how it happens in a very very high level and of course like if anyone wants more information on this i'm happy to schedule a time to talk to you separately is we do a survey that walks through all the questions about what are the hundreds of ways that you could you know violate the wage and hour um codes and but really focusing on the issues that we're seeing in class and paga cases afterwards we give you a color-coded assessment for those of us in california i now always think of this as like fire safety um you know is it red is it purple um so we get it we break it down for you not only in um scale in terms of where you are in terms of your your compliance level but also in categories um because as eric was highlighting earlier it's not just you know uh you know your overall wage and hour health but also like what are you doing to train people what are you doing to enforce what are you doing to monitor what do your policies look like and helping you see those all in isolation and then putting together an action plan that prioritizes not only legal risk but also just the realities of your business really thinking about that um analysis that would be taken under the statute in terms of it being like your your size and your resources and of course we're here to help you execute on it implement all of these things and once you once you're done if you've done everything we then can also offer you a non-privileged certification so that in the unfortunate event that you are you are faced with a paga or class action suit you then have evidence that you've taken these reasonable steps and i think the thing that is really to remember about important to remember about these reasonable steps this is not like you do this once and you're like once and forget it it really goes back to that analogy i was talking about earlier with the wellness check this should be at least annually you are checking your wage and hour systems you are making sure that things are running as you think they should be run um so while this is a very comprehensive plan once you've done this there's a there's then ways that we can leverage this on an annual basis for you to check your wage and our health if you will um and so then the other thing that i would just wanted to uh touch on that came up as a question and then um we'll go on to the next slide is you know can somebody file both a paga and a class action and they absolutely can eric why would somebody file both a paga and a class action

[Eric Lloyd] (55:38 - 57:06)
good question so class actions have a longer statute of limitations meaning that they can go back further in time than a paga case can class actions generally speaking most claims can date back four years from the filing of the complaint paga cases only have a one-year statute of limitations so uh you have three fewer years of liability from a plaintiff's perspective the other reason is that class actions are more valuable than paga cases typically the reason for that is that class actions are not limited by the amount of a penalty that can be in a class action a plaintiff would actually recover the amount of wages or damages or penalties that are owed as a result of a labor code violation so for instance if a plaintiff worked 500 hours of overtime for which they weren't paid they would get all $500 if they want in a paga case however you're only dealing with a penalty relating to a violation so that same plaintiff who got who was owed $500 on a paid overtime wages would only get a single $50 penalty or $100 penalty attached to that violation so it's different forms of remedies and different liability periods and the motivation for the plaintiff's attorney is to vigorously represent their client and get as big a recovery as they can and so they'll always want to go for a class action plus paga to get the best of both worlds from their perspective if they can

[Chantelle Egan] (57:06 - 57:50)
when we think about paga and this kind of dovetails into what we're just about to talk about is you know paga also has just some lower thresholds than a than a class action in terms of structures and things like that but those penalties for example that $50 you mentioned those can add up pretty quickly so when we think about compliance um what what should we be thinking about like the when i if i'm an employer and i'm like great yes you want me to be in compliance you want me to follow the law um but you know why why should i because you know in my experiences that $50 $100 penalties can very quickly depending on your uh workforce can you

[Eric Lloyd] (57:50 - 59:55)
know lead up to hundreds of thousands of dollars if not more easily penalties accrue on a per period pay period basis for the most part so that $50 violation if it's repeated in perpetuity can stack up really quick even though the initial $50 you know probably not a big deal but a simple violation can cascade into something much bigger and what the new paga law does is it provides the opportunity for employers to cap the amount of penalties that they could be liable for if they take quote unquote reasonable steps to ensure compliance and here's what the new law lays out from a prospective compliance standpoint employers that take reasonable steps to ensure compliance before they're served with a paga notice or a personnel record request from a plaintiff may be eligible for an 85 reduction in any penalties that would be awarded by a court so if you were to go all the way through trial you lose some you know there's some violations there's an award of penalties if the court finds that you took reasonable steps before the paga notice was served on you the court has the ability to reduce your penalties by 85 so and even if you don't go to trial that provides you with leverage during settlement discussions because if you have evidence of reasonable steps haven't been taken that should lower the settlement value of the case and the plaintiff's eyes from a from the perspective of somebody who didn't take prospective steps prior to being served with a paga notice you still have the ability to get a cap on your penalties if you take steps after being served with a paga notice within 60 days you stand to be eligible for a 70 reduction in potential paga penalties so if you are served with one of these notices you'll want to take action quickly start reviewing your processes make any changes that need to be made and be on the road to compliance within 60 days of being served with that notice in order to be eligible for that substantial reduction in penalties so we're seeing any

[Chantelle Egan] (59:55 - 60:01)
trends even though this law is has just been recently put on the books yeah we we have seen

[Eric Lloyd] (60:01 - 63:32)
some um and like i said earlier paga cases move very slow so things have not played out in the courts yet we haven't seen how courts are interpreting this new law and will need to in order to get some more clarity on its broader implications but one area where there has been clear impact already is that the settlement value of cases that were filed before the reform took effect appears to be a little higher now plaintiff's bar appears to be placing greater value on them because the the defined penalty cap in the reform does not apply to the prior cases so that they're the plaintiff's bar is tending to hold out for a bit more in the older cases than they may be in the newer cases we're also expecting there's going to be a sharper focus on pre-litigation compliance and training penalty reduction if it's on the table is ultimately up to the judge and since the new law speaks to proactive compliance we're expecting that judges are going to focus on it when they're assessing potential penalty awards as well we're also expecting there's going to be increased litigation over the standing what that means is does the plaintiff have the ability to bring the lawsuit under the old paga laws a plaintiff who suffered a single labor code violation could sue for any type of labor code violation under paga even if it didn't personally impact them and now with the new paga law the plaintiff can only sue for violations of the type he or she suffered the impact of that is that we're expecting a lot more litigation over whether or not a plaintiff suffered the types of violations actually alleged in their complaint under the old paga regime the plaintiff was kind of a bystander and didn't really take on that much significance since they could sue for any type of violation but now there's going to be a greater focus on what they actually endured in terms of violations the reason for that is if they didn't endure a particular type of violation they're not eligible to bring a paga claim premised on that violation and if they suffered no violations whatsoever their case could be subject to dismissal so employers that are inclined to litigate rather than attempt to settle paga cases are probably going to be engaging in a lot more aggressive discovery up front in these cases to determine whether the plaintiff has standing also expecting discovery battles over whether employees employers took reasonable steps to be in compliance this is this was already a common subject of discovery but we're expecting to there to be a greater focus on it now since that will determine whether or not penalty reductions are on the table and that poses really thorny attorney-client privilege issues in a lot of instances since employers often will work with counsel to ensure compliance so discovery battles are likely to ramp up on that front then finally this is just me speculating but even though the law was intended to curb paga lawsuits somewhat i think there's actually a potential that there could be an increase in filings and the reason why i say that is that plaintiff's attorneys typically take a cut or a percentage of any paga settlement as their fee and if the value of these cases for settlement purposes goes down the plaintiff's bar is either going to have to find a new stream of work or hold out for more money in order to ensure their revenue streams are not decreasing so it's possible we could see more cases being filed even though they're settling for a lesser amount on average than they were prior to

[Chantelle Egan] (63:32 - 64:28)
the passage of the new law yes only only time will tell um so all i think we answered most of your questions um live uh if there's there's a couple straggling questions and we can circle up with email we encourage you all to reach out if you have any questions uh legal updates at you can obviously call our phone number i'm happy to chat as well as um i want to share with you that everyone on this um that's joined this webinar will receive a copy of the webinar as well as our slides i know there's been a couple questions about that but we certainly thank you so much for your time today and um you know happy 2025 compliance updates and may your handbooks be be clear and compliant thank you all for your time thanks everyone thank you