Employer Alert: Brinker Decision

If you have hourly employees and are a California employer, take note of today's California Supreme Court decision.  Today the court announced it's decision on an employer's obligation to provide hourly employees a meal break.  Please visit Cook Brown's website for a full explanation of this issue.  Here is a brief excerpt from their announcement:

On Thursday, April 12, 2012, the California Supreme Court issued its long awaited decision on key issues confronting California’s employers – the extent of the obligation to provide nonexempt employees a duty free meal period, when such meal periods are required, and when rest periods must be allowed.

In a unanimous decision authored by Justice Kathryn M. Werdegar, the Court held that an employer’s duty under Labor Code Section 512 is to “provide” a duty-free meal break every five hours. This obligation is satisfied if the employer relieves employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30 minute break. This means that although employers cannot impede or discourage employees from taking meal period breaks, employers are not required to compel employees to take them.

Not all employers are subject to Labor Code 512, which expressly excludes employees in specified industries and those subject to certain collective bargaining agreements. However, the holding is a critical one for the majority of California’s employers because of the prior uncertainty regarding the extent of the meal period obligation. The open questions which have increased litigation in the past several years – with each side gambling on an interpretation in its favor – are now resolved.


This is an important decision that clears up any previous ambiguity about an employer's responsibility in providing breaks for their employees. 

Americans with Disabilities Act

This week marked the 20th anniversary of the US Government passing the Americans with Disabilities Act. The Americans with Disabilities Act of 1990 gives protections to individuals with disabilities. These protections are similar to those provided on the basis of a person's race, color, sex, national origin, age and religion. ADA guarantees equal opportunity for individuals with disabilities in public accommodations, employment, transportation, state and local government services and telecommunications.

As an employer, you must provide reasonable accommodations to your employees who are protected under ADA. You must engage in a good faith effort to find out what accommodations are required. While you are never allowed to ask if someone is disabled and requires accommodations, if an employee informs you that he or she is disabled, you are able to ask the employee for documentation about the disability, its functional limitations and the need for accommodation.

If you encounter this, a good first course of action is to contact your Human Resources department to find out if your company has any guidelines for handling ADA requirements. Also, discussing the situation with your legal counsel may be helpful in making sure you are complying with the law, and are getting the correct information.

When an employee requests accommodation, the employer can generally ask the employee to confirm the need for accommodation with a note from the employee's health care provider. The employee is obligated to cooperate in good faith with this request. Alternatively, upon the employee's consent, the employer may directly communicate with the health care provider to find out the nature of the disability and the accommodations that would allow the employee to continue working. Forms are available that you can provide to the employee and to their health care provider. The information on these forms can allow you to make modifications and accommodations to allow them to continue their employment with your company and ensure that you are complying with ADA.

If you have questions, or need assistance with ADA accommodations, please contact me. An excellent resource for ADA is Barbara Cotter, Attorney, Cook Brown LLP, www.cookbrown.com. Barbara specializes in employment law and understands the employer's responsibilities of ADA.

Are you Classifying Your Consultants Correctly?

Make sure you are classifying your employees and independent contractors correctly. The law firm of Cook Brown LLP will be putting on a seminar about this important issue this Thursday in Sacramento. Here is information from their website, and a link to register.

Worker Misclassification:

If you use independent contractors or have employees exempt from overtime, now is the time to perform an internal review of your practices. The IRS and Department of Labor are stepping up efforts to target employers who treat workers as independent contractors or as exempt from overtime under 2010’s “Misclassification Initiative.” An IRS audit, or claim by a single employee, can lead to a class-action lawsuit or a company-wide examination by the Department of Labor. Many companies inadvertently misclassify workers in these categories because of a misunderstanding of the appropriate factors to use in setting up the relationship. The California Labor Code, Wage Orders, federal Fair Labor Standards Act, the California Employment Development Department’s criteria, as well as, the IRS’s “20 factor” test must be analyzed to determine the appropriate classification.

Join attorney Stephen McCutcheon for a hands-on discussion about determining correct contractor and exemption status, and how to conduct an appropriate evaluation of pay practices to avoid government scrutiny.

WHERE:Holiday Inn – Capitol Plaza
300 J Street, Sacramento, CA
(Hosted parking in city lot adjacent to hotel)

WHEN:June 10, 2010
Registration and continental breakfast between 8:30 and 9:00 a.m.
Program from 9:00 a.m. to 10:15 a.m.

Click here for the event invitation and registration!

New I-9 Forms and Employment Authorization

I recently attended a Best Practices in Owning and Operating a Winery seminar and one of the sessions was about employment law. Within the immigration law section, they addressed current trends. One notable change was that on April 3, 2009 a new I-9 form was issued and is required for all U.S. employers. You can download the form from http://www.uscis.gov/i-9 The form was revised to reflect changes in the List of Acceptable Documents.

As an employer you are required to verify the documents presented with the I-9. Some guidelines on verifying the documents are that they must be viewed in the original form, that they correspond to the employee presenting them and that they appear genuine on their face. There are legal considerations if obvious forgeries are not caught. So, familiarize yourself with the acceptable documents and the information they contain. But as an employer you are not required to be a document expert. Examples of acceptable documents can be found at http://www.uscis.gov/files/form/m-274.pdf

The employer is required to retain the I-9 form for three years after the employee's date of hire or for one year after the employee's date of termination, whichever is later. It is advisable to not retain documents longer than the time required and to not retain copies of the supporting documents.

Employment Eligibility Verification applies to all employees actually hired and must be completed within three business days of the hire date. I-9s are not required for applicants, independent contractors, subcontractors or any individual that was hired before 11/7/86 who is continuing their employment and have reasonable expectations of continued employment.

I would like to thank Stoel Rives, LLP for hosting the seminar, and for the employment law information they provided. For more information on Stoel Rives, visit www.stoel.com.

Hiring a Consultant? Some Things to Consider

Consultants are a great resource for companies to bring in expert advice or to handle specific projects. There are a lot of winery professionals that call themselves consultants, but as an employer and a company, there are a few things you need to think of when bringing on a consultant.

The IRS offers an online 12 point checklist to use to make sure you are hiring a consultant. A consultant is a business person who is responsible for their own business, taxes and marketing. A winery does not have any responsibility to a consultant other than that outlined in a consulting agreement. The general rule of thumb is that a person is an independent consultant if the hiring company has the right to control or direct only the result of the work, not what the work is to be done or how the work will be done.

The basic items the IRS checklist covers are:

• Behavioral Control: An independent consultant is not directed and controlled by the client. The client can only direct and control the work.
• Financial control: A contractor has a financial stake in the work, and will incur expenses that the client does not need to reimburse for. Also, a consultant can show a profit or incur a loss for their business, unlike an employee who is compensated with a salary.
  
• Relationship of the Parties: A contractor must maintain their own benefits, insurance and business activities. A consultant is not an employee, and therefore is not entitled to the same benefits an employee is.

Why is this important? There have been rulings in the past where independent consultants did not meet these requirements, and were eligible to receive the benefits of a regular employee. Microsoft and several other large companies were found to be misclassifying regular employees as independent consultants. These were landmark rulings, and have caused independent consultants to come under scrutiny with the IRS.

A 20 point checklist has been created to see if a consultant is really able to be classified as a consultant. Here are the questions:

For the following questions, a "yes" answer means the worker is an employee.
1. Does the principal provide instructions to the worker about when, where, and how he or she is to perform the work?
2. Does the principal provide training to the worker?
3. Are the services provided by the worker integrated into the principal's business operations?
4. Must the services be rendered personally by the worker?
5. Does the principal hire, supervise and pay assistants to the worker?
6. Is there a continuing relationship between the principal and the worker?
7. Does the principal set the work hours and schedule?
8. Does the worker devote substantially full time to the business of the principal?
9. Is the work performed on the principal's premises?
10. Is the worker required to perform the services in an order or sequence set by the principal?
11. Is the worker required to submit oral or written reports to the principal?
12. Is the worker paid by the hour, week, or month?
13. Does the principal have the right to discharge the worker at will?
14. Can the worker terminate his or her relationship with the principal any time he or she wishes without incurring liability to the principal?
15. Does the principal pay the business or traveling expenses of the worker?

For the following questions, a "yes" answer means the worker is an independent contractor.
16. Does the worker furnish significant tools, materials and equipment?
17. Does the worker have a significant investment in facilities?
18. Can the worker realize a profit or loss as a result of his or her services?
19. Does the worker provide services for more than one firm at a time?
20. Does the worker make his or her services available to the general public?
(from TaxProphet.com, http://www.taxprophet.com/apps/active2/indep-mm.html).

Making sure your consultant is a true consultant and not a quasi-employee will allow you to have them bring their expertise to the company, and allow you the flexibility to maintain the appropriate compensation and employment relationship.

These points were previously discussed for consultants on WineTalent's employment blog at Avoid the Taxman: http://winetalent.blogspot.com

Employment and Labor Lawyer

Many of the resources I've mentioned were brought to my attention by my attorney friend Barbara Cotter. Barbara specializes in employment law, and is a partner at the Sacramento offices of Cook Brown, LLP. Cook Brown, LLP specializes in representation of employers in all aspects of labor relations and employment law.

Barbara Cotter is very active in the legal community, and is a valuable resource for you. Please visit the Cook Brown, LLP, www.cookbrown.com website for her contact information.

Employment Law Resources

My employment lawyer contact recommended some sites for employment-related news and updates. These websites are a resource for you, and often offer instruction and training on some employment issues.

• Jackson Lewis, Workplace Law Firm, http://jacksonlewis.com. The Legal Updates section has a lot of valuable insight.
• Shaw Valenza, LLP, http://shawvalenza.com, What’s New in Employment Law Blog
• The California's Chamber of Commerce has a lot of valuable employer information, www.calchamber.com
• Carlton, DiSante and Freudenberger, LLP has a CA Labor Law Blog,
  http://www.cdflaborlaw.com

Some government sites are also a good source. Some that focus on California law are,

• California Department of Fair Employment and Housing, www.dfeh.ca.gov
• California Department of Industrial Relations, www.dir.ca.gov
• California Employment Development Department, www.edd.ca.gov

Also, the Internal Revenue Service site has a lot of information for employers, www.irs.gov

Employment Law Resource Available to You

For years I have talked to lawyers about employment law in California. California is one of the toughest states for employers, and the laws are often unique to this state. A resource for any California employer is the California Chamber of Commerce's HRCalifornia. The CalChamber is the largest business advocate in California. The Calchamber offers many products and services to employers, and their employment law information is a regular reference for lawyers and employers alike.