California Employment Law

While still new enough that most employers don’t yet know what a “PAGA” claim is, a claim under PAGA (the four letter acronym for Private Attorney General Act) can indeed be a curse to those employers unlucky enough to have made its acquaintance. You see, under the Labor Code PAGA, aggrieved employees are allowed to file suit on behalf of the State of California Labor and Workforce Development Agency, themselves, and other employees to collect penalties for any violation of the California Labor Code.

If the Labor Code already specifies a civil penalty for violation of a specific provision, then an employee may attempt to collect that penalty for themselves and on behalf of other aggrieved employees. If the underlying Labor Code section does not specify the civil penalty, the PAGA penalty is equal to $100 for each employee per pay period for the initial violation, and $200 for each employee per pay period for each subsequent violation. Cal. Lab. Code §2699(f)(2).  Thus, given the breadth of the California Labor Code and the numerous opportunities for unintentional violations, the potential penalties are staggering. Even more, a successful employee will be awarded their attorney fees and costs.

Not only is there monetary incentive to assert PAGA claims (75% of the monies go to the State, and 25% to the employees), but plaintiff’s attorneys will often assert a PAGA claim as a backup in a class action because unlike class actions, a PAGA class does not have to be certified.  Additionally, PAGA claims are not waivable, whereas rights to assert class action are. Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014).

In July 2017, the PAGA claim became even more powerful.   In Williams v. Superior Court, 3 Cal.5th 531 (2017) the Supreme Court of California unanimously reaffirmed the broad scope of discovery in civil litigation, and held that plaintiff was entitled the name and contact information of all of the employer’s 16,500 employees, not just those of the workers in plaintiff’s store. In doing so, the Supreme Court rejected the notion that plaintiff must first show good cause or some likelihood of success on the merits before receiving such information. It reversed the trial court’s order that plaintiff must first answer deposition questions to establish some merit to plaintiff’s action before seeking that discovery.

The upshot of Williams is that a single employee, even on a weak or frivolous case, can force an employer to engage in extensive and costly discovery, and can expand the potential liabilities to such an extent that most employers cannot bear the risk of not settling.

With respect to PAGA, the saying “the best defense is a good offense” couldn’t be more true. Some Labor Code violations are considered “not serious” and are subject to a 33 day cure period before the employee may sue. Employers should contact their counsel immediately to ensure that the violations are properly corrected within that period. But even before a suit is filed, employers can mitigate their exposure to a PAGA suit by carefully examining their policies, procedures, and practices to preemptively spot any potential Labor Code violation and take corrective action.

Whether you have been sued under PAGA, or are simply looking to avoid a PAGA suit, we can help you.

Employers, it’s time to pull out the drafting pen and make an important change to your job application forms. Almost all job applications ask for basic information, including the applicant’s education and job history.  Under job history, application forms usually seek the names of prior employers, positions held, dates of employment, and salary history. But starting January 1, 2018, it will be illegal in California to ask, directly or indirectly, for an applicant’s salary history. Care must be taken to remove the salary history information requests from the application- even if the applicant does not fill out the information, the employer has improperly required the prohibited information. Care must also be taken to warn hiring managers and other job interviewers to avoid inquiry on past salaries in efforts to determine a salary offer. Further, an employer, upon reasonable request, is required to provide an applicant with the pay scale for the position. California employers should be prepared.

Finally, while the drafting pen is out, employers should also remove any questions regarding criminal convictions on their job applications.  This, too, has been prohibited.

The purpose behind this new law is to expand the equal pay protections of California’s pay equality mandates, including Labor Code Section 1197.5. Under section 1197.5, pay equality, on the basis of sex, race and ethnicity, is required for “substantially similar work, when viewed as a composite of skill, effort, and responsibility.” Use of salary history to set an employee’s wages is believed to perpetuate the pay gaps experienced by women and minorities, and therefore, has been banned. Further, although an employer may legally consider prior salary information disclosed voluntarily, without prompting, by an applicant in setting the compensation for that applicant, salary history alone may not justify any disparity in compensation; an employer still runs a risk of creating disparate pay for substantially similar work, and therefore, must tread carefully.

California employment rules are complex. Contact us if you need guidance in creating an equitable hiring and offer process, setting flexible and fair pay scales, drafting job descriptions, and/or updating your employment handbook or policies.

California Health & Safety Code § 118600 became operative on March 1, 2017, requiring all business establishments and places of public accommodation to have signage which identifies their single user toilet facilities as “all-gender toilet facilities.”

bathroomA single-user toilet facility means one with no more than one water closet and one urinal with a locking mechanism controlled by the user.

This law impacts not only those businesses open to the public but all those with employees. Contact me if you require advice on legal compliance for the proper signage in addition to your labor and employment compliance and litigation needs.