Waiting-Time Penalties Suffer Another Setback

Plaintiff-side employment lawyers often leverage an unusual part of California law, “waiting-time penalties,” which allows employees to recover 30 times an average day's wages for failure to pay any amount of wages due upon termination. Unpaid wages could include hourly pay, overtime premiums, or even unused vacation. The penalties accrue under Labor Code section 203, which can be viewed here.

These penalties can be remarkable. Common examples might include claims by a former employee not paid for a single one-hour training meeting. Such a claim might seek $15.00 for unpaid wages (one hour) but $3600.00 in penalties - 240 times the alleged lost wages. Courts have no discretion to reduce the penalty when due.

The penalty applies only when failure to pay is ‘willful,’ namely where there is no good-faith dispute as to whether wages are owed.

Some courts and the state Labor Commissioner have taken a sweeping view of ‘willful’ conduct, finding that – in almost all cases – even an honest dispute over an employee’s status (such as whether an employee should have been classified as hourly rather than overtime-exempt) counts as ‘willful’ failure to pay.

The federal Ninth Circuit Court of Appeals just dealt a serious blow to this broad interpretation of ‘willful.’ (And in doing so, the court dealt an even greater blow to an issue discussed earlier in this blog: serial claims by freelancers such as the plaintiff, actor/model Bijon Hill, who sued companies after completing assignments even when they had been fully paid. In one case, despite admitting she had already been paid the $2,000.00 agreed rate, Ms. Hill sought $60,000.00 in penalties following a single-day photo shoot.)

The court held that, while there was evidence of some control over the plaintiff’s activity, various other factors supported a reasonable argument for independent contractor status such as the parties’ agreement, lack of a W-2, work done by the plaintiff for other clients, and the fact that modeling was not a regular part of the defendant’s business.

This decision was made under the state’s common-law independent contractor standard (the "Borello" test) but may easily apply to other issues such as whether an individual falls outside the state’s recent Dynamex standard or whether an employee was properly classified as exempt from overtime.

Time will tell how this case is treated by California state courts, which are not bound by the federal appellate holding. It is nonetheless a welcome win for employers and meaningful progress against unreasonable interpretation of California employment standards.

The decision, Hill v. Walmart Inc., can be viewed here.

More COVID-19 Related Changes for Employers – This One is Nationwide

- Post by Kristopher J. Lopez

On September 9, 2021, President Biden announced several new proposals for combatting the COVID-19 pandemic, including new mandates for certain private employers.

To this end, the federal Occupational Safety and Health Administration (part of the United States Department of Labor) is now developing an emergency temporary standard for private employers with 100 or more employees, mandating that their workers be vaccinated against COVID-19 or undergo weekly testing. This is expected to look like a vaccine mandate; it will require weekly testing for workers unable to get the vaccine due to a medical or religious exemption, but it will not have an option for those who do not want vaccination for purely personal reasons.

The upcoming standard will also require large employers to provide paid time off for workers to get vaccinated and to recover from any post-vaccination symptoms. Employers that do not comply with the vaccine mandate or paid-time-off requirement for testing can be fined up to $14,000 per violation – even a handful of violations will add up!

The new standards are expected in the coming weeks, but neither the President nor OSHA have provided an estimated date. It is also unclear how a small agency like OSHA will enforce this requirement, which will impact over 80 million employees. Nonetheless, large employers should begin to consider how they will respond to the upcoming mandate to avoid being caught off-guard.

Information on the Presidential action, including its Path Out of the Pandemic plan, can be viewed here. OSHA will continue to provide COVID-19 news and information, including updates on existing and emerging standards here.

Watch Local Mandates: Battling Coronavirus Variants, One County at a Time

It's not news that things have changed in the fight against coronavirus variants. The surprise is how quickly recommendations have changed - inevitably followed by rapid changes in workplace requirements.

There is little new formal guidance from state or federal authorities, though change is certainly on its way. Employers should continue reviewing and updating their COVID-19 Prevention Plans: Cal-OSHA's model plan can be viewed here.

Businesses do face a variety of new, rapidly drafted local regulations. Counties throughout the state quickly adopted new indoor mask mandates that should be monitored for every location an employer maintains workplaces.

As has been the case throughout the pandemic, different counties rarely adopt identical rules. But the new requirements typically share a few common elements:

• They generally require face coverings for all individuals within a workplace except in limited situations, such as in a closed office, while actively eating or drinking, or when performing tasks were a covering is not feasible such as assisting hearing-impaired people.

• They apply to everyone in the location, whether employee or visitor.

• They adopt the definition of "Face Covering" used in Cal-OSHA's COVID-19 Prevention Emergency Temporary Standards (addressed previously in our blog here). They include bona-fide well-fitting masks and coverings while excluding ineffective coverings such as balaclavas, bandanas, and single-ply masks.

The local regulations generally also require postings at every business entrance. We believe these should incorporate general policy terms applicable to both employees and visitors. Our firm uses a simple one-page form similar to this draft.

We expect many more changes over the coming weeks but, for now, employers should watch local requirements closely and frequently.