New Federal Minimum Wage Poster Scam In California

The Federal minimum wage increased to $5.85 an hour on Tuesday, July 24, 2007, and employers are required to post an updated notice in the workplace. However, it has been reported that employers are receiving letters that appear to be from an official source threatening the employer with fines unless they purchase a new labor law poster, which these letters attempt to sell for $100, listing the new Federal minimum wage

The scam is that the new poster can be downloaded from the Department of Labor's website for free - click here to download the new wage poster.  Employers can simply post this new poster next to the existing 2007 workplace posters. 

California employers need to continue to pay employees at least the California minimum wage of $7.50 per hour for the remainder of 2007 and $8.00 per hour beginning January 1, 2008.  It is a bit baffling that California employers are required to pay more than the Federal minimum wage, but they are still required to post the information.

The EEOC's Insatiable Appetite For Publicity In The Litigation Process

Any company that has had to defend a case against the EEOC knows of the special aggravation associated with litigation against the Federal Government. Unlike private litigants, who are motivated primarily by money, the EEOC often pursues political, ideological or bureaucratic agendas that can seem downright baffling to private sector lawyers. For example, the EEOC will often pursue claims that the supposed “victim” does not even wish to pursue – the EEOC lost a case recently against Universal where the individual on behalf who the EEOC was litigating the case settled out of court privately, but the EEOC still litigated the case.  Read more about the EEOC's loss here. 

Furthermore, as noted recently by Judge Frederick J. Martone of the Federal District Court of Arizona (who had distinguished career on Arizona’s Supreme Court prior to being appointed to Federal Court) in E.E.O.C. v. Serrano's Mexican Restaurants, LLC, that the EEOC should not utilize press releases as a litigation tool – a common practice by the EEOC. Judge Martone stated:

Our denial of the defendant’s motion is not an expression of our view on the underlying merits or the propriety of the EEOC in using press releases as part of its approach to litigation. Lawyers have a professional obligation to avoid extrajudicial statements that may prejudice a proceeding, see ER 3.6, and an obligation to be truthful in statements to others, see ER 4.1. LRCiv 83.2(d). There is a big difference between promoting the public’s right to know through keeping proceedings public, on the one hand, see Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th Cir. 2003), and affirmatively issuing press releases, on the other. The United States, and its employees, have a special duty not to injure the reputations of its citizens. Nor should it use press releases as a bargaining tool in litigation.

Judge Martone’s comments are refreshing for employers and individuals who have had to litigate cases against the EEOC and to provide some good language for parties disputing the EEOC’s usual practice of issuing press releases upon settling a case. Hopefully many more judges in the Ninth Circuit follow Judge Martone’s example. 

[Hat tip to Jottings By An Employment Lawyer.]

Do you want to reduce your payroll and add to the bottom line?

(Note to readers: Today we have the first guest post (of hopefully many more) from Ody Milton, who is a Hospitality Consultant and Culinary Management Instructor.  We thought that many of our readers would be interested in Ody's real world experience in managing restaurants.)

Guest Post by Ody Milton

Banquet and catered events offer this opportunity. When special group events are booked or sold most catering sales operations require that a “Service Charge” be paid for the event. Often these service charges range from 17% - 22% of all food beverage and other charges to the guest. These service charges are classified and handled differently than gratuities or tips. Gratuities and tips are required to be distributed to employees while “Service Charges” distribution can be done fairly according to management policy. For example many hotels retain the entire service charge and pay set –up and servers for these banquet/events an hourly “Flat Rate”. This flat rate hourly payment includes at least a minimum wage plus some flat distribution of Service Charges.

The job classification of banquet server may offer a $17.50 dollar per hour rate of pay. In essence this flat rate of $17.50 per hour is comprised of a base pay such as minimum wage at $7.50 per hour and a service charge distribution of $10.00. If the hotel collects greater than a $10.00 share per hour in Service Charges, then it can retain the difference as a credit to payroll on the P & L. This retention can be considerable! In some cases profitably for catered events has more than doubled by adopting this flat rate distribution method.  Don’t forget to check with your favorite employment attorney, laws in some states may vary.


We would like to thank Ody for this first guest post.  He is correct in noting that under California law, mandatory service charges do not have to be paid to employees.  Alternatively, tips left by patrons for the employee are the employee's property and cannot be collected from the employee unless the employer has implemented a valid tip pooling arrangement.   For more information about Ody's post, he can be reached via email or at 818-292-2506.

Bills In California State Legislature Expanding Employee Leave Rights

Assemblymember Sandré Swanson posted an article recently on the California Progress Report discussing a few new bills currently being considered by the state legislature.  These bills should be of particular importance to California employers, as Assemblymember Swanson notes:

My bill, AB 537, will directly impact the ability of family members to care for their loved ones. This bill will add seriously ill "grandparents," "grandchildren," "parents-in-law," "siblings," and “domestic partners” to the list of family members that an employee can take job-protected, unpaid leave to care for under the California Family Rights Act (CFRA). It will also ensure that employees can take leave to care for their seriously ill independent, adult children.
He also mentions related bills making their way through the California legislature:
I am also pleased to be supporting two of Senator Sheila Kuehl’s (D – Santa Monica) bills.

The first bill, SB 727, expands paid family leave to cover the same family ties as my bill, AB 537. SB 836 expands the Fair Employment and Housing Act (FEHA) to prohibit discrimination against employees who care for their families by adding “familial status” to the list of prohibited bases for employment discrimination. SB 836 will especially protect mothers from being discriminated against at work. For example, research shows that mothers are often paid less and are less likely to be hired than non-mothers with the same qualifications. The bill also protects fathers and male employees who are often penalized at work when they seek to take an active role in caring for their children or other family members. In addition, SB 836 recognizes the diverse families and family care giving arrangements of California’s workforce. Studies show that families of color are most likely to be caring for elder relatives.
You may contact Assemblymember Swanson via email by clicking here and Senator Sheila Kuehl via email by clicking here

California Labor & Employment Law Podcast Is Available Through iTunes

Update: The California Labor & Employment Law Podcast is now available through iTunes.  Click the icon to the left or here to subscribe via iTunes.  We are just starting to experiment with the podcast and are considering future topics.  If you have any suggestions for future episodes, please contact us

Tattoos, Tongue Rings, and Other Body Piercings

Yes – you are still reading the California Labor & Employment Defense blog and we do have something to say about the items listed in the title of this post.

I came across this LA Times article recently about people removing their tattoos and body piercings because they feel that their appearances could impact their job prospects. Some employees entering into the corporate world are realizing that the tattoo they got in their early twenties does not portray the image of that of an executive or a children's camp counselor. 

The article correctly notes that generally employers are allowed to make job determinations upon and employee’s tattoos and body piercings.  Employers can also develop policies prohibiting employees to expose the tattoos and body piercings.  A great example of an employer implementing such prohibitions is Disney’s very conservative prohibitions mentioned in the LA Times article. 

One area of caution, if an employee protests against an employer’s grooming standard based upon his or her religion, the employer should carefully review whether it needs to reasonably accommodate the employee under the law.

Slate Profiles Big Law Firm's "Chow for Charity" Program

The extravagance of Big Firm summer associate programs is old news. But an article in Slate recently offered an interest critique of an increasingly popular twist to these programs. See Fifteen Dollars Worth of Smug.  According to Slate these Big Firms are allowing their summer associates to agree to be wined and dined at less expensive establishments. In return, the Firm will donate the difference to charity. Is this a common sense way to give some money to a worthy cause? Or, as Daniel Gross opines is it a cynical example of a corporate tendency to “undertake publicity-generating good works that don't require them to spend extra money or change the way they do business.” Either way, it’s a thought provoking article and an interesting glimpse into the way Big Law Firms operate.

Catholic Clergy Settlement Highlights Issues of Vicarious Liability for Sexual Abuse and Sexual Harassment

The long-running tragedy of the Catholic clergy abuse scandal has, by now, become a lurid fixture of our popular culture. (On a non-sectarian note, a large number of abuse cases are pending against Protestant clergy as well). The recently announced $660 million dollar abuse settlement by the Los Angeles Archdiocese has once again put these cases in the media spotlight. 

Yet, despite their religious context, these clergy abuse claims are not unlike the lawsuits for sexual harassment routinely faced by California employers. At their core, all such claims are premised on the allegation that the employer (whether secular or religious) should be held liable for the bad acts of its employees (or other agents). Thus, aside from the threshold question of whether the misconduct actually occurred in the first place, employer liability in the secular realm will turn on the same set of questions:

  • Was the misconduct closely related to the workplace or the employee’s job duties?
  • Was the employee a supervisor or highly placed manager?
  • Did the employer have advance notice that the employee could pose a risk to others? 
  • Did the employer take reasonable steps to prevent the employee’s misconduct before it happened? 
  • Did the employer investigate and discipline the wayward employee, or did it implicitly “ratify” the conduct after-the-fact by turning a blind eye?

Depending on the answers to these questions, any California employer could find itself legally liable for an employee’s sexual misconduct. For example, the California Fair Employment and Housing Act (the “FEHA”) imposes strict vicarious liability against the employer for any sexual harassment (which may arise from conduct running the spectrum from offensive language to rape) perpetrated by a supervisor.

In the recent case of Myers v. Trendwest Resorts, Inc., 148 Cal.App.4th 1403, (2007), a California Appellate Court held that “in order for the employer to avoid strict liability for the supervisor's actions under the FEHA, the harassment must result from a completely private relationship unconnected with the employment.” Id. at 1421 (emphasis added). Thus, even where the conduct occurs away from work and outside of working hours, employers are likely to be found liable for supervisor sexual misconduct toward other employees so long as there is even the slightest connection to work.  Id. at 1424. 

An employer may also be liable for the sexual misconduct of its employees toward customers or members of the public if it “knew or should have known” of the danger posed by the employee yet failed to take reasonable steps to prevent the assault or other misconduct from occurring. See Randi W. v. Muroc Joint Unified School Dist., 14 Cal.4th 1066 (1997).

Thus, to avoid the fate of the besieged archdioceses around the country, the same sound advice pertains to any entity with employees – screen your employees in order to avoid obviously bad hiring decisions, have a well-publicized policy against harassment or misconduct, train your employees to identify and report misconduct, and take prompt remedial action rather than attempting to cover up any resulting complaints. 

Introducing the California Labor & Employment Law Podcast

Van Vleck Turner & Zaller LLP announces the first episode of the California Labor & Employment Podcast. The goal of The California Labor & Employment Law Podcast is to provide California employers updates and general discussions about California employment law. 

Episode one is the first installment of a two-part discussion on employee handbooks and general obligations in regards to employee handbooks and policies under California law. In this first episode, I speak about whether California employers need an employee handbook and some policies that California employers should implement. 

The California Labor & Employment Law Podcast – Episode One can be heard here. 

 Click here to subscribe to the California Labor & Employment Law Podcast

The podcasts will be accessible through iTunes soon, and we will keep you informed about when and how you may subscribe via iTunes.  

If you have any questions or suggestions for future podcasts, please email us. We are excited about using this technology to keep California employers informed about new developments in California employment law. 

Special thanks to Derek K. Miller for his song More Red Than Red used in our podcast under the Creative Commons licensed music from Penmachine.com.

Employer Created Liability - When None Exists

Diane Pfadenhauer at Strategic HR Lawyer has an excellent post about the recent Sixth Circuit case Thomas v. Miller. The court in Thomas held that even though an employer may have less than 20 employees, it may be subject to COBRA requirements if the employer has used “conduct or language amounting to a representation” that an employee is entitled to COBRA benefits. Diane reminds employers to carefully draft their policies to ensure that the policy does not apply to employee who may otherwise be exempt from the law at issue.

I see this occur often in regards to California specific laws. For example, California Labor Code section 230 provides certain protections to victims of domestic violence or sexual assault. Employers cannot discriminate against employees who must take time off to seek a temporary restraining order or other injunctive relief to ensure the health or safety of the employee and/or his or her child. If an employer has 25 or more employees, however, the employer is prohibited from discharging, discriminating, or retaliating against an employee who is a victim of domestic violence or sexual assault and who takes time off to seek medical attention and a list of other services. Often times small employers assume this second requirement pertains to them and incorporate it into their policies without noticing that they are not covered by this law.

Avoiding Employment Lawsuits

Rush Nigut is a general business and corporate attorney in Iowa and writes a great blog, Rush on Business.  Recently he wrote about his top seven items to prevent employment lawsuits.  Here is a summary of his top seven tips (his entire post "Seven Ways To Avoid Employee Lawsuits" can be read here):
Employment lawsuits are continually on the rise. Here are seven things that may help you avoid employee lawsuits:
  1. Treat Employees with Respect
  2. Communicate with Your Employees
  3. Implement an Effective Unlawful Discrimination and Harassment Policy
  4. Document, Document, Document
  5. Conduct Honest Employee Evaluations on a Regular Basis
  6. Do Not Retaliate
  7. Take Action and Investigate Promptly
These simple steps will go a long ways to reducing employee lawsuits. To ensure that your company has done everything it can to avoid employee lawsuits, you should have your employment policies, training and practices reviewed by your employment lawyer.
Rush's top seven tips are great reminders about what employers need to continually remind themselves to do.  I also thought that it is interesting that Rush's top tip - treat your employees with respect - cannot be found in any of the 50 U.S. state laws, federal law, or any case law.  Even though there is no "legal" requirement to treat employees with respect, I wholeheartedly agree that this is the single best step employers can take to prevent litigation (in addition to having a satisfied and productive workforce). 

I also wanted to add three more tips to round out a "top ten" list for California employers:
8.  Develop and strictly enforce a meal and rest break policy
9.  Ensure your exempt employees (i.e., salaried employees) are properly classified as exempt under California law; and
10.  Review and update your employee handbook and/or policies once a year to incorporate any changes in the law.