Governor Jerry Brown recently signed legislation approving the California Secure Choice Retirement Program (S.B. 1234) (“Secure Choice”), which provides access to retirement savings accounts (“Secure Choice Accounts”) established and maintained by the state of California for the estimated 7.5 million employees in California that currently do not have access to employer-sponsored retirement plans.  Employees are automatically enrolled in Secure Choice unless they opt out.  Employees enrolled in Secure Choice automatically contribute 3 percent of their annual salary or wages to their Secure Choice Accounts, unless they specify a different contribution rate or opt out.  Private employers that do not offer employer-sponsored plans are required to enable their employees to make these contributions to their Secure Choice Accounts directly from their paycheck. More>>

On August 22, 2016 the Ninth Circuit Court of Appeals in Morris v. Ernst & Young, LLP ruled that class action waivers in arbitration agreements required by employers as a condition of employment are illegal and unenforceable, because they violate the National Labor Relations Act (NLRA).  The opinion was a split 2-1 decision with a strong dissent by Judge Ikuta, who noted that three other Federal Courts of Appeal have decided that class action waivers in employer promulgated arbitration agreements are valid and enforceable and that several recent U.S. Supreme Court decisions have favored individual rather than class-based arbitration under the Federal Arbitration Act. More>>

June 23, 2014

Today, the California Supreme Court issued its long-awaited decision in Iskanian v. CLS Transportation Los Angeles, LLC, regarding the enforceability of class-action waivers in arbitration agreements.  The Court finally acknowledged precedent from the United States Supreme Court and held that the Federal Arbitration Act (FAA) preempts any state law that would preclude an employee from waiving the right to bring a class-action proceeding in arbitration.  As a result, employers can require employees to individually arbitrate any claims that are typically asserted on a class-wide basis, such as relief for alleged wage and hour violations.  The Court also rejected the argument that the type of class-action waiver at issue in Iskanian was unlawful under the National Labor Relations Act because that statute’s general protection of concerted activity does not bar class-action waivers. More>>

By: Thomas F. Reed & Whitney B. Kringel

Within the ever-changing employee benefits landscape, there have been several important employee benefit developments recently meriting special attention.

First, in January of 2013 new Regulations were published overhauling the HIPAA Privacy Rules. Among other things, the new rules apply certain parts of the privacy rules to business associates, expand individuals’ rights to access their protected information and requires revisions of business associates’ agreements, privacy notices and privacy policies.

Employers and health funds need to, at a minimum, (i) review their policies and procedures, (ii) re-document their business associate agreements and (iii) review and republish their privacy notices. More>>

On September 25, 2013, Governor Jerry Brown signed the bill to increase California’s minimum wage (AB 10).  The bill was passed overwhelmingly on straight party-line votes by the California state senate and assembly.  The bill would increase the current $8 per hour minimum wage to $9 per hour effective July 1, 2014.  The minimum wage will automatically increase a second time to $10 per hour effective January 1, 2016. Employers with collective bargaining agreements in California should be certain to determine whether they will remain in compliance with overtime laws in light of the pending rate change.  Under most California Wage Orders, employers and unions are permitted to negotiate for overtime premiums that differ from the requirements of the Wage Orders provided that employees are covered by a valid collective bargaining agreement designating wages, hours of work, and working conditions, and the employees’ regular hourly rate is not less than 30 percent more than the state minimum wage.  More>>

Recently, the United States Supreme Court gave employers a big boost on the enforceability of class action waivers in arbitration agreements. In American Express Co. v. Italian Colors, Justice Scalia wrote a forceful opinion holding that a class action waiver in an arbitration agreement is enforceable, even as to federal anti-trust claims, and even if the plaintiffs convince a trial court that the cost of proving their claims on an individual basis would deter such litigation. Justice Scalia’s opinion built on other recent decisions favoring arbitration, including: (1) AT&T Mobility v. Concepcion, in which the Court held that California state law invalidating class action waivers in the consumer arbitration agreements is preempted by the Federal Arbitration Act (“FAA”) and unenforceable; and (2) CompuCredit Corp. More>>

Gonzalez v. Downtown LA Motors, LP, (CA2/2 B235292 filed 3/6/13, pub. ord. 4/2/13) In Gonzalez v. Downtown LA Motors the California Court of Appeal held that employers who compensate automotive service technicians on a “piece-rate” basis must also pay hourly minimum wage for time spent waiting for vehicles to repair or performing other non-repair tasks directed by the employer. In Gonzalez a class of 108 automotive service technicians who worked for Downtown LA Motors Mercedes Benz (“DTLA”) brought a wage and hour claim disputing their “piece-rate” compensation. Under this plan, DTLA pays technicians a flat rate for each hour spent working on repairs, but does not pay for the hours spent waiting at the site for work or doing non-repair tasks assigned by DTLA.  More>>

On March 8, 2013, the U.S. Citizenship and Immigration Services (USCIS) released a new Form I-9 for verifying employment eligibility. All employers are required to complete a Form I-9 to verify the employee’s identity and eligibility to work in the United States. After an initial grace period during which employers could use either the new or old Form I-9, use of the new form will be mandatory as of May 7, 2013. It is important that employers use the new Form I-9 because it contains a number of important changes from the previous form. Continued use of the old form could subject employers to fines of $110 to $935 per instance depending on non-compliance rate, and repeated offenses could result in higher fines. More>>

What happens when an employer terminates an employee based on a “mix of discriminatory and legitimate reasons”? The California Supreme Court answered that question last week in Harris v. City of Santa Monica. It held that when unlawful discrimination is a substantial factor motivating the termination, the employer is not liable for damages if it can prove that it would have made the same decision absent such discrimination.

That doesn’t mean employers get off scot free, however. The Court still held that an employer is subject to declaratory or injunctive relief to stop its discriminatory practices. Also, a plaintiff-employee may recover attorney’s fees and costs as the prevailing party. More>>