Aley Moyer

The Californian 2021 Q3 – CALIFORNIA SUPREME COURT RULES CALCULATION OF PREMIUM PAY MUST INCLUDE NON-DISCRETIONARY PAY

CALIFORNIA SUPREME COURT RULES CALCULATION OF PREMIUM PAY MUST INCLUDE NON-DISCRETIONARY PAY

Saba Zafar, Esq. and Jaimee K. Wellerstein, Esq. Bradley & Gmelich, CALSAGA Legal Advisor

On July 15, 2021, the California Supreme Court held that if an employer fails to provide a legally compliant meal period or rest break to an employee, the wage premium owed to the employee must be paid at the employee’s “regular rate of compensation,” which includes not just hourly wages but all nondiscretionary payments for work performed by the employee. The Court also held that its decision will be retroactive. 

The Case

Jessica Ferra worked as an hourly bartender for Loews Hollywood Hotel. She received hourly wages plus quarterly nondiscretionary incentive payments. If an hourly employee was not provided a compliant meal or rest break, Loews paid the employee an hour of pay at the employee’s base hourly rate. Loews argued this was the “regular rate of compensation” mandated by Labor Code section 226.7(c).

In 2015, Ferra filed a class action lawsuit, arguing that nondiscretionary incentive payments should be factored into the regular rate of compensation for purposes of meal and rest break premiums. The trial court and Court of Appeal agreed with Loews that the “regular rate of compensation” was not synonymous with the “regular rate of pay” used in Labor Code section 510(a) governing overtime. Ferra appealed to the Supreme Court, and the instant ruling followed.

The Supreme Court discussed the history and evolution of the wage orders as well as Labor Code section 226.7 extensively as the basis for its holding. The Court noted that neither the Labor Code nor Wage Order No. 5-2001 define the terms and the words could reasonably be construed to mean hourly wages or wages plus nondiscretionary payments as is the case under Labor Code section 510(a) for calculation over the regular rate of pay for purposes of overtime.

The Supreme Court also relied on the courts’ and DLSE’s understanding of two different terms, that “regular rate” under the Federal Labor Standards Act (“FLSA”) and “regular rate of pay” in Labor Code section 510 have the same meaning. “Regular rate” under the FLSA for purposes of overtime includes “all remuneration for employment paid to, or on behalf of the employee” including nondiscretionary payments. Thus using the word “compensation” in Labor Code section 226.7 as opposed to “pay” in Labor Code section 510 does not necessarily mean the terms have different meanings.

The Supreme Court also rejected several federal district court opinions holding that the regular rate of compensation only means an employee’s hourly rate. The Supreme Court observed that such an interpretation would put an employee who received only a piece rate or both a piece rate and an hourly rate of pay as compensation at a disadvantage as the nondiscretionary payments would not be counted towards calculating their premium pay.

Based on its analysis and legislative history, the Supreme Court held the phrase “regular rate of compensation” in section 226.7(c) has the same meaning as “regular rate of pay” in section 510(a) and encompasses not only hourly wages but all nondiscretionary payments for work performed by the employee.”

As the final blow to employers, the Supreme Court rejected Loew’s request to apply the decision prospectively. Thus, the decision will be applied retrospectively.

Employer Takeaway:

Employers should closely examine their policies and practices with regard to meal and rest periods. Employers must demonstrate constant vigilance in complying with California’s rigid wage and hour laws, including proper calculation and payment of the one-hour premium when violations do occur.

As the decision is retroactive, employers who have paid premium pay should analyze their calculations to ensure that it includes nondiscretionary pay.

If you have any questions about how this decision may impact your obligations, or need assistance with regards to calculating premium pay, please feel free to contact Bradley & Gmelich LLP. We are here to help.

 

Saba Zafar, Esq. is Special Counsel in Bradley & Gmelich LLP’s Employment Law Department. Saba has over a decade of experience as an attorney, primarily in employment law. Saba focuses her practice of providing strategic advice and counsel in all aspects of employment law and workplace matters, including drafting and implementation of HR policies and procedures, Employment Handbooks, providing advice to clients on personnel issues as well as general business matters. 

Prior to joining the firm, Saba was a Senior Counsel providing advice and counsel to mid-sized to large businesses on employment law compliance and day-to-day employment issues, including implementing policies and procedures, employee classifications, employment separations, managing and disciplining employees, and COVID-19 rules and regulations. Saba also handled a wide variety of employment matters in state and federal court, including cases involving wrongful termination, discrimination, and wage related cases. 

In her spare time, Saba has volunteered as a Mediator for the Department of Consumer Affairs and the Orange County Human Resources Department. She was also a Volunteer Tutor for Schools on Wheels, tutoring elementary school students on skid row in Los Angeles. Prior to practicing law, Saba was a Judicial Extern for California Court of Appeal, Second Appellate District.  

In her free time, Saba enjoys embarking on culinary adventures and catching up on new television shows. szafar@bglawyers.com

Jaimee K. Wellerstein, Esq. is a Partner at Bradley & Gmelich LLP, and the Head of the firm’s Employment Department. Jaimee concentrates her practice in representing employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. She also provides employment counseling and training in all of these areas. 

Jaimee routinely represents employers in federal and state courts and in arbitration proceedings throughout the state, as well as at administrative proceedings before the Equal Employment Opportunity Commission, the California Department of Labor Standards Enforcement, the United States Department of Labor, and other federal and state agencies.

Jaimee assists as a Legal Advisor to CALSAGA, and is a member of ASIS International. She is rated AV-Preeminent by Martindale-Hubbell, the highest peer rating available. jwellerstein@bglawyers.com.

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Kate

The Californian 2020 Q3 – WORKERS’ COMPENSATION EXECUTIVE ORDER UPDATE

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WORKERS’ COMPENSATION EXECUTIVE ORDER UPDATE

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

As you may recall, Governor Newsom signed an executive order on May 6, 2020  creating a temporary, rebuttable presumption that COVID-19 is work-related (industrial) for employees who meet the specific conditions below:

 

  • This Executive Order provides that COVID-19 cases for some employees will be presumed to be work-related (industrial) if certain conditions are met. This makes it easier for qualified employees to obtain workers’ compensation benefits because it shifts the burden onto the employer to prove that injury was not Fundamentally, if an employee worked on/after March 19, 2020 at the work location and direction of the employer and tested positive or was diagnosed by a medical doctor, the presumption will apply.

 

  • If the claim form (DWC-1) was filed on/after May 6, 2020, the employer has 30 days to investigate in order to try to challenge the presumption and deny the claim. Otherwise, the claim is presumed compensable. With that said, this presumption is temporary as well as rebuttable.  It only applies as long as the State of Emergency due to COVID-19 exists.  Right now, it is set to end 60 days from May 6, 2020 (about July 4, 2020).

 

  • Claims (DWC-1) filed after May 6, 2020 which show date(s) of employee’s COVID-19 diagnosis between March 19, 2020 and July 4, 2020 have a REDUCED investigation period of just 30 days, instead of the usual 90 days. The 30 days starts with the employee’s filing of the claim form (DWC-1). If a claim form for COVID-19 was filed before May 6, 2020, those claims are likely subject to the 90-day investigation period.

It is important to know that this presumption will cover claims of a COVID-19 diagnosis for employees working through July 4, 2020. Thereafter, the State Legislature and/or the Governor would have to pass a bill and/or extend the Executive Order to continue this rebuttable presumption after that date. 

 

It is past the July 5, 2020, what now?

Although the presumption expired on July 5, 2020, California Legislature is currently addressing three bills that could potentially extend the order. SB1159 aims to backdate the bill to cover claims filed after July 5 for an employee.  We will continue to monitor legislative updates. In the interim, new COVID-19 claims will again be addressed under previous workers’ compensation rules.

  • There is no automatic presumption for COVID-19 claims
  • We go back to a 90-day investigation period
  • Workers’ Compensation benefits will be provided according the Pre – Executive Order rules and regulations

Please note that all COVID-19 related claims are still exempt from the experience modification.  We will keep you posted on any updates.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

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Kate

The Californian 2020 Q3 -LAWSUIT DE JOUR: ADA WEBSITE COMPLIANCE VIOLATIONS

LAWSUIT DE JOUR:  ADA WEBSITE COMPLIANCE VIOLATIONS

Barry A. Bradley, Esq. and Mark I. Melo, Esq., Bradley & Gmelich, CALSAGA Network Partner

In CALSAGA’s Annual Conference last October, we warned about the rise in lawsuits based on persons claiming they were denied equal access to the websites of various businesses.  As we discussed, the failure to comply with state and federal laws allowing for disabled persons to have equal access to business websites – based on such factors as keyboard navigation, text size, compatibility with screen reader software, etc. – could potentially expose private security companies to state and federal fines, not to mention individual or class action lawsuits.

Just last month, the California Court of Appeal made a decision in one of these cases.  In   Martinez v. San Diego County Credit Union, the Court aimed to help more people with disabilities have access to online businesses and services on their own.  In 2017, Mr. Martinez – who is blind – sued his credit union because its official website was not compatible with software allowing him to “read” online content.

Mr. Martinez’ software was designed to read special codes on websites and translate their contents into audible speech which could be played on his computer.  Mr. Martinez explained that this kind of screen-reading software was “the only method by which a blind person may independently access the internet.”

Mr. Martinez claimed that the Credit Union violated Civil Code Section 51, California’s Unruh Civil Rights Act (“UCRA”).  The Act requires that all disabled persons be given “equal access” to “public accommodations.”   Because other, non-blind customers could arrange for in-person appointments or learn more about banking options through the website, Mr. Martinez claimed he was denied equal access to all of the services that the Credit Union had to offer.

The Court agreed with Mr. Martinez, and decided that the Credit Union website was covered by the state’s Civil Rights Act. Although the Act is over 30 years old – far older than websites – the Court accepted that “websites have become central to American life.”

In making this decision, the Court also said something we already knew – that “during the current pandemic, the Internet and websites have become even more critical.” As more and more of us depend on the internet to shop for groceries, order prescriptions, or just carry out our daily business, it is more important than ever for security companies to take steps to make their websites compliant with the ADA and the UCRA.  This need for “equal access” applies to job applicants, employees, clients, and even prospective clients alike.

One way of improving your website’s “equal access” compliance can be obtained through UNeedADA.com.  With this service, security companies can minimize their potential exposure and have continuous, 24-hour monitoring of their website to maintain proper compliance.  A special discounted rate is available for CALSAGA members.

If you have any questions about how the Martinez case and other rulings on disabled-person access can affect your business, contact Barry Bradley, Esq. or Jaimee Wellerstein, Esq. for a consultation.

If you have any questions as to how this ruling might affect your business, feel free to contact Bradley & Gmelich so we can help you with your specific needs.

Barry A. Bradley is the Managing Partner of Bradley & Gmelich LLP located in Glendale, California, where he heads up the firm’s Private Security Team and oversees the Employment and Business Departments at the firm.  A former Deputy District Attorney, Barry’s practice concentrates on representing business owners in employment, business and licensing issues, as well as defending litigated cases involving negligent security, employment and business related issues.  The firm acts as general counsel for many security companies in California.  Barry is the Legal Advisor to CALSAGA.

He has been conferred an AV-Preeminent Peer Rating by Martindale Hubbell, the highest rating attainable, and has been named a Southern California Super Lawyer for the past 14 consecutive years in the area of Business Litigation.  Barry is also the recipient of CALSAGA’s Security Professional Lifetime Achievement Award. bbradley@bglawyers.com  818-243-5200.

 

Mark Melo is Special Counsel in Bradley & Gmelich’s Law and Motion Department, with particular emphasis in premises liability, products liability, general civil litigation, and business litigation matters. Mark coordinates pre-trial motions for our trial teams and has successfully argued before the California Court of Appeals. Mark also trains and mentors attorneys and law clerks employed by the Firm.  mmelo@bglawyers.com

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Kate

The Californian 2020 Q1 – NEW YEAR, NEW DECADE, NEW LAWS!

NEW YEAR, NEW DECADE, NEW LAWS!

2020 EMPLOYMENT LAW UPDATE FOR CALIFORNIA EMPLOYERS

Jaimee K. Wellerstein, Esq. & Annette M. Barber, Esq., Bradley & Gmelich LLP

As we ring in a new year and a new decade, California employers are faced with a number of important new laws. Following are some key employment laws taking effect this year:

  • Sexual Harassment Training (SB 530): Last year, California employers were faced with SB 1343 which requires employers with at least 5 employees to provide at least one (1) hour of sexual harassment prevention training to all non-supervisory employees and two (2) hours for supervisory employees in California by January 1, 2020. SB 530 extends the deadline for mandatory sexual harassment training to January 1, 2021, and requires new supervisors to be provided trained within six (6) months of the assumption of a supervisory position.

Note that temporary services employers (including private patrol operators) must train all newly hired employees as of January 1, 2020, within 30 days of hire or 100 hours worked, whichever is earlier. Temporary services employers have until January 1, 2021 to train all current employees.

  • Prohibition of Mandatory Arbitration Agreements (AB 51): Intending to ban mandatory arbitration agreements, AB 51 was scheduled to go into effect on January 1, 2020. However, on December 30, 2019, a federal court issued a last minute temporary restraining order blocking AB 51 from going into effect and scheduled a hearing.

If it goes into effect, AB 51 would prohibit employers from being able to require applicants and employees to enter into arbitration agreements as a condition of employment. For now, the temporary restraining order remains intact and the matter has been taken under submission. Supplemental briefing is to be filed by the parties on January 24, 2020.

  • Sanctions for Failure of Employer to Timely Pay Arbitration Costs (SB 707): Employers must pay all arbitration fees and costs on time. If not paid within thirty (30) days, the employer is in material breach and waives its right to compel arbitration. Employer could then be subject to attorney’s fees and costs, and possibly evidentiary and terminating sanctions.
  • Expansion of Lactation Accommodation Requirements (SB 142): Lactation space must now include running water, refrigeration to store milk, and electricity or charging stations for electric or battery operated breast pumps.  The bill also provides for additional break time to express milk, policy requirements and penalties under the Labor Code for violations.
  • Settlement Agreements (AB 749): AB 749 voids “no rehire” provisions in settlement agreements entered into on or after January 1, 2020.  The law does include some significant exceptions, including where the employer made a good faith determination that the individual engaged in sexual harassment or assault.  Further, the law does not require an employer to rehire an individual “if there is a legitimate non-discriminatory or non-retaliatory reason for terminating the employment relationship or refusing to rehire the person.”
  • Independent Contractors (AB 5): AB 5 codifies the Dynamex Operations West, Inc. ruling, which changed the test used to determine whether California workers are deemed independent contractors. AB 5 codifies the “ABC” test, established in Dynamex, which presumes that all workers are employees, and places the burden on the hiring business to establish all of the following to classify a worker as a contractor: (A) the worker is free from the control and direction of the hirer in connection with the performance of the work; (B) the worker performs work that is outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity. If the company fails to establish any factor, the worker will be classified as an employee.  Extreme care and caution should be used with regard to classification of all independent contractors.
  • Prohibited Discrimination Based on Race Based Hairstyles (SB 188): Known as the Creating a Respectful and Open Workplace for Natural Hair (CROWN) Act, this law expands the definition of “race” under the California Fair Employment and Housing Act (FEHA) to include traits historically associated with race, such as hair texture and protective hairstyles. “Protective hairstyles” include, but are not limited to, “braids, locks, and twists.” The CROWN Act acknowledges the disparate impact workplace dress code and grooming policies potentially could have on black individuals. Policies that prohibit natural hair, including afros, braids, twists, and locks, are more likely to deter black applicants and burden or punish black employees than any other group. Employers should review their dress codes, grooming policies, and general hiring and employment practices to ensure compliance.
  • Statute of Limitations for FEHA Claims Extended to Three Years (AB 9): Under existing law, the California Fair Employment and Housing Act (FEHA) requires that an employee alleging discrimination, harassment, or retaliation must first file a verified complaint with the Department of Fair Employment and Housing (DFEH) before filing a civil action in court. Currently, the employee has a one (1) year statute of limitations to file their DFEH complaint. AB 9, known as the Stop Harassment and Reporting Extension (SHARE) Act, extends the deadline to file a claim with the DFEH to three (3) years. Employers should note that AB 9 does not revive claims that have already lapsed under the current one-year statute of limitations rule.
  • Amendment to California Consumer Privacy Act (“CCPA”) (AB 25): AB 25 clarifies that “consumers” under the CCPA includes employers, but exempts employers if they are collecting employee data for purposes solely relating to employment.  However, this exemption will expire on January 1, 2021. For now, businesses must:  1) implement physical and electronic security measures to safeguard personnel information of employees and job applicants; and 2) provide a disclosure notice to employees and job applicants listing the categories of “personal information” collected about them and the purposes for which the information will be used.  The disclosure may be provided to current employees through a handbook or memo, and to applicants at the time of
  • Recovery of Civil Penalties for Unpaid Wages (AB 673): Employees now have the right to recover civil penalties for unpaid wages. These civil penalties were previously enforceable only through an action by the Labor Commissioner.  Now, employees can recover $100 for each initial violation, and for a “subsequent violation, or any willful or intentional violation” of $200 for each failure to pay. AB 673 limits employee recovery to statutory penalties or civil penalties under the Private Attorney’s General Act (“PAGA”), but not both, for the same violation.
  • Unpaid Wages (SB 688): Amending Labor Code section 1197.1, which currently permits the Labor Commissioner to cite employers for failing to pay at least the minimum wage, SB 688 expands the power to issue citations for violations of unpaid wages that were less than the wage set by contract in excess of minimum wage.

Jaimee K. Wellerstein is a Partner at Bradley & Gmelich LLP, and the Head of the firm’s Employment Department. Jaimee concentrates her practice in representing employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. She also provides employment counseling and training in all of these areas.

Jaimee routinely represents employers in federal and state courts and in arbitration proceedings throughout the state, as well as at administrative proceedings before the Equal Employment Opportunity Commission, the California Department of Labor Standards Enforcement, the United States Department of Labor, and other federal and state agencies. Jaimee assists as a Legal Advisor to CALSAGA, and is a member of ASIS International. She is rated AV-Preeminent by Martindale Hubbell, the highest peer rating available. jwellerstein@bglawyers.com / 818-243-5200.

 

 

 

 

 

Annette M. Barber is Special Counsel on Bradley & Gmelich LLP’s Employment Team.  She represents clients providing employment advice and counsel in all aspects of hiring, performance management, training, compensation, and termination. Annette spent the past 17 years working with a global security company of 100,000 U.S. employees as an employment law attorney and then as Corporate Vice President directing HR Compliance nationwide for all 50 states, Puerto Rico and Guam.

Annette drafts and revises policies, handbooks, and extensive training materials for the firm’s clients. She provides workplace trainings, as well as workplace investigations. She is a member of the Association of Workplace Investigators, numerous bar associations and employment law sections.  abarber@bglawyers.com / 818-243-5200.

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Kate

The Californian 2019 Q4 – NEW REQUIREMENTS FOR REPORTING SERIOUS INJURY OR ILLNESS AND DEATH

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NEW REQUIREMENTS FOR REPORTING SERIOUS INJURY OR ILLNESS AND DEATH

Jaimee K. Wellerstein, Esq. & Gregory B. Wilbur, Esq., Bradley & Gmelich LLP

A site supervisor at one of your security company’s posts calls into your dispatch center and reports that there was an altercation at a client site. Two of your guards had been asked by the client to remove a trespasser, but a scuffle broke out and the trespasser sucker-punched one of the guards. The other guard gave chase to the assailant briefly, then returned to her partner to render aid. The guard appeared fine but the punch opened a cut on his upper cheek, requiring a brief trip to the hospital for stitches. Is this a reportable event to Cal-OSHA under Labor Code section 6409.1, which requires reporting of serious injuries, illnesses, or deaths in the workplace?

At this moment, it is not, for at least two reasons. The definition of “serious injury or illness” included hospitalizations only of 24 hours or more, so a brief ER visit didn’t trigger a reporting obligation if the incident wasn’t reportable for another reason. And the definition also excluded injuries of any level of severity caused by commission of a Penal Code offense, excusing reporting for injuries suffered as a result of assault, battery, and other crimes. In our hypothetical above, both the duration of the hospital stay and the criminal conduct causing the injury would have made the above scenario one that did not have to be reported to Cal-OSHA.

But not for long. The definition of “serious injury or illness” was significantly amended earlier this year by Assembly Bill 1805, which takes effect January 1, 2020, and for the most part the effect has been to broaden the scope of the Cal-OSHA reporting requirements. The 24-hour minimum for hospital stays is gone: all hospitalizations, except those for medical observation or diagnostic testing, now trigger the requirement. The Penal Code exclusion was repealed as well, meaning criminal conduct no longer excuses reporting what would otherwise be a serious injury or illness. Another exclusion, for accidents on public streets or highways, remains in the statute, but has been narrowed not to include accidents occurring in construction zones. And the statute added amputation or the loss of an eye to the list of injuries requiring reporting, replacing language requiring the “loss of any member of the body.”

Returning to our hypothetical and applying the new law, an event that is not reportable in 2019 will be in 2020. The hospitalization for stitches makes the guard’s injury a serious one under the statute. Furthermore, the criminal conduct that would have excluded the incident from the reporting requirement before no longer does, as the Penal Code exclusion has been removed from the law.

EMPLOYER TAKEAWAYS

To make sure your safety and injury reporting program is in compliance with the new amendments, employers should first be aware of the up-to-date and complete list of triggers for mandatory reporting:

  • Incident that requires inpatient hospitalization other than for medical observation or diagnostic testing, OR
  • Incident that results in an amputation, loss of an eye, or any serious degree of permanent disfigurement

The most important changes to PPOs and other security providers are likely to be those highlighted above: mandatory reporting for any hospitalization other than for observation and testing, and the elimination of the exclusion for incidents resulting from crimes. Employers must make sure supervisors, human resources staff, and safety coordinators are all aware of these changes and the newest standards for mandatory reporting to Cal-OSHA.

Additionally, employers should be on the lookout for an announcement from Cal-OSHA regarding the establishment of an online portal for reporting serious injuries, illnesses, or deaths. Under another new law, Assembly Bill 1804, the agency is directed to establish the online portal to replace immediate email reporting of serious incidents as currently required. Employers may still report serious incidents by phone or email until the portal is established, after which they will be required to report by either phone or the portal. More information on incident reporting can be found here.

Jaimee K. Wellerstein is a Partner at Bradley & Gmelich LLP, and the Head of the firm’s Employment Department. Jaimee concentrates her practice in representing employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. She also provides employment counseling and training in all of these areas.

Jaimee routinely represents employers in federal and state courts and in arbitration proceedings throughout the state, as well as at administrative proceedings before the Equal Employment Opportunity Commission, the California Department of Labor Standards Enforcement, the United States Department of Labor, and other federal and state agencies. Jaimee assists as a Legal Advisor to CALSAGA, and is a member of ASIS International. She is rated AV-Preeminent by Martindale Hubbell, the highest peer rating available. jwellerstein@bglawyers.com / 818-243-5200.

 

 

 

 

 

Gregory B. Wilbur is a member of Bradley & Gmelich LLP’s Employment Department, where he provides aggressive and cost-effective representation to employer clients in a wide variety of proceedings in state and federal court and before administrative agencies. He has extensive experience litigating wage and hour class actions, PAGA representative actions, and discrimination, harassment, and retaliation lawsuits under various equal employment and whistleblower statutes. He has also represented clients in appeals of Cal/OSHA and Labor Commissioner penalty assessments, including seeking judicial review of administrative decisions.

In addition to his active litigation practice, Greg also provides advice and counsel to employers to prevent costly disputes from arising, with a focus on high-risk areas such as wage and hour compliance, reasonable accommodation and the interactive process, and employee leaves of absence. He also helps clients manage their employment law exposure by advising them on the use of arbitration agreements with class action waivers, and drafting such agreements to ensure they remain enforceable in a rapidly changing legal landscape. gwilbur@bglawyers.com / 818-243-5200.

                                          Continue reading the 2019 Q4 edition of The Californian

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Kate

The Californian 2019 Q4 – WORKPLACE VIOLENT ACT – ACTIVE SHOOTER AND VIOLENT ACT COVERAGE

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WORKPLACE VIOLENT ACT – ACTIVE SHOOTER AND VIOLENT ACT COVERAGE

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

Personally, I want to say, “Thank you”, to the CALSAGA Team for putting on another wonderful conference! It is always great to see everyone and meet the new Members and guests. The Security Industry is continuing to change and CALSAGA does an excellent job keeping the Members updated on those changes that affect our businesses.

Did you know that workplace violence is the second leading cause of workplace fatalities?  With incidents increasing within the last three years, it has sadly become a sign of the times. Do you and your clients know that Active Shooter and Violent Act Insurance Coverage is available to assist in mitigating potential revenue loss and liability?

As the threat of violence emerges, business owners are reviewing their general liability insurance policies and finding that bodily injury or property damage caused by an active shooter may or may not be covered.

Standard coverage may not apply to the crisis management as a result of the event. Personal attacks against customers or other third parties may not be covered by general liability insurance. Additionally, if law enforcement determines your business should remain closed after an incident, your policy may not cover loss of business income.

This policy includes coverage for Business Interruption, Third Party Bodily Injury Liability, Property Damage and Incident Response Expenses.  While most people feel that GL covers some of this exposure, be aware of the following:

  • Intent – Current General Liability (GL) applications do not ask questions regarding this exposure and therefore are not underwriting for it.  The original intent of GL does not include coverage for this type of exposure.
  • Foreseeability – GL can exclude/deny coverage for events the Insured reasonably could have foreseen.  This can include losses where employees have a history of violent behavior and no action was taken to prevent an event, or security measures that could have been taken that were not, etc.
  • Crisis Response – GL will only respond if there is a lawsuit filed and NOT offer proactive crisis management services.  The Workplace Violent Act policy offers Incident Response Expenses (IREs) that include crisis response and extra expense as well as assistance and guidance during a crisis event to help mitigate and/or prevent demands and lawsuits after the crisis.
  • Terrorism – While GL policies offer TRIA to be purchased, there is still no coverage for uncertified violent act or terror events.

Policy definitions and coverage triggers:

Incident means Workplace Violent Act Event, Workplace Violent Act Threat Event, Workplace Violent Act Against

Offsite Employee Event or Stalking Event. Multiple Incidents involving the same Violent Actor(s) will be considered one Incident. In order for Workplace Violent Threat Event(s) or Stalking Event(s) to be considered for coverage, they must be reported to the appropriate government authorities as soon as practicable.

Workplace Violent Act Event means the use of a Deadly Weapon to cause Bodily Injury at a Covered Location.

Deadly Weapon means any firearm, vehicle or other device, instrument, material, or substance that, from the manner in which it is used or is intended to be used, is calculated to or likely to produce death or physical injury.

Active Shooter and Violent Act Insurance coverage may be something that you or your clients may be interested in reviewing. Specifically, if they are a school, religious establishment, airport, hospital, shopping center……anywhere. Click here to view information on the coverage. An application is included, if you would like to obtain a quote.

Please let us know if you have any questions or if we can be of assistance.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

Continue reading the 2019 Q4 edition of The Californian

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Kate

The Californian 2019 Q3 – WORK OPPORTUNITY TAX CREDITS

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WORK OPPORTUNITY TAX CREDITS 

Kwantek Team

 

In the Security Industry, it’s common to hire employees that would qualify for Work Opportunity Tax Credits (WOTC). If your company has significant annual hiring volume, using these credits can help deduct tens of thousands of dollars from taxable income.

WOTC is a Federal Tax Credit available to most employers who hire and retain veterans and individuals from other groups with barriers to employment. Employers are eligible to reduce their federal income tax liability by an average of $1,000 per employee, with a credit potential up to $9,600 for some employees.

Who is Eligible for WOTC?

WOTC is available for employers that hire veterans and individuals from other groups with barriers to employment. This includes:

  • Veterans – unemployed and other qualified
  • Temporary Assistance for Needy Families (TANF) Recipients
  • SNAP (food stamps) Recipients
  • Ex-Felons
  • Supplemental Security Income Recipients

This represents a massive opportunity for contract security companies to reduce their taxable income by thousands – and even hundreds of thousands of dollars. Let’s take a look at an example of a Kwantek client:

  • 665 New Hires were WOTC Eligible
  • 309 Received WOTC Certifications
  • $904.22 average Tax Credit earned per certified employee
  • $279,404.09 real Tax Credit to Employer

If you’re hiring veterans, ex-felons, or low-income employees, you could stand to deduct thousands of dollars each year from your taxes!

Click here to download a full report detailing everything you need to know about WOTC.

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Kate

The Californian 2019 Q2 – ON-CALL AND CALL-IN SHIFTS REQUIRE PAYMENT OF WAGES

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ON-CALL AND CALL-IN SHIFTS REQUIRE PAYMENT OF WAGES

Jaimee K. Wellerstein, Esq., Bradley & Gmelich, CALSAGA Network Partner

A sales clerk brought a putative wage and hour class action against his employer, Tilly’s, alleging that store employees were due reporting time pay for on-call shifts or call-in shifts in which employees were required to contact the stores two hours before the start of their shift to determine whether they were needed.  The sales clerk argued that having to be on a tether to determine if he should have to report is the same as being under the employer’s control and should be compensated as reporting time.

The employer argued that on-call scheduling is not what triggers the Wage Order reporting time pay requirements, but rather when they actually report physically to work.  In Ward v. Tilly’s, Inc., 31 Cal. App. 5th 1167 (2/4/2019), the Court of Appeal sided with the employees and held that if an employer directs employees to present themselves for work by telephoning the store two hours prior to the start of a shift, then the Wage Order’s reporting time requirement is triggered by the telephonic contact.

Reporting time pay is one-half of the scheduled shift and, in any case, not less than 2-hours of pay at straight time. (See, IWC Wage Order No. 4, section 5.)

LESSON LEARNED:  Although the On-Call or the Call-In models are not typically used in the security industry, if you do, be aware that each employee is deemed to be under the employer’s control while they are waiting to see if they will be needed.  As such, reporting time wages are required to be paid.

Jaimee K. Wellerstein is a Partner at Bradley & Gmelich LLP, and the Head of the firm’s Employment Department. Jaimee concentrates her practice in representing employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. She also provides employment counseling and training in all of these areas. Jaimee routinely represents employers in federal and state courts and in arbitration proceedings throughout the state, as well as at administrative proceedings before the Equal Employment Opportunity Commission, the California Department of Labor Standards Enforcement, the United States Department of Labor, and other federal and state agencies. Jaimee assists as a Legal Advisor to CALSAGA, and is a member of ASIS International. She is rated AV-Preeminent by Martindale Hubbel, the highest peer rating available. jwellerstein@bglawyers.com 818-243-5200.

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Kate

The Californian 2019 Q2 – U.S. SUPREME COURT: COURTS MAY ONLY COMPEL CLASS-WIDE ARBITRATION IF EXPRESSLY AGREED UPON IN EMPLOYMENT ARBITRATION AGREEMENT

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U.S. SUPREME COURT: COURTS MAY ONLY COMPEL CLASS-WIDE ARBITRATION IF EXPRESSLY AGREED UPON IN EMPLOYMENT ARBITRATION AGREEMENT

Jaimee K. Wellerstein, Esq., Bradley & Gmelich, CALSAGA Network Partner

In a split 5-4 decision in Lamps Plus, Inc. v. Varela, No. 17-988 (Apr. 24, 2019), the U.S. Supreme Court held that courts may only compel class action arbitration where the parties expressly declare their intent to be bound by such actions in their arbitration agreement. The holding and rationale are important to employers because the Court decisively ruled that class arbitration “fundamentally” changes the nature of the “traditional individualized arbitration” envisioned by the Federal Arbitration Act. Thus, the Supreme Court said, “Courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.”

Following the Supreme Court’s ruling, arbitration agreements must unequivocally state that the parties agree to resolve class actions through arbitration in order to proceed this way. Courts cannot compel the parties to arbitration when an arbitration agreement is ambiguous about the availability of class arbitration.

Employer Takeaway: This ruling is a win for employers. Courts can no longer impose class-wide arbitration unless the employer’s arbitration agreement clearly authorizes this. Only express agreements between the parties can lead to class arbitration. Companies, along with their counsel, should review their employment arbitration agreements to determine whether they comply with the SCOTUS standards.

Jaimee K. Wellerstein is a Partner at Bradley & Gmelich LLP, and the Head of the firm’s Employment Department. Jaimee concentrates her practice in representing employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. She also provides employment counseling and training in all of these areas. Jaimee routinely represents employers in federal and state courts and in arbitration proceedings throughout the state, as well as at administrative proceedings before the Equal Employment Opportunity Commission, the California Department of Labor Standards Enforcement, the United States Department of Labor, and other federal and state agencies. Jaimee assists as a Legal Advisor to CALSAGA, and is a member of ASIS International. She is rated AV-Preeminent by Martindale Hubbel, the highest peer rating available. jwellerstein@bglawyers.com 818-243-5200.

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Kate

The Californian 2019 Q2 – ESSENTIAL CONTRACT TERMS FOR YOUR SECURITY SERVICES AGREEMENTS

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ESSENTIAL CONTRACT TERMS FOR YOUR SECURITY SERVICES AGREEMENTS

Barry A. Bradley, Esq., Bradley & Gmelich, CALSAGA Network Partner

While recently teaching CALSAGA’s Security University course on contracts, it became clear that many of your service contracts with your clients are often missing some vital essential terms.  Without going into too much detail in this limited space, examine your contract template and see if they contain each of the following:

  • General Statement of Duties (Scope) Are your duties clear and defined both as to location, post responsibilities, hours, expectations, and especially limitations? Are your officers to use force? Are they just required to observe and report?
  • Term of Contract When does your service agreement expire? Will it automatically renew? Is termination addressed?
  • Price and Payment Terms Are all service hours defined and invoicing defined?
  • Attorney’s Fees If a dispute arises between you and your client (for example, for non-payment), does the prevailing party have a right to recover its reasonable attorney’s fees?
  • Disclaimers Are you making promises you shouldn’t?
  • Indemnification This is perhaps one of the most vital areas of your agreement. Is it in your favor, or are you giving up the farm?
  • Insurance Requirements Are you providing appropriate insurance coverage? Are you required to name your client as an Additional Insured? Are there exclusions that might apply for which you might not have coverage?
  • How Disputes are Resolved? In the event of a legal dispute with your client, where and how will it be addressed?

These are just a few of the necessary provisions that should be addressed in any of your service contracts.  There are additional areas that can protect your business, but at a minimum, you should make sure you have these basics.

LESSON LEARNED:  We all know it is better to use your own contract than one that is drafted by your client. Your basic template can and should fully protect your business.  However, when you must use your client’s contract, you can always negotiate before you enter into the agreement and try to ensure that some of these essential provisions are there that will protect your business.

Contact us to assist you in reviewing your contract template, or any agreements you might be asked to sign.  (Once you sign it, it’s too late to change things.)

Barry A. Bradley is the Managing Partner of Bradley & Gmelich LLP located in Glendale, California, where he heads up the firm’s Private Security Team and oversees the Employment and Business Teams at the firm.  A former Deputy District Attorney, Barry’s practice concentrates on representing business owners in employment, business and licensing issues, as well as defending litigated cases involving negligent security, employment and business related issues.  The firm acts as general counsel for many security companies in California.  Barry is the Legal Advisor to CALSAGA.

He has been conferred an AV-Preeminent Peer Rating by Martindale Hubbell, the highest rating attainable, and has been named a Southern California Super Lawyer for the past 14 consecutive years in the area of Business Litigation.  Barry is also the recipient of CALSAGA’s Security Professional Lifetime Achievement Award. bbradley@bglawyers.com  818-243-5200.

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