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Entries in wage and hour claims (8)

Friday
Aug252017

Six Ways Franchisors Can Reduce Joint Employer Liability Risk

CalBar Certified Franchise & Distribution Law Specialist

 

by Barry Kurtz

818-907-3006

 

In January 2016, the National Labor Relations Board (NLRB) determined that indirect control or the reserved right to control, even if unexercised, could be sufficient grounds to find a joint employer relationship between a franchisor and a franchisee. As a result, employees of McDonald’s, Dominos and many other systems initiated class action and individual lawsuits, naming the franchisor as a “joint employer” in wage and hour and other complaints.

Last June the Department of Labor withdrew the NLRB guidance.

Though good news, it doesn’t necessarily change the law – the action simply reflects the current administration’s friendlier attitudes towards business. But franchisors are still at risk. The  multitude of civil and administrative actions pending against franchisors in various courts on the joint employer issue are not affected by the Department’s action.

Because joint employer liability is still a risk for franchisors, consider taking these precautions:

1. Names: Prohibit franchisees from using your brand name when establishing their franchisee-entities; and consider enforcing the rule for existing franchisees as well as new owners. Virtually all Franchise Agreements forbid unit owners from doing so, but these provisions are not uniformly enforced.

2. Employment Materials: Require franchisees to prominently include their own entity name (rather than the system’s brand or logo) on employment applications, vendor and utility applications, checks, stationary, business licenses, employee manuals and the like.

3. Ownership: Require franchisees to post placards stating units are independently owned and operated under a license from you. If practical, consider providing your franchisees with such placards to maintain uniformity of message within your system.

4. Acknowledgements: Require franchisees to obtain written acknowledgments from all existing and new employees that that state the employee is employed by the franchisee and only the franchisee, and that the franchisor has no direct or indirect control over hiring, firing, compensation, discipline, supervision or scheduling policies. Again, consider providing franchisees with a standard-form acknowledgment to maintain uniformity if practical.

5. Reviews: Examine the various controls you have over operations in your franchise agreements, operating manuals and by custom and practice. Would you issue a default notice if a currently required action was not performed? If not, consider eliminating or modifying requirements that are not essential to the protection of your brand and brand standards.

6. Training: Educate field personnel. Teach them to avoid involvement in franchisees’ employment matters and the direct training of franchisees’ employees. Field personnel should be advised to direct franchisees to third-party human resource service providers of the franchisees’ choice for assistance and to offer training and support to franchisees and management personnel but not directly to staff employees.

Please let us know if you have any questions regarding these matters.

Barry Kurtz is the Chair of our Franchise & Distribution Practice Group.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
Aug292013

Wage & Hour Claims: Prevailing Employers Must Prove Bad Faith to Recover Fees

Lawyer for EmployerWage and Hour Defense

 

by Nicole Kamm
818.907.3235

 

California Senate Bill 462, providing a prevailing employer may only recover attorneys’ fees if the court finds the wage claim was brought in bad faith, was recently signed into law.

But what does this mean for California employers?

The new bill is an amendment to California Labor Code Section 218.5, which generally states the prevailing party in a wage and hour claim may recover attorneys' fees and costs, if requested on initiation of the action. Under the former code, an employer who prevailed in a claim for unpaid overtime, wages, meal and rest break penalties, etc. could request the recovery of attorneys' fees and court costs against the employee.

But under SB 462, it will no longer be enough for an employer to be the “prevailing party” (i.e., win the case). If a company wants to recover its defense costs, the employer must prove the employee or agency making a wage and hour claim did so in bad faith – proving an intention to defraud or deceive.

 

Lessons for Employers

 

As we've long been telling our employer clients: An ounce of prevention is worth a pound of cure.

  1. Minimize Employee Claims – Properly pay all wages, overtime, commissions and benefits on a timely basis, and provide all required meal and rest breaks, in compliance with California Labor Code.

  2. Document – Keep accurate records. If an employee complains of short pay, missed breaks or makes another wage and hour claim, you should have complete and accurate records confirming whether the claim has merit or not.

  3. Communicate with Employees – Because of SB 462, it is now more important than ever to ensure your employees understand how and when they are to be paid earned wages and other amounts.

If you have any questions, please feel free to contact me. I highly recommend all employers to take proactive steps to minimize the risk of wage and hour claims before they occur.

 

Nicole Kamm is a Wage and Hour/Employment Defense Attorney for employers. Contact her via email:  nkamm@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Friday
Mar222013

Wage and Hour Trends โ€“ The Rise of the Intern

Employer Defense Lawyer Los Angeles

 

by Sue M. Bendavid
March 22, 2013

Employer Lawyer Los Angeles Google+

 

Interns. Remember the good old days when as an employer, you could expect them to arrive punctually, help out in the day-to-day operations of your business, and be asked for little in return but job training (which used to be considered invaluable for those trying to break into the biz) and a glowing reference?

Those days may be long gone, if trends in employment litigation are any indication – and these trends aren't just in individual claims. Class actions are being brought against several very high profile employers.

In February 2012, a former Harper's Bazaar intern filed suit against the Hearst Corporation, claiming 40-55 hour work weeks without compensation. A New York Court later granted class certification – meaning approximately 3,000 former interns were joined in the suit against the media mogul.

Last summer, two interns working on the film, Black Swan, expanded their wage and hour claim to include all unpaid interns working for Fox Entertainment Group over the last two years. In December, talk show host Charlie Rose agreed to a six figure settlement for 190 unpaid interns who worked for The Charlie Rose Show between 2006 and 2012.

Also in December, a former assistant football coach initiated a class action claim against Hamilton College, alleging the school misclassified him and other plaintiffs as interns, paid them sums that didn't meet minimum wage, failed to pay overtime, and failed to pay split shift pay.

The above suits were all filed in New York, but given this increase in litigation initiated by interns, it may be time to discuss what an internship is in the legal sense, and how California employers can reduce the risk of claims.

 

How to Avoid Wage and Hour Claims by Unpaid Interns

 

What is an internship? Ideally, it's an educational experience, particularly if it's an unpaid internship. The United States Department of Labor's Wage and Hour Division (WHD) has very specific guidelines regarding hiring interns and offering internships on an unpaid basis.

Whether you're running a for-profit business or a not-for-profit organization and are thinking about getting an intern to help, you should consider what you're offering vs. what you'll be getting in return. The WHD provides a six point test to help employers decide if they need to compensate interns or not.

 Ask yourself these questions:

  1. Will you provide training similar to that provided in an educational environment? You should provide a learning environment, not a work environment.

  2. Is the internship you're offering a benefit to the intern? Will the student gain valuable "real job" experience, or will they be doing the "busy work" no one else wants to do?

  3. Will the intern displace a regular employee? If yes, you should compensate the intern. Otherwise, make sure the student is working under close supervision of your staff.

  4. Will you as an employer, be gaining any advantages from bringing in an intern? If yes, you may need to pay your intern. If your work is actually impeded by the presence of the intern, chances are better that you'll be providing more of the educational environment the WHD recommends.

  5. Will the student be entitled to a job at the end of the internship? If your answer is yes, that actually encourages the intern to work, rather than learn, which could lead to potential wage and hour claims.

  6. Does the intern understand that s/he is not entitled to wages? You should make clear up front, whether or not you will be compensating the intern for her/his time.

The six elements satisfy federal criteria. Not long ago, The California Division of Labor Standards Enforcement, or DLSE (commonly known as the Labor Board), adopted these six criteria as well (and disavowed certain other factors previously used by the DLSE).

This was according to a DLSE opinion letter handed down April 7, 2010:

The DLSE has consistently applied federal interpretations of statutes, regulations, and case law under the FLSA [Fair Labor Standards Act] where there is no inconsistency with State laws…Since DOL's [Department of Labor's] 6-point formulation is derived from the early U.S. Supreme Court's opinion in [the] Portland Terminal case and has been applied (with varying degrees of deference) by the federal appellate courts, it is reasonable and appropriate for the DLSE to look to the factors used by the DOL in determining the exemption for purposes of coverage of State minimum wage coverage for trainees/interns in the absence of a State statute or regulation on the matter.

It's important for employers to correctly classify their employees, independent contractors and interns. Misclassification can leave you open to claims for unpaid wages – including a failure to pay minimum wage and unpaid overtime, waiting time penalties (for not paying wages on a timely basis), and other penalties and tax claims. .

When all is said and done, remember that the person who should most benefit from an unpaid internship is the student. That means you are offering real educational opportunities, and not just taking advantage of getting some extra tasks done, or of lightening the work loads of your regular employees.

 

Sue M. Bendavid is a Wage and Hour Attorney who protects and defends employers from employee claims. For more information about wage and hour issues and avoiding employment litigation risks, contact Ms. Bendavid via email: sbendavid@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Tuesday
Feb192013

California Wage & Hour Violations โ€“ Residential Care Facilities Investigated

 

by Sue M. Bendavid
February 19, 2013

Employer Lawyer Los Angeles Google+

 

Three California district offices of the United States Department of Labor are investigating employers of residential care facilities. Initial results from the investigations indicate approximately 200 employees may be due more than $800K from residential care employers.

The investigations began in Sacramento in October, but expanded to include facilities in San Francisco and West Covina.

The Department of Labor says there are significant concerns, including:

  • Failure to count all hours of work time
  • Interrupted personal time
  • Interrupted sleep
  • Interrupted meals
  • Failure to compensate for training
  • Failure to pay for pre and post shift duties, and
  • Failure to pay overtime wages

 

How Should Employers Avoid Wage and Hour Claims?

 

The state minimum wage in California and Los Angeles remains $8/hour, though certain cities within the state mandate higher rates. Under federal law (the FLSA) nonexempt employees who work more than 40 hours per week must receive overtime pay. The state has daily overtime rules (for employees who work more than 8 hours in a day).

When training or seminars occur outside of an employee's regularly scheduled time, you'll need to compensate for attendance at those sessions with limited exception.

Under California law, you need to provide 30 minute duty-free, uninterrupted meal breaks, and cannot ask employees to perform duties during these breaks. In the case of a resident care facility where the residents often interrupt your employee with requests for assistance, you'll need to pay the employee for the time worked and also consider whether a meal period penalty is required.

Some employees work overtime by necessity, even though the time is not authorized by you the employer. You'll need to compensate for this time, known as work suffered or permitted. This overtime work usually occurs when a facility is short-staffed, or when employees choose to take work home rather than stay on the premises after their regular work schedule.

California's Industrial Welfare Commission instituted a series of Wage Orders to protect employees in 17 industry groups. As an employer, it's important for you to know which wage order governs your business. Residential care workers are generally covered under Wage Order #5, but if you have questions about California employment law or the wage orders that affect your employees, feel free to contact me.

 

Sue M. Bendavid is the Chair of our Employment Practice Group, who exclusively represents employers. She can be reached via email: sbendavid@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Wednesday
May232012

California Employment Law โ€“ Criminal Treatment of Employers

Lawyer for EmployersEmployment Defense Attorney Los Angeles

 

by Sue M. Bendavid
818.907.3220

Employer Lawyer Los Angeles Google+

 

Picture this: The owner of a small company in Los Angeles is in an office, calmly tackling the challenges of day-to-day business needs, when all of a sudden a task force of officers enter wearing guns.

Sound like the latest episode of CSI or some other fictional, televised cop show? Think again.

This year, the California Labor Commissioner's Office, a/k/a the Department of Industrial Relations (DIR) Division of Labor Standards Enforcement (DLSE), activated their own Criminal Investigation Unit (CIU) to deal with misbehaving employers. And yes, they'll be wearing guns.

In addition to the state's civilian administrators, employers in California may now have to contend with armed peace officers who underwent and completed police academy training. The CIU will conduct investigations, inspections and arrests; file criminal charges; and serve subpoenas.

According to the Labor Commissioner's Office, the CIU task force will particularly look for employers who:

  • Violate Worker's Compensation Laws
  • Engage in theft of labor
  • Pay wages with bounced checks or insufficient funds
  • Employ minors in violation of labor guidelines
  • Employ unlicensed farm labor contractors or garment manufacturers
  • Take kickbacks on public projects
  • Impede Labor Commissioner investigations

In addition, the CIU will train representatives of the DLSE to spot employers who may be guilty of any of the above activities.

Granted, a spokesperson for the DIR says they will look for employers who are engaged in "flagrant mistreatment of workers." But the activation of such a task force serves as a good reminder for ALL employers:

Make sure you keep accurate time-keeping records, and never try to cheat the system. If you have questions about California Labor Law, or your employee policies, contact me immediately.

Sue M. Bendavid is the Chair of our Employment Practice Group. You may reach her via e-mail: sbendavid@lewitthackman.com.

 

 Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

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