Category Archives: Labor Law

Waiting Time Penalty

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Waiting Time Penalties in California

Public policy in California has long favored the full and prompt payment of wages due an employee. To ensure that employers comply with the laws governing the payment of wages when an employment relationship ends, the Legislature enacted Labor Code Section 203 which provides for the assessment of a penalty against the employer when there is a willful failure to pay wages [willful failure to pay wages within the meaning of Labor Code Section 203 occurs when an employer intentionally fails to pay wages to an employee when those wages are due. However, a good faith dispute that any wages are due will preclude imposition of waiting time penalties under Labor Code Section 203. Title 8, California Code of Regulations, Section 13520 The term “willful” as used in Labor Code Section 203 and as defined in civil court decisions does not necessarily imply anything blameworthy or evil intent, but rather that the person knows what he or she is doing, is a free agent, and fails to perform a required act.] due the employee at conclusion of the employment relationship. Assessment of the waiting time penalty does not require that the employer intended the action or anything blameworthy, but rather that the employer knows what he is doing, that the action occurred and is within the employer’s control, and that the employer fails to perform a required act.

Assessment of the penalty is not automatic however, as a “good faith dispute” [that any wages are due occurs when an employer presents a defense, based in law or fact which, if successful, would preclude any recovery on the part of the employee. The fact that a defense is ultimately unsuccessful will not preclude a finding that a “good faith dispute” did exist if the defense was reasonable and presented in good faith. Defenses presented, which, under all the circumstances, are unsupported by any evidence, are unreasonable, or are presented in bad faith, will preclude a finding of a “good faith dispute.” Title 8, California Code of Regulations, Section 13520] that any wages are due will prevent imposition of the penalty.

In order for the penalty to apply, there must be a true employer-employee relationship and a quit or a discharge, which includes a layoff.

The penalty applies to the willful failure to pay “any wages” [all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation. Labor Code Section 200(a) A “wage” is defined as money or other value that is received by an employee as compensation for labor or services performed. “Other value” could include room, board, clothes, and other benefits to which the employee is entitled as a part of his or her compensation], which refers to the definition of “wages” in Labor Code Section 200 [where “Wages” includes all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation, and “Labor” includes labor, work, or service whether rendered or performed under contract, subcontract, partnership, station plan, or other agreement if the labor to be paid for is performed personally by the person demanding payment]. Thus, all compensation must be considered in determining if all wages due were paid as prescribed by law. “Wages” does not include expenses. In calculating the penalty, overtime wages are considered only if overtime is regularly scheduled each week. Occasional or infrequent overtime is not considered in the calculation of the daily rate of pay for purposes of computing the penalty.

The penalty is measured at the employee’s daily rate of pay and is calculated by multiplying the daily wage by the number of days that the employee was not paid, up to a maximum of 30 days. This does not mean that the wages continue for a 30-day period, but that the employee may be entitled to up to 30 actual days’ worth of wages. The 30-day period is calendar days, and includes weekends and holidays and any other days that the employee would not normally work. Payment of the wages or the commencement of an action stops the penalty from accruing. Filing a complaint in court commences an action. An employee’s filing a claim with the Division of Labor Standards Enforcement (DLSE) is not considered the filing of an action, and does not stop the penalty from accruing.

The waiting time penalty is not wages, thus, no deductions are taken from the penalty payment.

Note: If the answer to any of the questions below states that the employee is entitled to the waiting time penalty, it is assumed that all of the conditions for imposition of the penalty exist and there is no good faith dispute that any wages are due.

1. Q. Seven days ago I gave my employer notice that I was quitting on Friday, which I did. I did not receive my final paycheck on that day, and on the following Monday called my former employer to find out when I would be paid. He informed me that my check was available and that I could come in and pick it up, and I told him I would do so. I purposely did not pickup my check until 10 days later, which was 13 days after I quit. Am I entitled to the waiting time penalty?

A. Yes, you are entitled to the waiting time penalty in the amount of three days’ wages. In this situation, since you gave your employer at least 72 hours prior notice that you were quitting and quit on the date you said you would, the employer’s obligation is to pay you all of your unpaid wages at the time of quitting. Labor Code Section 202 Since tender of payment of the final wages stops the penalty from accruing (in this case “tender of payment” is your former employer’s informing you on the Monday following your quit that your check was available, and your telling him that you would pickup it up), you are entitled to only three days’ wages worth of penalty.

You are not entitled to 13 days’ wages worth of penalty because you purposely avoided picking up your check for ten days after you were informed it was available. Labor Code Section 203 provides that “An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her…is not entitled to any benefit…for the time during which he or she so avoids payment…”

2. Q. On Monday of last week I informed my employer in writing that Friday of that week would be my last day of work as I was quitting. On Friday as I was leaving work I asked my employer for my check. He told me he didn’t have my check and that I would have to wait until the end of the payroll period when the payroll service prepared the semimonthly payroll checks. I asked if he would call me so I could come pickup my check, and he told me “no,” he’d just mail it when he got it. Fifteen days after the day I quit I received my check in the mail. The envelope was postmarked three days prior to that date. Am I entitled to the waiting time penalty, and if so, in what amount?

A. Yes, you are entitled to a waiting time penalty in the amount of 15 days’ wages. Under Labor Code Section 202, when an employee not having a written contact for a definite period quits his or her employment and gives 72 hours prior notice of his or her intention to quit, and quits on the day given in the notice, the employee is entitled to his or her wages at the time of quitting. Since you gave at least 72 hours prior notice of your intention to quit, quit on the day given in the notice, and did not receive your wages until 15 days later, you are entitled to a waiting time penalty in the amount of 15 days wages; the number of days between the date you were required to be paid and the date you were paid. Under these circumstances, the day you received the wages, and not the day they were mailed, is the date of payment and the day when the penalty stops accruing.

3. Q. If I quit my job without giving 72 hours prior notice and am not paid all of the wages due me within 72 hours after the time I quit, must I return to my former employer’s place of business 72 hours after quitting and demand my wages in order for the waiting time penalty to apply?

A. Waiting time penalties may apply to an employee who quits without 72 hours prior notice and who does not return to the workplace to demand wages. There are instances if the employer prevents you from returning for your wages, or the employer informs you that the wages will not be available even if you do return, whereby waiting time penalties may apply. Such situations are handled on a case-by-case basis. Furthermore, if you quit without giving at least 72 hours prior notice, you are entitled to receive payment of wages by mail if you request this and designate a mailing address. Labor Code Section 202. If you do so, and wages are not paid, waiting time penalties may apply. In general, employers should make diligent, good faith efforts to ensure that employees are paid, including payment of final wages.

4. Q. I was discharged from my employment two weeks ago. At that time I was paid all of my wages, but did not get reimbursed for any of my business related expenses until 10 days later. Am I entitled to the waiting time penalty, and if so, in what amount?

A. No, you are not entitled to the waiting time penalty. The waiting time penalty is assessed only when an employer willfully fails to pay an employee in accordance with Labor Code Sections 201, 201.5, 202, or 202.5, any wages of an employee who quits or is discharged. As you were paid all of your wages in accordance with the law and the reimbursement for business expenses is not wages, the waiting time penalty does not apply to your situation.

5. Q. I was discharged from my job two weeks ago. At that time I was paid the wages for all of the hours that I had worked, but was not paid for my 15 days of earned, accrued and unused vacation until 10 days later. Am I entitled to the waiting time penalty, and if so, in what amount?

A. Yes, you are entitled to the waiting time penalty in the amount of 10 days’ wages. The waiting time penalty is assessed only when an employer willfully fails to pay in accordance with Labor Code Sections 201, 201.5, 202, or 202.5, any wages of an employee who quits or is discharged. Under California law, earned vacation time is considered wages; and under Labor Code Section 227.3, unless otherwise provided by a collective bargaining agreement [An agreement negotiated between a labor union and an employer that sets forth the terms of employment for the employees who are subject to the agreement. This type of agreement may include provisions regarding wages, vacation time, working hours, working conditions, and health insurance benefits], whenever an employment relationship ends for any reason whatsoever and the employee has not used all of his or her earned and accrued vacation, the employer must pay the employee at his or her final rate of pay for all such earned, accrued and unused vacation. In your situation, since your former employer was obligated to pay you all of your wages at the time you were discharged, including your 15 days of vacation wages, and did not do so, you are entitled to the waiting time penalty in the amount of 10 days wages, the number of days between the date you were discharged and the date you received all of your final wages, i.e., the 15 days vacation pay.

6. Q. How is the daily rate of pay calculated and the waiting time penalty computed?

A. The following are examples of calculations of the daily rate of pay and computations of the waiting time penalty. In each instance, these examples assume all of the conditions for imposition of the penalty exist and that there is no good faith dispute that any wages are due.
A security guard is discharged on Friday, July 12, 2002, and not paid all of her earned wages due until Monday, July 22, 2002, ten days later. She regularly worked 35 hours per week, Monday through Friday, and was making $8.00 per hour at the time of her termination.
Daily Rate of Pay Calculation

35 hours/week ÷ 5 days/week = 7 hours/day

7 hours/day x $8.00/hour = $56.00/day (daily rate of pay)

Waiting Time Penalty Calculation

10 days, the number of days between the date the employer was obligated to pay the employee, July 12, 2002, and July 22, 2002, the date she is paid all of her wages. (See Labor Code Section 201, discharge of employee; immediate payment)

10 days x $56.00/day = $560.00 waiting time penalty.

A salesclerk is discharged on Friday, May 3, 2002, and not paid all of his earned wages due until Friday, June 14, 2002, 42 days later. He regularly worked 40 hours per week, Tuesday through Saturday, but during the last week of his employment he worked four hours of overtime. At the time of his termination, the employee was earning $10.00 per hour.
Daily Rate of Pay Calculation

40 hours/week ÷ 5 days/week = 8 hours/day

8 hours/day x $10.00/hour = $80.00/day (daily rate of pay)

This example shows that occasional or infrequent overtime is not included in calculating the daily rate of pay for purposes of determining the amount of the waiting time penalty.

Waiting Time Penalty Calculation

30 days. Although the employee was not paid all of his wages due until June 14, 2002, 42 days after the date the employer was obligated to pay him, the maximum penalty allowed under the law, is 30 days’ wages. Labor Code Section 203

30 days x $80.00/day = $2,400.00 waiting time penalty.

This example shows that the maximum penalty allowed under the law is 30 days’ wages.

A fry cook voluntarily quit her job on Tuesday, July 2, 2002, without giving notice to her employer. She regularly worked 45 hours per week, Monday through Friday, and was making $10.00 per hour when she quit. She is paid all of her earned wages due on Friday, July 12, 2002, 10 days after she quit.

Daily Rate of Pay Calculation

45 hours/week ÷ 5 days/week = 9 hours/day

8 hours/day x $10.00 per hour = $80.00

1 hour/day overtime x $15.00/hour (1� x $10.00) = $15.00

$80.00 + $15.00 = $95.00 daily rate of pay

This example shows that regularly scheduled overtime is included in calculating the daily rate of pay for purposes of determining the amount of the waiting time penalty.

Waiting Time Penalty Calculation

7 days. The employee is entitled to only seven days’ wages as the penalty because the employer has 72 hour (3 days, which in this example would be until July 5) to pay terminal wages when an employee quits without giving at least 72 hours prior notice of his or her intention to quit. (See Labor Code Section 202, quitting employee; payment within 72 hours)

7 days x $95.00/day = $665.00 waiting time penalty.

This example shows that the employer has 72 hours to pay terminal wages when no notice or less than 72 hours prior notice of intention to quit is given.

A part-time file clerk voluntarily quit his job on Friday, March 15, 2002. On Friday, March 8, 2002, he gave his employer notice that he was quitting on the 15th of that month (more than 72 hours notice). He regularly worked two days per week, four hours per day. He was making $7.50 per hour when he quit. He is paid all of his earned wages due on Friday, April 5, 2002.

Daily Rate of Pay Calculation

4 hours/day x $7.50/hour = $30.00/day (daily rate of pay)

Waiting Time Penalty Calculation

21 days, the number of days from the date the employer was obligated to pay the employee, March 15, 2002, until April 5, 2002, the date he was paid all of his wages.

21 days x $30.00/day = $630.00 waiting time penalty.

This example shows that the waiting time penalty applies to employees regardless of whether they are part-time or full-time, and that when an employee gives at least 72 hours prior notice of intention to quit, and quits on the date given in the notice, the employer’s obligation to pay all of the wages due is the date that the employee quits.

A commission salesperson working for an appliance dealer is discharged on May 10, 2002. She is not paid her earned commission wages due until May 25, 2002, the regular payday. She regularly worked 40 hours per week, five days per week. For the last three full months of her employment, on average she earned $3,000.00 per month. As of the date of her discharge, May 10, 2002, all commissions since the end of the previous pay period had been earned and were calculable by the employer on that date. At the time of her discharge, the employee did not know the amount of commissions she had earned since her last pay period.

Daily Rate of Pay Calculation

$3,000.00/month x 12 months/year = $36,000.00/year

$36,000.00/year ÷ 52 weeks/year = $692.31/week

$692.31/week ÷ 5 days = $138.46/day (daily rate of pay)

Waiting Time Penalty Calculation

15 days, the number of days from the date the employer is obligated to pay the employee, May 10, 2002, until May 25, 2002, the date she is paid all of her wages.

15 days x $138.46/day = $2,076.90 waiting time penalty.

A salesperson is paid a fixed salary of $2,500.00 per month and a commission of 10% of sales she makes each month. She quits her job on March 15, 2002 after providing more than 72 hours notice of her intention to quit. She quits on the day given in her notice. For the past three months she has averaged $1,500.00 in commission wages each month. She regularly worked 40 hours per week, five days per week. She is paid her salary wages on March 15, 2002, the day she quits; however, she is not paid her commission wages until April 1, 2002, the regular payday for commissions. All commission wages were earned prior to March 15, 2002, and were calculable by the employer on that date.

Daily Rate of Pay Calculation

$2,500.00 base salary/month + $1,500.00 average commissions/month = $4,000.00 average wages/month.

$4,000.00 average wages/month x 12 months/year = $48,000.00/year

$48,000.00/year ÷ 52 weeks/year = $923.08/week

$923.08/week ÷ 5 days/week = $184.62/day (daily rate of pay)

This example shows how the daily rate of pay is calculated when two different types of wages are earned.

Waiting Time Penalty Calculation

17 days, the number of days from the date the employer is obligated to pay the employee, March 15, 2002, until April 1, 2002, the date she is paid all of her wages.

17 days x $184.62/day = $3,138.54 waiting time penalty.

7. Q. Is overtime included in calculating the daily rate of pay for purposes of computing the waiting time penalty?

A. It depends. Regularly scheduled overtime is included in calculating the daily rate of pay for purposes of computing the waiting time penalty. On the other hand, occasional or infrequent overtime is not included in the calculation of the daily rate of pay for purposes of computing the waiting time penalty.

8. Q. I understand that if I am discharged from my job, or quit, and my employer willfully fails to pay me my final wages and there is not a good faith dispute that any wages are due, that I am entitled to a waiting time penalty of up to 30 days’ wages. If my employer pays me 15 days after my final wages are due, am I entitled to the full 30 days’ wages of penalty?

A. No, payment of wages or the commencement of an action stops the penalty from accruing. Filing in court commences an action. Filing a wage claim with the Labor Commissioner’s office (DLSE) is not considered an action and does not prevent the waiting time penalty from continuing to accrue.

9. Q. I was discharged last week and not paid all my wages. At the time I was discharged my former employer informed me that he could not pay me because he didn’t have the money. Will this be a valid defense to my claim for the waiting time penalty?

A. No, it will not be a valid defense. Inability to pay is not a defense to the failure to timely pay wages under Labor Code Sections 201, 201.5, 202, and 202.5, and does not relieve the employer from liability of the waiting time penalty under Labor Code Section 203.
Other reasons commonly given by employers for not making a timely payment under Labor Code Sections 201, 201.5, 202 and 202.5 that do not relieve the employer of liability from imposition of the waiting time penalty are:

Payroll checks are only paid on regular paydays, and that is when you will receive your wages.
Our payroll department is out-of-state and cannot get us a check in time.
You still owe us money for the goods you purchased, and we are not going to pay you your wages until you pay us.
10. Q. Does the waiting time penalty apply to part-time and temporary employees, or just to full-time employees.

A. The waiting time penalty applies to all employees regardless of status, exempt, nonexempt, full-time, part-time, temporary, probationary, or otherwise. The penalty does not apply to independent contractors or volunteers, as they are not “employees.”

11. Q. When computing the amount of penalty, do you count only the days I might have worked during the period for which the penalty accrues, or do you also include all non-workdays?

A. All non-workdays are included. When computing the penalty you count all of the calendar days for which the penalty accrues, including weekends, non-workdays (e.g., days off), and holidays.

12. Q. I am a salaried employee. For purposes of determining the waiting time, is one month’s salary the same as 30 days’ wages?

A. No, one month’s salary does not equate to 30-days wages. A salaried employee working five days per week will on average work 21.6 days per month (52 weeks/year ÷ 12 months/year x 5 days/week) in earning his or her full salary. However, since the waiting time penalty is calculated using a daily rate of pay, and can be up to 30 days’ wages, the maximum penalty will always exceed a person’s monthly salary. For example, assume that the maximum penalty of 30 days’ wages is appropriate for a salaried employee who was making $2,500.00 per month at the time the employment relationship ended. In such a situation, the penalty would be $3,461.54, computed as follows:
$2,500.00/month x 12 months/year = $30,000.00/year

$30,000.00/year ÷ 52 weeks/year = $576.92/week

$576.92 ÷ 5 days/week = $115.38/day (daily rate of pay)

$115.38/day x 30 days = $3,461.54 (waiting time penalty)

13. Q. My employer failed to pay me my final wages within the time period prescribed by law and I believe I am entitled to the waiting time penalty. What can I do?

A. You can either file a wage claim with the Division of Labor Standards Enforcement (the Labor Commissioner’s Office), or bring an action in court against your former employer to recover the wages if they are still due you, and to claim the waiting time penalty.

14. Q. What is the procedure that is followed after I file a wage claim?

A. After your claim is completed and filed with a local office of the Division of Labor Standards Enforcement (DLSE), it will be assigned to a Deputy Labor Commissioner who will determine, based upon the circumstances of the claim and information presented, how best to proceed. Initial action taken regarding the claim can be referral to a conference or hearing, or dismissal of the claim.
If the decision is to hold a conference, the parties will be notified by mail of the date, time and place of the conference. The purpose of the conference is to determine the validity of the claim, and to see if the claim can be resolved without a hearing. If the claim is not resolved at the conference, the next step usually is to refer the matter to a hearing or dismiss it for lack of evidence.

At the hearing the parties and witnesses testify under oath, and the proceeding is recorded. After the hearing, an Order, Decision, or Award (ODA) of the Labor Commissioner will be served on the parties.

Either party may appeal the ODA to a civil court of competent jurisdiction. The court will set the matter for trial, with each party having the opportunity to present evidence and witnesses. The evidence and testimony presented at the Labor Commissioner’s hearing will not be the basis for the court’s decision. In the case of an appeal by the employer, DLSE may represent an employee who is financially unable to afford counsel in the court proceeding.

See the Policies and Procedures of Wage Claim Processing pamphlet for more detail on the wage claim process procedure.

15. Q. What can I do if I prevail at the hearing and the employer doesn’t pay or appeal the Order, Decision, or Award?

A. When the Order, Decision, or Award (ODA) is in the employee’s favor and there is no appeal, and the employer does not pay the ODA, the Division of Labor Standards Enforcement (DLSE) will have the court enter the ODA as a judgment against the employer. This judgment has the same force and effect as any other money judgment entered by the court. Consequently, you may either try to collect the judgment yourself or you can assign it to DLSE.

Legal Forms

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Legal Forms in California

Research Guide – California Legal Forms

California Civil Procedure Formbooks

These include:

  • California Affirmative Defenses 2d, Bancroft Whitney, 5 volumes. These forms are for defenses to civil actions. This publication is also available on Westlaw (Formerly, CAAFDEF).
  • California Civil Litigation Forms Manual, Continuing Education of the Bar, 2 volumes. The forms in this practice guide are derived from CEB civil procedure and civil discovery books. Sample forms are including.
  • California Civil Procedure Before Trial, 3rd ed., Continuing Education of the Bar, 3 volumes. This publication is also available on Lexis (formerly, ceb;cebcpt).
  • California Forms of Pleading and Practice, Annotated, Matthew Bender, 55 volumes. This is a very comprehensive and current set of California legal forms. It includes relevant laws and the procedures for using the forms. It is organized by subject. These forms are available on Lexis.
  • California Practice Guide: Alternative Dispute Resolution, Rutter Group. This publication is also available on Westlaw (Formerly, TRG-CAADR).
  • California Practice Guide: Civil Appeals and Writs, Rutter Group, 2 volumes. This publication is also available on Westlaw (Formerly, TRG-CACIVAPP).
  • California Practice Guide: Civil Procedure Before Trial, Rutter Group, 3 volumes. This publication is also available on Westlaw (Formerly, TRG-CACIVP).
  • California Practice Guide: Civil Trials and Evidence, Rutter Group, 3 volumes. This publication is also available on Westlaw (Formerly, TRG-CACIVEV).
  • California Practice Guide: Enforcing Judgments and Debts, Rutter Group, 2 volumes. This publication is also available on Westlaw (Formerly, TRG-CADEBT).
  • Debt Collection Practice in California, Continuing Education of the Bar, 2 volumes.
  • Practicing California Judicial Arbitration, Continuing Education of the Bar.

Judicial Council Forms

These include:

  • California Forms of Pleading and Practice, Annotated, Matthew Bender. A three volume supplement, Judicial Council Forms, contains forms for use in discovery, wage garnishment, family law, juvenile court law, guardianship, civil harassment, and small claims proceedings.
    These forms are available on Lexis.
  • California Judicial Council Forms Manual, Continuing Education of the Bar, 4 volumes. Forms can be removed for copying and are accepted by the California courts. Set includes table of contents, alphabetical list of forms, and table of statutes and rules.
  • West’s California Judicial Council Forms, 4 volumes. For use in conjunction with West’s Annotated California Codes. Forms are effective through current year.

Judicial Council Forms are also available through the California Courts’ Internet homepage.

Jury Instructions and Selection

  • [CACI] California Jury Instructions: Civil, Plain English, This publication is also available on Westlaw (Formerly, CA-CACI) and Lexis (Formerly, cal;cjcjur).
  • [BAJI] California Jury Instructions: Civil, 9th ed., 2 volumes. This publication is also available on Westlaw and Lexis.
  • Bennett’s Guide to Jury Selection and Trial Dynamics:California Civil Litigation, West Publishing Company. Forms for jury selection, including sample questionnaires for different types of trials. These forms are also available on Westlaw (formerly, through the LTG-TP database). Hint: To limit your search to Bennett’s, add “ci (bennett)” to your search.
  • [CALCRIM] California Jury Instructions: Criminal, Plain English, 2 volumes. This publication is also available on Westlaw and Lexis.
  • [CALJIC] California Jury Instructions: Criminal, 6th ed., 2 volumes. This publication is also available on Westlaw and Lexis.
  • Bennett’s Guide to Jury Selection and Trial Dynamics:California Criminal Litigation, West Publishing Company. Forms for jury selection, including sample questionnaires for different types of trials. These forms are also available on Westlaw (formerly, through the LTG-TP database). Hint: To limit your search to Bennett’s, add “CI (bennett)” to your search.
  • California Forms of Jury Instructions, Matthew Bender, 4 volumes. These forms are also available on Lexis.
  • California’s New Civil Jury Instructions are available through the California Courts’ web page at http://www.courtinfo.ca.gov/reference/documents/civiljuryinst.pdf. There is a conversion chart at the end for cross-referencing BAJI numbers with the correct numbers for the new instructions.
  • FORECITE: Latest Developments in California Criminal Jury Instructions. This looseleaf volume supplements and updates CALJIC.

Formbooks Organized by Subject Specialization

Multi-Subject Formbook Sets:

  • California Legal Forms: Transaction Guide, Matthew Bender, 36 volumes. Includes forms for business and nonprofit organizations, real estate transactions, commercial transactions, wills & trusts, contracts & obligations, performance of services, and personal transactions.
    These forms are also available on Lexis.
  • West’s California Code Forms With Practice Commentaries, 46 volumes. For use with West’s Annotated California Codes. Includes volumes devoted to Business and Professions, Civil, Civil Procedure, Commercial, Corporations, Education, Elections, Fish & Game, Food & Agricultural, Insurance, Government, Labor, Probate, Public Utilities, and Revenue & Taxation. This publication is also available on Westlaw.

Attorney’s Fees:

  • California Attorney Fee Awards, 2nd ed., Continuing Education of the Bar. This guide includes forms for recovering attorney’s fees.
  • Fee Agreement Forms Manual, Continuing Education of the Bar. This guide provides a complete and practical guide to planning and drafting attorney-client fee agreements that meet the requirements of the fee agreements statute.

Businesses and Business Entities:

  • Advising California Employers and Employees, 2nd ed., Continuing Education of the Bar, 3 volumes. These forms are available on Lexis.
  • Advising California Partnerships, Continuing Education of the Bar. These forms are also available on Lexis.
  • California Practice Guide: Corporations, The Rutter Group, 2 volumes. These forms are also available on Westlaw.
  • California Corporation Laws, Ballantine & Sterling, 7 volumes. These forms are also available on Lexis.
  • California Transactions Forms : Business Entities, Bancroft-Whitney, 6 volumes. These forms are also available on Westlaw.
  • California Transactions Forms: Business Transactions, Bancroft-Whitney, 6 volumes. These forms are also available on Westlaw.
  • Financing and Protecting California Businesses, Continuing Education of the Bar. Forms for business startups.
  • Drafting Business Contracts: Principles, Techniques & Forms, Continuing Education of the Bar. These forms are also available on Lexis.
  • Forming & Operating California Limited Liability Companies, Continuing Education of the Bar. These forms are also available on Lexis.
  • Selecting & Forming Business Entities, Continuing Education of the Bar, 3 volumes. These forms are also available on Lexis.

Class Actions:

  • Cohelan on California Class Actions, West Group. This publication has forms and samples for filing class actions.

Criminal Law:

  • California Criminal Practice, Motions, Jury Instructions and Sentencing, 3rd ed., Thomson-West, 5 volumes.
  • California Criminal Law Forms Manual, Continuing Education of the Bar.

Family Law:

  • California Family Law: Practice and Procedure, Matthew Bender, 6 volumes. These forms are also available on Lexis. Includes a supplement with Judicial Council Forms.
  • California Family Law Trial Guide, Matthew Bender, 4 volumes. This publication is also available on Lexis.
  • California Marital Settlement and Other Family Law Agreements, 3rd ed., California Continuing Education of the Bar.
  • California Practice Guide: Family Law, Rutter Group, 3 volumes. This publication is also available on Westlaw.
  • California Transaction Forms: Family Law, West Group, 2 volumes. Also available on Westlaw.

Insurance Law:

California Practice Guide: Insurance Litigation, The Rutter Group, 3 volumes.
These forms are also available on Westlaw.

Landlord-Tenant Law:

  • California Eviction Defense Manual, Continuing Education of the Bar, 2 volumes. This publication is also available on Lexis.
  • California Landlord-Tenant Practice, Continuing Education of the Bar, 2 volumes. This publication is also available on Lexis.
  • California Practice Guide: Landlord-Tenant, Rutter Group, 2 volumes. This publication is also available on Westlaw.
  • California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities, State of California. Available online at http://www.dca.ca.gov/legal/landlordbook/index.html. Published by the California Department of Consumer Affairs.
  • California Tenants’ Rights, Nolo Press.
  • The California Landlord’s Law Book: Rights and Responsibilities, Nolo Press.

Real Property, Financing, and Construction Law:

  • California Practice Guide: Real Property Transactions, Rutter Group, 2 volumes. This publication is also available on Westlaw.
  • California Real Estate Forms,2nd ed., [Miller and Starr] Bancroft-Whitney, 4 volumes. These forms accompany Miller and Starr, California Real Estate 2d, the preeminent treatise on real estate law in California. Volume 1 contains forms pertaining to the purchase and sale of real property; Volume 2 contains forms pertaining to leasing transactions. Also available on Westlaw.
  • California Real Property Practice Forms Manual, Continuing Education of the Bar. This practice guide collects forms from CEB’s most commonly used real property books in one easy-to-use volume. Readers can remove forms for easy photocopying.
  • California Construction Contracts and Disputes, Continuing Education of the Bar. This practice guide has forms for drafting California construction contracts. This publication is also available on Lexis.
  • California Lis Pendens Practice, 2nd ed., Continuing Education of the Bar. This practice guide has forms for filing and perfecting notices of pending actions.
  • California Mechanics Liens and Related Construction Remedies, 3rd ed., Continuing Education of the Bar. This practice guide has forms for statutory remedies on public and private construction projects. This publication is also available on Lexis.
  • Condemnation Practice in California, 3rd ed., Continuing Education of the Bar, 2 volumes. Litigation forms are available in this publication.
  • Financing and Protecting California Businesses, Continuing Education of the Bar, 2 volumes.
  • Forming California Common Interest Developments, Continuing Education of the Bar, 2 volumes. This publication has forms for creating a common interest development.
  • Ground Lease Practice, Continuing Education of the Bar. This practice guide has forms for drafting building leases.
  • Office Leasing: Drafting and Negotiating the Lease, Continuing Education of the Bar, 2 volumes. The practice guide has forms for drafting commercial leases. This publication is also available on Lexis.
  • Real Property Exchanges, Continuing Education of the Bar.

Taxation:

  • Print: For tax forms, looseleaf services with forms are pageable. Also, state tax formbooks for the current year are in the Reference Collection.
  • Internet: California tax forms are available on the Internet at: http://www.ftb.ca.gov/forms/index.html and federal tax forms are available at: http://www.irs.ustreas.gov/formspubs/index.html

Tort Law:

  • California Practice Guide: Personal Injury, Rutter Group, 2 volumes. Also available on Westlaw.
  • California Products Liability Actions, Matthew Bender. Also available on Lexis.

Wills & Trusts and Elder Law:

  • California Elder Law: An Advocate’s Guide, Continuing Education of the Bar, 2 volumes. Also available on Lexis.
  • California Practice Guide: Probate, Rutter Group, 2 volumes. This publication is also available on Westlaw.
  • California Transaction Forms: Estate Planning, 2nd ed., West Group, 4 volumes. This publication is also available on Westlaw.
  • California Will Drafting, Continuing Education of the Bar, 3 volumes. Also available on Lexis.
  • Drafting California Revocable Trusts, Continuing Education of the Bar. This publication is also available on Lexis.
  • Drafting California Irrevocable Trusts, California Continuing Education of the Bar, 2 volumes. This publication is also available on Lexis.
  • California Conservatorship Practice,Continuing Education of the Bar, 2 volumes.
  • This publication is also available on Lexis.

California Forms on the Internet

  • FindLaw California: Legal Forms
  • Judicial Council Legal Forms
  • California Business Portal: http://www.ss.ca.gov/business/corp/corp_formsfees.htm
  • Internet Legal Resource Guide: Legal Forms Archive – http://www.ilrg.com/forms
  • LexisONE provided access to more than 6,000 forms, as well as forms from the extensive Matthew Bender collection. While the forms are free to view, there is a charge to use the interactive forms, and users must register and select a password.
  • The California Superior Court hosts EZLegalFile at http://www.ezlegalfile.org, where interactive forms for family, marriage, divorce, small claims, evictions, guardianship, and domestic violence can be filled out online and printed in a form suitable for filing.

California Forms on Lexis and Westlaw

  • LEXIS: There are many California legal forms on Lexis in the Matthew Bender Treatises and the CEB publications.
  • WESTLAW: There are numerous California legal forms available on Westlaw. To locate the list of forms, go to the online Westlaw directory, select “State Materials”, then select “California”, and then select “Forms, Treatises, CLEs and Other Practice Material”.

Attorney Career

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Attorney Career in California

A Good Attorney Career Path is not Enough

By Dan Grunfeld. He is a litigation partner, who co-heads Kaye Scholer’s Los Angeles and Palo Alto offices. Formerly a top policy advisor to LA Mayor Antonio Villaraigosa, he also was Public Counsel’s president and CEO. (2013)

For thousands of newly minted lawyers in California, a well-trodden career path is no longer paying off.

For many recent graduates, a job in “big law” was the dream that brought them to law school in the first place. Tempted by both high pay and the prospect of representing marquee clients in highly complex legal disputes, theirs was a well-trodden career path that came with a lot of hard work and considerable debt – but could still pay off handsomely. However, since the Great Recession, that payoff has failed to materialize.

Of course, it wasn’t supposed to be this way. Nancy, a first-generation American, is bright, articulate, and self-possessed. “As far back as I can remember, I wanted to become a lawyer,” she told me. And everything about her résumé says as much. As an undergraduate at UCLA she was president of the school’s pre-law society. After graduating cum laude, she moved on to a law school in the Los Angeles area where she did everything she was supposed to: She was a dean’s scholar and sat on the moot court board. She clerked. She volunteered at the district attorney’s office. Then, starting in her third year, Nancy sent out résumés to hundreds of firms, and she contacted every one of the 130 firms that interviewed students at her school. She didn’t receive a single job offer.

How is this possible? The numbers tell at least part of the tale. Since 2008, the nation’s 250 largest law firms have shed more than 10,000 lawyers. The numbers also show that law graduates in the class of 2011 suffer from the highest unemployment rate of any class since 1994. According to the ABA’s 2011 Law School Employment Summary Report, after nine months only 45 percent of graduates from California’s 20 accredited law schools had secured a full-time, long-term legal job that required bar passage. Moreover, just 5 of those 20 schools saw a majority of their 2011 graduates employed in such jobs, and at only 2 – UC Berkeley and Stanford – did 80 percent or more land long-term legal jobs.

I’d love to be able to say that the worst is over. But it doesn’t look that way at all.

And in the scramble for scarcer jobs, minorities, immigrants, and first-generation professionals are being hit especially hard. (From 2008 to 2011, according to the professional advocacy group NALP, the share of black associates at big firms dropped from 4.75 percent to 4.29 percent.)

Commentators speak of the legal industry’s permanent transformation, how going forward there simply won’t be as much demand for attorneys in the United States. At the same time, applications are way down at law schools across the country, and more than a few are downsizing in response.

Who’s at fault? Law schools have been accused of obfuscating the employment rates of their alumni and misleading applicants about their chances of professional success. Pundits complain that the government has made education loans too available. Law firm partners are blamed for striving to maximize profits at the expense of the next generation of attorneys they would in other times hire and develop. Even law students themselves are said to be naive, or taken with a false sense of entitlement.

None of this, however, takes us even one step closer to a solution.

So what is to be done? First of all, law schools must become more conscientious gatekeepers to the profession. This means telling applicants up front what their eventual job prospects are. It also means teaching students more real-life lawyering skills than they’ve received in the past.

For their part, would-be lawyers should think twice before even applying to law schools. The legal profession can be noble and rewarding. Yet it is also demanding, and not immune to the same economic forces that have thrown so many other industries into turmoil. Law school hopefuls should apply because they want to become lawyers, not because they can’t figure out what else to do – and especially not because they see it as an easy path to a lucrative career.

Law firms, in turn, must take steps to ensure that meaningful opportunities to compete for these scarce jobs are available to individuals who traditionally have been underrepresented in our profession, such as minorities, women, immigrants, and first-generation professionals. Beyond their own hiring practices, firms should also support nonprofits and other public service organizations that can provide coveted job opportunities to the next generation of California’s lawyers.

Systemic reforms can repair and conserve the legal profession. But Nancy and her contemporaries are naturally preoccupied with more immediate concerns. When I asked one 2008 graduate from a Northern California law school whether she was embittered by what she described as her “nightmarish” job-hunting experiences, she said: “No. I’m mostly hopeful that someone will give me a chance.” And then she repeated, almost in a whisper to herself, “All I need is a chance.”

Labor Code

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Labor Code in California

Labor Code Practical Issues

By Michelle Lee Flores. She is a member of the labor and employment department of Cozen O’Connor in Los Angeles.

Defense-side employment lawyers—or businesses that employ even one person in California—likely have stories to tell about someone tripping over the statutory minefield better known as California employment law. Here is a sampling of issues that commonly trigger liability, plus tips on how to avoid problems.

Employee Reimbursement

Employees are entitled to be reimbursed for business use of personal items if necessary to perform the duties of their job. (Cal. Labor Code § 2802.)

Employers should be reimbursing employees for business use of their personal electronic devices (for example, cell phones used for business). They should also know that employees are entitled to attorneys fees incurred in their attempts to enforce their rights under this law.

Personnel Records

Employers are required to produce their employees’ personnel records for inspection within 30 days of a written request. (Cal. Labor Code § 1198.5.) This rule applies to both current and former employees. Recent statutory amendments require that employers also must provide a copy of the requested personnel records.

Waiting-Time Penalties

If the employer terminates the employment relationship, the employee is entitled to be paid immediately for all wages due. If the employee quits without giving advance notice, payment must be made within 72 hours. (Cal. Labor Code § 203.) If payment is not made, the employee may be entitled to a penalty of up to 30 days’ pay. Note that the term “wages” includes accrued vacation time.

If an employer owes even a single day of vacation to a highly paid employee and fails to pay it upon termination, the liability adds up quickly. Consider someone who earns $150,000 per year. One day of unpaid vacation could potentially cost more than $17,000 in waiting-time penalties. (Here’s the math: $150,000/year = daily rate of $576.92; $576.92 x 30 days = $17,307.60.)

Overtime

Employees are entitled to daily and weekly pay for overtime unless they qualify under California’s exemptions from overtime laws. (Cal. Labor Code §§ 510, 515 [exemptions include administrative and managerial employees, among others].) The standard daily overtime calculation is one-and-one-half times the employee’s regular rate of pay for any work performed beyond eight hours, and up to and including twelve hours in a single workday; the rate increases to double time for all hours worked in excess of twelve hours in any workday.

Premium pay also is due for work performed on the seventh consecutive workday in a workweek: one-and-one-half times the regular rate of pay for the first eight hours, and double time for all hours worked in excess of that. For any hours worked in excess of 40 hours per workweek that were not already paid at an overtime premium, the overtime rate is one-and-one-half times the employee’s regular rate of pay.

Meal and Rest Breaks

Employers must provide nonexempt employees with a meal period of at least 30 minutes if they work more than six hours in a day. If the employees work ten or more hours, the employer may have to provide a second meal period. In addition, a ten-minute rest period is required for every four hours worked, or major fraction thereof. (Cal. Labor Code §§ 512, 516.) Violations incur penalties based on the employee’s regular hourly rate of pay.

A conservative compliance plan for the average eight-hours-per-day worker is to schedule and enforce approximately four hours of work, with a ten-minute rest period after two hours, then a one-hour meal period and four additional hours of work, with a ten-minute rest period after two hours. If the employee has to work overtime, do not have the overtime exceed two additional hours, otherwise a second meal period will be triggered. This second meal period can be waived only if the total hours worked in the day do not exceed twelve hours; both the employee and employer agree; and the employee takes the first meal period of that day.

Commissions

Employers must put commission agreements in writing, and the agreements must specify the method by which the commissions will be computed and paid. The employee must get a signed copy, and the employer must get a written receipt confirming the employee actually received the copy. (Cal. Labor Code § 2751.) California employers would be wise to self-audit their files and determine if their commission agreements comply with the code requirements. If not, they should prepare new, compliant agreements and secure the required written confirmation of receipt from each commission-paid employee.

Notice of Changes

Employers must give written notice to employees when certain changes are made in the employment relationship. Key triggers are changes in the rate of pay, including overtime rates, and changes in the identity of the employer or workers compensation insurance carrier. (Cal. Labor Code § 2810.5.) This is another area in which a self-audit may be wise. The California Division of Labor Standards Enforcement has prepared a “Notice to Employee” form to help employers comply with this section of the code (available online at www.dir.ca.gov). Assuming the person receiving the notice is an at-will employee, it should include a reminder to the effect that nothing in the notice changes the at-will employment relationship.

Employee Handbook

California employers are wise to prepare, distribute, and follow an employee handbook. But a few words of caution are in order: First, make sure the handbook is up to date. Second, review it every year with counsel to make sure it remains up to date. And third, adhere to it. If you don’t, it may not be worth the paper it’s printed on.

This article serves merely as a quick overview. When employers administer legal rules that govern the workplace, they should consult with knowledgeable employment counsel. Each employment case is unique and requires detailed analysis. The key is to seek counsel before disputes arise, not after.

Suitable Seats

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Suitable Seats in California

Suitable Seats Lawsuits

Most of the California Wage Orders require an employer to prove “suitable seats when the nature of the work reasonably permits the use of seats.

Suitable Seating in California Employment Law

Most of the California Wage Orders say that: “All working employees shall be provided with suitable seats when the nature … number of suitable seats shall be placed in reasonable proximity to the work”.

When Must Employers Provide a Suitable Seat?

The majority of the wage orders mandate “suitable seats when the nature of the work reasonably permits the use of seats.” The Ninth Circuit asked the state Supreme Court to clarify whether suitable seating laws apply to retail workers.

Retail Workers and the Right to ‘Suitable Seating’

by Michael Rosen

Seating arrangements in workplaces across California may get a little adjustment, depending on how the California Supreme Court handles certified questions about state law that the Ninth U.S. Circuit Court of Appeals has asked of it in two cases.

Most of the state Industrial Welfare Commission’s wage orders (15 of 17) require employers to provide workers “suitable seats when the nature of the work reasonably permits the use of seats.” Employees have stood up for that right since the Second Appellate District held in Bright v. 99cents Only Stores (189 Cal. App. 4th 1472 (2010)) that they can seek penalties under the state’s Private Attorney General Act.

Now, in Kilby v. CVS Pharmacy and Henderson v. JP Morgan Chase Bank (questions certified, 739 F.3d 1192 (9th Cir. 2013)), the state Supreme Court will address whether retail workers have a right to “suitable seats.”

Marc A. Koonin, an employment associate with Sedgwick in San Francisco, said in an email that the exposure for major chain stores could amount to millions of dollars: “This will be a big deal, since there is currently so little guidance on these issues, and since the extent of potential employer exposure is likely to change significantly depending on the specific answers.”

CVS, whose lead counsel is Tim Long, a partner with Orrick, Herrington & Sutcliffe in Sacramento, argues that the seating rule was meant to apply only in factory settings – to workers on assembly lines or operating sewing machines, for example – not in retail environments. State wage orders address numerous conditions in various workplaces, from broadcasting to manufacturing.

“When you come into a retail store and the cashier is seated, it gives you a very different experience,” says Long. “When someone is standing, it projects a feeling that they are ready to help you.”

The Ninth Circuit asked the state Supreme Court to clarify what factors courts may consider in determining the suitability of seating, including:

  • all or just some of an employee’s duties
  • the employer’s business judgment
  • workplace layout
  • workers’ physical characteristics
  • whether an employee must prove what qualifies as a suitable seat.

Michael Rubin, a partner at Altshuler Berzon representing both the CVS and JPMorgan plaintiffs, says job tasks should be disaggregated to determine which could be performed while seated, and he says the law requires California employers to provide seating for workers while they’re performing those tasks, much as it requires employers to provide breaks for meals and rest.

The state’s high court hasn’t yet set a date for argument on the Ninth Circuit’s certified questions.

Pension Plan

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Pension Plans in California

San Jose Mayor Chuck Reed and four other California mayors announced their support for a statewide initiative on a constitutional amendment to reduce public workers’ pensions. Later, the stage is set for a battle royal. The proposed amendment would protect the retirement benefits that public workers have earned to date, while clarifying that “vested contractual rights” would not legally apply to employees’ future benefit accruals. It would also prohibit state and local government agencies from interfering with the voters’ rights to prospectively modify public employee retirement plans.

Proponents of this initiative will argue that once it is enacted, politicians and labor alike will have no choice but to engage in a realistic conversation about the cost of benefits to both employees and employers. This process would help cities avoid bankruptcy, while encouraging collective bargaining solutions. Opponents, on the other hand, view this as yet another attack on collective bargaining rights, and argue that it is both unlawful and unjust.

Commentators may not venture to predict whether the initiative will qualify for the ballot box, and if it does, whether it will prevail. But some will say this: Even if this measure fails to pass in 2014, that will hardly be the end of the story.

Fair Employment and Housing Act

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California Fair Employment and Housing Act (FEHA)

California Fair Employment and Housing Act (FEHA): Pregnancy

by Sherry Karabin

A San Francisco jury determined in 2007 that Bimbo Bakeries USA had engaged in gender and pregnancy discrimination, violating the California Fair Employment and Housing Act. It awarded Lopez $340,700 for losses and damages, plus another $2 million in punitive damages, and more than $1 million in attorneys fees. Two years later, the verdict was affirmed on appeal (Lopez v. Bimbo Bakeries USA Inc., 2009 WL 1090375).

Lopez’s case is among the increasingly high awards given in recent years to workers who file discrimination claims related to their responsibilities as parents or to care for aging parents.

The Center for WorkLife Law at UC Hastings has been studying the trend for a decade and documented an almost 400 percent increase in the number of lawsuits that have been filed. Its 2006 report on 613 caregiver discrimination suits in the United States showed an average award of about $100,000. Four years later the average settlement had risen to more than $500,000.

According to the U.S. Equal Employment Opportunity Commission (EEOC), in 1997 the agency received close to 4,000 administrative complaints alleging pregnancy discrimination, which resulted in $5.6 million in out-of-court settlements; 13 years later roughly 6,000 complaints yielded $18 million.

Michele Miller, a shareholder at San Francisco’s Miller Law Group, says she increasingly spends time advising in-house attorneys on family responsibility discrimination policies and procedures that will help companies avoid such claims.

“It is important for management to understand how stereotypes can adversely influence the workplace and how important it is to avoid bringing the biases to bear on their workplace decisions,” says Miller. As examples, she cites the “belief that a young mother will not be able to travel or work nights or a single father will not work as hard or is less committed if he takes time off to care for an elderly parent.”

Caregiver discrimination cases can be filed under an array of laws and statutes, including gender and pregnancy discrimination under federal and state law, as well as under the Family and Medical Leave Act or Americans with Disabilities Act. Miller says some states are now adopting their own laws drafted specifically to protect caregivers in the workplace.

Employee

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Employee in California

Domestic Employees

By Anthony J. Oncidi and Jeremy Mittman. The first is a partner at Proskauer Rose in Los Angeles, where the second is an associate.

Legal obligations abound for hiring domestic help.

Though wealthy individuals with household workers may not think of themselves as “employers,” California certainly does. In fact, householders – well-heeled or not – must comply with a complex web of state and federal employment laws if they wish to prevent costly litigation and nasty publicity. And their attorneys should be ready to guide them.

Hiring the Help

To find the best candidate, it’s essential for a prospective employer to ask the right questions during the interview process. Inquiring about protected characteristics – such as race, religion, national origin, age, sexual orientation, disability, marital status, or pregnancy – is illegal. However, it’s good to ask for references, which will likely shed some light on the candidate and his or her work habits.

To ensure that the new domestic worker is hiding no scary skeletons in the closet, consider getting a background check. This should be done with the applicant’s written permission – and using the appropriate consent forms. If prospective employers reject an applicant based on the results of a background check, they must provide the applicant with additional information, including details that enable the candidate to contact the investigating company for access to the information that has been gathered. (See Cal. Civ. Code § 1786.16.) In most cases, California employers are prohibited from checking the credit history of an applicant or employee. (Cal. Lab. Code § 1024.5.)

Document the Relationship

Once the employer has decided to hire someone new, the next step is to draft a short-form employment agreement. Unfortunately, even employment relationships that start out amicably don’t always end that way, so it’s important to have certain terms in writing to ward off ambiguity – and lawsuits. The most important element is an employment-at-will provision stating that either party is free to terminate the relationship at any time, with or without cause.

To deter employees from disseminating confidential information, the agreement should also contain a strong nondisclosure/confidentiality provision prohibiting them from speaking to anyone about private information gleaned during the course of the employment.

Finally, consider having the employee agree to privately arbitrate any claims arising from the job, to avoid a public airing of any potential unpleasantness.

Wages and Hours

Domestic employees in California are entitled to be paid at least the minimum wage – currently $8 per hour (but scheduled to increase to $9 next July 1 and then to $10 in 2016). (See Cal. Labor Code § 1182.12.) Employees who work overtime (more than 40 hours per week) are entitled to a wage premium, which varies depending on whether the household worker is a “live-in” or “live-out” employee. Under a law that takes effect next month, domestic workers who are personal attendants will be entitled to receive overtime. (Cal. Lab. Code § 1454.) Employees also are guaranteed at least one 30-minute meal break and two 10-minute rest periods per work day. (See Cal. IWC Order No. 15-2001.) The employer bears the burden of proving compliance with the law.

Paying a worker “under the table” is never a good idea. The employer may be liable for back taxes, significant penalties, and interest. (26 U.S.C. § 7201.)

Other laws govern the timing and manner of the payment of wages and vacation benefits. For example, employers are required to pay a terminated employee all wages, including any unpaid vacation, on the last day of work. (Cal. Lab. Code § 201.) And it is always wise to secure a release of liability in exchange for the payment of severance.

Doing It Right

In California, domestic employees can be integral members of the household, whether or not it’s a high-profile one. Even though such relationships may be built on handshakes and implicit trust, if they go awry the financial and reputational repercussions can be significant.
When hiring domestic employees, clients should review these guidelines and consult counsel with expertise in these matters. Any employer who doesn’t take appropriate protective steps may end up capturing headlines for all the wrong reasons – and whiling away the hours in a nearby courthouse.

Job Protection

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Job Protection in California

Teacher Job Protection

by Rebecca Rosen Lum

A lawsuit claims that certain job protections for California teachers violate kids’ civil rights.

Despite decades of litigation over California public school funding and facilities, sharp disparities persist. Now, a quiet Silicon Valley nonprofit backed mainly by a fiber-optics entrepreneur is targeting teacher job protections embedded in the state Education Code.

Students Matter filed a civil rights lawsuit in 2012 on behalf of nine students in five districts, claiming state law “entrenches” bad teachers and pushes them into districts that serve lower-income people of color. Chiefly, the suit challenges grants of tenure after 18 months; a cumbersome review and dismissal process; and seniority-based layoffs. (Vergara v. California, No. BC 484642 (Los Angeles Super. Ct.).)

David N. Plank, executive director of Policy Analysis for California Education (PACE), agrees that whiter, wealthier communities tend to have better and more experienced teachers; they also tend to pay better and be easier places to work. But he says subpar teachers aren’t any more to blame for low student achievement than “no breakfast, aching teeth, no glasses or the wrong prescription glasses.”

“Poverty tends to be very closely correlated to school performance,” Plank says. “To say … [that], if not for ineffective teachers, [lower-income students] would perform more closely to their peers in privileged districts is a highly contestable proposition.”

Students Matter, founded in 2010 by David F. Welch, first hired Quinn Emanuel Urquhart & Sullivan to pursue education reform. Partner Kathleen Sullivan says the firm developed key theories for the action. The nonprofit also hired Griffin Schein, a Democratic-aligned campaign and communications firm. In 2011 Welch covered 82 percent of Students Matter’s $515,919 bill from Quinn Emanuel and its $451,058 payment to Griffin Schein with a donation and an interest-free loan. No 2012 figures were available.

In 2012, Griffin Schein moved the lawsuit to Gibson, Dunn & Crutcher and a team led by Theodore J. Boutrous and Theodore B. Olson , who went on to argue the U.S. Supreme Court case that effectively struck California’s same-sex marriage ban in 2013.

Welch – cofounder of Sunnyvale fiber-optics maker Infinera – declined to speak to California Lawyer. But Gibson Dunn associate Joshua S. Lipshutz said Welch’s goal is to force a restructuring of public education in California through litigation. Lipshutz said Students Matter’s advisory board includes top education reformers. But a list of advisers disappeared from its website in August, after which a spokeswoman at Griffin Schein said the group has no advisory board. It also has no staff.

Plank says Welch’s lawsuit will hurt unions rather than improve education for poor children, and two major teachers unions chimed in as defendants. At the California Teachers Association, legal director Laura Juran says that for Students Matter’s equal protection claim to hold water, it would have to prove the state deliberately discriminates against minority and low-income students. The unions and the state made that argument in moving for summary judgment in September and noted that districts “can and do” dismiss teachers. (School district defendants in Los Angeles and the San Jose area have settled, while Oakland was reportedly in talks.)

Griffin Schein countered the motion with a press release focused on the defendants’ support of AB 375, which tweaks teacher dismissal procedures. A formal response is due this month and a hearing on the motion is set in December as the case moves toward a January trial date.

Workers’ Compensation

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California Workers’ Compensation

Workers’ Compensation – Related Statutes

California State Government Workers’ Compensation Law Resources

California Workers’ Compensation Law Links

Note: We linked the resources to archive.org in an effort to decrease the number of broken links cited.

For California Attorneys: Workers Compensation Subrogation

( August 2013 ) A claims examiner for a workers compensation carrier receives a voice mail that an employee of their insured, ABC Heating and Air Conditioning, has just suffered catastrophic injuries as a result of an on-the-job accident. The injured employee, a married 31-year-old HVAC technician, has suffered life-threatening injuries after falling from a roof during a routine service call. The injured employee was alone at the time of the accident, and there were no witnesses to the fall. Projected compensation benefits are in the high six-figure range.

What at first blush appears to be a straightforward workers compensation claim may, in fact, be a claim with significant potential for subrogation recovery, provided the carrier can identify a third party who is legally responsible for the employee’s injuries.

Workers Comp Basics

Generally, a worker who is injured in the course and scope of employment may not pursue a direct civil action for damages against the worker’s employer. (See Cal. Lab. Code § 3602.) In exchange for the right to receive workers compensation benefits pursuant to the employer’s payment of such insurance premiums, the employee forgoes any direct right of action against the employer.

However, the liability analysis does not stop there, for in many instances a third party – not the employer – is responsible for all or part of the injuries sustained by the employee. This is when subrogation comes into play.

Subrogation Rights

The state Labor Code confers employers the right to pursue responsible third parties for recovery of any and all workers compensation benefits paid to or on behalf of an injured employee. (See Cal. Lab. Code § 3852.) For purposes of subrogation, workers compensation insurers are considered to be “employers.” (See Cal. Lab. Code § 3852(b).) The employer’s right to reimbursement from any proceeds recovered from a third-party tortfeasor takes first and full priority over any recovery by the injured employee. (Cal. Ins. Guar. Ass’n v. W.C.A.B., 112 Cal. App. 4th 358, 368 (2003))

When evaluating the subrogation potential of any matter, counsel must assess the conduct of the potentially responsible third party. But that is only the first step. In addition, there must be a thorough review of the conduct of the injured employee, the employer, or both, for though any negligence on their part will not bear on the underlying workers compensation claim, it may drastically impact the subrogation potential against a third party.

More about Workers Compensation for Lawyers

Assessing Negligence

The law imposes a general standard of care; everyone is responsible not only for the results of their willful acts but also for any injury occasioned to another by their lack of ordinary care. (See Cal. Civ. Code § 1714 (a))

Every person also has a duty to avoid exposing themselves to an unreasonable risk of harm. Thus, when the injured party’s conduct causes or contributes to his or her own injury, it is referred to as “comparative negligence,” and it reduces the amount that a third party tortfeasor will have to pay in damages. (See Li v. Yellow Cab Co., 13 Cal. 3d 804 (1975.) This principle is central to workers compensation subrogation claims because an employee’s negligence cannot be imputed to the employer for purposes of reducing the compensation lien. (Kemerer v. Challenge Milk Co., 105 Cal. App. 3d 334, 338 (1980))

When both an employee and the employer seek relief from a third party, a delicate balance exists. In these cases, although the injured worker and his or her employer are pursuing the same defendant(s), they seek different remedies. The employee requests damages; the employer, however, seeks recovery of workers compensation benefits paid to or on behalf of the employee as a result of his or her injury. The law gives the employer a lien for those benefits, and the lien may be asserted in a number of different ways, each of which is discussed below.

As noted above, an injured party’s negligence may reduce the ultimate award of damages. In the subrogation context, some lawyers wrongly assume that any negligence attributed to the employee is automatically imputed to the employer for purposes of reducing the employer’s lien. But that is not so. Although an employee’s negligence will reduce his or her entitlement to damages, the employee’s negligence is not imputed to the employer to lower the amount of the compensation lien, because doing so would, in effect, grant the third-party tortfeasor a double deduction for the same employee negligence. (Kemerer, 105 Cal. App. 3d at 337-339)

However, though employee negligence will not directly reduce the employer’s lien, it can have the indirect effect of reducing the “settlement pool” from which the lien will be satisfied. This result occurs because the total damage award will be reduced by any allocation of fault to the injured worker. Furthermore, an employer seeking reimbursement must first pay workers compensation benefits in an amount equal to the employer’s own percentage of fault multiplied by the injured worker’s total civil damages before it may recover any remaining portion of its lien from a culpable third-party defendant. (DaFonte v. Up-Right, Inc., 2 Cal. 4th 593, 599 (1992).) This mathematical calculation is commonly referred to as the “employer negligence threshold.”

An example: Assume the injured worker is awarded $100,000 at a civil trial. The worker is assigned 20 percent comparative negligence. The employer, whose lien totals $20,000, is assigned 10 percent fault. The two defendants at trial are each allocated 35 percent fault.

Under this scenario, the total award of $100,000 is reduced by $20,000, which represents the plaintiff’s negligence ($100,000 x .20 = $20,000). The employer’s “threshold” is then quantified by multiplying the amount of employer negligence (10 percent) by the injured worker’s total civil damages ($80,000), yielding a “threshold” of $8,000. Only the benefits paid above this “threshold” (i.e., $20,000 – $8,000 = $12,000) are recoverable by the employer. If the calculation leads to a result in which the employer has not paid benefits exceeding the computed “threshold,” there will be no lien recovery for benefits paid.

With the passage of Proposition 51 in 1986 (Cal. Civ. Code § 1431.2), a comparative-fault system was adopted in California that permits a concurrently negligent employer to obtain reimbursement for workers compensation payments made in excess of the percentage of the employer’s fault or liability. (Associated Constr. & Eng’g Co. v. W.C.A.B., 22 Cal. 3d 829 (1978).) Although a culpable defendant is only liable for its own percentage of noneconomic damages, joint and several liability exists for all economic damages, including the compensation lien. (DaFonte, 2 Cal. 4th at 600)

Pursuant to Labor Code section 3864, third-party tortfeasors generally are barred from receiving indemnification from concurrently negligent employers. However, pursuant to Prop. 51, judgments against third parties may take into account the employer’s negligence, and the judgment may be reduced accordingly, thus affecting the amount of reimbursement to the employer.

Development of Workers Compensation for Attorneys

Passive Employer Negligence

Employers may be negligent even in the absence of affirmative misconduct. Allegations of employer negligence often reference improper or inadequate training, supervision, and/or the provision of faulty or inadequate equipment or tools. Thus, even when the employer has not engaged in affirmative negligent conduct, a seasoned plaintiffs or defense counsel can make the case that the employer’s passive conduct – failing to properly train or supervise the injured employee – contributed to the accident such that the employer’s lien should be reduced in an amount commensurate with its negligence.

With these basic concepts in mind, it is now appropriate to identify and discuss several common mistakes made by counsel and workers compensation carriers in the area of subrogation.

– Overlooked potential. When faced with a factual scenario such as the one presented at the outset of this article, it is entirely possible that the claims examiner may conclude that no third party is at fault, or that it would be impossible to prevail in a civil suit absent witnesses or evidence, even if a potentially responsible third party is identified. However, as will become apparent, these conclusions may be premised upon a faulty or incomplete understanding of the applicable evidentiary standards that must be satisfied to prevail in an action to recover the employer’s lien.

The following hypothetical arises from an actual incident. Subrogation counsel was contacted on the day of an incident in which an employee was injured. On advice of counsel, a prompt investigation (consisting of a site inspection, photographs of the accident scene, and interviews with the employer, and others) revealed that unbeknownst to the customer (who owned the building), a tenant had placed a metal guard over the exterior roof ladder only days before the accident occurred in an attempt to prevent teenagers from accessing the roof after business hours. The tenant failed to advise anyone of this change in the condition of the premises. As a result, the employee had to gain access to the roof from inside another tenant’s store. The inside access was subsequently locked by mistake, trapping the worker on the roof. The accident occurred when the worker attempted to descend the roof using the guarded exterior ladder after having been trapped for several hours.

What first appeared to be a claim with no obvious subrogation potential evolved into a case in which it was possible to demonstrate that third parties caused or significantly contributed to the worker’s injury by (1) improperly guarding the exterior ladder (a code violation); (2) failing to advise the building owner, other tenants, or service personnel of the change in condition to the property; (3) trapping the worker on the roof by inadvertently locking the inside access; and (4) by installing what amounted to a tripping hazard. The lesson: In any claim, investigate thoroughly and studiously analyze the potential existence of third-party liability.

– Delay. It is settled law that when an employee receives workers compensation benefits necessitated by third-party negligence, the employer has three options to pursue recovery of its lien from the third party. (See Fremont Comp. Ins. Co. v. Sierra Pine, Ltd., 121 Cal. App. 4th 389, 396 (2004).) The first option is for the employer to file its own independent action against the negligent third party. Second, the employer may intervene in the employee’s existing civil personal injury suit. And finally, if there does not appear to be any employer negligence, the employer may simply file a notice of lien in the injured worker’s civil action. (This latter procedure comes with a caveat. An employer who files a notice of lien is not deemed to be a party to the employee’s suit. As such, the employer exercises no control over the case. If allegations of employer negligence arise and are proven, the employer is powerless to refute them)

The statute of limitations for an employee or employer to commence suit arising out of an employee’s personal injury is two years. (Cal. Code Civ. Proc. § 335.1.) The statute begins running from the time of the employee’s injury, not from the time that benefits are paid to the injured worker by the compensation carrier. There is no time limit governing when an employer may intervene in the employee’s existing civil lawsuit. However, to the extent the employer intervenes late in the action, the injured employee’s attorney may be able to argue that to the extent his efforts have aided the employer in proving the negligence of a third party, a portion of his fees should be paid out of the employer’s lien recovery. (Cal. Lab. Code § 3856)

Many compensation carriers make the mistake of waiting for the injured worker to commence suit and/or perform the necessary investigation. But regardless of who commences the action, delay is the enemy of subrogation recovery. That’s because memories fade, witnesses disappear, documents become lost or misplaced, and accident scenes change. Failure to act promptly and safeguard evidence severely decreases the prospects for a successful suit, be it for damages or recovery of the lien.

– Backseat mentality. Too often, compensation carriers adopt what can best be described as a “backseat” mentality. The employer, either by design or inaction, assumes a secondary role, relying on the other parties to develop the facts, evidence, and arguments that will form the basis for the action. By so doing, the employer often finds itself in a position where it cannot exert any control. The practical result is that the other litigants treat the employer as an afterthought; moreover, a “nonparticipatory” employer sends a message that it lacks confidence in the case, or worse, the case is not to be taken seriously. Consequently, the employer may lose leverage during settlement negotiations.

– Penny-wise, pound-foolish. Subrogation is necessarily a study in economics. The employer’s recovery is limited to the actual amounts paid to the injured employee and cannot account for increases in premiums or losses of profit. (Fischl v. Paller & Goldstein, 231 Cal. App. 3d 1299, 1304 (1991))

All expenditures, recoveries, and settlements in pursuit of subrogation are evaluated in light of the size of the lien and future exposure to the carrier. A Pyrrhic victory in the form of a legal bill that rivals or surpasses the lien rarely results in warm feelings at company headquarters, and for good reason. Such a result evidences a lack of appreciation for the economics of subrogation; counsel should pursue only cases that are good candidates for significant subrogation recovery. Each case should promise an economic return that justifies the attorneys fees and costs necessary to achieve it.

– Inexperienced counsel. The failure to retain a seasoned litigation attorney is the single biggest mistake compensation carriers make in the subrogation arena. As the foregoing discussion illustrates, this area of law is complex and requires crossover knowledge of workers compensation and civil tort law. But make no mistake, subrogation cases are litigation matters, not workers compensation claims. Accordingly, experienced and knowledgeable litigation counsel should manage them. Engaging seasoned, trial-ready subrogation counsel is the single most important step in identifying and maximizing subrogation recovery.