Private Attorney General Act

Labor Code Private Attorney General Act – L.C. §2698, et seq.

The Labor Code Private Attorney General Act (“PAGA”) enables aggrieved employees to recover civil penalties for violations of the Labor Code on behalf of himself and other aggrieved employees.  If the Labor Code allegedly violated does not set forth a specific civil penalty, the employee can recover a default penalty of up to $100.00 for each aggrieved employee per pay period.

Because a PAGA plaintiff is entitled to prosecute an action on behalf of himself/herself as well as any other aggrieved employee, and because the default penalties can be assessed “per employee” and “per pay period,” PAGA penalties in a modest case can easily exceed $250,000.00. Courts have discretion to lower the penalties if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory. Although 75% of any PAGA penalties recovered must be paid to the Labor Workforce Development Agency, an employee prosecuting a PAGA claim is entitled to recover his/her attorneys’ fees and costs.  Employers are never able to recover their attorneys’ fees defending a PAGA claim even if successful.

Before filing a PAGA lawsuit, the aggrieved employee must provide written notice by certified mail to the Labor Workforce Development Agency and the employer “of the specific provisions of the code alleged to have been violated, including the facts and theories to support the alleged violation.”  Failure to adequately describe the facts and theories can result in dismissal of the claims.  If the LWDA does not investigate the employee’s claim, the employee can file suit on the alleged violations.  In some situations, an employer may be able to “cure” the alleged violations and avoid penalties.

Recent court decisions make it difficult for an employer to force PAGA plaintiffs into arbitration or other forms of alternative dispute resolution.

Robert Nuddleman has represented aggrieved employees pursuing PAGA claims.  He has also successfully defended employers against lawsuits seeking PAGA penalties.  When the Labor Code Private Attorney General Act was first established, and when it was amended shortly thereafter, Robert Nuddleman was invited by the Labor and Employment Law Section of the State Bar of California to educate other employment attorneys regarding PAGA and its impact on employee-employer litigation.  Robert Nuddleman frequently trains other attorneys regarding pursuing and defending PAGA claims.

If your company has been accused of violating the Labor Code, or if you believe you may have a PAGA claim, contact the Nuddleman Law Firm to learn how to protect your interests.

New Laws Require Overtime for Caregivers, Personal Attendants and Companions

California and federal law requires overtime for caregivers, personal attendants and companions.  Different laws could apply depending on whether the employee is hired by a third-party employer or directly by the home owner.  Robert Nuddleman helps families, care agencies and caregivers understand their respective rights and obligations.

California’s Overtime Requirements for Caregivers

Prior to 2014, persons hired to work in the home to dress, feed and/or supervise a person who cannot care for themselves as a result of age and disability were not entitled to overtime pay.  The Domestic Workers Bill of Rights, which became effective January 1, 2014, eliminated the “personal attendant” exemption from Wage Order 15, which applies to workers employed by the household owner.

Although some employees whose wages are paid by state or county programs (i.e., In-Home Supportive Services, Lanterman Developmental Disabilities Services Act, California Early Intervention Services Act, etc.) are still exempt from California’s overtime laws, most other personal attendants working in the home are entitled to overtime compensation at one and one-half times the employees’ regular rate of pay for all hours worked in excess of 9 hours per day or 45 hours per week.  The overtime obligation applies regardless of whether the worker is employed by the family or a third-party employment agency.  The only exception is if the wages are paid through one of the listed state or county programs or if the person providing the services is the “parent, grandparent, spouse, sibling, child, or legally adopted child of the domestic work employer.”

Federal Overtime Requirements for Companions

Since its inception, the FLSA exempted certain domestic workers (i.e., persons employed about the home).  In 1974, Congress amended the FLSA to include some, but not all, domestic workers.  Companions, sometimes referred to as “elder sitters,” or “personal attendants”, were not covered by the FLSA.  Effective January 1, 2015, new Department of Labor regulations modified the definition of companion and when those workers must be paid overtime.

The revised regulations eliminate the companion exemption for any worker employed by a third-party employer.  This means that if a family uses a third-party agency to provide companion care for a family member, the companion must be paid one and one-half times the employee’s regular rate of pay for any hours worked in excess of 40 hours per week.   Workers employed directly by the family are still exempt from the FLSA’s overtime requirements.

The regulations also narrow the type of work that constitutes “companion” services.  Under the new regulations, the term “companionship services” means “the provision of fellowship and protection for an elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself.” Companionship services also includes the provision of “care” if the care is provided “attendant to and in conjunction with the provision of fellowship and protection and if it does not exceed 20 percent of the total hours worked per person and per workweek.”

The FLSA provides the minimum protection, and employers are still required to comply with state laws that either mirror the FLSA or provide greater protections for workers.  The revised FLSA regulations are somewhat historic in that it is one of the only occasions where federal law provides greater protection for the workers than California law.  Because employers are required to comply with state and federal law, many families must now pay overtime when the employee works more than 9 hours in a day (state) or more than 40 hours in a week (federal).

Shortly before the federal regulations were to go into effect, a D.C. circuit court judge declared the regulations void. On August 21, 2015, an appellate court overturned the decision, declaring the regulations valid. The Ninth Circuit and the U.S. Supreme Court have not yet ruled on the issue, therefore it is unclear whether California workers are entitled to the protections provided by the new federal regulations.

The recent changes in California and federal law require many employers and employees employed about the home to renegotiate the terms of employment.  Knowing the lawful ways to employ household workers and understanding employee rights to overtime will enable both parties to negotiate fair and reasonable terms of employment.

Whether the employee is hired directly by the family, through a care agency or a referral agency, and where the services are performed alter the rights and responsibilities of the employee and the employer.  Robert Nuddleman has been representing and advising employers and employees regarding wage and hour obligations for over two decades.  He frequently presents seminars and training regarding domestic worker rights and obligations. If you have questions about your rights or responsibilities, contact Robert Nuddleman.

Facts and Myths Regarding Employee Handbooks

Are All Employers Required to Have Employee Handbooks?

HR professionals and employment attorneys recommend employee handbooks for most companies, but there are no statutes or cases that require employee handbooks.  An employee handbook centralizes the company’s policies, sets forth the company’s expectations for its workforce and describes the benefits available to its employees.  While the law does not require a handbook, if a company has a handbook several laws require the employer to include certain policies in the handbook.

Can a Company Be Sued for Failing to Follow the Employee Handbook?

Most handbooks are not contracts, and are not enforceable as contracts.  Employees typically do not have a private right of action to enforce the handbook.  Failing to follow the employer’s stated policies can, however, give rise to other liability.  For example, an employee trying to prove discrimination may use the employer’s failure to follow established policies in order to prove the employer treated the employee differently than other workers.  So, while an employer usually cannot be sued for a breach of the employee handbook, failing to follow the company’s established policies may be evidence of other violations.

What Policies Should the Employee Handbook Include?

The specific policies will depend on the company, but there are some policies that should be in every handbook.

At-Will Employment – Every handbook should specify that the employment is at-will, and can be terminated by either party at any time, for any reason or no reason, and that the at-will nature of the employment can only be modified in writing signed by the head of the company

Anti-Harassment, Non-Discrimination and Anti-Retaliation – Companies with even 1 employee are subject to California’s anti-harassment laws.  It is important for the company to identify prohibited conduct and provide a clear complaint process for employees who believe they are the victim of unlawful harassment or discrimination.

Meal and Rest Periods – California requires employees to receive certain mandated rest and meal breaks.  A clear policy expressing the employee’s right to take breaks helps employee’s understand their entitlement to breaks.

Employment Classifications – Employees may be classified in different ways (exempt versus non-exempt, full-time versus part-time, temporary versus, non-temporary, production versus management, etc.).  Their classification can impact their pay, benefits, schedule and obligations.  Companies with different classification can use the handbook to clearly identify how the different classifications are treated differently

Leaves of Absence and Time Off Benefits – Depending on the size of the employer, if an employer has an employee handbook the employer is required to identify certain legally required leaves of absence.  Employers can also use the handbook to define when time off will be paid or unpaid (e.g., paid sick leave, paid time off, vacation, holidays, etc.).

Payroll – Employers are required to identify the pay periods and pay dates.  In addition to posting the pay dates in the workplace, the employee handbook is an appropriate place to describe the employer’s payroll practices.  Employers should consider identifying when time cards must be turned in, whether the company allows payroll advances, and what happens when a payday falls on a non-work day.

Depending on the size of the employer, different laws can require other policies in the employee handbook, such as rights and obligations under:

  • The Family Medical Leave Act (FMLA)
  • The California Family Rights Act (CFRA)
  • The Pregnancy Disability Leave Act (PDLA)

How Often Should A Company Revise The Employee Handbook?

Employers should review their employee handbook on an annual basis.  Any time there is a significant change in the law, whether created by a new or revised statute or by a court’s interpretation of the law, employers need to evaluate whether their handbook needs to be updated.

For example, in 2014, the California legislature adopted the Healthy Workplace Healthy Family Act of 2014, requiring all employers in California to provide paid sick leave for all employees.  This major shift required companies to review their paid time off policies to ensure compliance with the new law, and to develop new compliant policies.

Several years ago, California and Federal courts identified a possible defense to sexual harassment claims when an employee failed to follow an employer’s written anti-harassment policies and later sued the employer for sexual harassment.  The cases clarified that an employer may avoid, or at least limit, liability in certain circumstances provided the employer clearly communicated a complaint process for victims of sexual harassment.  Companies had to review their policies to ensure the complaint process was clearly explained and communicated to employees.  Employers that were not aware of the cases may have missed an opportunity to take advantage of the newly developed defense. In 2016, the FEHC modified the regulations regarding sexual harassment prevention policies, requiring employers to ensure employees received the anti-harassment policies.

I recommend employers have their handbooks reviewed at least every one to two years, but changes in the law can require modifications at more frequent intervals.

Can an Employer Use a Handbook from Another Company and Just Change the Name?

Many companies try to save time and money by using handbooks created for other companies, and simply changing the name of the company.  Although many policies may be similar or even identical, this is a very bad idea.  Different laws apply to employers depending on their location, their size and even their industry.  Companies that simply copy policies from another company may wind up with policies that do not apply or that create obligations that are not appropriate.

Additionally, many companies consider their employee handbooks confidential, proprietary, or even a trade secret.  Copying another company’s handbook could also violate the law.

There are low cost, trusted methods to create an employee handbook, but all handbooks should be reviewed by a competent, knowledgeable employment law professional. Don’t be penny-wise and a pound-foolish. A bad employee handbook can be worse than no handbook at all.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

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The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.