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EDD’s Work Share Program

In these troubled times, unemployment insurance is on the top of many people’s minds, employers and employees alike. California offers a Work Sharing Program, with the goal of reducing the need for employers to furlough, rather than terminate, their staff in times of economic hardship. Essentially, under this program, the state incentivizes employers to make necessary cuts by reducing their staff’s hours instead of laying off a portion of their workforce. The state then pays impacted workers a partial unemployment benefit in order to assuage some of their lost income. This program has existed for decades but has taken on new importance as coronavirus places an unprecedented strain on businesses throughout the state. This article will explain the eligibility criteria of the workshare program and lays out the benefits of the program for both employees and employers, respectively.

Eligibility Criteria Under California’s Work Sharing Program

The workshare program is designed for employers who are unable to maintain the entirety of their usual payroll, due to an economic downturn or other shortfalls. In order to qualify, businesses must be legally registered in California, have an active California State Employer Account Number, and meet certain requirements regarding the size of the payroll reduction. At least 10 percent of a business’s workforce (a minimum of 2 employees) must be impacted, and the hour/wage reduction must be between 10 and 60 percent of the typical payroll. Employers that offer healthcare or retirement benefits to their staff must maintain their usual benefits, or change the benefits offered to all employees, not just those facing a pay cut.

The Work Sharing Program also has certain restrictions on who can participate. Seasonal or temporary workers are not covered, giving employers that rely on those workers few alternatives to layoffs in an economic crisis. Additionally, employees that are corporate officers or major stockholders in the business cannot receive payments. Finally, employers with a unionized workforce must receive approval from the collective bargaining agent in order to apply.

In order to apply for the program, employers must fill out an application provided by the state Employment Development Department documenting compliance with all of the above requirements and restrictions. The application must also include the name, SSN, and hire date of every employee covered by the plan. Importantly, the application also requires employers to certify that they are not using the Work Sharing program as a transition to layoffs.

Benefits for Employees Under the EDD’s Work Share Program

The primary benefit of this program for employees is continued employment. Covered employees maintain a portion of their normal wages and, in many cases, the same benefits they usually enjoy. They also receive more money from the state than they typically would if they were treated as “underemployed.” Underemployed employees receive only the difference between 75% of their reduced wages and their full unemployment benefit.

Under the Work Sharing Program, employees receive a proportion of their full unemployment benefit equal to the proportion by which their pay has been temporarily reduced.  Additionally, “partial” or “underemployment” benefits only phase in when workers’ weekly pay drops below approximately $600 (1.33 times the maximum weekly benefit amount). Work Sharing payments, however, are available to any worker whose employer participates in the program, regardless of their salary. It is important to note that Work Sharing benefits are deducted one dollar for every dollar paid to an individual by another employer, which limits the financial benefit of finding a second part-time job.

Benefits for Employers

The primary benefit for employers is the same as it is for employees: continued employment of a steady and experienced workforce. This saves an unquantifiable sum of potential costs, including the recruitment and training of new replacements. Work Sharing employers’ reserve accounts are charged the same amount they would be for regular unemployment benefits. Essentially, flexibility and continuity are the main advantages for employers who choose to participate in the Work Sharing program.

Determining whether the Work Sharing Program is right for you and/or applying to participate in the program is a complicated and difficult process. Contact us for assistance making the right decision for your business.

Written by J.T. Keane, edited by Robert Nuddleman; Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Using this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. Using the Internet or this blog to communicate with the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted on this blog.

The Nuddleman Law Firm, P.C. represents employers and employees in a wide range of employment law matters. Much of his practice focuses on wage and hour issues, such as unpaid overtime, meal and rest break violations, designing or enforcing commission plans, and other wage-related claims. He also advises employers on how to avoid harassment and wrongful termination claims, and represents employees who have been victims of unlawful discrimination, retaliation or harassment. The Nuddleman Law Firm, P.C. helps employers develop good employment policies, and helps employers and employees with disability accommodation issues.

HR Director Can Sue When Fired for Retaliation

 

The FLSA provides that it is unlawful for an employer to: “discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee[.]”  29 U.S.C. § 215(a)(3).  Employees fired for retaliation in violation of the FLSA can sue their employer.

But what if the employee’s job is to report violations of the company to the employer so the employer can decide whether to fix the problem?  Has the employee “filed a complaint,” or just done the employee’s job?  In Rosenfield v. Globaltranz Enterprises, the Ninth Circuit held an HR Director can state a claim that she was fired for retaliation when she reported violations of the FLSA to the employer.

Alla Rosenfield was the Director of Human Resources for Globaltranz. Throughout her employment, Plaintiff reported to her superiors that the company was not compliant with the FLSA, and she repeatedly sought changes to attain statutory compliance.  After GlobalTranz fired Plaintiff, she filed a lawsuit alleging that she was fired for retaliation in violation of the FLSA.  Plaintiff claimed GlobalTranz fired her for complaining to other managers and to executives that GlobalTranz was failing to comply with the FLSA.  The court had to decide whether an HR Director can state a claim for retaliation under the FLSA when it was her job to bring FLSA violations to the employer’s attention.

HR Directors and Managers Can Sue when Fired for Retaliation

Even though the district court recognized that Plaintiff had “advocated consistently and vigorously on behalf of . . . GlobalTranz’s employees whose FLSA rights Plaintiff thought were being violated,” the district court held that she nevertheless was not entitled to the protections of § 215(a)(3) because she had not “filed any complaint” for purposes of the FLSA.

Unlike some laws, congress did not create a detailed federal supervision system or process requiring government payroll inspections. Rather, it chose to rely on information and complaints received from employees seeking to vindicate rights claimed to have been denied. The FLSA is not supposed to be a “gotcha” statute and “seeks to establish an enforcement system that is fair to employers.” “To do so, the employer must have fair notice that an employee is making a complaint that could subject the employer to a later claim of retaliation.” Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 131 S. Ct. 1325, 1334 (2011).

 

In Kasten, the Supreme Court established a “fair notice” test for deciding whether an employee has “filed any complaint” under the anti-retaliation provision of the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 215(a)(3): “[A] complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.”

 

If an entry-level employee reported that someone is underpaid in violation of the FLSA and requested that the employee be compensated in compliance with the Act, a reasonable employer almost certainly would understand that report as a “complaint.” But if the identical report were made by a manager tasked with ensuring the company’s compliance with the FLSA, a reasonable employer may not understand that report as a “complaint.” Rather, the employer think the manager was just carrying out his or her duties. Therefore, when determining whether an employee has “filed any complaint,” the employee’s role as a manager often is an important contextual element.

According the Ninth Circuit:

The employee’s job title and responsibilities—in particular, whether he or she is a manager—form an important part of that “context.” Generally speaking, managers are in a different position vis-a-vis the employer than are other employees because (as relevant here) their employer expects them to voice work-related concerns and to suggest changes in policy to their superiors. That may be particularly true with respect to upper-level managers who are responsible for ensuring compliance with the FLSA.

The Ninth Circuit held that a complaining employee’s position as a manager is an important part of the “context” that the fact-finder must consider, and a jury reasonably could find that Plaintiff, a managerial employee, filed such a complaint. Because Kasten requires consideration of the content and context of an alleged FLSA complaint, the question of fair notice must be resolved on a case-by-case basis. An employee’s managerial position is only one consideration.

The court declined to formulate or adopt a special bright-line rule to apply when considering whether a manager has “filed any complaint” within the meaning of the FLSA.

Even if an employee is responsible for reporting violations of the law to the employer, such reports can constitute “filing a complaint,” and serve as the basis for a retaliation complaint.  Employers must carefully consider a number of factors before terminating an employee (even and at-will employee).  Employers may need to take particular care when terminating HR employees or other managers whose job requires them to report violations of the law.

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

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

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.