California Supreme Court Explains How to Calculate Overtime Pay When Non-Exempt Employees Earn Flat Sum Bonuses

On March 5, 2018, the California Supreme Court issued its long-awaited opinion in Alvarado v. Dart Container Corporation of California, Case No. S232607 (Cal. Sup. Ct., March 5, 2018). The opinion resolves a dispute between an employer and a former employee regarding how his overtime wages should have been calculated for workweeks in which he worked overtime hours and also earned a flat sum bonus. (A flat sum bonus is a bonus whose amount is fixed regardless of the number of hours the employee works.) The calculation method urged by the employee, which would result in slightly higher overtime pay, would treat the bonus as earned only during the non-overtime hours he worked; the employer’s method effectively treated the bonus as earned during all hours he worked. (more…)

Contractor v. Employee in the Gig Economy

A federal court in California, (Lawson v. Grubhub, Inc., No. 15-CV-05128-JSC (N.D. Cal February 8, 2018)), recently ruled that drivers for Grubhub, a food delivery service, are independent contractors rather than employees. The critical factor in the court’s decision was Grubhub’s lack of control over how its drivers perform deliveries, and even whether deliveries are to be performed at all. The decision is significant because, under California law, if an individual performing services is deemed to be an employee, that person has rights to minimum wage, overtime, expense reimbursements and workers compensation benefits. In contrast, an independent contractor is not entitled to those benefits. The decision is thus a welcome development for employers who rely on flexible and semi-autonomous workers in the “gig” economy. (more…)

EMPLOYMENT LAW UPDATE: 2018 Brings Major Changes for California Employers

Several important new California employment laws took effect on January 1, 2018. These new laws will impact California employers from the pre-hiring stage through the entire employment relationship.

Restriction on Obtaining Salary History

Effective January 1, 2018, Assembly Bill 168 went into effect, which prohibits all California employers from:

  • Directly or indirectly inquiring into a job applicant’s salary history, compensation or benefits
  • Using such salary history information in determining whether to extend a job offer or in deciding what salary to offer the applicant.


Employment Challenges in a Holocratic Work Environment

Many Silicon Valley start-up companies, as well as larger companies such as Zappos, have moved from a traditionally structured work environment to a “holocracy” model. Essentially, while there are lots of variations, a holocracy model is a “boss free” business environment that focuses less on a structured workplace with traditional job descriptions and job titles, and more on creating self-organized “circles” of workers that concentrate on specific goals. Each circle of workers is a self-organized entity with the authority to manage itself, and the circle is ultimately part of a larger circle within the company. In addition, there is a general principle of transparency in the organization’s rules and decision-making. For companies that are able to tolerate a high level of adaptability, have motivated workers, and are established and mature enough to bounce back if things do not work out as anticipated, this is a highly attractive work model. However, this organizational model raises a host of potential employment issues, a few of which are highlighted below:


Employment Law Update: What’s In Store for California Employers in 2017 and Beyond?

In 2016, California Governor Jerry Brown signed numerous laws that will affect California employers. Here are some of the new laws that employers need to be aware of:

Employers Are Not Required to State Hours Worked on Wage Statements of OT Exempt Employees

AB 2535 clarifies the wage statement requirements for tracking hours worked for exempt employees. The bill was passed following the federal court decision in Garnett v. ADT, LLC, which held that employers must include total hours worked on pay stubs for exempt outside sales employees and executives because they received bonuses and stock options. Under the new law, employers are not required to provide itemized wage statements to employees if the “employee’s compensation is solely based on salary and the employee is exempt from payment of overtime,” or the “employee is exempt from the payment of minimum wage and overtime under …any applicable order of the Industrial Welfare Commission” and specified statutes. (more…)

The Election Is Over, Now What?

The 2016 Presidential election will go down as one of the most unpredictable, polarizing and controversial elections ever to occur in United States history. Although it was anticipated that the House of Representatives would remain controlled by the Republicans, the race was decidedly less clear with regard to control of the White House and Senate. But now that Republicans have won both majorities in the House and the Senate, and President-elect Donald Trump is in the midst of making selections of who will serve in his administration, what impact will this election have for employers? The outlook is murky at best. (more…)

Travel Time Compensation in California


California law requires that employers pay employees for all hours worked. The term “hours worked,” however, is not all that simple to define or apply. The analysis is compounded when the hours worked are, for instance, part of the employee’s commute, consist of travel to a remote conference, or spent moving from client to client throughout the day. Once you conclude the time is “worked,” you must include those numbers in overtime calculations, and decide whether you want to pay travel at a different rate than the employee’s regular rate of pay. (more…)

2016 Brings Major Changes to California Employment Laws

There are a myriad of new California employment laws on the books as of January 1, 2016. This is a friendly reminder to check and update your handbooks, posters, contracts, and handouts so you remain in compliance with state law.

1. Labor Commissioner’s Authority to Enforce Judgments for Wage Theft Expands With Enactment of the New California Fair Day’s Pay Act (SB 588)

California’s Senate Bill (“SB”) 588, known as the California Fair Day’s Pay Act, adds teeth to the California Labor Commissioner’s ability to enforce judgments for wage theft. (more…)

Whose Cell Is It Anyway? Appellate Court Rules California Employers Must Reimburse for Cell Phone Expenses

According to the Pew Research Center, as of January 2014, ninety percent of American adults have a cell phone, while fifty-eight percent of American adults have a smartphone. It is undeniable that mobile technology is fully engrained into our everyday lives. Our mobile handsets no longer simply function as communication tools; rather they are precious multi- and cross-functional devices connecting us to the world and to the community. Slowly, everything is being funneled into our smartphones: personal and professional communications, word and data processing, amateur photography and videography, numerous social media platforms for marketing and advertising, streaming film and television, educational tools and texts, lectures and podcasts, etc. As pervasive as they are, it is no wonder that lines begin to blur as it relates to the ownership of technology, especially in the workplace. (more…)

Alert — California Supreme Court Rules on Class Action Waivers in Arbitration Agreements with Mixed Results for Employers and Employees

In a long-anticipated ruling, on June 23, 2014, the California Supreme Court held in Iskanian v. CLS Transportation Los Angeles, LLC., that mandatory class action waivers in pre-employment arbitration agreements are enforceable, following the United States Supreme Court’s landmark decision AT&T v. Concepcion, 131 S. Ct. 1740 (U.S. 2011). However, despite this victory for employers with arbitration programs, the Iskanian court also held that representative claims brought under California’s Private Attorneys General Act (PAGA) may not be waived in such agreements, with the net result mixed for employers and employees. (more…)