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Sunday, July 27, 2014

The Next Big Thing: Ban the Box

By: Peter Glaessner

“Ban-the-box” refers to the question on the employment application that asks: “Do you have a criminal conviction?”

Effective July 1, 2014, California adopted a “ban-the-box” law prohibiting public employers from asking job applicants about criminal convictions  until after the employer has determined that the applicant meets the minimum qualifications for the job. The law makes an exception for any position where a criminal background investigation is required by law, as well as for criminal justice agencies. California Penal Code § 432.9.

But knowing about Penal Code § 432.9 is only the start to staying out of legal trouble for employers.  The next chapter is likely to be local cities and counties passing their own ordinances applying “ban-the-box” to private employers.  For example, San Francisco’s “Fair Chance Ordinance” takes effect August 13, 2014, barring private employers with 20 or more employees and operations in the City & County of San Francisco from inquiring about a job applicant’s criminal history during the preliminary stage of the hiring process. Convictions more than seven years old, diversions, and juvenile adjudications can never be considered in San Francisco and only those “directly-related” to the position sought by the applicant can be considered at all. The San Francisco ordinance is chock full of procedural requirements to snare private employers, too. Examples: Before an employer can order a criminal background check, notice must be given to the applicant complying with several federal and state statutes. Job postings and advertisements must include a statement the employer will consider qualified applicants with criminal histories.

At present, few cities and counties have targeted private employers, but with the passage of statewide legislation for public employers, keep an eye out for this development.

Like many areas of employment law, this will be a minefield of legal problems for uninformed employers.  Our practical, ready to implement suggestions to avoid legal claims for California employers, public or private, are as follows:

  • Determine if and how “ban-the-box” applies to you as a public or private employer;
  • Carefully study the local ordinances as there are likely to be important differences between them concerning the timing of any inquiry and limiting the inquiry about criminal history to crimes “directly related” to the particular job, or the staleness of the conviction;
  • If so, review all employment applications hiring materials to determine whether they need to be modified to comply with “ban-the-box” rules where the company is hiring;
  • Train managers involved in the interviewing process about when criminal history inquiries are restricted and permissible. This will require careful review of local ordinances, as some (e.g. San Francisco) only permit limited inquiries, even after a first person-to-person interview or conditional offer of employment.

This document is intended to provide you with general information about employment law developments. The contents of this document are not intended to provide specific legal advice. If you have questions about the contents of this alert, please contact Peter Glaessner at 415-697-3461 or at pglaessner@aghwlaw.com. This communication may be considered advertising in some jurisdictions.

Saturday, July 26, 2014

Employer May Deduct from Exempt Employees’ Vacation/PTO for Partial Day Absences of Less Than Four Hours

By: Hannibal Odisho

Brief Summary
With its July 21, 2014 decision in Rhea v. General Atomics, the Court of Appeals aligns California law with Federal law regarding employee deductions from Paid Time Off (PTO)/Vacation for Partial Day Absences. Employers may now deduct partial-day absences in increments, including increments of less than four hours, from exempt employees’ accrued leave time without violating California law or losing the employee’s exempt classification.

Background
To provide some background, the California Supreme Court held more than 30 years ago in Suastez v. Plastic Dress-Up Co. (1982) 31 Cal.3d 774 that an exempt employee’s accrued vacation qualifies as earned wages.  As such, an employer could not require an exempt employee to forfeit unused vacation/PTO and the employer had to pay out at termination any and all accrued and unused vacation/PTO.

If an exempt employee took a full day off from work, the employer was permitted to deduct a day from the employee’s vacation/PTO bank. However, if an exempt employee took a half day of vacation or worked only a partial day, employers were advised (and as was held by the California Division of Labor Standards and Enforcement – DLSE) that deducting from the employee’s vacation/PTO bank would violate California law’s salary basis test because the employer would effectively be reducing the amount that the employer paid the employee for that day.

Conley
In Conley v. Pacific Gas & Electric Co. (2005) 131 Cal.App.4th 260, the Court of Appeal held that an employer’s policy of allowing the employer to deduct hours from an exempt employee’s accrued vacation/PTO bank to cover partial day absences did not violate California law.  The Conley ruling followed federal law, under which a deduction of this type is allowed because vacation/PTO is not considered “vested.”  However, the DLSE subsequently interpreted Conley to mean that employers could only deduct from an employee’s vacation/PTO bank if the absence was for four hours or more.  Until now, employers complied with the DLSE’s interpretation of Conley by only allowing or requiring exempt employees to use vacation/PTO in increments of less than four hours.

Rhea
Recently, the Court of Appeal finally clarified the ruling in Conley with its decision in Rhea v. General Atomics. Under this decision, the “four hour” minimum absence rule is no longer required under California law. An employee’s vacation/PTO may be deducted for partial day absences, including absences of less than four hours, without jeopardizing an employee’s exempt status.

In Rhea, the employer, General Atomics, had a policy that required exempt employees to use their annual leave hours when they were absent from work for portions of any single day. A salaried, exempt employee sued the employer on the ground that the employer’s policy violated the “four hour” minimum absence rule.

The Court of Appeal agreed that under California law, vacation or annual leave is treated as a type of “wages” or “deferred compensation” that is earned by an employee. However, the Court did not agree with the employee that an employer’s deduction of annual leave for an employee’s partial-day absences constitutes a forfeiture of wages. The Court stated that the employer is not taking away vested annual leave when an employee takes a partial-day absence; it only requires the employee to use the annual leave under the terms and conditions the employer has created.

This document is intended to provide you with general information about employment law developments. The contents of this document are not intended to provide specific legal advice. If you have questions about the contents of this alert, please contact Hannibal Odisho at 415-697-3463 or at hodisho@aghwlaw.com. This communication may be considered advertising in some jurisdictions.