Jessica is a Partner in the Labor and Employment group. She advises clients on a wide variety of matters including employment agreements, non-competition issues, wage and hour compliance, reasonable accommodation under state law and the ADA, and employee discipline and termination.
While portions of California’s Immigrant Worker Protection Act have been enjoined, employers remain subject to notice obligations. California passed a statute limiting the extent to which employers could cooperate with federal immigration officials. Litigation quickly ensued, and a recent decision enjoined enforcement of part of the law, while leaving other provisions unaffected. With the speed of the news cycle, employers may understandably require clarification as to which immigration policies are actually in effect. What portions of the sanctuary state law were enjoined, and what parts remain effective?
The Immigration Worker Protection Act (AB 450), which went into effect in January 2018, imposed three primary obligations on employers:
A prohibition against allowing or consenting to a federal immigration enforcement agent’s request to enter nonpublic areas in the workplace, or to access employee records, without a judicial warrant;
A prohibition against re-verifying the employment eligibility of a current employee outside the time and manner required by federal law; and
A requirement to provide notice to employees upon receipt of a Notice of Inspection of Form I-9, and after the inspection, provide notice regarding the results of the inspection.
Almost immediately, the law was challenged in court, in a case called United States v. California. On July 5, 2018, John A. Mendez of the United States District Court for the Eastern District of California issued a preliminary injunction blocking the enforcement of the first two of the above obligations, but not the third obligation concerning notice. The court reasoned that the first prohibition on cooperation with federal immigration officials likely “impermissibly discriminates against those who choose to deal with the Federal Government,” and therefore violates the intergovernmental immunity doctrine. The court also found that the second prohibition on early re-verifications likely violates the Supremacy Clause. The notice obligation, on the other hand, regulates the employer’s “failure to communicate with its employees,” and is therefore likely a permissible exercise of state power.
Accordingly, as it currently stands, the notice provisions are in effect. Under the statute, employers must notify employees and labor union representatives within 72 hours of receiving a Notice of Inspection of Form I-9. Employers must include the name of the federal agency conducting the inspection, the nature of the inspection, the date the employer received the inspection notice, and a copy of the inspection notice. Additionally, within 72 hours after the inspection takes place, employers must also provide affected employees and their labor union representatives with the results of the inspection, a timeframe for correcting any deficiencies found, the date and time of any meetings with the employer to correct any deficiencies found, and a notice to the employees about their rights to representation during any meeting with the employer.
It is important to note that at this point the court entered a preliminary injunction; the ultimate enforcement of the statute may change when the case reaches completion, and even then, an appeal to the Ninth Circuit (and perhaps ultimately to the Supreme Court) is likely.
It’s a situation any Human Resources professional might find themselves in – circumstances require you to effectuate a termination in short order and you have to scramble to calculate the employees’ correct final pay and prepare a paycheck. But what if the wage statement is not ready? Does the law require employers to provide a wage statement to a terminated employee simultaneously with their final paycheck? Thanks to a recent decision from the California Court of Appeal, you have a little breathing room.
In Canales v. Wells Fargo Bank, 23 Cal. App. 5th 1262 (2018), Wells Fargo had a practice of paying certain terminated employees final wages via cashier’s checks – which were prepared in the bank branch – and then mailing the wage statements to the employees from another location, either that same day, or the following day. The plaintiff complained that the wage statements should have been provided simultaneously with the paychecks, and that Wells Fargo’s practice of mailing them constituted a violation of California Labor Code section 226, which provides:
“…[e]very employer should semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing…”
Wells Fargo responded that it was in compliance with the statute because:
1) The statute does not require simultaneous delivery of wage statements and specifically allows employers the option to provide wage statements “semimonthly;” and
2) It was permitted to mail the wage statements, because the statute provides that wage statements can be delivered “separately” in the case of a cashier’s check, which is analogous to cash.
The court agreed, holding, “…if an employer furnishes an employee’s wage statement before or by the semimonthly deadline, the employer is in compliance.” The court explained that it interpreted the phrase ‘“semimonthly or at the time of each payment of wages’ as representing the outermost deadlines by which an employer is required to furnish the wage statement.” The court provided the following example:
[S]uppose an employer furnishes wage statements on the first and 15th of each month. The employer discharges an employee on the second of the month. Per the statute’s plain language, if an employer pays the final wages by personal check or cash, it has the option of furnishing the discharged employee with the wage statement.
We find it illogical to conclude an employer violated section 226 by furnishing a wage statement before the semimonthly date has been reached. If the employer furnishes the wage statement to the discharged employee of the fifth of the month, the employer has complied with the requirement that it furnish the wage statement to the employee “semimonthly” because the employee would have ostensibly been furnished with the wage statement by the semimonthly date.
The court also rejected the plaintiff’s reliance on the California DLSE (Division of Labor Standards Enforcement) Enforcement Policies and Interpretations Manual, which provides, “[a] California employer must furnish a statement showing the following information to each employee at the time of payment of wages (or at least semi-monthly, whichever occurs first),” holding that the Manual is not entitled to deference as an agency regulation because it was not promulgated in accordance with the Administrative Procedure Act. The court also did not find the agency’s interpretation persuasive, finding that the term “whichever occurs first” appears nowhere in the statute, and simply does not make sense given that the statute specifically provides employers a choice of two separate timeframes to issue wage statements:
1) “semimonthly” or
2)“at the time of each payment of wages.”
The Canales decision is certainly one where common sense prevailed. Keep it in mind next time next time you have the final pay, but not the wage statement, ready at the time of termination.
Let’s face it. The hiring process involves mounds of regulations, disclosures, authorizations, and then more disclosures. The last thing an employer – or applicant – wants to see is a higher stack of documents filled with legal jargon. Should employers then consolidate disclosures and authorizations to simplify the hiring process?
Not when doing a credit check pursuant to the Fair Credit Reporting Act (FCRA). Recent cases emphasize the importance of employers allowing disclosures to obtain background checks from consumer reporting agencies to “stand alone” from every other document.
The FCRA mandates that employers who seek to procure a consumer report must present “clear and conspicuous” disclosures that are contained in a document that consists solely of the disclosure. This is known as the “stand alone” requirement.
While the FCRA allows the disclosure form to also include an authorization – which is also required before procuring a report – Courts have recently cracked down on employers who include anything extraneous.
For instance, in Syed v. M-I, Ltd. Liab. Co., 853 F.3d 492 (9th Cir. 2017), the Ninth Circuit Court of Appeal held that the inclusion of a liability waiver in the same document as the FCRA disclosure violated the FCRA’s “stand alone” requirement.
The Ninth Circuit further held that violation of this technical requirement is enough of a “concrete harm” to allow the case to proceed in Federal Court where the plaintiff alleged he was confused about the excess language and would not have signed the disclosure otherwise.
The Court in Poinsignon underscored the importance of “[p]resenting the disclosure in a separate stand-alone document free from the clutter of other language” to call “consumers’ attention to their rights and to the significant of their authorization.”
And in Lagos v. Leland Stanford Junior Univ., No. 5:15-cv-04524-PSG, 2015 U.S. Dist. LEXIS 163119 (N.D. Cal. Dec. 4, 2015), a District Court held that inclusion of seven state law notices and a sentence stating, “I also understand that nothing herein shall be construed as an offer of employment or contract for services,” plausibly violated the FCRA’s “stand alone” requirement.
Employers have also been recent targets of FCRA class action lawsuits alleging violation of the FCRA’s “stand alone” requirement.
For example, on April 20, 2018, Petco Animal Supplies, Inc., asked a Federal Court in the Southern District of California to approve a class-wide settlement of a 2016 lawsuit based on allegations that its web based application contained a FCRA disclosure containing a broad authorization for “any person” to provide “any and all information” to the consumer reporting agency, in addition to information relating to the laws of seven different states. Petco agreed to pay $1.2 million to resolve the claims of approximately 37,000 individuals.
And on April 12, 2018, Frito-Lay, Inc., asked a Federal Court in the Northern District of California to approve a class-wide settlement of a 2017 lawsuit based on allegations that Frito-Lay violated the FCRA’s “stand alone” requirement by including additional language in its FCRA disclosure form including, among other things, a statement that “I have been given a standalone consumer notification that a report will be requested and used [.]” Frito-Lay agreed to a settlement of about $2.4 million to resolve the claims of roughly 38,000 class members.
2018 marks a new opportunity for employers to review and update their hiring forms to ward off FCRA lawsuits.
Question: Some of our retail company’s employees in California are demanding chairs to sit in while they work. Management thinks it appears unprofessional to have workers sitting, but I hear the employees might have a legal right to sit down. Should management take a stand?
Question: We recently interviewed a candidate for a server position at our restaurant. During the interview, he informed us that he has an anxiety disorder, which causes him to have panic attacks out of the blue. Do we have to hire him? What if he had a panic attack in the middle of serving a customer?
Question: We have an employee who claims she has a mental disability involving stress and anxiety caused by working with her supervisor, and she has asked for a different supervisor as an accommodation. This doesn’t seem to be a legitimate disability – are we missing something? Answer→
Dorsey is a business law firm with more than 550 attorneys across the United States, Canada, Europe and Asia. Our lawyers regularly handle every sort of employment matter, litigated and non-litigated. We have extensive, successful trial experience (including class and collective actions), as well as an outstanding record for obtaining summary judgments. Dorsey also has broad experience in advising, counseling, compliance and development, policy handbook review, training and other measures that can greatly reduce the likelihood of litigation or governmental enforcement actions.