As part of the significant changes going on at the DFEH, they have renumbered the California Regulations as per this doc. This does not create and substantive changes. A source you should keep handy is this link www.dir.ca.gov/dlse/dlseLaws.html, which contains those regulations and much more. The email from the DFEH follows:
The DFEH Fair Employment and Housing Council’s (Council) Changes without Regulatory Effect have been approved by the Office of Administrative Law (OAL) and published in the California Code of Regulations, title 2, section 11001 et seq. These changes conform the regulations of the former Fair Employment and Housing Commission (Commission) to the statutory changes made by Senate Bill 1038 (Stat. 2012, ch. 46, §§ 18, 27-66, 68, 70, 101 &115.) The action repeals certain of the former Commission’s regulations for which there is no longer statutory authority. The action renumbers and relocates the regulations within Division 4.1 of title 2 as the regulations of the newly established Council. The action also makes non-substantive grammatical and style changes to the regulations as well as changes to Authority and Reference citations. OAL approved this change without regulatory effect as meeting the requirements of the California Code of Regulations, title 1, section 100.
Please see the attached “Notice of Approval” and the below excerpted table of contents from Barclays Official California Code of Regulations. You can read all the Council’s current regulations here by clicking on “TITLE 2,” “DIVISION 4.1,” “CHAPTER 5,” and the within subchapters and articles.
BARCLAYS OFFICIAL CALIFORNIA CODE OF REGULATIONS
TITLE 2. ADMINISTRATION
DIVISION 4.1. DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING
CHAPTER 1. PROCEDURES OF THE DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING
CHAPTER 5. FAIR EMPLOYMENT AND HOUSING COUNCIL
SUBCHAPTER 2. DISCRIMINATION IN EMPLOYMENT
ARTICLE 1. GENERAL MATTERS
ARTICLE 2. PARTICULAR EMPLOYMENT PRACTICES
ARTICLE 3. RACE AND COLOR DISCRIMINATION (RESERVED)
ARTICLE 4. NATIONAL ORIGIN AND ANCESTRY DISCRIMINATION
ARTICLE 5. ANCESTRY DISCRIMINATION (RESERVED)
ARTICLE 6. SEX DISCRIMINATION
ARTICLE 6A. SEX DISCRIMINATION: PREGNANCY, CHILDBIRTH OR RELATED MEDICAL CONDITIONS
ARTICLE 7. MARITAL STATUS DISCRIMINATION
ARTICLE 8. RELIGIOUS CREED DISCRIMINATION
ARTICLE 9. DISABILITY DISCRIMINATION
ARTICLE 10. AGE DISCRIMINATION
ARTICLE 11. FAMILY CARE AND MEDICAL LEAVE
SUBCHAPTER 3. DISCRIMINATION IN HOUSING (RESERVED)
2 CA ADC T. 2, Div. 4.1, Chap. 5, Refs & Annos
SUBCHAPTER 4. PROCEDURES OF THE COUNCIL (RESERVED)
2 CA ADC T. 2, Div. 4.1, Chap. 5, Refs & Annos
SUBCHAPTER 5. CONTRACTOR NONDISCRIMINATION AND COMPLIANCE
ARTICLE 1. GENERAL MATTERS
ARTICLE 2. REGULATIONS APPLICABLE TO CONSTRUCTION CONTRACTS
ARTICLE 3. REGULATIONS APPLICABLE TO SERVICE AND SUPPLY CONTRACTS
SUBARTICLE 1. SMALL CONTRACTS
SUBARTICLE 2. REGULATED CONTRACTS
ARTICLE 4. OCP REVIEW PROCEDURES
ARTICLE 5. OCP ENFORCEMENT PROCEEDINGS
For your reference, please see the attached FEHA Regulations Conversion Chart. Please refer to the renumbered regulations effective immediately.
California passed AB241, known as Domestic Worker Bill of Rights. The bill essentially provides wage and overtime protection to these workers. Domestic work means services related to the care of persons in private households or maintenance of private households or their premises. Domestic work occupations include childcare providers, caregivers of people with disabilities, sick, convalescing, or elderly persons, house cleaners, housekeepers, maids, and other household occupations.
A domestic work employee who is a personal attendant shall not be employed more than nine hours in any workday or more than 45 hours in any workweek unless the employee receives one and one-half times the employee’s regular rate of pay for all hours worked over nine hours in any workday and for all hours worked more than 45 hours in the workweek.
Here’s an interesting article on the bill. While the intentions behind this bill seem well intended it will be interesting to see the impact affects the ability to now afford this care in the first place.
Worklaw® Network firm Swerdlow Sanchez wrote the following about AB241:
Starting January 1, 2014, nannies, caregivers, and other “personal attendants” working in private homes in California will be entitled to overtime pay. The Domestic Worker Bill of Rights was signed into law by Governor Jerry Brown on September 26, 2013, and requires domestic employees who are “personal attendants” to receive one and one-half times their regular rate of pay for all hours worked over nine hours in any workday and over 45 hours in any workweek. “Personal attendants” are employees who: (1) supervise, feed, or dress a child or person who by reason of advanced age, physical disability, or mental deficiency needs supervision, and (2) spend at least 80% of their time in those activities.
Personal attendants have historically been excluded from many of California’s wage and hour laws, which allowed flexibility for households and families who rely on domestic workers for personal care. Prior to the Domestic Worker Bill of Rights, personal attendants were exempt from California’s overtime-pay requirements. The new bill specifically provides overtime premium pay for personal attendants, including live-ins, for hours worked over nine in a day or 45 in a week. The bill does not, however, require domestic employers to provide personal attendants with meal or rest periods.
The bill provides several exclusions to the overtime requirement for personal attendants. Most notably, the bill does not provide overtime pay for casual babysitters. A casual babysitter is defined as a person who babysits on an irregular or intermittent basis and whose vocation is not babysitting. If a babysitter does a significant amount of work other than supervising, feeding and dressing a child, the babysitter will be considered a domestic work employee and will be entitled to overtime pursuant to the bill.
Also exempt from the overtime requirement is any person under 18 years of age who is employed as a babysitter for a minor child in the employer’s home, as well as any parent, grandparent, spouse, sibling, child, or legally adopted child of the domestic work employer.
Domestic employers in California should be aware that in addition to complying with California’s Domestic Worker Bill of Rights, they must also comply with existing federal law regulating domestic caregivers. Under the Federal Labor Standards Act (FLSA), employers with non-live-in nannies (i.e., personal attendants to care for a child) remain responsible for complying with federal overtime rules which require overtime pay of one and one-half times the nanny’s regular rate of pay for all hours worked over 40 in a workweek. Further, an employee who provides at-home companionship for adults who cannot care for themselves due to advanced age or physical or mental infirmity remains exempt from the FLSA’s minimum wage and overtime requirements.
The new bill does not affect the wage and hour requirements of other domestic work employees, such as housekeepers, maids and other workers engaged in the maintenance of private households and their premises. Those employees generally remain entitled to overtime pay at one and one-half times their regular rate of pay for all hours worked in excess of eight hours and up to 12 hours in any workday, in excess of 40 hours in any workweek, and for the first eight hours worked on the seventh consecutive day of work in a workweek. Those employees also remain entitled to double-time for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek. Such housekeepers, maids, and other domestic work employees who are not personal attendants remain entitled to meal and rest periods.
The bill is set to expire on January 1, 2017, unless it is extended. In the meantime, the bill requires the Governor to convene a committee to study and report the impact of this overtime requirement on domestic workers and their employers.
SB 770 broadens the definition of family within the Paid Family Leave (PFL) program to allow workers to receive the partial wage replacement benefits while taking care of seriously ill siblings, grandparents, grandchildren, and parents-in-law. The law takes effect July 1, 2014. To learn more about PFL, click here.
Governor Edmund G. Brown Jr. will join business owners, legislators and dozens of working Californians tomorrow in Los Angeles and Oakland to sign AB 10 which will raise the minimum wage in California from $8.00 per hour to $10.00 per hour. AB 10 will raise California’s minimum wage in two one-dollar increments, from $8 per hour today to $9 per hour, effective July 1, 2014 and from $9 per hour to $10 per hour, effective January 1, 2016. Click here to see the new law.
In the most recent newsletter we discussed the challenges of working with alcoholics. A case out of California brings home why this is such a risky liability exposure. In the case of Purton v. Marriott a bartender, who was drinking at a company holiday party, drove home drunk and then decided to come back to the party to drive another drunk employee home. It was on that trip that he rear-ended Dr. Purton at approximately 100 MPH, killing him. He pleaded guilty to gross vehicular manslaughter while under the influence of alcohol and received a six-year prison sentence. To keep the story short, the court ruled that the bartender’s actions where attributable to the employer as a foreseeable cause of allowing him to be intoxicated and drive. There are some courts that rule the harm itself had to take place while acting in the course and scope of employment. In California, Washington and other more “liberal” states the rule is that only the alcohol consumption had to occur during work hours.
Bottom line: Don’t let your employees drink and drive in any jurisdiction.
“Great work is at the edge of your confidence.” – Michael Bungay Stanier, Box of Crayons
This issue discusses:
- Editor’s Column: What Can Employers Do to Prevent Psychiatric Stress Claims?
- Assessing the Effectiveness of Wellness Programs
- Workplace Harassment: Can’t We All Just Get Along?
- What’s Most Important in HR?
- The ADA After FMLA
- Eight Key Provisions in Your Sales Commission Agreement
- California Auto Dealer Must Pay for Waiting Time of Repair Staff
- Question of the Month
We have also provided you with the Form of the Month.
Please click here to view the newsletter in PDF.
Editor’s Column: What Can Employers Do to Prevent Psychiatric Stress Claims?
According to the California Department of Industrial Relations, Division of Workers Compensation, employers can and should try to prevent these unwanted exposures. Here’s what they recommend…which just so happens to be good management practices, period:
For victims of traumatic, violent or frightening events, critical incident debriefings and trainings are appropriate as soon as possible after the incident. Post-trauma support groups and individual counseling might also be helpful.
Employers can reduce stress from changes in the workplace by ensuring effective communication with employees by:
- Using newsletters, staff meetings, and individual contact between managers and workers.
- Establishing internal complaint procedures and informal dispute resolution systems as outlets for employees to have their concerns heard and addressed.
- Soliciting formal and informal input from employees about ways to make the work environment more productive and less stressful.
Managers can also improve the management of job-related injury cases so that physical injuries don’t lead to psychiatric stress injuries. The same principle applies to dealing with employees who have pre-existing mental problems or stress issues that might be subject to complications in the workplace.
In addition to considering modified duty adjustments and rehabilitation needs for injured workers, supervisors can help resolve problems or personal issues that don’t relate directly to the injury, but can impact employees’ readiness to return to work.
Firms should implement confidential employee assistance programs that acknowledge the interrelationship between personal and work problems and encourage stressed employees to seek help.
Be sure to provide managers and supervisors with training on the basics of effective supervision. Here are some helpful tips:
- Set realistic goals for workers.
- Make sure that workers have the resources and authority to meet assigned responsibilities.
- Give individuals an opportunity to offer input on actions that affect their jobs.
- Monitor and document worker performance.
- Let workers know how they’re doing and what the expectations are for improvement.
- Reinforce and reward good job performance.
- Learn how to cooperate with resolution efforts.
- Maintain confidentiality.
- Learn constructive confrontation with troubled employees.
- Identify behavior patterns that might indicate problems requiring professional assistance.
- Make effective referrals to employee assistance programs.
- Comply with legal restrictions against any form of sexual harassment or discrimination.
Sounds like common sense to me.
Assessing the Effectiveness of Wellness Programs
The jury is still out on whether wellness programs generate a significant return on investment. The fact is that getting people to change their behavior is difficult – which reminds me of an old joke I’ve changed for these circumstances:
Question: How many wellness coaches does it take to change a light bulb?
Answer: Only one, but the light bulb really has to want to change!
Those who promote wellness programs claim that they’re the be-all and the end-all of healthcare problems. This is clearly an overstatement: there has been little evidence of these programs dramatically reducing the costs of healthcare (See the Rand Report). Of course, there are other reasons for businesses to encourage wellness programs for their workers—reduced absenteeism/ increased presenteeism, higher productivity, less use of sick pay, etc.
In light of a 2012 study of client outcomes by Wellness Coaches of USA, which paints a much rosier picture than does the Rand report, health care cost expert Wendy Lynch recommends that businesses ask these questions in evaluating the effectiveness of wellness programs:
- How much money did the program spend on people who didn’t change?
- How many people gained weight or increased their health risk?
- To what extent were any improvements in health sustained?
- What was the control group or company used to compare results? Would the impact have been any different without the program?
- Which risk factors changed (i.e. did employees have more servings of vegetables?)
- What was the cost per risk change?
As Wendy reminds us, every dollar spent on benefits (and wellness programs) comes from the employees’ pocket—which means that you’re substituting these programs for better wages, training, bonuses, or new equipment/technology. Ask yourself if investing in these areas will be more cost-effective in helping employees do their jobs than offering them wellness programs.
Although I’m a great believer in wellness, I believe that people are primarily self-motivated. I live a healthy life because I am personally motivated to do so, but most people don’t have the same motivation. As Wendy Lynch will tell you, factors such as management of sick leave, compensation plans, and return-to-work programs play a far greater role than wellness programs in curbing employer health care costs.
Wendy also noted that the Wellness Coaches study compares 2012 client outcomes to those of 2009. We all remember 2009 as one of the most stressful years in recent memory, which had a significant effect on the health, exercise level, and general disposition of employees. It’s like saying that a company made more money in 2012 than in 2009, while ignoring the impact of the recession. Sometimes variables completely outside of your control have a greater impact than those you can manage.
Join us on August 1st at 2PM EST for a webinar with Wendy entitled Winning the Race to Optimal Performance: Best Practices in Policy Alignment & Transparency.
Workplace Harassment: Can’t We All Just Get Along?
This case reminds me of the Bronx neighborhood where I grew up, except that it happened in upstate New York. The employer was a door-to-door transport company for the elderly and disabled. Apparently the Italian-American managers and workers gave their Black and Puerto Rican workers a hard time. The question in the case was whether their conduct, as boorish and bullying as it was, constituted racial harassment.
The court decided that there was enough evidence of racial hostility to take the case to trial in Rivera v. Rochester Genessee Regional Transportation Authority.
Comment: One has to believe that management had a good idea that this conduct was going on and chose to look the other way. It could be Christians abusing Muslims, men harassing women, or straights hassling gays. The point: Whenever you have a mix of cultures, races, genders, or sexual orientations in the workplace you have the potential for poor conduct. Smart employers will recognize this challenge and meet it head on by banning abusive behavior. I encourage HR That Works Members to review the Diversity and Discrimination Training Module and related materials.
What’s Most Important in HR?
Here’s the answer to this question by more than 200 companies in the 2013 HR That Works Member Survey.
This is one of my favorite questions because helps clarify what is really most important to companies about HR. (Unlike a competitive program, which claims that the No. 1 job of HR is preventing lawsuits!) Interestingly, retention squeaked back into second place for the first time since 2008, which means that the economy is improving and employers are concerned about turnover as jobs begin to open up. As in past years, employers are highly concerned about training. HR That Works has more than 130 training titles, as well as a Learning Management System (LMS).
Of course, employers remain concerned about getting poor performers off the bus and dealing with the Affordable Care Act. Again, HR That Works offers tools, webinars, etc. and other programs to help with these concerns.
P.S. Although legal exposures tend to get all the press, preventing lawsuits came within All Other Responses. This is just one reason why HR That Works is unique—we encourage practices that help grow companies, not just protect them!
The ADA After FMLA
In Sanchez v. Swissport, Ms. Anna Sanchez was employed by Swissport from August 2007 until July 14, 2009 as a cleaning agent. Around February 27, 2009 she was diagnosed with a high-risk pregnancy that would require bed rest. To help, Swissport provided her 19 weeks of leave, consisting of accrued vacation time, in addition to the time allowed by the California Family Rights Act (FMLA equivalent) and the California Pregnancy Disability Leave Law (which offers four months of leave). Essentially, Sanchez told the company that she would be able to come back to work after delivering her baby on October 19. Instead, the company terminated her on July 14, claiming that it had exhausted all its legal obligations.
The question in the case is whether The Fair Employment and Housing Act (the ADA equivalent) applies even after the plaintiff had exhausted all of her leave and—big surprise—the answer is yes. Essentially, Swissport had to show that keeping her job open for another 12 weeks or so would have been an undue burden. Unfortunately, because the company never entered into an accommodation dialogue with Sanchez, the case was allowed to continue to trial.
The lesson for employers is clear: No matter the state you are in, you must continue the accommodation dialogue. If an extended absence would pose an undue burden, you had better be able to prove this; guessing will only get you in trouble.
Eight Key Provisions in Your Sales Commission Agreement
Many an employer has engaged in litigation with current or former salespeople who claimed that they were not paid commissions earned. Some states, such as California, require companies to put commission agreements in writing, which is a good idea, whether or not it’s mandatory. Here are provisions that should be found in most all commission agreements.
- The date of earning commissions. Is it the time the sale was made, the money was collected, etc.?
- The date of paying commissions. This is usually the next available pay period.
- The management of draws against commissions. How long does the draw last? What if commissions never exceed the draw?
- Dealing with commissions when employment is terminated.
- The treatment of commission reductions when a customer fails to pay or returns an item.
- The commission split if the sale involves more than one person.
- The level of profitability required for a sale to earn a commission.
- The period of commission payments if the sale involves ongoing payments (i.e. a service contract) For example, a salesperson might receive commissions for six months, after which the item becomes a house account).
HR That Works has an extensive Employment Agreement which includes commission provisions.
California Auto Dealer Must Pay for Waiting Time of Repair Staff
In Gonzales v. Downtown LA Motors, a California appeals court ruled that the employer’s method of compensation violated minimum wage law because state law prohibits an employer from paying employees for all hours worked by averaging total compensation over total hours worked in any period. The court ordered the auto dealer to pay minimum wage for the waiting time of repair mechanics.
Most auto repair facilities pay mechanics a flat rate for a repair job based on its “book value.” This piecework approach satisfies minimum wage obligations if the total compensation paid over the pay period averages at least minimum wage both for repair and waiting time. However, the California statute differs from federal law because it requires paying minimum wage for “each and every separate hour worked.”
The court noted that this requirement is distinct from the federal statute, which “requires payment of minimum wage to employees who in any workweek are engaged in commerce.”
You can imagine the potential exposure to similar claims for auto repair facilities in California. For example, in this case, the trial court indicated that the plaintiffs lost $553,653 in uncompensated time—and that the value of the waiting time, including interest was $1,555,078. The ruling also awarded penalties of $237,840 for the willful failure to pay all wages owed at the time the employees were terminated.
The Gonzalez case included amici curie briefs filed by the California Employment Lawyers Association, the National Automobile Dealers Association, the California Automotive Business Coalition, the California New Car Dealers Association, and the Alliance of Automobile Manufacturers. This decision will remain the law unless the California Supreme Court overturns it (which is unlikely), or the state legislature changes the existing rule. Either way, it represents an enormous windfall for auto repair workers in the state and their attorneys.
Question of the Month
How would you deign a compensation package for a self-directed work team in an office setting?
- Understand what you would have to pay to hire these folks today. The market determines their going rate, not you.
- Pay up to 15% above market grade in total compensation to attract top 10% employees. I find that paying more returns little value.
- Reward what you want to incentivize…team play. Offer a bonus of 10% to 15% based on the team’s productivity. Let them own the benchmarks where possible. Publish progress reports where everyone can see it.
- When employees or the entire team go the extra mile, give them “spot rewards:” tickets, cash, an afternoon off, etc. Surprise them and you will motivate them.
- Give rewards for new ideas generated at monthly suggestion meetings.
Do this, and you’ll be far ahead of most. I don’t like making things complicated—the above suggestions are about as simple and straightforward as possible.
Is there anything you would add to this list? Please e-mail your answer to email@example.com.
Form of the Month
Employee Value Checklist (PDF) – In our hypercompetitive and stressed work environment, there’s no substitute for an employee understanding how they bring value to your company. Smart companies will actually help to identify the benchmarks supporting any one of these value propositions.
Click here to to listen to this month’s newsletter podcast.
REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:
©2013 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.
The Worklaw® Network has put together excellent summaries of the recent US Supreme Court decision on same sex marriages and regarding supervisors and retaliation. These are must read articles. A few of my quick observations:
- These were all tightly contested 5-4 cases with Chief Justice Kennedy being the swing vote.
- The United States v. Windsor same sex marriage case simply means there must be equal benefits under federal law and some state laws. So if a state allows same sex marriage then they must get equal benefits. This will also affect the FMLA definition of what is a spouse.
- In Vance v. Ball State the court ruled that an employee is a supervisor in Title VII harassment cases only if empowered by the employer to take a “tangible” employment action against the plaintiff (hiring, firing, etc.). The mere ability to direct the plaintiff’s tasks, and nothing more, does not make them a supervisor. The court drew a very narrow definition of a supervisor, which reduced the breadth of direct liability for the acts of these people. For example the California definition of supervisor is much broader under its laws. None of this matters of course until and unless somebody sues you. I will note that this is a “low level” discrimination case that was originally filed in 2006! I am sure it costs hundreds of thousands on both sides to get to this point, not including all the public resources utilized. How ridiculous. One reason why the conservative Supreme Court is looking to clamp down these cases. Note that they also threw the EEOC regulations/definitions under the bus.
- Lastly, in University of Texas v. Nassar, the court did some more narrowing saying that retaliation cases require a “but for” standard to show discrimination. What this means to you is this: In the past if somebody filed a complaint they would get a free pass on discipline for a few months so as to not trigger a retaliation claim. Now you don’t have to do that anymore, at least under Title VII. If you can prove that the action was in part motivated due to performance, then the employer wins. As in the Vance case, the court pointed to perhaps poor legislative drafting, not some moral imperative on their part. Of course the vigorous defense felt this undermined Title VII protections which it did.
- Looking at how deadlocked Congress has been you can expect these decision to avoid legislative cleanup for at least some time. You must also remember that in many states, like California, these decisions have no effect as broader state laws already apply.
If you are in any of the following businesses you are now required to post a Human Trafficking Notice as required by Civil Code Section 52.6:
- On-sale general public premises licensees under the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000) of the Business and Professions Code).
- Adult or sexually oriented businesses, as defined in subdivision (a) of Section 318.5 of the Penal Code.
- Primary airports, as defined in Section 47102(16) of Title 49 of the United States Code.
- Intercity passenger rail or light rail stations
- Bus stations.
- Truck stops. For purposes of this section, “truck stop” means a privately owned and operated facility that provides food, fuel, shower or other sanitary facilities, and lawful overnight truck parking.
- Emergency rooms within general acute care hospitals.
- Urgent care centers.
- Farm labor contractors, as defined in subdivision (b) of Section 1682 of the Labor Code.
- Privately operated job recruitment centers.
- Roadside rest areas.
- Businesses or establishments that offer massage or bodywork services for compensation and are not described in paragraph (1) of subdivision (b) of Section 4612 of the Business and Professions Code.
More information is available at http://oag.ca.gov/human-trafficking/sb1193
The model notice can be obtained by going to http://oag.ca.gov/sites/all/files/agweb/pdfs/ht/HumanTraffickMandate_ENG.pdf
The bill itself can be found at http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_1151-1200/sb_1193_bill_20120924_chaptered.html
We were recently asked about the propriety in California of deducting wages from an employee’s paycheck for damage they were caught on video causing. The bill was over $1,500! Here was my response:
First of all please remember to look at the BNA state law summaries on HR That Works.
Here’s what it says:
Employers cannot deduct from employee wages for any cash shortages, breakages, or loss of equipment, unless the shortages, breakages, or losses are caused by employees’ dishonest or willful acts or gross negligence.
[Note: In enforcing this prohibition, the Department of Labor Standards Enforcement takes so narrow a view of the definition of “gross negligence” that an act must be criminal to qualify. Employers are advised to get a ruling from the DLSE before making deductions from wages on the basis of employee negligence, because a misjudgment can result in an employee's recovery of wages due and penalties. (Dept. of Labor Standards Enforcement Letter No. 2003.02.24 (2003)]
So I dug even further. The DIR website says the same thing but in more detail and throws in a big time caution:
Q. If I break or damage company property or lose company money while performing my job, can my employer deduct the cost/loss from my wages?
A. No, your employer cannot legally make such a deduction from your wages if, by reason of mistake or accident a cash shortage, breakage, or loss of company property/equipment occurs. The California courts have held that losses occurring without any fault on the part of the employee or that are merely the result of simple negligence are inevitable in almost any business operation and thus, the employer must bear such losses as a cost of doing business. For example, if you accidentally drop a tray of dishes, take a bad check, or have a customer walkout without paying a check, your employer cannot deduct the loss from your paycheck.
There is an exception to the foregoing contained in the Industrial Welfare Commission Wage Orders that purports to provide the employer the right to deduct from an employee’s wages for any cash shortage, breakage or loss of equipment if the employer can show that the shortage, breakage or loss is caused by a dishonest or willful act, or by the employee’s gross negligence. What this means is that a deduction may be legal if the employer proves that the loss resulted from the employee’s dishonesty, willfulness, or grossly negligent act. Under this regulation, a simple accusation does not give the employer the right to make the deduction. The DLSE has cautioned that use of this deduction contained in the IWC regulations may, in fact, not comply with the provisions of the California Labor Code and various California Court decisions. Furthermore, DLSE does not automatically assume that an employee was dishonest, acted willfully or was grossly negligent when an employer asserts such as a justification for making a deduction from an employee’s wages to cover a shortage, breakage, or loss to property or equipment.
Labor Code Section 224 clearly prohibits any deduction from an employee’s wages which is not either authorized by the employee in writing or permitted by law, and any employer who resorts to self-help does so at its own risk as an objective test is applied to determine whether the loss was due to dishonesty, willfulness, or a grossly negligent act. If your employer makes such a deduction and it is later determined that you were not guilty of a dishonest or willful act, or grossly negligent, you would be entitled to recover the amount of the wages withheld. Additionally, if you no longer work for the employer who made the deduction and it’s decided that the deduction was wrongful, you may also be able to recover the waiting time penalty pursuant to Labor Code Section 203.
Bottom line: I’m not sure you want to invite the DIR to your company to make sure your deduction is proper. But since it was recorded it would be hard to say it is not willful. Problem is even the DIR says the regulations may not comply with the law! So while you may be able to make the deduction without permission, the safest thing to do is to ask them to voluntarily agree to a paycheck deduction, get a ruling from the DLSE first, or sue them in small claims!
While much is being made about the NLRB aggressively enforcing Section 7 and 8 employee rights, the fact is the California Labor Code, and maybe that your state as well, carries similar provisions:
232. No employer may do any of the following:
(a) Require, as a condition of employment, that an employee refrain from disclosing the amount of his or her wages.
(b) Require an employee to sign a waiver or other document that purports to deny the employee the right to disclose the amount of his or her wages.
(c) Discharge, formally discipline, or otherwise discriminate against an employee who discloses the amount of his or her wages.
232.5. No employer may do any of the following:
(a) Require, as a condition of employment, that an employee refrain from disclosing information about the employer’s working conditions.
(b) Require an employee to sign a waiver or other document that purports to deny the employee the right to disclose information about the employer’s working conditions.
(c) Discharge, formally discipline, or otherwise discriminate against an employee who discloses information about the employer’s working conditions.
(d) This section is not intended to permit an employee to disclose proprietary information, trade secret information, or information that is otherwise subject to a legal privilege without the consent of his or her employer.
Bottom line: If an employee complains about working conditions talk to a lawyer before you reprimand or fire them!