Articles, news & events

Read the latest news from Scali Rasmussen, including legal alerts and event listings.

Just in time for the summer

A refresher on unpaid interns

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In January 2018, the U.S. Department of Labor (DOL) endorsed the primary beneficiary test for assessing whether interns qualify as employees under the Fair Labor Standards Act (FLSA). The test is a seven-factor test for determining interns’ status that was laid out by the Second Circuit in its 2015 ruling, Glatt v. Fox Searchlight Pictures Inc. as the way to distinguish employees from bona fide interns under the FLSA. Courts have analyzed the “economic reality” of interns’ relationship with their employer to determine which party is the primary beneficiary of the relationship. The standard has been applied in various cases where courts have ruled that interns in a variety of industries, as the primary beneficiaries of their internships, do not qualify as employees for FLSA purposes and cannot collectively pursue claims for misclassification and wage violations under that statute.

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As we previously reported, in an effort to better address pay disparity issues based on gender and race, the Obama-era EEOC announced in February 2016 that it would seek to revise the EEO-1 data collection report that employers with 100 or more employees and certain federal contractors are required to file each year with sex, race and ethnicity data concerning their workforces. Specifically, the report would be expanded to contain a “Component 2” that would include data on employees’ W-2 earnings and hours worked. However, in August 2017, the current administration froze this new requirement in order to re-evaluate whether the burden it would impose on employers is justified. This resulted in litigation by groups who sought to have the proposed new requirements upheld. A federal district court agreed and ordered the EEOC to more forward with the new expanded EEO-1 reporting requirements.

Dynamex is a year old. Can you still have independent contractors?

Probably not, if your business depends on them!

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The 2018 Dynamex v. Superior Court case radically modified California’s test for determining when a worker is an independent contractor or an employee and signaled further divergence between state and federal law. As businesses from strip clubs to delivery services to home-based cleaning services have struggled to determine how to apply the so-called “ABC Test” of Dynamex to their workplaces going forward, the Ninth Circuit Court of Appeals in May 2019 intensified the urgency of their situation when it ruled in Vazquez v. Jan-Pro Franchising Int’l that the Dynamex decision applies retroactively.

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“Rita is a powerhouse when it comes to complex automotive transactions, whether involving privately or publicly held companies. Rita’s joining our team not only reunites us with a dear friend, but substantially adds to our already deep transactional practice,” said firm Founder and Managing Partner, Christian Scali. “She understands the auto business, knows what clients are looking to accomplish and has the judgment and experience to navigate the gray areas of law to find the best solutions.”

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The California Court of Appeal’s decision in Ward v. Tilly’s, Inc. is a warning that employees must be provided reporting time pay when an employer requires its employees to call in two hours before a potential shift to learn whether the employee is needed for work and the employee is told not to come into work that day. To be clear, “reporting to work” is not limited to the when the employee physically appears at work but is sent home early.

Employers take notice!

Replace your outdated notices with these newly-released ones

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New publications were released in March of 2019 pertaining to employers’ obligations to notify employees of their rights related to family medical, parental, disability and pregnancy leaves. Specifically, the California Employment Development Department (EDD) released two new brochures pertaining to disability leave benefits and family care/medical leave benefits that provide updated information on the amount and calculation of paid benefits, and other clarifications. In addition, the Department of Fair Employment and Housing (DFEH) issued a new notice on family care and medical leave, and pregnancy disability leave. While the previous version of this DFEH notice applied only to employers with 50 or more employees, this new notice also applies to employers with 20-49 employees who are now covered under the recently-enacted New Parent Leave Act.

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Plaintiffs’ attorneys in California have long been scrutinizing their clients’ paystubs, looking for any excuse to file a claim against defendant employers for wage statement violations. Considering the Labor Code’s requirement that wage statements contain the “name and address of the legal entity that is the employer,” (Lab. Code § 226(a)) some plaintiffs have argued that paystubs reflecting only a company’s fictitious business name (“FBN”) violate the Labor Code. In one recent case, the plaintiff argued that the employer, YRC, Inc., erred in listing its fictitious business name, YRC Freight, on plaintiff’s paystubs. Under an additional theory of liability, the plaintiff alleged that the employer violated the Labor Code by failing to include the employer’s Zip+4 Code (the unnecessary last four numbers sometimes added to zip codes).

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California employers and dealerships are regularly getting hit with class action wage and hour claims, or lawsuits under the Private Attorneys General Act (PAGA), which presently allows a single employee to bring claims for all others who suffered any violation of numerous labor statutes. One common issue in these cases is meal breaks. Employers should be aware of potential meal break pitfalls. This article will help you avoid them.

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