California Labor Code §2802 requires an employer to indemnify (reimburse) its employees for all necessary expenses or losses incurred in the course of his or her duties. This includes an employee’s expenses when an employee uses their own vehicle for business purposes. Many employers reimburse their employees on a per mileage basis for use of their own vehicle during business errands.  The reimbursement is used to cover the costs (fuel, insurance, etc..) associated with the use of the vehicle for non-personal use.  However, many employers are not sure what mileage reimbursement rate they should use in making the reimbursement calculation.

While there is no specific reimbursement rate provided for in the Labor Code, there is guidance on the matter in both the Opinion Letters issued by the California Department of Labor Standards Enforcement (DLSE) and Labor Code Section 2802.

The DLSE has stated in its manual and opinion letters that it in the absence of other “evidence to the contrary” it will consider the use of the IRS mileage allowance rate as satisfying the requirement that the employer reimburse the expense’s incurred in use of an employee’s car. Businesses using the IRS mileage rate for calculating reimbursements should therefore be safe from under reimbursing their employees and violating Labor Code Section 2802.

On December 23, 2009, the Internal Revenue Service (“IRS”) issued the mileage rates used to calculate the deductible costs of operating an automobile for business purposes in 2010. Beginning on January 1, 2010, the mileage rates for the use of a car (also vans, pickups or panel trucks) will be $.50 cents per mile for business miles driven.

Failing to reimburse your employees at the proper rate subjects the business to a potential lawsuit, which could seek damages for the amount not properly reimbursed, interest from the date on which the employee incurred the necessary expenditure or loss ,and the employee may also seek all reasonable costs (including attorney’s fees incurred by the employee enforcing the rights granted by Labor Code §2802).

Double check the rates you are using when reimbursing employees for use of their personal vehicle for business purposes.

Apparently, there is a new set of class action cases that have been filed recently against several large employers for alleged “seating” violations under the California Labor Code (“Labor Code”). In these cases, plaintiffs seek to enforce Section 14 of the relevant Industrial Welfare Commission (“IWC”) Wage Orders, which until recently was a largely unnoticed provision of the Order that requires employers to provide seating for their employees under certain circumstances. While past case law gave employers some comfort, a new Northern District of California decision, Curie-White v. Blockbuster, has expanded damages available to plaintiffs in such cases, and will likely lead to further claims being filed.

Section 14 of IWC Wage Order 7 (entitled “Seats”), which is typical of several other industry specific wage orders, requires that (a) all workers shall be provided with suitable seating when the nature of the work reasonably permits it; and (b) when the nature of the work requires standing, the employer must provide reasonable seating in proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.  However, Section 14 does not contain its own penalty provision and does not address seating claims.

The new class action claims assert that employers who fail to comply with Wage Order seating requirements violate Section 1198 of the Labor Code, which makes it illegal to employ an employee under conditions that are prohibited by an IWC Wage Order.  These new seating claims have been brought under the Private Attorneys General Action of 2004 (“PAGA”), which allows recovery for violations of all provisions of the Labor Code except those for which a civil penalty is specifically provided.  PAGA penalties consist of $100 for each aggrieved employee per pay period for the first violation, and $200 for each aggrieved employee per pay period for each subsequent violation.

Prior to the decision in Curie-White v. Blockbuster, the only court opinion to address a seating claim was in Hamilton v. SF Hilton and the decision there weighed heavily in favor of the employer.   However, In Curie-White, the court significantly undermined several of the key defenses that had succeeded in the Hamilton case.  Most significantly, the court ruled that plaintiffs may seek civil penalties under PAGA because the penalty provision of the Wage Order “does not provide a penalty for the violation…specifically a failure to provide seats for employees.”

Given the conflict between the Hamilton and Curie-White decisions, it is likely that the issue will continue to be litigated in the more recent seating claims cases.  The ultimate resolution in those cases will likely determine whether the these seating claims form a new fad in class action litigation.

WHAT TO DO:

• Document any efforts that have been made to determine whether seats are necessary;

• Review and analyze current job descriptions and customer service standards to determine whether they clearly identify jobs where continual mobility and standing are essential functions of the job, and incorporate those standards into the job descriptions;

• Provide an adequate number of suitable seats in a nearby break room and allow employees to use the seats when it does not interfere with the performance of their duties.

Here is a link to Wage Order 7, which contains the relevant Seating Requirements at Section 14

Is there a new wave of Class Action cases coming in California?

In September 2009, the First Appellate District of the California Court of Appeal affirmed a Marin County trial court decision awarding an Albertson’s employee $200,000 in damages for a FEHA violation (CA Gov’t Code Sections 12900-12996).

The employee, a cashier, sued Albertson’s for failure to provide her with reasonable accommodations for her disability.   She had notified Albertson’s about one year prior to the event, due to side effects from her chemotherapy treatment, she needed to drink water constantly and, consequently, had to urinate frequently.   Albertson’s normally did not allow its employees to have beverages at the check-stand.  However, when she told the managers what she needed, she was told it was not a problem and that she was to let the duty-managers know when she needed to go to the bathroom and they would cover for her.

In February 2005, while the employee was on duty at the check-stand, only one manager was in the store, along with a courtesy clerk.  The employee called several times to the back of the store requesting a bathroom break, but was denied because the manager was too busy.   Eventually the employee, unable to control the urinary urge, and unable to leave the check-stand, urinated on herself in front of customers.  The employee left the store in tears and subsequently underwent a major depression and hallucinations of continuing body odor.  She entered a psychiatric hospital.  There is no evidence that the employee mentioned her accommodation to the on-duty manager that day, or that the on-duty manager was aware of the accommodation granted to the employee.

The jury heard evidence of the employee’s susceptibility to emotional distress.  She had grown up in El Salvador during a period of civil war, had seen people killed, had been robbed at gunpoint, and underwent a myriad of other stressful experiences.  Albertson’s position was that the employee was unusually susceptible to depression, contending that the February 2005 incident triggered a shift from general anxiety disorder to a more severe psychotic disorder.  The jury disagreed.

Albertson’s had a written procedure for processing employee requests for reasonable accommodation, and decisions about such accommodation were made by Albertson’s HR mangers for the Northern California district, not by store managers.  If a store manager granted an ongoing accommodation to an employee, a record of such should be made to pass along to a new manager, but sometimes no record was made.  None was used in the employee’s case.

Under the FEHA, an employer that fails to make reasonable accommodation for an employee’s known physical disability engages in an unlawful employment practice.  It is also an unlawful employment practice for an employer to fail to engage in a good faith interactive process with the employee to determine an effective reasonable accommodation if an employee requests one.  These two aspects are separate.  Albertson’s argued that the employee had a continuing duty to notify managers of her disability and agreed-upon accommodation.  The Court found otherwise.  Once a reasonable accommodation has been granted, then the employer has a duty to provide it.

Employers need to make sure they are providing reasonable accommodations that do not pose an undue hardship to the employer. And as this case highlights, it is also important to continue engaging in the good faith interactive process to determine whether the accommodation is working and whether your supervisory personnel are properly implementing the accommodation.

This post provides an update for an earlier post on the use of incentives in wellness programs. The EEOC’s final rules interpreting Title II of the Genetic Information Nondiscrimination Act (GINA) had been anticipated in November, but the EEOC now intends to issue a final rule on  this month, according to its Semiannual Regulatory Agenda (pdf) released online yesterday.

Title II of GINA, which prohibits genetic information discrimination in employment, took effect on November 21, 2009. The regulation applies to employers with more than 15 employees. Under Title II it is illegal to discriminate against employees or applicants because of genetic information. Title II of GINA prohibits the use of genetic information in making employment decisions, restricts acquisition of genetic information by employers and other entities covered by Title II, and strictly limits the disclosure of genetic information.

The EEOC enforces Title II of GINA (dealing with genetic discrimination in employment). The Departments of Labor, Health and Human Services and the Treasury have responsibility for issuing regulations for Title I of GINA, which addresses the use of genetic information in health insurance.

The U.S. Equal Employment Opportunity Commission (“EEOC”) announced the release of a new mandatory supplement to the “EEO Is The Law” poster, which is a required posting for private employers, state and local governments, educational institutions and labor organizations. The new supplement is available for download here.

The new poster supplement reflects updated federal employment discrimination law, including the Americans with Disabilities Act Amendments of 2008. It also contains a new section about the Genetic Information Nondiscrimination Act of 2008 (“GINA”), effective November 21, 2009, along with updated EEOC contact information. There are also revisions affecting employers holding federal contracts or subcontracts, supplementing the “EEO Is The Law” poster promulgated by the Office of Federal Contract Compliance Programs (“OFCCP”) in August 2008. These revisions include a change to the Individuals with Disabilities section, a change to the Vietnam Era, Special Disabled Veterans section, a new section regarding Retaliation, and an update to the OFCCP contact information.

Employers may comply with the new requirement by downloading the supplement and posting it alongside their September 2002 EEOC poster.