Labor & Employment Law Blog

On March 11, 2021, the U.S. Department of Labor announced plans to rescind two final rules which were promulgated under the prior administration: (1) the Independent Contractor Rule, which sets forth the standard under which a worker may be considered an independent contractor or employee under the Fair Labor Standards Act (FLSA); and (2) the Joint Employer Rule, which provides guidance for determining joint employer status when an employee performs work for his or her employer that simultaneously benefits another individual or entity.

On January 6, 2021, the Department of Labor (“DOL”) announced the new final rule for worker classifications called the “economic reality” test. The new DOL final rule provided that two core factors were to be examined to determine whether a worker is properly classified as an independent contractor under federal law: (1) the nature and degree of control over the work; and (2) the worker’s opportunity for profit or loss based on initiative and/or investment. As previously discussed here, these requirements are much less stringent than the “ABC” test adopted by California, which requires that the worker perform work outside the usual course of the hiring entity’s business and that the worker is customarily engaged in an independently established business of the same nature.

On January 15, 2021, in the case of Scalia v. Department of Transportation and Public Facilities, 985 F.3d 742 (2021), the Ninth Circuit Court of Appeal decided that for an employee, who works a rotational schedule of seven days on, followed by seven days off, both his “on” and “off” weeks shall be used to calculate the length of “12 workweeks of leave” under the Family and Medical Leave Act of 1993 (FMLA).  As such, when a rotational employee takes continuous leave, both his on and off weeks count toward his “workweeks of leave” under Section 2612(a)(1) of the FMLA.

On February 8, 2021, the United States Ninth Circuit Court of Appeals issued a decision clarifying the circumstances under which a per diem benefit must be included in the regular rate of pay for overtime purposes under the Fair Labor Standards Act (FLSA).  The court held that since per diem benefits functioned as compensation for work rather than as reimbursement for expenses incurred by traveling healthcare clinicians, they were improperly excluded from the clinicians’ regular rates of pay for purposes of calculating overtime pay under federal law. Clarke v. AMN Servs., LLC (9th Cir., 2021) No. 19-55784, 2021 WL 419473.

In a welcome surprise to the trucking industry, the Ninth Circuit Court of Appeals on January 15, 2021, upheld the Federal Motor Carrier Safety Administration’s (“FMCSA”) December 2018 determination that California’s meal and rest break rules (“MRB rules”) are preempted by federal law and do not apply to commercial truck drivers engaged in interstate commerce.  California’s strict meal and rest break laws require more breaks, more often, and with less flexibility as to timing than the federal hours-of-service regulations do for commercial drivers.  The decision is a welcome reprieve for the trucking industry which has faced a fair share of wage and hour battles in California over the last decade.

Unfortunately, there can be no doubt that the political environment in the United States right now has everyone a little bit on edge, especially in the midst of an ongoing international health crisis.  Passions are running high, and tempers are flaring; however, California employers have particular cause to exercise caution and diligence when their employees voice and/or demonstrate their political beliefs.

On December 22, 2020, the United States Department of Labor (“DOL”) finalized a rule opening tip pools to employees who do not normally receive tips themselves. As the restaurant industry looks towards easing lockdown restrictions and a hopeful return to “business as usual” in 2021, California restaurants should be mindful of the impact of the DOL’s new regulations.

If this sounds like an oxymoron to you, join the crowd.  For years, California employers have relied on the principle that plaintiffs cannot prevail under Government Code section 12940(k) for “failure to prevent” discrimination (or harassment or retaliation) if the plaintiff does not prevail on the underlying claim.  The failure to prevent cause of action has been viewed as a derivative cause of action that stems exclusively from a finding that discrimination, harassment or retaliation actually occurred.  Carter v. California Dept. of Veterans Affairs (2006) 38 Cal. 4th 914, 925, fn. 4.  The Carter rule has been used as a successful tool for employers when filing motions for summary judgment and eliminates “failure to prevent” tag-a-long claims when the underlying law is not broken.

On January 4, 2021, a California appellate court held an employer waived its right to enforce an arbitration agreement against a truck driver who filed a wage and hour class action against it, by waiting almost twenty months after the case was filed to make an arbitration demand.  The court held that the delay was unjustified because the employer’s conduct in defending the case in court for that period of time was inconsistent with its right to arbitrate and because such delay prejudiced the employee’s ability to use the benefits and efficiencies of arbitration. Garcia v. Haralambos Beverage Co., No. B296923, 2021 WL 22015 (Cal. Ct. App. Jan. 4, 2021).

The U.S. Department of Labor (“DOL”) just announced a “final rule” setting forth the standard for worker classifications – employee versus independent contractor – under the Fair Labor Standards Act (“FLSA”).  The FLSA establishes federal minimum wage, overtime pay, recordkeeping, and youth employment standards for the public and private sectors.  All employers in the United States must abide by the FLSA; however, many states, including California, set forth more stringent requirements for worker classifications.