So what’s it going to be for 2015? Get up and run three miles every morning? Finally pay off those credit cards? Learn to speak French? Before you finish the list of New Year’s resolutions, consider adding a few on the human resources front. Below are a few recommendations for HR leaders—the payoff will be much better than losing 10 pounds (again). Pick a few and knock them off early in the year, and call it a good start.
- Waive Goodbye to Class Actions
In 2015, you may—and you probably should—require your employees to sign an agreement waiving the right to file a class action lawsuit.
In 2014, the Supreme Court of California issued its long-awaited decision in Iskanian v. CLS Transportation Los Angeles, LLC, S204032 (June 23, 2014). The court examined an arbitration agreement that required employees to bring their legal claims on an individual basis and not as a class action. The court held that class action waivers in arbitration agreements were permissible under the Federal Arbitration Act (FAA). Further, the court ruled that the FAA preempted state law and prior court decisions holding to the contrary.
Employers should consider rolling out arbitration agreements or updating the ones they already have in place to take advantage of this landmark ruling.
- Dial in on Cell Phone Policies
In 2015, employers that expect employees to use personal cell phones for work should update their policies to include an expense reimbursement plan. In Cochran v. Schwan’s Home Service, Inc., the Court of Appeal of California held in part that employers must always reimburse employees for the “mandatory” use of personal cell phones pursuant to Labor Code section 2802. Generally, that code section requires employers to reimburse employees for necessary business expenditures. To minimize the risk of class action claims, California employers should review their reimbursement policies and consult with an employment law attorney regarding compliance alternatives. Among several alternatives, some employers have considered prohibiting or limiting the use of personal cell phones, issuing corporate phones to employees, or devising a reimbursement policy.
- Prescribe a Healthy Dose of Sick Pay
Beginning July 1, 2015, paid sick leave is mandatory in California. The benefit will be owed to all full- and part-time employees, with limited exceptions. Existing paid time off (PTO) or sick pay plans might satisfy the new obligation, provided that all of the new law’s technical requirements are met.
Resolve to begin planning for this new benefit requirement. Have you posted the new notice and started distributing the Labor Code 2018.5 notice? The state’s labor agency expects employers to do so beginning January 1.
- Close the Deal on Commissioned Employees
Make 2015 the year that you master the pay rules for commissioned employees. A 2014 court decision clarified that commissions paid in one pay period may not be attributed to prior pay periods to satisfy minimum wage obligations and California’s inside sales commissioned employee overtime exemption. This means that big commissions paid at the end of the month do not satisfy pay obligations for the first half of the month, when sales were still in the pipeline. Also note that if your commission plans have changed for 2015, you should update the written commission agreement in compliance with Labor Code section 2751.
- Beat the Clock
Lawsuits that include claims for off-the-clock work remain common. Such claims often involve preparatory activities before shifts, concluding activities after shifts, and after-hours work outside of the office. While you may understand the rules, supervisors often do not. Time spent training managers to capture all staff hours worked could translate into less time spent dealing with legal claims.
- Put a Headlock on Bullying
California’s harassment prevention training law has been amended to include an abusive conduct prevention component. As defined by AB 2053, abusive conduct may include “repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.” AB 2053 provides that a single act does not constitute abusive conduct, unless it is especially severe and egregious. The new law does not prohibit abusive conduct; it merely requires training on its prevention. Incorporate this new training requirement into the existing two-hour harassment prevention training obligation. Along with the training, employers may choose to formulate policies that discourage such misconduct and describe how a victim can seek assistance.
- Take a Seat
Lawsuits alleging the failure to provide employee seating will continue in 2015. Most of the California Wage Orders require employers to provide employees with “suitable seats” when the work reasonably permits, and with seats in reasonable proximity for use when not required to stand. In 2015, the Supreme Court of California is expected to issue a key ruling on this topic. In the meantime, conduct an audit to ensure compliance with the Wage Order requirement.
These are just a few of the resolutions to consider in the new year. Hopefully these will lead to a more successful, efficient, and legally compliant 2015.
Christopher W. Olmsted is a shareholder in the San Diego office of Ogletree Deakins.
