Sarah A. Williams
Associate Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Q: What are the top challenges employers face under today’s California employment laws?
A: Every organization that employs individuals in California is challenged by California’s employee friendly laws. The top challenge organizations face is not simply the laws rather operating a business in compliance with the ever-changing and developing compliance requirements. While the laws do not change, how an employer must comply with the laws does change. A perfect example of this is the standard or test applied to determine the classification of an individual as an independent contractor or an employee. An organization’s legally compliant classification for the past over 20 years is likely no longer compliant (in terms of the wage order) in light of the new ABC Test developed by the California Supreme Court in Dynamex Operations West Inc. v. Superior Court (2018) 4 Cal.5th 903. Never before had this strict test been applied in California, yet organizations that for several years correctly classified individuals under the prior standard as independent contractors are now facing lawsuits for misclassification under a standard that was not in existence until 2018. The top challenge organizations face in employing individuals in California is knowing how to comply when the standards for compliance are constantly changing in favor of employees.
Q: What changes do you see coming in employment law? How can employers better prepare?
A: California has implemented new harassment discrimination and retaliation prevention policies. Employers can prepare by reviewing their existing policies and update them to ensure compliance with the new laws. The new laws contain provisions for employee complaint processes and investigation processes for those complaints. Employers should update policies and familiarize themselves with the new standards.
Q: When it comes to sexual harassment prevention training, what does the state expect? How can an employer best provide such training?
A: Beginning January 1, 2019, California law requires employers with five or more employees, including temporary or seasonal employees, to provide at least two hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020. The new law requires that the training occur once every two years.
Employers should set up trainings and ensure they are in compliance with the new laws as soon as possible. Ogletree and other law firms provide sexual harassment training. Employers should be aware that there are minimum trainer qualifications. There are also options available for training online. E-learning programs must be created by a trainer and an instructional designer who has expertise in current instructional best practices. An e-learning program must provide a link to a trainer who can answer a trainee’s questions within two business days. Other types of technology (e.g., audio, video, computer) may be used in conjunction with classroom, online and e-learning programs.
One challenge will be keeping track of sexual harassment training since it is required for all employees beginning in 2020. Human resources departments will need to be very organized and conduct regular audits to ensure employees are in compliance and personnel files are updated with proof of training.
Q: Would you recommend an employer provide additional training related to other forms of harassment and discrimination? If so, what are some best practices?
A: Yes! More training is always better! Gender discrimination and sexual harassment are not the only societal problems which may manifest in the workplace. California laws protect employees from harassment and discrimination based on a number of categories: race, national origin, religion, age (over 40), gender (including pregnancy, childbirth, breastfeeding), sexual orientation, gender identity, medical condition, genetic information, marital status, and military or veteran status. Employer-provided training may help employees better appreciate how their words and actions might be interpreted by co-workers from different backgrounds.
The best way to prevent discrimination and harassment in the first place is to foster a culture of professionalism and tolerance from the top. Sensitivity training can go a long way to ensure that employees understand what type of behavior is acceptable in the workplace.
Q: There has been a lot of talk about classifying employees as independent contractors. What does the law say now? How has that changed?
A: Employers should take note that the California legal standard for independent contractor status has recently changed in important ways. In 2018, the California Supreme Court issued its landmark ruling in Dynamex. This case established the “ABC” test to determine whether a person is an employee or an independent contractor. This test presumes a worker is an employee and places the burden on the employer to prove the worker is an independent contractor. A worker may only be classified as an independent contractor if: (A) “the worker is free from control and direction” of the employer; (B) the work performed is “outside the usual course of the hiring entity’s business”; and (C) the worker engages “in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.”
This new legal standard may make it more difficult to properly classify workers in certain job and industries as independent contractors under the state’s labor laws. The Dynamex test will apply if a worker brings a claim pursuant to a California wage order against an employer. California’s wage orders contain provisions related to minimum wage payments, overtime compensation and meal and rest requirements (among others). Under this new test, a worker will be considered misclassified as an independent contractor if they do not meet any of the three parts (ABC) of the test. As a result, employers can expect more misclassification lawsuits. We recommend consulting with an attorney if an employer has any workers classified as independent contractors or intends to retain a worker and classify them as an independent contractor. The ABC test is nuanced and an employment attorney can help with this analysis.