News, Articles & Updates

INCREASES TO MINIMUM WAGE FOR SAN FRANCISCO AND NEARBY CITIES EFFECTIVE 7/1/2017

The city of San Francisco and several nearby localities will face a scheduled minimum wage increase on July 1, 2017. Affected employers should ensure their payroll administrators are aware of these increases and amend their payroll schedules accordingly.  Employers should also amend any separate policies or pay scales, such as travel pay, that are based upon the minimum wage.

Below is a table of the expected minimum wage increases.  Please reach out to your Mitzel Group employment expert for additional information.

Locality Current Minimum Wage New Minimum Wage Effective July 1, 2017
San Francisco $13.00 $14.00
Berkeley $12.53 $13.75
Emeryville (employers with 56+ employees) $14.82 $15.20
Emeryville (employers with 55 or fewer employees) $13.00 $12.00
San Jose $10.50 $12.00

FEDERAL COURT ISSUES FIRST VERDICT FINDING THAT INACCESSIBLE WEBSITES VIOLATE TITLE III OF ADA

On June 13, 2017, a Florida federal district court issued the first verdict of its kind holding that a website that was inaccessible to a blind customer violated Title III of the Americans with Disabilities Act (ADA).  The case, Gil v. Winn-Dixie Stores, Inc.,  concerned a blind man who could not access Winn-Dixie coupons, order prescriptions, or find store locations on the company’s website.  After a full trial, the Court ordered injunctive relief, requiring Winn-Dixie to modify its website and pay the plaintiff’s attorneys fees and costs.

Although the decision is non-binding, it has significant implications.  First, it is the first case of its kind concluding that an inaccessible website violated Title III of the ADA.  Businesses should carefully consider whether to litigate or settle these forms of cases, as the possibility of an adverse verdict – once thought unlikely amongst business and legal communities – has now become a reality.   Second, the draft injunction adopts the Web Content Accessibility Guidelines (WCAG) 2.0 as the applicable standard in determining a website’s accessibility.  These guidelines were developed by a private group of  experts and have been incorporated into many consent decrees and settlement agreements. The guidelines have not been adopted as the legal standard for public accommodation websites, but businesses should remain aware of their increasing relevance, especially in light of this decision. Third, the Court did not consider the $250,000 cost of updating the website to be an undue burden to Winn-Dixie, considering that the company had previously invested $9 million to create and remake its website. This cost comparison is likely to be emulated in later cases.

Of particular note, the Court held Winn-Dixie responsible for the entire website’s lack of accessibility, even though parts of the website are operated by third party vendors.  This implication bears particular relevance to businesses who extensively rely on outside vendors to provide services offered through their website.

Although there are not yet any federal regulations setting forth requirements for a website accessibility program, businesses should remind mindful of judicial decisions such as this one because they provide potential frameworks for Title III compliance.  For additional questions regarding this case or compliance with Title III of the ADA, please contact a Mitzel Group specialist.

NONSIGNATORY JOINT EMPLOYERS RECEIVE BENEFITS OF ARBITRATION AGREEMENT

A recent decision from the California Court of Appeal provides considerable protection to certain joint employers seeking to arbitrate claims.  In Garcia v. Pexco, LLC, the Court held that a company hiring temporary workers from a staffing agency can enforce the arbitration agreement entered into between the staffing agency and its workers, even if the company did not sign the arbitration agreement itself.

Garcia v. Pexco, LLC

In Garcia, the plaintiff, Narciso Garcia, sued a staffing agency for alleged wage and hour violations.  He included Pexco LLC, the company that had hired him through the staffing agency, as joint defendant, alleging that Pexco was also liable as a joint employer.  The trial court compelled arbitration for all parties, including Pexco, according to an arbitration agreement signed by Garcia and the staffing agency. Garcia appealed this decision on the grounds that Pexco could not invoke an arbitration agreement it had not signed.

The Court of Appeal disagreed, stating that two exceptions – equitable estoppel and agency – warranted application of the agreement to Pexco.  First, under the doctrine of equitable estoppel, it would be unfair for Garcia to allege that Pexco was as a joint employer  – and therefore liable for the staffing agency’s wage and hour violations – while excluding the company from applicable employment agreements.  Second, under the agency exception, the Court held that Garcia’s allegations that Pexco was an agent of the staffing agency did not stop at the offense; rather, as an agent, Pexco could enforce the arbitration agreement as an agent of the staffing agency that had signed it.

Implications for Employers

The Garcia decision is especially important for employers who rely on temporary staffing agencies to meet their business needs.  Although limited to those instances where the plaintiff’s claims against both defendants are “inherently inseparable” and “intimately founded in … the underlying contract obligations,” the decision, when applicable, provides employers significant protection against claims brought by temporary employees.  Employers should review the staffing companies’ employment agreements to determine the protections such agreements may afford.

For more information, please contact your employment attorney at the Mitzel Group, LLP.

PRESIDENT TRUMP ISSUES NEW EXECUTIVE ORDER REVISING PREVIOUS TRAVEL BAN

On March 6, 2017, President Donald Trump issued a new Executive Order temporarily banning the entry of nationals from Iran, Libya, Somalia, Sudan, Syria, and Yemen who are outside of the United States, do not hold a valid visa on March 6, 2017, and did not hold a valid visa at 5:pm EST on January 25, 2017.

The new Executive Order follows – and revokes – an Executive Order issued on January 25, 2017 that immediately banned nationals from the above-mentioned six countries and Iraq. The prior Executive Order generated significant controversy due to its application to legal permanent residents and valid visa holders, along with the immediate effect of the order. The Executive Order was reviewed and halted by federal courts in February 2017.

The Executive Order issued on March 6, 2017 is more limited in scope than its predecessor. Notable differences include exemptions for legal permanent residents, dual nationals from non-designated countries, foreign nationals holding a valid visa on the effective date of the order, and individuals already granted asylum or refugee status in the United States before the effective date of the order. The new Executive Order also fails to exempt religious minorities from the ban and imposes a 120-day – rather than indefinite – ban on Syrian nationals.  The Trump administration cited concerns for the stability for the United States-allied Iraqi government as justification for excluding Iraqi nationals from the new ban.

Attorneys at the Mitzel Group recommend that all foreign nationals consult with their immigration attorneys before any international travel. As always, please contact our immigration attorneys, Lisa Liu and Amelia Lancaster, with additional questions.

NOTES ON THE DRAFT EXECUTIVE ORDER AFFECTING H-1B VISAS

Employers of individuals holding H-1B  and other forms of employment-based visas may be concerned about a draft Executive Order that has been circulated by the media.  While immigration attorneys at the Mitzel Group recognize the serious consequences this order would have to employers, we want to emphasize that this is a draft Executive Order that has not yet been signed by President Donald Trump.  The final version of the order and its mandates remain to be seen.  It is also uncertain at this time whether President Trump will sign the order or leave reform of the employment-based visa system to Congress.

The draft executive order would reduce the scope of employment-based visas and contains a variety of provisions. Among them, the order would reverse the current OPT extension available to F-1 visa holders in a STEM field, reform the H-1B and J-1 visa programs, and increase site visits to employers with L-1 employees.  The overall objective of the order is to “prioritize[] the interests of American workers.”

Unlike the Executive Order affecting individuals from select countries that took effect on January 25, 2017, this draft  Executive Order would not take immediate effect.  Rather, the order directs the Director of Homeland Security to take appropriate measures to achieve the order’s objective within varying time frames.  Thus, procedural and administrative changes enacted by the draft Executive Order are unknown at this time.

Your immigration attorneys at the Mitzel Group will keep you apprised if and when this draft Executive Order is signed by President Trump. As always, please contact us with any questions.

ALL EMPLOYERS ENCOURAGED TO SCHEDULE I-9 TRAINING & INTERNAL AUDIT

Following Donald Trump’s recent executive orders and the release of a new Form I-9 that became mandatory on January 22, employers must remain aware of their obligations to correctly complete and store their Forms I-9. To better protect your company, to ensure your workforce stays intact, and to better prepare for new federal regulations and presidential directives, we at The Mitzel Group, LLP encourage you to consider an I-9 training and internal I-9 audit with our office.

Why I-9 Training now?

On January 25, 2017, President Donald Trump issued an executive order tripling the number of immigration and customs enforcement (“ICE”) officers with potential authority to conduct I-9 audits. In addition, a draft executive order is now circulating that would require ICE officers to target certain employers as a means of immigration enforcement. These signed and draft executive orders imply that increasing number of I-9 audits are certain and imminent.

Changes to the new form I-9 and new federal regulations also present substantial pitfalls for employers. The new paper and electronic versions of the form introduce changes that can lead well-intentioned employers to commit grievous and irremediable errors. Increased civil and criminal penalties magnify the impact these errors can have to employers, potentially resulting in asset forfeiture, loss of business license, mandatory layoffs, and criminal liability, among others. Civil penalties increased in August 2016 and can now amount up to $21,000 per form I-9.

The best way to protect your business and yourself from criminal and civil liability is to review your current forms I-9 and train staff in properly completing the new form going forward. Thus, I-9 training and audit are two crucial measures that you, as an employer, can take when preparing for changes brought by the new presidential administration.

How do I schedule I-9 Training?

Please contact The Mitzel Group, LLP attorneys Lisa Liu or Amelia Lancaster by email or by calling (415) 742-4972 to schedule a training at your earliest convenience. As always, we are available to answer any questions you may have and help ensure your company is protected in the event of future immigration enforcement.

SF PAID PARENTAL LEAVE ORDINANCE TAKES EFFECT

The San Francisco Paid Parental Leave Ordinance (PPLO) took effect on January 1, 2017, requiring San Francisco employers to provide supplemental compensation for employees who receive California Paid Family Leave benefits to bond with a new child. The PPLO is now in effect for employers with 50 or more employees and will expand on July 1, 2017 to cover employers with 35 or more employees, and again on January 1, 2018 to cover those with 20 or more employees.

Eligible employees under the PPLO generally include those who have worked for at least 6 months with the employer and have worked at least 8 hours per week in San Francisco. Employees must also be eligible to receive California Paid Family Leave benefits and provide proof of their receipt of such benefits to their employers.

Employers who are subject to the PPLO are advised to do the following:

1. Post the PPLO poster in the workplace;
2. Provide the PPLO form to employees planning to go on leave to bond with a new child and apply for Paid Family Leave benefits and request that they complete the form;
3. Determine the amount of PPLO compensation the employee is entitled to receive and when they should receive it;
4. Ensure that any updates to their current employee handbook include a policy on the PPLO.

Please do not hesitate to let us know if you have any questions about the PPLO to ensure proper compliance with this new law.

CA SUPREME COURT HOLDS THAT ON-CALL REST BREAKS ARE NOT PERMISSIBLE

On December 22, 2016, the California Supreme Court held in the case of Augustus v. ABM Security Services, Inc. that employers in California cannot require employees to remain “on-call” during rest breaks, even though employees are paid during this time. The Court reasoned that because rest breaks are only 10 minutes in length, employees often must remain on-site or nearby during their rest break.  This constraint, together with an employer’s obligation that employees remain “on-call” and responsive during their rest breaks, undermines the underlying purpose of employee rest breaks: affording employees ten minutes of freedom to use as they choose.

The Court’s decision applies to employers in all industries and can potentially subject them to heavy penalties for failing to provide rest breaks free of interruptions. Should you have any questions regarding the decision or its implications for your workplace, please feel free to contact your Mitzel Group employment attorney.

RATES FOR SAN FRANCISCO EMPLOYEE HEALTH CARE PROGRAM TO INCREASE ON JAN. 1, 2017

Effective January 1, 2017, employers subject to the San Francisco Health Care Security Ordinance (HSCO) must increase the hourly rates they pay to help provide health insurance to covered employees.  Per a 2014 amendment to the HSCO, the lock-step increase in hourly rates for 2017 is as follows:

# OF COVERED EMPLOYEES              CURRENT RATE            RATE EFFECTIVE 1/1/2017
20-99                                                                      $1.68                                           $1.76

100 OR MORE                                                      $2.53                                           $2.64

Covered employees are defined as those who have been employed for more than 90 days and who regularly work at least 8 hours per week in San Francisco.

Together with the rate increase, the San Francisco Office of Labor Standards Enforcement has released an updated 2017 HCSO Notice, which employers must post in a visible location at their workplace.

Employers who are – or may become – subject to the HSCO are encouraged to speak to their Mitzel Group attorney for additional information.

IMPORTANT CHANGE AFFECTS EMPLOYEES PREVIOUSLY EXEMPT FROM WORKERS’ COMPENSATION

A new change in California workers’ compensation law now requires all previously exempt employees  – including officers, directors, and working partners of a business –  to submit insurance waivers to their insurance carriers in order to remain exempt from workers’ compensation insurance requirements. Previously, these employees were automatically exempt from coverage, requiring no affirmative action on their part.

To remain exempt from the new rules, which become effective January 1, 2017, employees must submit insurance waivers to their insurance carriers before December 31, 2016. The new law specifically defines qualifying exempt employees as owners or directors owning 15% or more of a corporation’s stock, general partners of a partnership, and managing members of an LLC.

Employers should receive waiver forms from their workers’ compensation insurance carriers. Employers may direct additional questions regarding these changes to employment attorneys at the Mitzel Group.