As reported here and here, California recently enacted new legislation – Assembly Bill 5 – that expanded the scope of an “employee” under state law.  Beginning January 1, 2020, the answer to whether a person providing services in California is an independent contractor (as opposed to an employee) under the California Labor Code, the Industrial Welfare Commission (“IWC”) Wage Orders, and the California Unemployment Insurance Code, will generally depend on whether they satisfy all three prongs of the so-called ABC Test:

  1. The worker must be free from the control and direction of the hirer in connection with the performance of the work.
  2. The worker must perform work outside the “usual course” of the hirer’s business.
  3. The worker must be customarily engaged in an independent established trade, occupation, or business of the same nature as the work performed.

There are a myriad of occupational and industry exemptions to the application of the ABC Test, many of which are highlighted here.

Having tightened independent contractor classification standards, the next big target for the state legislature may be joint employer liability.


Continue Reading Back to the Joint Employer: Having Changed the Classification Test for Independent Contractors, Will the California Legislature Target the Joint Employer Test Next?

With the rise of the #MeToo movement, companies have been forced to re-examine how they litigate and settle allegations of sexual harassment in the workplace.  Specifically, companies are facing increasing criticism if they compel claims of sexual harassment to private arbitration or force employees who allege sexual harassment to sign settlement agreements with confidentiality clauses, effectively shielding both the company and the alleged sexual harasser from public scrutiny.
Continue Reading #MeToo Changes the Face of Sexual Harassment Litigation for Employers

On Sunday, September 30, 2018, Governor Jerry Brown signed into law a number of bills that will have a significant impact on litigation and legal counseling in the employment context. Many of the new laws are a response to the traction gained by the “me-too” movement and are summarized herein.
Continue Reading New Wave of Employment Bills Signed into Law

On September 30, 2018, California Governor Jerry Brown signed into law a bill that prohibits a provision in settlement agreements that prevents the disclosure of information pertaining to sexual harassment and sex discrimination. The law goes into effect on January 1, 2019, and serves as an extension of the already-existing law that prohibits provisions in settlement agreements that prevent the disclosure of acts that could be prosecuted as felony sex offenses and certain sex offenses against children.
Continue Reading New California Law Puts an End to Secret Sexual Harassment Settlements

On July 26, 2018, the California Supreme Court issued its long awaited decision in Troester v. Starbucks Corporation (S234969) on whether California wage and hour law recognizes the de minimis doctrine established by the United States Supreme Court in Anderson v. Mt. Clemens Pottery Co. 328 U.S. 680 (1946) for wage claims arising under federal law.  Under the federal de minimis rule, small amounts of otherwise compensable work time are not actionable when tracking and paying for it is impractical.  Anderson held: “When the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded.  Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act.  It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved.”  Id. at 692.  In deciding whether compensable work time is de minimis, federal courts consider “(1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.” See e.g. Lindow v. U.S. 738 F.2d 1057, 1063 (9th Cir. 1984); Kellar v. Summit Seating Inc., 664 F.3d 169, 176 (7th Cir. 2011); Kosakow v. New Rochelle Radiology Assocs., P.C. 274 F.3d 706, 719 (2d Cir. 2001).  Ten minutes or less is generally considered de minimis under federal law.  See Lindow, 738 F.2d at 1062.  The issue before the California Supreme Court in Troester (certified from the Ninth Circuit) was whether California wage and hour law recognizes the same or a similar rule.  Even though de minimis worktime is (by definition) small and insignificant, whether or not a de minimus exception to the requirement to pay for all time worked applies has major implications because relatively small amounts of unpaid wages have the potential to trigger substantial penalties and liability for plaintiffs’ attorneys’ fees in California.
Continue Reading California Supreme Court Issues Narrow Holding In De Minimis Case, Leaving Many Issues Unresolved