PKWH shares Labor and Employment law updates covering independent contractor classification, implications of an activist NLRB, California's new sick leave law, use of smartphones, remote access and its impact on overtime, minimum wage updates and the Private Attorney General Act (PAGA).

1. Labor and
Employment Law
Update
Presented By:
Palmer Kazanjian Wohl Hodson LLP
December 10th, 2015

2.  Independent Contractor Classification
 Implications of an Activist NLRB for Employees and
Employers
 California’s New Sick Leave Law
 Use of Smartphones, Remote PC Access and its
impact on Overtime
 Labor Code Issues
Agenda for Today

3. Independent Contractor
or Employee?

4. Growing Focus On Employee Misclassification
• U.S Department of Labor continues to
work with the IRS and other federal
and state agencies to eliminate
misclassification.
• In the fiscal year of 2014, WHD
investigations resulted in more than
$79 million in back wages or more
than 109,000 workers.
• A.B 1897: Passed in 2014, extending
liability to client employers who
obtain workers from third party labor
contractors.
• DOL issued an interpretive memo (Administrator’s Memorandum
2015-No. 1) earlier this year stating that “most workers are
employees under FLSA’s broad definition of employment.”
Independent
contractor

5. Independent Contractor Classification Criteria
11-Factor IRS Test looks at the degree of control
employer has over worker’s independence:
• Behavioral Control
• Financial Control
• Type of Relationship
EDD Test:
Basic test looks to whether the employer has
the right to control and direct manner and
means by which work is preformed.

6. Economic Realities Test:
1. Extent to which work performed is an integral part of
employer’s business.
2. Whether the worker’s managerial skills affect opportunity for
profit and loss.
3. Relative investment by worker and employer.
4. Worker’s skill and initiative.
5. Permanency of worker’s relationship with the employer.
6.Nature and degree of control by employer.
Independent Contractor Classification Criteria

7. • The CA Supreme Court applied the Economic Realities Test, finding
that the growers were not employees because they had control
only over result and not over the means by
which desired result was accomplished.
• Existence of written agreement purporting to
establish independent contractor status is not
determinative.
• Court discouraged rigid application of common law control test to
determine employment relationship and listed other factors such
as belief by parties that there is an employer-employee
relationship, method of payment used, and whether the worker’s
business is distinct from the principal.
S.G Borello & Sons v. Department of Industrial
Relations (1989)

8. Garcia v. Seacon Logix, inc (2015) The Court of Appeal affirmed
holding that the truck drivers employed by Seacon had been
misclassified as independent contractors, reasoning that Seacon, in
providing the trucks and tools (instrumentalities), controlled the
manner and means by which the drivers carried out their work.
Alexander v. FedEx Ground Package System, Inc. (2014) The Ninth
Circuit ruled earlier last year that FedEx had misclassified its drivers as
independent contractors, which led to a $228 million dollar settlement.
Similar suits against FedEx are pending in other states.
Shepard v. Lowe’s HIW, Inc. (2014) A class of home improvement
independent contractors claimed that the company has misclassified
them as independent contractors. Federal court approved settlement
for $6,500,000.
Recent Independent Contractor Cases

9. Pending Uber Case
Could Significantly Affect
Technology-Driven Sharing Economy
Uber v. Berwick (2015) California labor commission ruled that under California Law,
Uber driver Ann Berwick is an employee and not an independent contractor.
U.S. District Judge Edward Chen granted class-action status to lawsuit filed by 3 Uber
drivers who claim to have been misclassified as independent contractors. This
enables all drivers who worked between 2009-2014 to join the class action.
A ruling that Uber drivers are employees would require Uber to provide, among
other expenses, back pay for each employee and also provide Uber drivers with
employment benefits—a tremendous cost to Uber.
A decision in favor of “employee” classification would have a major effect on other
ridesharing companies such as Lyft, Airbnb and other start-ups.

10. Implications of an Activist NLRB for
Employers and Employees

11. The NLRB Continues to Pursue an Activist
Agenda
• December 2007: Three members’ terms expired, leaving the Board with only two
members.
• December 28, 2007: The two remaining members agreed to delegate their
authority to a three-person panel. Only two members remained, Board concluded
that was a quorum for the three-person panel.
• June 2010: Supreme Court ruled in New Process Steel, L. P. v. NLRB that the two-
member Board had no authority to issue decisions, invalidating the rulings made
by 2 members.
• 2013: Senate approved all five of Obama’s nominees, bringing the board to 5
members for the first time since 2007.
• 2014-Present: Board made several decisions favoring unions and disfavoring
employers.
• August 2014 – Browning-Ferris decision re: new test for joint employers.
• December 15, 2014 – New union election rules
• March 18, 2015 – Issued a report concerning employer rules

12. NLRB Issued New Union Election Rules -
Notable Changes
• New posting requirements
• Electronic filing and transmission of election petitions/other
documents
• Employers must provide additional contact information (personal
telephone numbers and email addresses) to the extent possible
• The non-petitioning party is required to respond to the petition
before the pre-election hearing opens.
• Pre-election hearing: Only issues necessary to determine
whether an election should be conducted.
Post-Election: The regional director may defer
all other issues to the post-election stage

13. Employee Handbook Guidelines
1. If it explicitly restricts activities protected by
Section 7  per se invalid.
2. If the rule does not explicitly restrict activity
protected by Section 7, the violation is
dependent upon a showing of one of the
following:
• Employees would reasonably construe the
language to prohibit Section 7 activity;
• It was promulgated in response to union
activity; or
• It has been applied to restrict the exercise
of section 7 rights.

14. Examples of Handbook Violations
• Preventing employees from discussing the terms and conditions of
employment.
• Restricting disclosure of “employee” or “personnel” information
without clarification.
• Prohibiting criticism of the employer, Company, or management
• Rules that a reasonable employee would construe as forbidding
protected strike actions and walkouts are unlawful.
• Prohibiting disclosure of the contents of the Company’s handbook
• Prohibiting distribution of electronic literature in “work areas”
• For more examples refer to handout.

15. Joint-Employer Liability – Browning Ferris
• Two or more entities are joint employers of a single
workforce if
• They are both employers within the meaning of the
common law; and
• They share or codetermine those matters governing the
essential terms and conditions of employment.
• Looks to factors such as control over salary and
working conditions
• Direct control is not required

16. Section 7 & 8(a)(1) Violations
• D.R Horton (2012) The decision held that arbitration agreements
signed as a condition of employment and preclude workers from
bringing joint, class, or collective claims over working conditions are
unlawful
• Fifth Circuit, Second Circuit, and Eighth Circuit Courts have rejected
NLRB holding that arbitration agreements barring class or collective
claims are in violation of federal labor law
• Murphy Oil USA (2015) reaffirmed D.R Horton ruling that arbitration
agreement barring workers from pursuing class actions are unlawful
• Amex Card Services Company (2015)-applied Murphy and held that
arbitration agreement was unenforceable, affirming D.R Horton

17. Section 7 & 8(a)(1) Violations
• There is a split between the Board and Federal Courts on the
issue of whether requiring an employee to waive the right to
assert a class action is in violation of the NLRA.
• Issue has yet to be settled by the U.S. Supreme Court
Reducing Liability
Employers subject to the NLRB who condition employment on
signing of arbitration agreement should:
(1) Consider whether the arbitration agreement should
include waiver of class action suits
(2) Understand that opt-out provisions do not necessarily
reduce liability

18. New Paid Sick Leave Law
(A.B. 304; Cal. Lab. Code § 245-249)

19. Eligibility
• Employee who, on or after July 1, 2015, works in California for 30 or
more days within one year from beginning employment. Employee
can use leave beginning on the 90th day of employment.
• Includes: Part-time and temporary employees
• Does NOT Include: Employees covered by qualifying collective
bargaining agreements, In-Home Supportive Services providers,
and certain employees of air carriers.

20. Usage
• Paid at current rate of pay (special calculation for commission or
piece rate employees). **See handout for examples**
• Accrued leave must carry over to the following year or 12-month
period, but the employer may cap total leave at 48 hours (or 6 days).
• Employee may begin using accrued sick leave on the 90th calendar
day of employment
• Employee may use paid sick leave for:
• Themselves or a family member for the diagnosis, care or
treatment of an existing health condition or preventive care
• Specified purposes for an employee who is a victim of domestic
violence, sexual assault, or stalking
• Employer may limit use at 24 hours or 3 days per year. Employee
needs to be notified prior to implementation

21. Accrual & Alternatives
• Accrual Method: Leave accrues at the rate one hour per every 30
hours worked.
• An employee who works 40 hours/week will accrue 1.33 hours
per week.
• Frontload Method: Employer may frontload leave instead of using
accrual method.
• Employer must give 24 hours or 3 days at the beginning of the
calendar year, anniversary date, or 12-month period used.
• Employer is not required to track accrual, but must still comply
with the notice requirement by displaying usage on wage
statement or other complying written document.
• Under this method, employer is not required to provide for carry
over of sick leave.

22. Existing Paid Time Off Policies (PTOs)
• Employer may offer more than the minimum required
under the Paid Sick Leave law, but not less.
• Must be in writing .
• Must be provided for the same usage and same purposes
as outline in the Paid Sick Leave provision.

23. Notice
• An employer is required to display a poster in a
conspicuous area, stating employee’s rights to:
• Accrue, request, and use paid sick days;
• The amount of sick days provided;
• The terms of use of paid sick days; and
• Retaliation against employee for requesting sick
leave
• An employer must provide notice to individual
employees at the time of hire with paid sick leave
information.
• An employer must provide written notice informing
the employee of their available paid sick leave on
wage statement or other written document
• An employer is required to keep a documented record
of hours worked and paid sick days used by employee
for a minimum of three years.
• Notice forms are available on the DIR website:
http://www.dir.ca.gov/DLSE/resource.html

24. Penalties for Employer Noncompliance
Possible retaliation damages
Employee may be entitled to:
• Reinstatement (if terminated)
• Lost wages (if suspended or terminated)
• Removal of any disciplinary action from personnel file
• A civil penalty of up to $10,000 per violation
An employee may file a paid sick leave claim and administrative
penalties may be awarded
An employee may recover:
• An administrative penalty equal to the paid sick leave x 3 or $250
whichever is greater, but in no case greater than an aggregate penalty of
$4,000
• The administrative penalty may also include a sum of $50 per day for
each day the violation occurred or continued

25. 6 Steps to Successful Compliance
Display poster on paid sick leave where employees can read it easily. Document policy and
share with staff.
Provide written notice to individual employee at the time of hire with paid sick leave
information.
Provide for accrual of one hour of sick leave for 30 hours of work for each eligible
employee to use.
Allow eligible employees to use accrued paid sick leave upon request or
notification.
Show how many hours of sick leave an employee has available. This must be on a pay
stub or a document issued the same day as a paycheck .
Keep records showing how many hours have been earned and used for three years.

26. Overtime: Smartphones
and Remote PC Access

27. Overtime: Federal Law v. State Law
Federal Law (FLSA)
• FLSA establishes basic wage standards that affect workers in private sector,
federal, state and local governments.
• Salaried employees must earn at least $455/week and their primary duty must
be executive, professional, or administrative.
• Hourly employees are eligible for overtime if they work >40 hours a week.
California State Law (DLSE)
• 17 Industrial Welfare Commission Wage Orders establish wages, hours, and
working conditions in CA.
• There is a higher minimum salary threshold for salary employees, and they
must spend >%50 of time performing executive, profession, or administrative
duties.
• Hourly employees are eligible for overtime if they work >40 hours a week, >8
hours a day and double time for hours worked in excess of 12 hours in a day or
on a 7th consecutive day.

28. State Law Supersedes Federal Law
Employers should note that CA state law provides more generous
protections to employees than FLSA and therefore
supersedes Federal law
Pacific Merchant Shipping Ass’n v. Aubry (9th Cir. 1990)

29. “Hours Worked”: Federal Law v. State Law
Federal Law (FLSA)
29 C.F.R. Section 778.223 & Part 785 : The FLSA does not contain an express definition of “hours
worked,” but federal regulations state that it includes: (1) all time during which an employee is
required to be on duty or to be on employer’s premises and (2) all time during which an
employee is “suffered or permitted to work,” whether or not required to do so.
California State Law (DLSE)
IWC Wage Orders:
Under basic definition set forth by IWC Orders, “hours worked” means time during which an
employee is subject to control of any employer and includes any time employee is suffered or
permitted to work, whether or not required to do so.
Court decisions based on California’s slightly broader standard
State and federal standards are generally consistent but due to California’s slightly broader
standard, situations arise where non-compensable time under federal law is compensable under
California law, as the following examples illustrate.

30. DLSE Advice Letter 2008.11.25: “It is the level of the employer’s control
over its employees which is determinative, rather than the mere fact
that the employer requires the employee’s activity.”
Morillion v. Royal Packing Co. (2000): Court found that level of control
displayed by employer made travel time compensable. Employers (1)
required employees to use employer vans for travel to job sites and (2)
prohibited them from picking up their children, stopping for food, or
running personal errands. Definition of “control” used by the court was
broader than standard set forth by FLSA.
Rutti v. Lojack Corp: Alarm installation techs were required to drive
company vans to work from home and back. Lojack set forth rules
prohibiting certain activity during drive. Compensation was denied under
federal law because activity was not integral to principle activities;
however, CA state law awarded compensation, asserting that employee
was under the control of the employer.
DLSE’s Broader Standard

31. “Gray Areas”
Waiting Time
All waiting time is considered “hours worked” if an employee is on duty(Morillion). If
the time during which an employee is relieved of duty is long enough such that
employee may effectively use time for his or her own purposes, then it is not
compensable (DLSE Enforcement Policies and Interpretations Manual Section 10.73
(1989)
Travel Time
• Travel time to and from work is generally not compensable; however, it is
compensable where it is related to the employee’s job or where it occurs in addition
to regular working hours and is pursuant to employer instructions.
• This is an area where stricter state law standard makes a difference; travel time is
compensable if employee is subject to the control of the employer even if not
“suffered or permitted to work.”
• Ex: employees who are required by employer to meet at designated place and to
use work-provided transportation are entitled to compensation for travel and wait
time.
On-Call Time
Constitutes hours worked and must be compensated where the employee is under
the control of the employer. These cases are heavily fact-based.
-Non-compensable: employee is able to use time effectively for own purposes
-Compensable: employee’s freedom to use time for his or her own purposes is
sufficiently restricted by employer

32. Cases
On-Call/Standby Time
Madera Police Officers Assn. v. City of Madera The DLSE has adopted the
two-prong test for assessing control:
(1) whether the restrictions placed on the employee are primarily directed
toward the fulfillment of the employer’s requirements and policies, and
(2) whether the employee was substantially restricted so as to be unable to
attend to private pursuits.
Berry v County of Sonoma (1994) Court considered (1) geographical
restrictions, (2) frequency of calls, (3) required response time, (4)
employees ability to trade on-call responsibilities, and (5) ability to engage
in personal activities during on-call period.
Skidmore v. Swift & Co (1944) Where restrictions do not prevent
employee’s activities from taking place, an employee is said to be “waiting
to be engaged,” which is not compensable

33. Modern work practices make it easier for employees to stay
connected to work through:
• Smartphones
• Remote access to work
computers
How is overtime established where
unauthorized work time in question includes activities that do not
occur in the employer’s presence (checking work e-mail on
personal smartphone, accessing work computers from home).
Modern Work Practices and Overtime

34. Unauthorized Work Time
• In determining whether unauthorized work time is compensable, courts
look to whether the employer had a “chance to comply with the law”
(Forrester v. Roth’s I.G.A Foodliner, Inc. (1981) )
• Did the employer have knowledge of work performed?
• Constructive Knowledge: “Should the employer have known?”
• Actual Knowledge (White v. Starbuck (2007)
• Did the employer take reasonable action to prevent unwanted work from
being performed?
It is not sufficient that an employer promulgate a rule against working
unauthorized overtime; it must also enforce it (Porch v. Materfoods USA,
Inc. (2008); Fletcher v. Universal Technical Institute, Inc. (2006) )
• Did the employee deliberately prevent the employer from acquiring knowledge
of his or her overtime work? (Forrester v. Roth’s I.G.A Foodliner, Inc. (1981)

35. Forrester v. Roth’s I.G.A Foodliner, Inc. (1981)
This case set out the following factors in determining
whether an employer has a chance to comply with the
law:
(1) the employer had no knowledge that the employee was performing
overtime work, (2)there was no indication that the employer should have had
such knowledge, and (3) the employee failed to notify the employer or
deliberately prevented the employer from acquiring knowledge of overtime
work
Reich v. Department of Conservation and Natural Resources (1994):
The Eleventh Circuit reversed the trial court decision under the reasoning that
the department, through reasonable diligence, could have acquired knowledge
of overtime work performed by employees
White v. Baptist Memorial Health Care Corp. (2012)
An employee who failed to follow reasonable reporting procedures for reporting
missed or interrupted meal periods could not recover damages under FLSA for
such work

36. Scenario #1: Sam, an hourly employee, leaves work at the
close of his 8-hour shift. Once home, he watches television
in his living room for a couple hours and then decides to
check his work email on his smartphone. He spends about
an hour sifting through old email.
Scenario #2: Sam, an hourly employee, leaves work at the
close of his 8-hour shift. Once home, he watches television
in his living room for a couple hours and then decides to
check his work email on his smartphone. He sees an email
that was sent by his boss just before he left work. He
spends the rest of his evening drafting a response to the
email and sends it.

37. Does it Constitute “Work time?”
Possible Considerations:
• Was Sam was able to effectively use that time for his own
purposes?
• To what extent did the Sam’s boss exert control over the Sam?
-would failure to conduct such activity have affected his job?
-Do prior communications/interactions suggest that Sam’s boss
expected/required an immediate response?
• Did Sam’s activity benefit his employer?

38. Agui v. T-Mobile USA, Inc. (2009)
Former T-mobile sales representative claimed that company
required them to respond to text messages and work-related
emails at all hours using company provided smart devices. The
case settled.
Rulli v. C.B Richard Ellis Group, Inc (2009)
Hourly maintenance employee claimed he was not fairly compensated
for time spent on company PDA device. Court granted motion to certify
class of similarly situated employees.
Jeffrey Allen v. City of Chicago (2015)
An employee of Chicago Police Department, demanding overtime pay
for work-related time spent on smartphone, has secured class-action
status in lawsuit against the city. Case Pending
Cases Involving Smartphone Devices

39. Labor Code Issues
•Minimum Wage Updates
•Private Attorney General Act
(PAGA)
•Labor Code Section 226

40. • State-Level
AB 10 : min wage is set to increase from $9 to $10 on 1/1/16
Local Minimum Wage increases
Minimum Wage Updates
Passed in 2014 Minimum Wage Effective Date
Oakland, CA $12.25 In effect
Berkeley, CA $12.53 By 2016
Richmond, CA $9.60, up to $12.30 By 2017
San Francisco, CA $12.25, up to $15.00 By 2018
Passed in 2015 Minimum Wage Effective Date
Emeryville, CA $16.00 By 2019
Los Angeles, CA $15.00 By 2020-2021
Sacramento, CA $10. 50
$11
$11.75
$12.50
By 2017
By 2018
By2019
By 2020

41. California’s Fair Pay Act (SB 358)
• Signed into law by Governor Brown on October 6, 2015
-Amendment to Cal. Lab. Code § 1197.5
• California has prohibited gender-based wage discrimination since 1949.
-However, it was rarely utilized because the previous statutory language
made it difficult to establish a successful claim.
• The New legislation eliminated the “same establishment” requirement
-Now workers will be allowed to sue under pay discrimination laws if they
can prove a worker of the opposite sex is paid more for substantially
similar work with no legitimate reason (as defined by statute).
• It also outlaws retaliation for inquiring about other employees' wages, and
prohibits retaliating against employees who disclose or discuss their own
wages.

42. AB 1513: Piece-Rate: “Non-productive time” & “Rest and Recovery Periods”
-Signed by Governor Jerry Brown on October 10, 2015, the bill sets forth compensation for
“nonproductive time” and rest and recovery periods.
-Nonproductive time under this section is to be separately compensated at no less
than min wage rate
-Rest and recovery periods are to be compensated at the average hourly
piece rate or higher than min wage.
-Second part of bill creates a narrow safe harbor for employers to address their liability
under this bill. However, it expressly excludes car dealership employers.
SB 588: Wage Theft
-Passed in September, the bill authorizes the Labor Commissioner to provide for a hearing to
recover penalties against any employer or person acting on behalf of an employer who
violates provisions regulating minimum wages or any order of the IWC.
-20 days after entry of judgement in favor of an employee, the Labor Commissioner is
authorized to collect from the charged employer any outstanding amount of the judgment
by mailing notice of levy upon his or her credits, money, or property.
-The bill sets forth heavy fines for employers who, within 30 days of final judgement, fail to
satisfy final judgement and continue conducting business.

43. Private Attorney General Act (PAGA)
PAGA is a law that enables private citizens to pursue civil penalties for CA Labor Code violations
on behalf of the DLSE. It was enacted in 2004 response to inadequate resources, which made it
difficult to ensure Labor Code compliance by employers.
PAGA actions are Representative Actions
An employee may bring a PAGA action on behalf of the Labor Commissioner to seek relief for
labor Code violations against himself or herself and other current and former employees.
3 types of violations:
1. More serious violations (Section 2699.5)
2. Health and Safety Violations (Section 6300)
3. Other Violations (Violations falling outside first two categories)

44. Private Attorney General Act (PAGA)
California Supreme Court holds that class action waivers are enforceable but
PAGA Representative Action Waivers are Unenforceable in Arbitration
Agreements
Iskanian v. CLS Trans Los Angeles, LCC (2014):
• The CA Supreme Court ruled that class action waivers in
arbitration agreements are enforceable. It held that the FAA
preempts a state’s refusal to enforce such waiver on grounds of
public policy or unconscionability (overturning Gentry v. Superior
Court (2007)).
• The court also held that agreement compelling waiver of employee’s right to
bring representative PAGA action is contrary to public policy and thus, as a
matter of state law, unenforceable.
-Note: The court did not express preference as to whether PAGA claims are to
be arbitrated or litigated—just that they cannot be waived in any contract

45. Private Attorney General Act (PAGA)
The U.S Court of Appeals for the Ninth Circuit upheld Iskanian in Sakkab v.
Luxottica Retail N. Am. (2015), holding that the waiver of PAGA representative
claims in arbitration agreements are unenforceable
• Sakkab’s appellate decision settled the dispute; prior to this case, the courts were split on
the issue of PAGA waiver enforceability, with a handful of federal courts ruling that
waivers of PAGA claims were enforceable and state courts ruling to the contrary.
• This ruling is binding on all lower federal courts in California.
• Facts: The case originally arose when Sakkab, a former
employee of Lenscrafters, filed a putative class action
complaint against Luxottica, the owner of Lenscrafters, for
(1) unlawful business practices, (2) failure to pay overtime,
(3) failure to provide accurate itemized wage statements, (4)
failure to pay wages when due. The Plaintiff also added a
non-class representative claim for civil penalties under
PAGA.

46. Private Attorney General Act (PAGA)
PAGA Representative actions do not fall under the category of “class action”
Arias v. Superior Court (2009) The court held that PAGA claims may be pursued without
meeting Rule 23 class certification requirement, arguably facilitating execution of PAGA
claims.
Urbino v. Orkin Services( 2014) On appeal, the Ninth Circuit Appellate Court
addressed the issue of whether PAGA actions may be removed to federal court, which
required a look at whether PAGA claims may be classified as “class actions.” The court found
that PAGA claims, unlike “class actions” consist of “employee claims that are not “common
and undivided” and thus the penalty amounts could not be aggregated to meet the $75,000
claim requirement for the purposes of diversity jurisdiction.
Thus it was held that federal diversity jurisdiction may not be exercised over PAGA claims (28
U.S.C Section 1332).
What this Means for Employers
• Representative PAGA claims are not “class actions”
• PAGA claims may not be removed to federal courts based on diversity jurisdiction

47. Private Attorney General Act (PAGA)
• Amendment to CA Labor Code Section 226 threatens to increase the number of
PAGA Suits
Labor Code Section 226 Amendments:
Amendment to CA Labor Code Section 226 lowers the standard for proving a wage
statement violation by employer:
-Showing of “knowing and intentional failure” to comply with code requirement is no
longer required.
-A showing of a harm is now presumed.
How does this Impact employers?
-Wage statement violation class-action suits may prove costly
-PAGA claims broaden enforceability of statutory violations
-Anticipated increase in wage statement claims due to new sick leave law
Employers should protect themselves by ensuring compliance with 9 statutory wage
statement obligations (See handout)

48. Private Attorney General Act (PAGA)
• The legislature responds to increase in section 226 PAGA suits with AB 1506
AB 1506 Urgency Bill signed by governor on October 2, 2015
• Amendment to the California Labor Code Private Attorney General Act.
• Provides employers with right to cure Section 226 violations, including
failure to provide employees with wage statements that contain (1) proper
pay period dates and (2) employer’s legal name and address.
• Removes Labor Code Section 226 from list of enumerated “serious
violations.”
• Enables employers to cure violations by providing aggrieved employees with
fully compliant itemized wage statements for each pay period for previous 3
years.

49. Joint-Employer Liability – AB 1897
• The bill took effect January 1, 2015 and requires employers to share with labor contractors all
civil and legal liability for the payment of wages and provision of workers compensation
coverage.
• A labor contractor is defined as “an individual or entity that supplies, either with or without a
contract, a client employer with workers to perform labor within the client employer’s usual
course of business.”
• Advice for Employers:
• Employers need to carefully review the contractors who provide workers for their
companies.
• While companies cannot contract around the provisions of the new law, companies can
enter into indemnification agreements with the staffing agencies to mitigate some of
the risk.
• Companies should audit the staffing agencies they work with to insure they are
compliant with the law, and should consider asking for indemnification from the staffing
agency should there be any wage and hour violations.

50. Questions