TPO's Employment Update


n  Upcoming Training Calendar

n  TPO Conference Recap

n  Sue Your Boss Law

n  HR Rumors



Training Calendar

CA Employment Essentials (HR101)

n  April

Management Excellence Series

n  May - June

Specialized Workshops

n Uncomplicating Retirement Plans & Administration
March 22

n HR Automation:
Data Management Made Easy! 
April 19

n Prevention of Harassment & Discrimination

n Can't We All Just
Get Along?
June 21


With over 200 public, private and nonprofit employers in attendance, TPO's February 9 conference received rave reviews.

Richard Simmons filled the morning with a predictably entertaining and profoundly informative session. At lunch, we learned about some of the challenges and strategies affecting CA employers in Sacramento from Secretary of State Bruce McPherson. Then our afternoon session leaders shared insightful and practical expertise to keep us on the leading edge:

Terrence L. Garciulo;

Robert Wendover;

Martha Finney and,

Romanus Wolter

Photo provided by
Monterey County Herald

PS: Congratulations to Romanus who has just officially become "Trump University's Success Guru"!

Again, we would like to thank all of our cosponsors for their assistance with spreading the word about the conference: InterWest Insurance Services, Inc., Monterey Peninsula Chamber of Commerce, Monterey County Herald and, Santa Cruz Sentinal and
SantaCruz, Hayashi & Wayland, Pinnacle Business Services, TAB, JL White International, and the SCCMA.

And thanks to all of you who attended!
If you weren't there, you truly missed


Click here for Monterey County Herald's feature article covering the day.

We look forward to seeing you all at

TPO's 2007 Annual Employment Law & Leadership Conference!


A Recap of Richard Simmons, ESQ

Presentation at TPO's Employment Conference on 2/9/06

(Prepared and provided by TPO)

With a brilliant combination of legal expertise and cunning humor, Richard Simmons was able to drive his point home: "Employers cannot sit idly by and hope that ignorance of a rule is a defense or that a failure to comply with their state and
federal obligations will go undetected."

2006 marked a year with less of an emphasis on new legislation (laws) and more of an emphasis on judicial review (court cases) dealing with clarifying employment laws
from the past.

Court Cases

CA Supreme Court Decisions:

n  Personal Liability – 8/05 class action lawsuit claiming that in addition to the company paying $210 million for misclassifying exempt / non-exempt positions and the associated overtime penalties, that the eight executives of the company should also be personally liable for the misclassification. While the CA Supreme Court did not find personal liability, one Justice sent a letter to the CA Legislature asking for more personal liability when forming employment laws.

"There are 2 to 8
wage and hour
class action suits
filed every day in

"It is out of control
and the wheels are
off the wagon!"

Richard Simmons, ESQ

n  Partial-Day Deductions of Vacation/PTO Time for Exempt Positions – 7/05 decision that now aligns CA with a Federal allowable practice of making partial-day deductions of exempt employee's vacation/PTO banks of time.

• Side Note from Richard Simmons: While this may be allowed according to the CA Supreme Court, it may not make sense depending upon your organization. For organizations where employees in exempt positions work Monday – Friday, 9-5, it is one thing to deduct ½ day of vacation; however if you have employees in exempt positions who work 6 days a week, 12-14 hours a day, a deduction for a ½ day off might not be an employee relations-friendly practice.

• Side Note from TPO: While Richard Simmons was very clear in his opinion that CA employers may now make such deductions, there is information from other reputable sources indicating continued caution. Such sources state that the recently revised DLSE (the agency that hears and decides on CA Wage & Hour cases) Enforcement and Interpretations Manual still provides that partial day deductions cannot be made from vested wages (vacation/PTO).

n  Harassment and Favoritism – 7/05 decision that widespread favoritism can be harassment if it sends the message that preferential treatment occurs if an employee is engaged in a real or perceived romantic relationship with a manager, if not engaging in such a relationship results in deferential treatment, or if women are in general characterized as "play-things."

   Although an isolated instance of favoritism on the part of a supervisor toward a female employee with whom the supervisor is conducting a consensual sexual affair ordinarily would not constitute sexual harassment, when such sexual favoritism in a workplace is sufficiently widespread it may create an actionable hostile work environment.

n  Physical Attractiveness – 2005 decision that showed a manager who refused to terminate an "unattractive" employee and replace the employee with one who was "hot" could have a claim for retaliation for not following the directive, even though she never complained internally about the process. Essentially, "a whistleblower without a whistle" according to Richard Simmons.

"Never tell a supervisor to hire a "HOT" employee!"

Richard Simmons, ESQ

CA Court of Appeals Cases:

n  Regular Rate of Pay – 8/05 case clarifying that the "regular rate" includes non-discretionary bonuses (bonuses based on productivity, quality and similar calculations) and shift differentials.
To calculate overtime, the "regular rate of pay" must be calculated each workweek.

• "Regular Rate" equals all compensation divided by the total hours worked

n  Meal Periods – For every meal period that an employee does not take, the employer owes an additional hour of pay. At odds in the CA court system is whether that pay is a "penalty" (1 year statute of limitations) or a "wage" (4 year statute of limitations). Due to conflicting appellate rulings, expect the CA Supreme Court to take on the issue.

n  "Sue Your Boss" – 11/05 case allowing an employee to bypass reporting claims to the Labor Commissioner and, instead, suing the employer directly. An employer must respond to any letter addressing such claims in order to reduce liability. For more information, read "Sue Your Boss" (PAGA) in this issue.

Circuit Court Appellate Cases:

n  Pre-hire Process, 9th Circuit (CA's Jurisdiction) – An offer of employment can be made contingent upon the successful completion of a "medical exam" however; such exams must be completed after ALL other non-medical post-offer considerations (background checks, etc.).

n  Personality Tests, 7th Circuit – The MMPI (Minnesota Multiphasic Personality Inventory) is a personality test which is not allowed in the employment process because it inappropriately divulges characteristics which might be covered under disability anti-discrimination laws.

CA Court Case:

n  Meal Periods – 12/05 a jury awarded $172 million in damages, including $115 million in punitive damages, to Wal-Mart employees in a class action lawsuit who accused the giant retailer of violating California law covering meal period which requires workers take a half-hour meal period during any work period of more than 5 hours per day. The high dollar amount of the punitive damages was sent as a "message" to employers that such practices would not be tolerated.

"Class action lawsuits: great for plaintiff attorneys…

bad for employers"


Richard Simmons, ESQ

CA Legislation

n  Final Paychecks – Final paychecks may be made by direct deposit to the employee's account, however, the deposit must be made within the required timeframes: 1) immediately upon "termination", 2) on last day of work if "resignation" period is more than 72 hours, and 3) within 72 hours if "resignation" period is less than 72 hours.

Audit the High Risk Areas

n  Meal Periods – 5 different "zones" depending on the length of the shift:

1. Working no more than 5 hours = no meal period required.

2. Working more than 5, but no more than 6 hours = 30 minutes, however may be waived through mutual agreement.

3. Working more than 6 hours, but no more than 10 hours = 30 minutes.

"Watch out for slippage!"

Richard Simmons, ESQ

If an employee works one minute over the zone, they move into the next zone.

4. Working more than 10 hours, but no more than 12 = two, 30 minute meal periods, however one may be waived through mutual agreement.

5. Working more than 12 hours = two, 30 minute meal periods with no provision for waivers.

n  Pay Stubs – 9 items must be on each pay stub:

1. Gross wages earned

2. Total hours worked for non-exempt positions – This is true for all non-exempt positions, therefore, "salaried", non-exempt employees should also list all hours actually worked rather than an automatic number each day. This requirement is one of many reasons to not have "salaried", non-exempt positions.

3. The number of piece-rate basis

4. Deductions

5. Net wages

6. Dates the pay-period covers

7. Employee's name and social security number (no more than the last four digits)

8. Name and address of the legal entity that is the employer

9. All applicable hourly rates in effect during the pay period with corresponding hours worked for each hourly rate

"Either you can audit your employment practices, or a plaintiff's attorney can audit them for you!" 

Richard Simmons, ESQ

n  Harassment – Take all "affirmative" steps to prevent harassment. An employer's first line of defense, called the "Avoidable Consequences Doctrine" may reduce the liability and/or damages from a claim of harassment if two things exist: The employer took all steps necessary to prevent harassment in the workplace, and the employee did not complain or take other reasonable steps for the employee's own protection.

1. Training – CA law requires employers with 50 or more employees to train managers/supervisors/leads on preventing harassment in the workplace. The requirement extends to employees who are not in CA, but who do supervise CA employees.

• Richard Simmons Recommendation: In order to use training as a viable defense in a harassment complaint, it is recommended that ALL employers train ALL employees in ALL states.

• Side note from TPO: TPO provides "The Prevention of Harassment and Discrimination in the Workplace" training both at TPO's training location in Monterey (next program - May 17) as well as at the client's site. Additionally, TPO can arrange for remote broadcast of the training to reach employees in other locations.

2. Policy – Ensure that Harassment Policies address how and to whom employees can complain.

3. Signature – Obtain a signed acknowledgement of the Company policy upon hire.

If you attended the Conference, you know that Richard Simmons spoke enough words
to fill many pages with text. The purpose of this recap was to hit the highlights.
If you have any questions, please contact TPO via

Richard Simmons can be reached via
His books can be purchased through Castle Publications

Compliance Audit Practices Under the CA Private Attorneys General Act 2004 (PAGA) standards have never been more important especially in California, which is certainly one of the most (if not the most) litigious state in the country.

Richard J. Simmons, who recently spoke at our TPO Employment Law & Leadership Conference, recommends that audit practices include key compliance areas such as those covered by the CA Labor Code and enforced by the Labor Commissioner's Office (such as posting notifications, meal and rest periods and payment of wages).

State law permits individual employees to file claims with the Labor Commissioner alleging violations of specific provisions of the Labor Code. As an alternative, PAGA allows employees to sue employers directly (therefore the name "Sue Your Boss Law") in court for damages, reinstatement and other appropriate relief if the Labor Commission declines to bring an action based upon a complaint.

According to PAGA, in order to sue an employer, an aggrieved employee must first give written notice by certified mail to both the Labor and Workforce Development Agency (LWDA) and the employer. The employer has the right to 'cure' the alleged violation within 33 calendar days of the postmarked date of the employee's notification. If the Labor and Workforce Development Agency intends to investigate, it must first notify the employer and employee within 33 days.

What Should You Do?

n  Respond immediately (at a minimum within the 33 day period) to any written notice - consider contacting a labor attorney or TPO for consultation.

n  Employers have the right to "cure" alleged violation within 33 days and notify employee and LWDA.

n  Comply with all provisions of the California Labor Code, including:

Breaks, meals, final pay, pay stubs, overtime, minimum wage, etc.

n  Post all required employment notices (Order your posters on TPO's website)

n  Do not retaliate against an employee who files a claim with a state labor agency.

As a reminder, TPO Members receive an Annual HR Check-Up as part of their membership where these areas are addressed (more about Annual Membership HR Check-ups here). During the fourth quarter of membership, TPO consultants meet with members to: discuss and confirm the HR initiatives accomplished within the previous period; ascertain what the member views as outstanding needs, priorities and challenges with regard to HR practices, and provide critical information to ensure the organization is aware of current legal requirements and up to date with best employee relations practices to optimize productivity and employee retention. Participating in an annual HR Check-Up can go a long way toward ensuring you are in the best possible position to defend against "Sue Your Boss" actions. We also provide this service to non-members for a fee.

If you have any questions regarding PAGA or scheduling an HR Check-Up, please contact us at

HR Rumors: Get Your Facts Straight from the Experts!

  If you're coasting on recent workers
   compensation premium reductions,
                you may be going downhill....

"Is it true that rates have really gone down on
Worker's Compensation premiums in CA?"

FactAccording to the Workers' Compensation Insurance Rating Bureau, average statewide insurer rates declined 18% between the first half of 2005 and the third quarter of the year. However, opponents of the reforms have prepared three versions of an initiative to reverse the beneficial changes. The three versions of the "Worker Empowerment Act" are:

n  Version 1 which would allow injured workers, 90 days after injury, to choose to remain within the workers' compensation system or file lawsuits against their employers.

n  Version 2 which would allow injured workers to choose their treating physicians. It would also repeal Section 4600.2 of the Labor Code, which allows employers and insurers to contract with third parties to provide medications.

n  Version 3 which would increase disability benefits, restore the presumption of correctness once enjoyed by treating physicians and require the Workers' Compensation Appeals Board to liberally construe statutes to the benefit of injured workers.

"So what's next, increased premiums AGAIN? SAY IT ISN'T TRUE!"

It COULD be! Don't Get Too Comfortable with Reduced Workers Comp Costs resulting from recent reform measures...we ALL better get involved NOW to combat current efforts to unravel the progress!

Clearly, reversing the recent and successful workers comp reform measures are BAD BUSINESS for California. But, believe it or not, that is exactly what some business opponents have in mind! How do we respond to such nonsense? One answer is to be proactive with your trade associations and with our state legislators.

You can also respond by working with TPO and other concerned employers. Dave Dias, with InterWest Insurance Services, is gathering employer interest and support to personally meet with our friends in the legislature who oppose these job-killer initiatives - and who support the recent reform measures that have proven to reduce employer premiums. Dave would welcome your input and involvement. You can contact Dave at, or call him directly at 831.688.1082.

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