In Thursday’s post, I explained why employers can’t win in employment litigation in California. The costs of even a favorable outcome can be so prohibitively expensive that the highest degree of success is only achieved by avoiding litigation in the first place.
So how do employers minimize the likelihood of getting sued by their employees? The answer is easy: don’t break the law. Putting that into practice, however, is trickier. California law is full of "gotcha" provisions that keep in-house counsel awake at night. So someone in the employer’s organization (or advising the employer’s organization) needs to understand California employment law well enough to identify where the employer is vulnerable.
This involves understanding, at the very least:
- How California law differs from federal law in determining who gets overtime and how it gets paid;
- The extent to which California law applies to employees traveling to California for business;
- The requirements for meal and rest periods;
- How state law determines who is an independent contractor;
- The rules regarding vacation accrual and payouts;
- What deductions from wages are allowed;
- What information must appear on a paycheck and itemized wage statement;
- Deadlines for paying terminating employees;
- The various leaves provided by state law, including pregnancy disability leave, paid family leave, leaves for parents of kids in school, sick leave, and “kin care;”
- What categories are protected against discrimination and harassment in California;
- What policies, handouts, posters, and trainings are required by state law;
- What policies, handouts, and trainings, even if not required, can significantly reduce a company’s exposure to employment-related claims;
- The interactive process for determining whether a reasonable accommodation is available to a disabled employee or applicant;
- The rights of domestic partners;
- The prohibition against covenants not to compete;
- The privacy rights guaranteed by the first section of the first article of the state constitution (and how they apply to drug testing, employee searches, background checks, and the like); California’s analogs to COBRA, the WARN Act, FMLA, OSHA, and other federal statutes;
- California’s requirements for an Injury and Illness Prevention Program;
- How best to document decisions regarding terminations, demotions, and other similar events;
- What documents to retain and for how long; and
- Who to turn to when questions arise.
California employment law is complex and constantly changing. And determining where a particular company is most vulnerable depends on the company’s size, industry, location, organization, the makeup of its workforce, and other factors.
But the choice is simple. Do you make a concerted effort to identify and address vulnerabilities now or do you wait until there’s litigation when the cost of fixing the problem will be many times greater?
In part, this post answers the question British Columbia-based employment lawyer Earl Phillips asked me in this post -- how do you minimize the risk of a runaway jury? You minimize that risk by periodically reviewing your human resource policies and practices to determine if you're compliant with California employment law. I’ll post the second part of that answer – involving mandatory arbitration agreements – shortly.
Also, you can download our brief discussion on unique aspects of California employment law here (pdf).