While everyone’s been paying attention to AB 5, the Legislature, agencies and courts have continued their work. Here are some quick takes. I’ll have some more in a couple of days.
The U.S. DOL Re-Issues Regulations Regarding Overtime
The Department of Labor’s long-delayed overtime regulations are back on. The DOL filed a “final rule” for review. The main issue is that the federal “salary basis test” will increase to $35,568 for white collar exemptions, and it will increase to $107,432 for the “highly compensated” exempt employees’ test. Employees will be able to apply up to 10% of certain variable compensation like bonuses to the salary test to qualify. The previous regulations were tied up in litigation. It may be that a lawsuit is filed against these regulations as well. Stay tuned.
Of course, in California, the minimum salary basis for white collar exempt employees is 2 times the state minimum wage times 40 hours / week, which is well in excess of $35,568. The “highly compensated’ short-test exemption does not apply in California, although there are different highly compensation exemptions for certain hourly compensated computer professionals and medical professionals. However, employers in other states may be affected to a greater degree by the new regulations.
You can read about the new proposed federal regulations here.
No “Component 2” Data Obligation Next Year?
Employers currently complying with submitting EEO-1 Forms and in particular the “Component 2” compensation data apparently will not have to worry about repeating the “Component 2” part of the exercise next year. The Equal Employment Opportunity Commission posted a notice (here) that rather cryptically indicates it will not require submission of Component 2 data in 2020. There is an election in 2020, I am told. So, the Component 2 data requirement could return in the future…
No “Tameny” Common Law Claim for Wrongful Failure to Hire in Violation of Public Policy
The California Court of Appeal held that there is no claim for common law “wrongful failure to hire in violation of public policy.” The tort of “wrongful termination in violation of public policy” allows employees to enjoy a two-year statute of limitations, and avoid the Fair Employment and Housing Act’s administrative charge requirement, but does not allow for recovery of attorney’s fees. The Court declined to extend the tort to failure to hire in Williams v. Sacramento River Cats Baseball Club, LLC (opinion here).
Is Dynamex Retroactive?
The Ninth Circuit has asked the California Supreme Court to rule on whether the Dynamex decision (ABC Test for independent contractor status) is retroactive. If so, the ABC Test will apply to claims based on the IWC Wage Orders that predated the 2018 Dynamex decision. The Ninth Circuit’s request is here.
Significant EPLI Development, Maybe
Employers with EPLI (Employment Practices Liability) coverage may wish to call their brokers. The Court of Appeal in Southern Cal. Pizza Co. LLC v. Certain Underwriters Etc. decided that an EPL policy covered certain wage and hour claims, despite a wage and hour exclusion that was written in the policy. As a result, those employers with similar policy language may be or may have been entitled to coverage for certain claims that were previously denied by the insurer. Or not. Talk to your brokers or coverage counsel. But the case is here.