California Public Agency Labor & Employment Blog

California Public Agency Labor & Employment Blog

Useful information for navigating legal challenges

Three Common Pitfalls in the Reasonable Accommodation Process

Posted in Employment

Wheelchair 2The Reasonable Accommodation Process continues to be an important issue for public sector employers. Under the ADA and FEHA, the employer has the duty to identify and implement a reasonable accommodation to allow a disabled employee to perform the essential functions of the job. Over the past several years, we have seen numerous public agencies have challenges with determining appropriate accommodations. As a result, we would like to re-emphasize some of the common pitfalls in this process:

1.     Over-reliance on the written job description

Job descriptions are critical in the disability interactive process for identifying the essential functions of the job.  This is one reason why we repeatedly urge employers to update job descriptions.  However, the employer should refrain from over-relying on the written job description for identifying the essential functions without considering what is actually occurring in the workplace.  For instance, a written job description for a parks maintenance worker may list removal of trees as an essential job function and state that this function requires the worker to use a heavy piece of equipment such as a wood chipper.  However, in practice, the maintenance workers may have only removed one tree in the last several years.   So this essential function may not be essential after all.  This is a fact-specific determination that should be made on a case-by-case basis. The important thing for the employer to do when determining the essential functions is to make the relevant inquiries of incumbents and supervisors for the job position and consider how the job is currently being performed.

2.     Failure to consider all vacant positions for reassignment

Reassignment to a vacant position should be considered in these circumstances: (1) accommodation within the individual’s current position would pose an undue hardship; (2) the employee can no longer perform the essential functions of the current position even with accommodation;  (3) if both the employer and employee agree that reassignment is preferable; or (4) if the employee so requests.

The employee with a disability is entitled to preferential consideration for assignment to a vacant position over other applicants and incumbent in-house candidates unless doing so would violate a bona fide seniority system.

The employer is not required to create a position.  Again, however, it is important for the employer to be aware of what is actually occurring in the workplace.  For example, the employer should inquire and consider whether there is a position that will be vacant within a reasonable period of time.

3.     Failure to analyze the undue hardship defense thoroughly

Undue hardship is an ADA and FEHA defense to the employer’s obligation to provide reasonable accommodation to a disabled employee.  The employer must affirmatively show that a requested accommodation creates an undue hardship.   Employers will sometimes cursorily conclude that the requested accommodation is too expensive and would cause financial difficulty and therefore is an undue hardship.  However, financial difficulty is not enough.  There are numerous factors, including cost, that must be considered when evaluating an undue hardship defense.  Employers should review all the ADA and FEHA factors and carefully analyze whether a requested accommodation would cause undue hardship.   Keep in mind that hardship is not enough to justify denying accommodations.  The hardship must be “undue.”  The hardship must create a significant difficulty or expense to the employer.  In enacting the ADA and FEHA requirements, Congress and the California legislature intended that some hardships must be shouldered by employers in order to accommodate disabled employees and applicants.

When Retirees Earn Post-Retirement Income, Is Your Agency Responsible for Their Increased Costs to Medicare?

Posted in Retirement

Retirement-Sign.jpgAfter the retirement parties are over, some individuals never truly retire.  Instead of taking it easy, some retirees choose to perform post-retirement work for non-CalPERS employers.  For example, a retired police captain may work for a private security firm and or a retired Human Resources director may open a private consulting practice.  While a retiree’s work for a non-CalPERS employer does not raise any issues regarding public agencies hiring retired annuitants, what many retirees do not realize is that if they earn a high amount of income and qualify for Medicare, Social Security will charge them an increased amount of their participation in Medicare.  This increased amount is called an “income-related monthly adjustment amount” (“IRMAA”).

The increased IRMAA may also impact public agencies if retirees have a vested contractual right to the agency’s retiree health care and possibly, payment of the IRMAAs.  The retiree may expect the public agency to pay for the IRMAA or reimburse the retiree for the IRMAA.  Depending on the contractual language conferring retired health care benefits, which may include full payment for Medicare, and the vested nature of such benefit, an agency may be responsible for covering the IRMAA.

Which Retirees are Subject to an IRMAA?

An individual’s most recent federal tax return determines the amount of his/her income.  Individuals who file taxes as “married, filing jointly” and have a modified adjusted gross income greater than $170,000 are subject to an IRMAA.  Individuals who file taxes using a different status and have a modified adjusted gross income greater than $85,000 are subject to an IRMAA.  If a Medicare beneficiary performs post-employment work and earns a high income, the Act requires Social Security to charge an adjusted IRMAA amount to the beneficiary for enrollment in Medicare Part B and/or Medicare Part D.

The Medicare Part B IRMAA

Medicare Part B provides medical insurance for services and supplies that are considered medically necessary to treat a disease or condition.  Individuals pay a monthly premium for Medicare Part B.  In addition to the standard monthly premium, an individual whose modified adjusted gross income exceeds the threshold amount is required to pay an IRMAA.  Failure to pay the billed amount may result in termination of the beneficiary’s coverage.

The Medicare Part D IRMAA

Medicare Part D provides prescription drug coverage.  For those participating in CalPERS health insurance, CalPERS prohibits retirees from enrolling in a separate, non-CalPERS Medicare Part D plan.  The Part D IRMAA must be paid through a withholding from the beneficiary’s Social Security benefit.  Where the beneficiary’s Social Security benefit is not sufficient, or the beneficiary has no Social Security benefits, Medicare directly bills the beneficiary.  Failure to pay the Part D IRMAA will result in termination of coverage.

When Retirees Seek Payment or Reimbursement for IRMAAs

If a retiree seeks payment or reimbursement for an IRMAA by a public agency, the public agency may understandably view the amount as an unnecessary burden.  After all, it does not make sense that the agency should pay for a retiree’s personal decision to perform post-retirement work, particularly when the retiree makes a lot of money from that work.  When faced with such a request, the public agency must determine two things: (1) whether any post-employment benefit to medical insurance is vested, and (2) if so, whether the benefit includes IRMAAs?

To determine if a post-employment benefit is vested, the agency must carefully review the language of any written documents creating any post-employment benefit.  A memorandum of understanding, personnel rule, employment contract, or other agency policy may create a post-employment benefit.  The idea of a vested right is that an employer promises a benefit in the future if the employee provides service today and the employer promises that the benefit will not be terminated or modified.

If a post-employment benefit has vested, the next step is to determine what post-employment benefit the employee is vested in by again looking to the language of the document creating the benefit, as well as the long-standing practices approved by the governing board that may give rise to implied contractual terms.  Does the agency’s document promise to pay the “full cost” of medical insurance in post-employment?  How does the document define what constitutes “medical insurance” and could it conceivably include Medicare?  If the language provides or could be interpreted to provide a vested right to the payment of Medicare premiums, then the agency may be responsible to pay the IRMAAs.

To complicate matters, many agencies provide post-retirement health coverage through CalPERS.  When retirees turn 65, CalPERS requires them to apply for Medicare Part A and Part B in order to keep their CalPERS health coverage.  Based on contractual language, a retiree could argue the agency has promised he/she can remain enrolled in lifetime health insurance at no cost.  Since he/she must enroll in Medicare Part B at age 65 to keep CalPERS medical insurance, the retiree could claim the agency has an obligation to pay for all of Medicare Part B, including IRMAAs.

Be careful in drafting MOU language, personnel rules, resolutions or other documents which confer retiree health care coverage and avoid the implication that the agency could be liable for payment of the IRMAAs. If retirees from your agency request payment or reimbursement for IRMAAs and you are unsure of your agency’s obligation to cover these costs, seek legal counsel to ensure that your agency is in compliance with any vested, contractual rights based on the specific language in your agency’s documents.

Tips from the Table: FLSA and Contract Overtime

Posted in FLSA, Labor Relations, Tips from the Table

We are excited to continue our video series – Tips from the Table. In these monthly videos, members of LCW’s Labor Relations and Negotiations Services practice group will provide various tips that can be implemented at your bargaining tables. We hope that you will find these clips informative and helpful in your negotiations.

21 States Sue the DOL to Stop Implementation of the New DOL Overtime Rule; Congress Weighs in Too

Posted in Legislation, Wage and Hour

DOLIn May of this year, the U.S. Department of Labor (DOL) issued a new rule that raises the federal salary basis for exempt employees to $47,476 per year, effective December 1, 2016.  The rule also increases the salary threshold level for the highly compensated employee exemption from $100,000 per year to $134,004 per year, and adjusts salary levels automatically every three years.  The Office of Management and Budget estimates the new rule will extend overtime coverage to more than 4 million employees nationwide.  While some employers have begun to take measures to evaluate the impact of the new rule on its pay practices, other employers have pushed back, using the courts and Congress to challenge the new DOL rule.

A Judicial Fix?

On September 20, 2016, two federal lawsuits were filed in the Eastern District of Texas against the DOL seeking to overturn its new rule.  The lawsuits – one filed by a coalition of twenty-one states (State of Nevada et al. v. U.S. Department of Labor) and the other filed by a coalition of business groups (Plano Chamber of Commerce et al. v. U.S. Department of Labor) – advance numerous legal theories to challenge the rule, including that the DOL failed to follow proper procedures when adopting the new salary threshold and that the automatic indexing for upward adjustments runs contrary to the terms of the Fair Labor Standards Act (FLSA).  The lawsuit filed by the states (California is not a party to the lawsuit) also argues that the rule is unconstitutional because the DOL does not have the power to dictate how state governments pay their employees and spend state resources.  The states’ lawsuit argues further that the FLSA delegates too much power to the DOL and that the 1986 decision extending the FLSA to the states, Garcia v. San Antonio Metro. Transit Authority, should be overruled.  The lawsuits also ask the courts to block enforcement of the rule.

Congress to the Rescue?

On the legislative front, the U.S. House of Representatives voted 246-177 on September 28, 2016, to delay implementation of the DOL’s new rule by six months.  The bill, H.R. 6094, was brought as an emergency measure by Rep. Tim Walberg (R-MI).  A companion bill was introduced by Sen. James Lankford (R-OK) in the U.S. Senate on September 29.  The White House has publicly stated that if the President were presented with H.R. 6094, he would veto the bill.  Another Congressional bill has been introduced that would, according to Sen. Tim Scott (R-SC), “nullify” the new DOL rule.

What Should Be Done Now?

Employers who pay their exempt workers less than the proposed new salary threshold are truly between a rock and hard place.  December 1 is less than two months away.  Taking a “wait and see” approach is risky as there is no assurance that the courts or congress will overturn the rule or delay the implementation date.  Indeed, it is extremely difficult to predict how or when a judge will evaluate the merits of the federal lawsuits.  Moreover, even if both the House and Senate pass emergency measures to delay the new DOL rule’s implementation, the Obama administration has threatened to veto any such bill.  With no clarity that the new DOL rule will be overturned or stayed, employers should prepare for implementation while monitoring for new developments on the judicial and legislative front.  Any decision to “wait and see” should be made after careful consideration and in consultation with legal counsel.

Appellate Law — What Are Amicus Curiae Briefs?

Posted in Appeals

2A couple of years ago we blogged about Amicus Curiae briefs, their role in the appellate law, and how they can benefit California’s employers. Since our original post, we witnessed a number of cases in which Amicus Curiae briefs played a significant role in landmark cases.  Such briefs continue to be an important way for employers, and in particular public employers, to help shape the law.  Accordingly, we thought it would be helpful to re-visit this blog entry.

Public agency officials and employees may read newspaper articles about recently decided landmark cases in public sector labor and employment law, and may feel relief, anger, surprise, or vindication in the result.  This is especially true if the decision impacts how the agency functions on a day-to-day basis.  These same individuals may also find developing U.S. Supreme Court and California Supreme Court decisions important and interesting enough to want to join the fight directly in a particular case, and try to persuade the Court which way a case should be decided.  Understandably, though, they would prefer not to do this if it meant their agency had to be a defendant in a lawsuit.

There is a way organizations can join the fight on landmark cases without having actually to be a party, and that is by filing an amicus curiae brief with the Court.

The brief of an amicus curiae (“friend of the court”) is submitted by a company, government agency, trade association, or other organization or individual who is not an actual party to the case but wishes to contribute argument or general information for the Court to consider.  Leave of Court is required to submit an amicus brief.  Although Courts usually grant such leave freely, they expect organizations seeking to file briefs to explain why they have an interest in the case’s outcome, and also to explain how their brief can help the Court decide the case.  Such briefs can be filed not only in the U.S. Supreme Court and state Supreme Courts, but in state and federal intermediate appellate courts.

Why would a lower level appellate court decision in a particular case, or even a Supreme Court decision, be important to an agency?  To understand this requires a short digression on the principle of precedent, something all lawyers learn in law school but rarely have occasion to explain in detail to clients.  Rules of precedent require courts to follow the prior decisions of higher courts.  In both state and federal courts, the decisions of trial courts (the first level of courts which conduct jury trials and bench trials, rule on requests for writs, and conduct other proceedings) are not precedential.  Their decisions affect the parties only, and although for example a large jury verdict or an injunction may send a “signal” to an industry, the outcome does not control anyone except the parties.  A Court of Appeal decision designated for publication, however, is controlling on all trial courts in the state.  Thus, if the Court of Appeal holds that individual supervisors can be held personally liable under the Fair Employment and Housing Act (“FEHA”) for retaliation, then every trial court in the state has to follow that holding and has to take that position in every case.

The losing party may, a short time after the appellate case is decided, ask the California Supreme Court to review the case.  The Supreme Court picks and chooses the cases it takes and does so with an eye toward shaping California law.  If the Supreme Court decides to review the Court of Appeal decision in our example, and ultimately reverses it, holding that supervisors cannot be personally liable, then every Court of Appeal, as well as every trial court in California, must follow this rule.  (The Supreme Court in fact rejected a rule of personal liability for retaliation in Jones v. Lodge at Torrey Pines, 42 Cal. 4th 1158 (2008), a case in which our firm participated in amicus briefing.)

Federal courts work the same way.  The first level of the appellate courts, the one that can issue binding decisions in California, is called the United States Court of Appeals for the Ninth Circuit, which lawyers commonly call just the “Ninth Circuit.”  It covers other states as well, including Arizona, Nevada, Hawaii, and Alaska.  Other federal circuits cover different states, and at the top of all the “circuits” is the United States Supreme Court, which, like the California Supreme Court, picks and chooses the cases it takes, and issues decisions that control all the circuit courts and all the federal trial courts.  As you would expect, the California Supreme Court generally decides issues of state law and the U.S. Supreme Court issues of federal law.

Thus, influencing how an appellate court decides a case can be important, and influencing how the U.S. Supreme Court or a state Supreme Court rules can be very important.

What are the best arguments for amicus curiae briefs to make?  Generally, they are those that present the organizations’ unique perspective in a cogent light.  For example, in an employment case between an individual and a private company, neither side may think to brief the Court on how the Justices’ decision will affect the public sector, where employment laws can apply differently.  Briefing by public organizations can alert the Court to these issues, so that the Court’s holding can be phrased to avoid unintended problems in the public sector.  Briefs can also emphasize the impact of the case’s ruling on particular segments of the workforce, for example, police, fire, utilities, or educators.  Perhaps most importantly, the amicus brief can present practical, real-world examples from the sponsoring party’s industry, that show why as a public policy matter the Court should rule in a certain way, or at a minimum craft its’ ruling to avoid certain pitfalls.

In addition, although it is a less traditional function, amicus briefs can join the legal debate directly by advancing unique and/or creative legal arguments the parties might not have presented.  It can develop one side’s legal case in an alterative way, or even in a more forceful way, if the party was reluctant to take certain approaches or positions.  (That said, counsel for the actual parties have often spent enormous time on the case, and may not have made certain arguments for tactical reasons.  It is best to coordinate with them in presenting arguments.)

As described above, intermediate appellate cases are important areas for amicus briefing as well.  What are a few rapidly developing areas of employment law to which amicus briefing could contribute at this level?  A partial list is the vested rights of public employees in retirement benefits (a very rapidly developing area), enforceability of arbitration agreements, cyber-bullying and the First Amendment rights of students, use and misuse of social media by public employees, anything regarding the scope of laws against harassment and discrimination, and increasingly the protections for concerted activity of individual non-unionized employees under labor relations statutes.  This is definitely a partial list, however.  In fact, any published case that has an important effect on public employers is worth consideration as a candidate for amicus briefing.

What steps can an agency actually take?  Trade associations and leagues designed to benefit the agency can help.  The agency should be sure to consult lawyers with expertise not only in appellate law and preparation of amicus curiae briefs, but in the substantive area of law at issue – be it retirement, wage and hour, disability, employee free speech, privacy, or labor relations.

The Importance of Posting a Salary Schedule

Posted in Retirement

Retirement-Sign.jpgThis post was authored by Heather Coffman

We’ve all heard the saying, “If it’s not written down, it didn’t happen.”  In the context of retirement benefits for PERS members, the saying is slightly modified: “If an employee’s salary isn’t set forth on a properly adopted salary schedule, that individual’s retirement benefits may not pay out as expected.”  While a mouthful, the message is an important one: employees’ salaries must be part of a publicly available, posted salary schedule to be counted by PERS when calculating pension benefits.  PERS’ regulation requiring a publicly available pay schedule is often overlooked, with potentially serious consequences.  Here we will review the requirements under the regulation, and identify actions your agency can take if it’s not currently in full compliance.

Establishing Compensation Earnable:  Requirement for a Publicly Available Pay Schedule

When a member retires, PERS is tasked with determining the amount of “compensation earnable” to determine how much that individual will receive as a monthly pension in retirement.  Compensation earnable is a term defined by the Public Employees’ Retirement Law (“PERL”), section 20636.  Generally, compensation earnable is calculated using the member’s pay rate and special compensation the employee earned while working for the contracting agency.

To determine the pay rate for the compensation earnable equation, PERS will only consider the normal monthly rate of pay or base pay that is established on a publicly available pay schedule.  That pay schedule must meet several criteria, detailed in Title 2 of the California Code of Regulations, section 570.5.  First and foremost, the governing body must have approved and adopted the pay schedule as a standalone document detailing the pay rates for each agency position.  The schedule must be publicly accessible, and available for inspection for at least 5 years.  The schedule itself must also include the following: every position’s title; the base salary for each position (ranges or steps); the time base for how pay is calculated (i.e., hourly, bi-weekly, etc.); and the effective date and dates of revisions.

Consequences for NOT maintaining a compliant salary schedule

If an employer does not establish the publicly available pay schedule outlined above, PERS may consider additional relevant information to determine the appropriate pay rate for the employee or employees.  However, the PERS Board has the sole discretion to decide what the pay rate should be.  PERS usually limits the member’s pay rate to the salary that was part of the publicly available pay schedule that was approved by the agency’s governing board and disregards most other evidence presented to support including the additional compensation into the pay rate.  As a result, individuals may receive a lower monthly pension benefit than expected.

Does your agency employ individuals whose positions are not part of an established salary schedule? 

To avoid any unwelcome surprises when PERS determines pay rates when calculating compensation earnable, we recommend a careful review of your agency’s pay schedule practices.  Here are a few common issues that you should consider:

  • Is the position and title of every person who is enrolled in PERS on the agency’s pay schedule, including employees with individual employment agreements?
  • Do employees in certain classifications receive annual increases to their base pay rates under a memorandum of understanding or collective bargaining agreement? If so, has your agency’s governing board approved, and published, updated salary schedules each year to reflect those annual increases?

If the answer to the questions above is no, then your agency may not have a properly administered pay schedule.  In practice, employers should make sure that their governing bodies adopt one unified pay schedule that includes all employee classifications.  Additionally, the governing body should adopt an updated pay schedule every year that salaries change – including pursuant to a negotiated memorandum of understanding, or per an employment contract for an unrepresented employee.    Further, the governing body should not simply pass a resolution adopting the salaries that are detailed in a separate document, like a memorandum of understanding or collective bargaining agreement.  The salary schedule should be its own, standalone document that the governing body adopts in a publicly-noticed meeting that complies with all open meeting laws.

If you have any questions as to how to ensure compliance with this PERS regulation (section 570.5 of Title 2 of the California Code of Regulations), please consult legal counsel.

Employers, Prepare for the Wave of Unequal Pay Litigation

Posted in Employment, Workplace Policies

African-Woman-Interviewing.jpgDear Human Resource Managers (and other interested management):

How many times has an employee complained to you that he or she was not being paid fairly?  Certainly, at least once and possibly more.  What was your impression of the complaint?  Did you immediately disagree?  Did you understand what the employee was actually complaining about?  Did you believe the complaint to be accurate?  Did you have any idea what to do?

Despite the California Equal Pay Act being enacted in 1949, unequal pay in the workforce is not a myth but a reality.  (Yes, it was 1949.)  Unequal pay is a problem for employers and employees even after nearly 70 years of laws against it.  A recent report found that as of 2013, female employees in California earned on average 84 cents on the dollar compared to male employees.  Women of color fare even worse with African-American women earning 64 cents on the dollar and Latina women earning 44 cents on the dollar.  California’s working women lose $33 billion per year as a result of the wage gap.  These are troubling statistics that should cause concern among human resource managers.

While wage and hour class actions and challenges to arbitration clauses continue to dominate employment litigation, the next wave of lawsuits could be unequal pay claims.  Prior to the January 1, 2016 amendments to the California Equal Pay Act [Gov. Code, sec. 1197.5], the most recently published California appellate court decision regarding unequal pay was in 2003.  Notably, only four cases that directly concern unequal pay claims have been published in California since 1968, which suggests that unequal pay litigation has not been significantly pursued.  Moreover, in just one of the four published cases was the employee successful in proving an unequal pay claim.

At this point, you may be asking why then should employers be concerned when these types of claims are far and few between?  The reason for concern is that the amended Act makes it easier for an employee to assert the claim and much more difficult for the employer to defend it.  The California Department of Industrial Relations describes the major changes to the law as:

  • Requiring equal pay for employees who perform “substantially similar work when viewed as a composite of skill, effort, and responsibility.”
  • Eliminating the requirement that the employees being compared work at the “same establishment”
  • Employers supposedly will have increased difficulty in satisfying the “bona fide factor other than sex” defense.
  • Legitimate factors relied upon by the employer must be applied reasonably and account for the entire pay difference.
  • Retaliation against employees seeking to enforce the Act is prohibited and employees are expressly permitted to discuss or inquire about a co-worker’s wages.
  • Employers must maintain wage and other employment records for three years instead of two.

The majority of the factors are straightforward.  The challenge for employers will be in defining “substantially similar work when viewed as a composite of skill, effort, and responsibility.”  Prior to the amendment, the statute referred to “equal work” and now it is “substantially similar work.” What’s the difference?  At this point, we do not know exactly what that difference will be when examined by a court since no appellate decisions have addressed the statute’s amendments.  We can make educated predictions based upon interpretation of the previous language compared to the new language.  An often cited example is to compare a hotel janitor to a hotel housekeeper.  Under the previous language, the argument that the two positions are not equal likely would have withstood challenge because the skill, effort, and responsibility were not exactly the same.  For example, a janitor may be required to lift heavy objects but the housekeeper does not.  The “substantially similar work” is less restrictive and a reasonable argument could be made that the two positions are substantially similar enough to support an unequal pay claim.

The ostrich approach to dealing with these issues may sound appealing because employees rarely complain about unequal pay.  A proactive approach in most circumstances, however, is better than a reactive one.  In two recent settlements of unequal pay class action claims, one employer agreed to pay $19.5 million in back pay to 3,300 female engineers and another employer agreed to pay $4 million to 300 female claims litigators and $1.8 million to their attorneys.

So, what can you do to avoid these types of claims?  Audit your pay practices, even if you have a set salary schedule.  Placement on the salary schedule could establish an unequal pay claim if the male and female are equal but the female is placed in a lower step than the male.  For example, a female employee with a county office of education learned a male colleague was earning $12,000 more per year than she was despite her having more experience, education, and seniority.  Also, they performed the same work and she was hired four years before he was.  When she discovered that she was placed on step one of the ten step salary schedule when she was hired and he was placed on step nine at the beginning of his employment—a significant disparity—she asked for the situation to be remedied.  When it was not, she filed a lawsuit.

Review and make necessary revisions to job descriptions.  Also, if you have not reviewed the salaries of higher level managers, it may be worth commissioning an outside agency to conduct a class and compensation study.  Correcting errors before a lawsuit is filed will ultimately save the employer money.  Also, having an understanding of your employer’s pay practices, such as seniority, merit, etc., will allow you to explain to employees how wages are determined and that the wages are in fact equal.

Tips from the Table: Listening During Negotiations

Posted in Labor Relations, Negotiations

We are excited to continue our video series – Tips from the Table. In these monthly videos, members of LCW’s Labor Relations and Negotiations Services practice group will provide various tips that can be implemented at your bargaining tables. We hope that you will find these clips informative and helpful in your negotiations.

Do You Have Seasonal Workers? What To Know About Health & Retirement Benefit Obligations

Posted in Retirement

Retirement-Sign.jpgThis blog post was authored by Erin Kunze

As the summer season winds down, so do public agency departments that hire seasonal workers to staff summer camps, pools, extended park and recreation hours, and a myriad of season-specific facilities and activities. But, just how do seasonal workers impact the agency’s health and retirement benefit obligations?

  1. The Affordable Care Act (“ACA”), Seasonal Worker Exception

The number of seasonal workers you hire may impact whether your agency is subject to certain ACA obligations. Under ACA, employers that have at least fifty (50) full-time employees, including “full-time equivalent” employees, on average during a particular year, qualify as “Applicable Large Employers” subject to the Act’s shared responsibly and employer information reporting provisions for offers of minimum essential coverage.* However, ACA provides a limited exception to the Applicable Large Employer calculation for employers with “seasonal workers.” (Note: Admittedly, there’s a lot of ACA jargon here. For a primer on ACA, we recommend reviewing our March 2014 post)

Under the exception, an employer will not be considered an Applicable Large Employer if the following are both true:

  • the employer’s workforce exceeds 50 full-time employees (including full-time equivalents) for 120 days or fewer during a calendar year; and
  • the employees in excess of 50 during that period were “seasonal workers.”

This exception is narrow, and must be carefully applied.  For the purposes of ACA, a “seasonal worker” must be a worker who performs labor or services on a “seasonal basis,” such as a ski instructor or retail workers employed exclusively during holiday seasons. Seasonal based work means work that “ordinarily” pertains to or is of the kind exclusively performed during certain seasons or periods of the year, and which, “from its nature,” may not be continuous or carried on throughout the year.  Accordingly, if your agency’s camp, park, or swimming pool is only operated during summer months, or if it operates at a high demand or for extended hours, only during summer months, the employees associated with the limited seasonal operation may qualify as “seasonal workers” under ACA.  If the employment of those workers also lasts 120 days or less, they may be excluded from the agency’s Applicable Large Employer assessment.

As an aside: we caution that ACA also uses the term “seasonal employee,” which is used in the employer shared responsibility provision, in a different context than “seasonal worker.”

  1. California’s Healthy Workplaces, Health Families Act

Despite the ACA requirements discussed above, seasonal workers may be entitled to paid sick leave under California’s Healthy Workplaces, Healthy Families Act. Even a part-time, seasonal worker will be entitled to accrue paid sick leave if the employee works for at least 30 calendar days in a year.  However, the employee must be employed for at least 90 days before he/she is entitled to use accrued time. When it comes to seasonal workers, be sure to check the 30/90 day requirements against your agency’s sick leave policy.  In some cases, the agency’s policy may be more generous.

  1. The Public Employees’ Retirement Law (“PERL”), Seasonal Employment Exception

Careful consideration is required when determining whether “seasonal” workers are entitled to membership in the Public Employees’ Retirement System (“PERS”).  Under the PERL, certain part-time or limited term employees are excluded from membership in PERS.  Under any circumstance when the employer hires an employee who is already a member of PERS, the employee must be enrolled in membership with the employer, even if a seasonal worker. In addition, if full-time employment has a fixed term of more than six months, or more than one-year for a part-time employment (an average of at least 20 hours per week), the employee is entitled to membership.  If seasonal employment in fact exceeds six months of full-time service or one year of part-time service (at least an average of 20 hours per week), the employee must be enrolled in membership with CalPERS.  The most often cited membership thresholds for “seasonal” employees is 125 days of service (if paid on a “per diem” basis) or 1,000 hours of services (if paid on a basis other than “per diem”) in a fiscal year.   If  paid service equals or exceeds 125 days or 1,000 hours in a fiscal year, the employee will be entitled to membership. As summer comes to a close, and seasonal employees may still be “on the books,” PERS employers should review the actual number of hours and days the employee has worked in the current fiscal year, to determine whether the employee may now, or soon, be entitled to PERS membership.

For those of you ramping up on employees in the fall/winter season, begin planning ahead today.  Fix contract terms for seasonal workers, ensure they do not exceed work hour / day limits established by the PERL or ACA.  At the same time, ensure that your seasonal workers accrue paid sick leave, if they work for your agency for at least 30 days. And fear not; cooler days are ahead!

Court of Appeal Rules Custodial Deputies are Exempt from CCW Permit Requirement

Posted in Public Safety Issues

SheriffIn Stanislaus County Deputy Sheriffs’ Association v. County of Stanislaus, decided August 11, 2016, the California Court of Appeal, Fifth Appellate District, held that custodial deputies may lawfully carry concealed firearms while off duty without obtaining a CCW permit, and invalidated the Stanislaus County Sheriff’s policy of requiring all such custodial deputies to obtain a permit to carry in their off-duty hours.  In reaching this conclusion, the Court of Appeal disagreed with a 2002 California Attorney General opinion on which the County had relied.  Agencies may still limit peace officers’ ability to concealed carry off-duty on an individualized basis.

Stanislaus County Sheriff’s Department had a policy that sworn custodial deputies may carry a concealed firearm while off duty only if that deputy has first obtained a license or a permit to carry a concealed weapon.  The union representing those deputies, the Stanislaus County Deputy Sheriff’s Association, alleged that this policy violates Penal Code section 25450, which exempts peace officers from the general prohibition against carrying a concealed weapon.

The union filed a petition for writ of mandate in the Superior Court and argued that because Section 25450 categorically exempts all peace officers listed in Penal Code section 830.1 from the permit requirement, the County could not require sworn custodial deputies to obtain a permit to carry off-duty.  The County, in opposition, relied on language in Section 830.1 limiting the scope of the custodial deputies’ peace officer authority.  The statute states:

“Any deputy sheriff of [the County of Stanislaus] who is employed to perform duties exclusively or initially relating to custodial assignments with responsibilities for maintaining the operations of county custodial facilities, including the custody, care, supervision, security, movement, and transportation of inmates, is a peace officer whose authority extends to any place in the state only while engaged in the performance of the duties of his or her employment and for the purpose of carrying out the primary function of employment relating to his or her custodial assignments, or when performing other law enforcement duties directed by his or her employing agency during a local state of emergency.” The Superior Court agreed with the County that this language bestowed peace officer status on Custodial Deputies only while on-duty, and therefore did not entitle them to carry concealed firearms without a permit while off-duty.

The union appealed, and the Court of Appeal reversed the decision of the Superior Court.  In reaching this decision, the Court of Appeal held that the language in Section 830.1 relied on by the County and the Superior Court limited the scope of Correctional Deputies’ peace officer authorities but does not limit their peace officer status; they are peace officers at all times, even at times they do not have the authority to act as peace officers.  The Court of Appeal chose not to follow a 2002 opinion of the California Attorney General on which the County had relied, which had expressly interpreted Section 830.1 to mean that custodial deputies described in that section do not have peace officer status or authority when they are away from the county detention facilities at which they perform their peace officer duties.  The Court noted that Attorney General opinions are not binding on the courts, and disagreed with the Attorney General’s analysis that the statute only confers peace officer status on custodial deputies while performing those duties.

Further, the Court of Appeal noted that other sections of the Penal Code (sections 830.3, 830.5, 830.6, 830.33, 830.35, 830.36) place limitations on off-duty carrying of firearms by other categories of peace officers, but Section 830.1 does not.  The Court of Appeal additionally cited a previous Court of Appeal decision, Orange County Employees, Assoc., Inc. v. County of Orange (1993), that stated that even where Legislature specifically limited a type of peace officer’s ability to carry a concealed weapon on-duty, that type of peace officer is still exempt from the requirement to obtain a permit to carry a concealed weapon off-duty unless the statute expressly says otherwise.

However, the Court of Appeal’s decision does not entirely eliminate an agency’s ability to limit the off-duty carrying of concealed weapons by custodial deputies or similarly-limited peace officers.  In a footnote, the decision reads, “Of course, our discussion assumes that the custodial deputies are in good standing with the Stanislaus County Sheriff’s Department and have complied with all legal requirements of peace officers (see [Penal Code] sections 830, 832).”  This language does not define what it means to be in “good standing” but it appears to allow for restriction on off-duty concealed carrying on an officer-by-officer basis based on the department’s assessment of the deputy’s “standing.”  Further, the footnote expressly states, as held in Gordon v. Horsley (2001), that a sheriff or police department may impose restrictions on a particular officer’s privilege to carry a concealed weapon off duty when necessary for public safety.