This Special Bulletin was written by Heather DeBlanc and Amit Katzir.

Notice 2019-63 extends the deadline under the Affordable Care Act for applicable large employers to furnish individuals with a Form 1095-C for 2019.  The new due date is March 2, 2020, but the IRS will not consider further extensions.  The new March 2 deadline also applies to small employers sponsoring self-insured coverage that furnish individuals with 2019 Forms 1095-B.  A failure to timely furnish the requisite forms may subject employers to penalties.

Importantly, the notice does not extend the February 28, 2020 deadline for paper filing Forms 1094-B, 1095-B, 1094-C, or 1095-C with the IRS, or the March 31, 2020 deadline to e-file.

Notice 2019-63 provides additional relief to self-insured small employers.  Instead of furnishing individuals with a 2019 Form 1095-B, the small employer may: 1) post a notice prominently on its website stating that responsible individuals may receive a copy of their 2019 Form 1095-B upon request, accompanied by certain contact information, and 2) furnish a 2019 Form 1095-B within 30 days of such a request.   A small employer who provides self-insured coverage will not be penalized for failure to furnish Form 1095-B to individuals if it meets both of these requirements.

In addition, as in past years, the notice provides relief from penalties for incorrect or incomplete reporting to the IRS, provided that the reporting entity can show that it made a good-faith effort to comply with the ACA’s information-reporting requirements.  However, this relief does not apply where a reporting entity fails altogether to make the requisite filings.

It is no secret that Generations Y and Z do not often see eye-to-eye with the Baby Boomer generation on a number of complex cultural, social, and political issues.  Baby Boomers criticize Millennials (Generation Y, born between 1981 and 1996) and Gen Zers (Generation Z, born between 1997 and 2010) as “entitled” and “narcissistic.”  In turn, Millennials and Gen Zers criticize Baby Boomers as “hypocritical” and “oblivious.”  Baby Boomers fault Millennials and Gen Zers for expecting “participation trophies,” and, in turn, Millennials and Gen Zers fault their Baby Boomer parents and grandparents for coming up with and handing out “participation trophies” in the first place.  (Indeed, Millennials, who by and large are children of Baby Boomers, are often referred to as “Echo Boomers.”)

As the inter-generational conflict raged on, the term “snowflake” was coined to capture the perceived overly sensitive and selfish attitudes Baby Boomers often attributed to Millennials and Gen Zers.  Until 2019, however, there was no term directed to Baby Boomers the way “snowflake” was to Millennials and Gen Zers.  Then, “OK, Boomer” happened.

“OK, Boomer” is the “clapback” heard around the world – or, at the very least, around all of social media.  The phrase was coined to provide a short, sharp rebuke to comments or ideas perceived to be narrow-minded or based on outdated notions, which Millennials and Gen Zers often attributed to Baby Boomers.  The term became prevalent in both traditional and social media, and in numerous articles, memes, and tweets.

“OK, Boomer” does not mean “OK, old person,” much like “snowflake” does not mean “young person.”  Rather, “OK, Boomer” simply conveys Millennials’ and Gen Zers’ disagreements with Baby Boomers’ cultural, social, and political stances, much like “snowflake” conveys Baby Boomers’ disagreements with those of Millennials and Gen Zers.  Simply stated, neither term has anything to do with chronological age.

Whatever its place in popular culture – or in the inter-generational conflict – may be, it is abundantly clear that in light of federal and state anti-discrimination laws, “OK, Boomer” has no place in office e-mails, meetings, banter, or other interactions.  That is because the phrase, by its language (although not by its meaning) is intrinsically tied to age.  “Boomer” is firmly rooted in “Baby Boomer.”  In turn, the Baby Boomer generation is defined (like all generations) by the time period within which its members were born – specifically, 1944-1964.  This means that the youngest Baby Boomers are 55 years old, while the oldest members of the generation are in their mid-70s.  As such, all Baby Boomers are covered by the anti-discrimination and harassment protections both California and federal law provide for workers over the age of 40.  The phrase “OK, Boomer” may therefore by interpreted to suggest bias against older workers, and expose employers to liability under laws such as the Fair Employment and Housing Act and the Age Discrimination in Employment Act.

Training can play a significant part in reducing such exposure.  Millennials are currently between the ages of 38 and 23, and already make up a majority of the country’s workforce.  Some research suggests that by 2020, Millennials will make up half of the workforce, and Gen Zers one third.  In other words, Millennials and Gen Zers, together, will make up the vast majority of the working population.  Because Millennials and Gen Zers do not use the phrase “OK, Boomer” to refer to chronological age, they may innocently use it at the office, unaware of its potential implications.  Training can serve as a reminder that even such use of a popular social media quip can have serious consequences.  It can thereby reduce the likelihood that the phrase will find its way into the workplace.

With Thanksgiving just around the corner, we would like to take a moment to appreciate all of the wonderful people in our lives that we have the pleasure of working with every day. At LCW, we are thankful to do the work that we love within the communities that we love. Our clients are a constant reminder of why we do what we do, and we are grateful to be able to serve them. This Thanksgiving, we are thankful for the trust and continued support of our friends, clients, and family.

What else are we thankful for this Thanksgiving? Here are a few highlights from members of the LCW family:

“I am thankful for working with an amazing group of talented people (both co-workers and clients). I am also thankful for my amazing wife Linda and all three of my kids who have given me such joy and happiness, Sarah, Ben and Andrew.” – Peter Brown, Partner in the Los Angeles Office

“I am thankful for my wife Andrea and son John Paul, for all my family, friends and work colleagues, and for being given the wonderful opportunity as a career to provide advice and counsel to help guide my clients on labor and employment law issues.” – Gage Dungy, Partner in the Sacramento Office

“I am thankful to work with so many educators and staff members at colleges throughout the state who inspire me and those they serve.”  – Pilar Morin, Partner in Los Angeles Office

“I am thankful to be doing good, meaningful work surrounded by clients and co-workers I care deeply about.  I’m also thankful to be part of a well-run law firm committed to our clients’ best interests and providing service at the highest level.” – Eileen O’Hare Anderson, Partner in Fresno Office

“I am thankful for the attorneys and staff at our San Francisco office in voting to name one of our conference rooms “The Whitmore Room” and doing it while I am still alive.” – Dick Whitmore, Partner in San Francisco Office

“I am thankful to practice law on behalf of clients whose core mission is to serve their communities.  I am doubly thankful to do so with talented colleagues who are passionate about serving LCW’s public and non-profit clients and who make work fun.  Happy Thanksgiving!” – Scott Tiedemann, Managing Partner of LCW

From our team to yours, we wish you a Happy Thanksgiving!

Liebert Cassidy Whitmore

There are two ways an FLSA covered employer may pay a nonexempt employee a fixed salary: the employer may pay a salary for a specific number of hours each week or the employer may pay a salary for whatever number of hours are worked in the week.  Payment of a fixed salary for fluctuating hours of work – referred to as a Fluctuating Workweek – is permitted by existing Department of Labor (DOL) guidelines at 29 CFR section 778.114, subject to certain conditions, including a mutual understanding of the parties regarding the compensation arrangement.

Importantly, under a valid Fluctuating Workweek, the employer need only pay one half (0.5) the regular rate for each hour worked in excess of forty per week, instead of time and one half (1.5) the regular rate.  (For more on the regular rate, click here.)   The halftime premium for overtime hours would be paid in addition to the fixed salary.  Referred to as the Fluctuating Workweek Method of Calculating Overtime, this arrangement benefits employees by providing them with a fixed salary despite fluctuating hours of work and benefits employers by reducing overtime costs.

Despite its benefits, the Fluctuating Workweek Method has been challenged in courts and its application is unclear.  For this reason, on November 4, 2019, the DOL proposed new guidelines on the requirements of the Fluctuating Workweek Method of Calculating Overtime.  The new guidelines are expressly intended to make it easier for employers to apply this method in the modern workplace.  To read the proposed rulemaking, click here.

The main thrust of the DOL’s proposed rule is that additional pay of any kind on top of the fixed salary is compatible with the Fluctuating Workweek Method.  Presently, courts have issued conflicting decisions on whether add-on pay disqualifies employees from the Fluctuating Workweek Method.  Under the DOL’s proposed rule, employees would be eligible for the Fluctuating Workweek method regardless of whether they receive bonuses, additional hourly pay, additional lump sum pays, premiums, shift differentials, and/or incentive-related sums.

The DOL’s proposed rule does not, however, clarify exactly what it means for workweek hours to fluctuate sufficiently to qualify for this method of compensation.  But the DOL’s proposed rulemaking document does state that an employee who works a “usual” number of hours may still be paid under the Fluctuating Workweek Method if there is some weekly variation in the number of hours worked.  In this way, the Fluctuating Workweek Method may be most appropriate for employees who are transitioning from exempt to non-exempt status but wish to retain their fixed salary or salaried status.  Employers considering the Fluctuating Workweek Method of Calculating Overtime should consult with legal counsel prior to making any changes to employee compensation.  Change to represented employee compensation is a mandatory subject of bargaining under California’s Meyers-Milias Brown Act.

The DOL has requested comments on these proposed changes.  Comments are due by December 5, 2019.  Those interested can submit their comments online.

LCW will continue to monitor the comment period and will provide further updates as needed.  Please visit our website at www.lcwlegal.com for regular briefings on the FLSA.

Many CalPERS agencies hire CalPERS retirees for limited post-retirement work to help with overflow or special projects.  Often times, these retirees are the agency’s former employees who are familiar with the agency and the work to be performed.  CalPERS can review these arrangements and determine that the retiree was engaging in unlawful post-retirement work either during the retiree’s appointment or years after the retiree’s post-retirement work ended.  If CalPERS determines that there is a violation, then CalPERS will send a letter to both the agency and the retiree of its determination and require that the retiree give back all the pension payments collected during the period of post-retirement work for up to three years of retroactive payments.  We have seen seemingly minor violations result in demands for repayment for hundreds of thousands of dollars!

But Can’t We Employ Retired Annuitants?

Yes, CalPERS agencies can employ CalPERS retired annuitants.  However, the general rule is that a CalPERS retiree needs to be reinstated back into CalPERS membership, i.e., “unretire,” unless they qualify for an exception.  We typically see post-retirement work violations in this context when agencies do not strictly comply with the exception requirements.  For example, a retiree may be paid an hourly rate higher than what was allowed under a publicly available pay schedule for an employee performing similar duties, received benefits in addition to an hourly rate, or performed work that suggests the retiree is filling a vacant position.  For a more detailed on these exceptions, please see our previous blog post here.

But What if the Retiree is an Independent Contractor?

There is nothing that prohibits a CalPERS agency from obtaining the services of an independent contractor who also happens to be a CalPERS retiree.  However, simply labeling someone as an “independent contractor” will not be sufficient to make it so.  CalPERS will look at various factors, such as where the person works physically, whether the person wears a uniform, whether the person has an agency email, etc.  The most important factor, however, is whether the agency controls the manner and means of how the individual performs the services.  In cases where a retiree is misclassified as an “independent contractor,” CalPERS may find a violation of post-retirement work.  For more details on whether an “independent contractor” may be misclassified, please see our previous blog post here. 

What Are the Consequences?

If CalPERS finds a violation of post-retirement work, there are major consequences, for both the retiree and the agency.  CalPERS will retroactively reinstate the retiree back into CalPERS membership as of the effective date of when he or she began the unlawful post-retirement work, with a three-year limit.  Employers will then be liable for employer contributions and possibly employee contributions for any of the wages paid for the unlawful post-retirement work.  In addition, CalPERS can assess administrative penalties against the employer for its efforts to resolve the issue (e.g., accounting or payroll consultants).

For retirees, on the other hand, CalPERS will demand that the retiree pay back up to three years of retirement benefit payments, or the length of the unlawful post-retirement work, whichever is shorter.  So, for example, if a retiree has been engaged in unlawful post-retirement work for three years, CalPERS will demand that the retiree pay back all three years of pension payments.  In addition, CalPERS can assess employee contributions on the unlawful post-retirement work earnings and administrative penalties.  CalPERS can also reduce future pension payments from the retiree in order to recover these “overpayments.”

What Should We do if CalPERS Notifies Us of a Post-Retirement Work Violation?

We recommend you contact legal counsel and get advice on how to respond to CalPERS.  The employer has a right to appeal CalPERS’ determination before an Administrative Law Judge (ALJ) with the California Office of Administrative Hearings (OAH).

LCW has a team of experts throughout California who have successfully represented employers against CalPERS before OAH on these matters.  Each case is different, so each must be analyzed on its own facts to determine the best course of action.

If you would like to learn more about this topic, please view our webinars on-demand:

Life After Retirement – Hiring Retired Annuitants and Avoiding Violations 

How to Hire CalPERS Retirees the Right Way

If you are a supervisory employee for a public agency or private school in California, or a member of your employer’s human resources department, you have most likely sat through a 2-hour supervisory training regarding preventing harassment in the workplace.  You may know this training as “AB 1825  Training.”  If you are a non-supervisory employee, don’t feel left out!  Due to recent changes in California law, if you have not already done so, your employer will be requiring you to sit through a 1-hour harassment prevention training by January 1, 2020 (*friendly reminder to all agencies and schools who have not scheduled this training yet*).

Harassment prevention trainings cover a lot of information, including legal standards for harassment under the California Fair Employment and Housing Act (“FEHA”) and its implementing regulations and what types of conduct may constitute harassment.  Additionally, the FEHA now requires that harassment trainings also include instruction on the prevention of “abusive conduct,” what may colloquially be called bullying.  While “abusive conduct” is not illegal, engaging in such conduct will likely violate employer codes of conduct and subject a perpetrator to discipline, up to and including termination.  Harassment, and abusive conduct, include visual conduct, such as the use or display of derogatory or lewd posters, pictures, drawings, and cartoons, and making lewd gestures, as well as verbal conduct, such as epithets, derogatory comments, slurs, jokes, or lewd propositions.  Whether such visual or verbal conduct constitutes unlawful harassment depends on if the conduct was perpetrated because of someone’s membership in a protected classification, including race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, or association with someone who is a member of one of these protected classes; if the conduct is unrelated to a person’s protected status, it will not satisfy the legal definition of harassment, but may constitute abusive conduct.

This may all sound familiar to you.  Employers have been investigating and litigating claims of harassment for decades.  Most supervisors have been sitting through harassment prevention trainings for the last 15 years.  But while the overarching legal definition of harassment may not have substantially changed, the types of behavior that may constitute harassment has greatly expanded.  In the age of social media – where people (and not just Millennials and Gen-Z’ers) are choosing to more regularly communicate through emoticons (e.g., :) or ;) ), emojis (e.g.,  😊), memes, and Instagram and Facebook postings and messages – the types of behavior that may expose an employee and employer to allegations of harassment and bullying are expansive.  Images or videos that may constitute evidence of visual harassment may now include emoticons, memes, “snaps” and other images or videos created or posted through social media applications.  Verbal harassment may no longer be as simple making inappropriate jokes or lewd comments in front of or directed to colleagues.  What about “tagging” someone in an inappropriate Instagram or Twitter post?

As social media and image-based communication becomes a regular part of our lexicon and daily interactions, it is important to understand how these types of visual and verbal communications have the potential to implicate claims of harassment and abusive conduct.  Here are some tips for employers, as well as individual employees, for preventing certain types of conduct from being used to establish claims of visual or verbal harassment or abusive conduct:

  • Avoid using emoticons, such as “winky” faces ;), or emojis in communications with colleagues. Given different contexts in which a fellow employee can receive these images, sending a ;) to a colleague may be misconstrued as having a sexual undertone, even though this is not the message the sender intended to convey.  If you are attempting to convey appreciation or another emotion through these means of communication, use your words instead.
  • Consider not “friending” colleagues, and in particular subordinates, on social media, including Instagram, Facebook, Twitter and Snapchat. While the use of a personal social media account off-duty will generally not give rise to actionable claims for workplace harassment, standing alone, the types of statements you make in private could lead to uncomfortable situations with colleagues in the workplace, and may also be used as evidence in support of other allegedly harassing conduct in the workplace.  If you chose not to heed this advice, think twice about who your social media audience includes before posting or sharing personal or private information on social media.  (As a caveat, at the same time, labor relations laws can protect employees’ communications with others on social media concerning their wages, hours, and conditions of employment.)
  • If you are a supervisor, consider making it a personal policy not to accept “friend requests” from subordinates.
  • If you are friends with colleagues on social media, be careful about what posts you “tag” your colleagues. For example, a meme that you consider funny may be considered offensive to others.  Just because you consider a colleague to be your friend does not mean they have the same sense of humor as you.
  • If you work for an educational institution, considering making it your personal policy not to accept “friend requests” from students or otherwise engage with current students via social media.
  • Do not use social media accounts to communicate about work-related matters. For example, many agencies do not provide certain classes of employees with agency email accounts.  This may include front-line utility and recreation & parks employees, as well as volunteers.  Just because your agency does not provide these individuals with email accounts does not mean that those individuals’ supervisors should communicate about work related matters using non-employer approved methods of communication.  Employers should ensure that there are established lines of communications between supervisors and those employees or volunteers without email accounts.  For public sector employees, it is also important to remember that written communications about agency-related matters made through personal email accounts, social media accounts, or phones can be subject to California Public Records Act requests.

As an LCW attorney who conducts harassment prevention trainings for public agency and private school clients, I regularly get looks of concern when I tell training participants that what they perceive as their innocent use of winky faces in an email communication, or a gesture of friendship by “friending” a colleague on social media, comes with the risk exposing them to claims of harassment.  While such behavior may end up being innocuous, those trainings, and this post, should serve as important reminders that the use of social media or other modern means of communication is a new legal frontier with which we are all learning to deal.  The growing use of technology both in and tangential to the workplace comes with the additional responsibility to check your behavior and that of your colleagues to ensure that the means by which they choose to communicate is objectively and subjectively respectful, unbiased, and inclusive.

Once again, the annual look at outlandish employment cases that should make you all think, “It could be worse.”

No Pot of Gold at the End of This Rainbow

The former aide of a state senator (amazingly not California) submitted a complaint to the state’s division of human rights, complaining that the state senator directed him to dress up as a leprechaun for a St. Patrick’s Day parade. According to the former aide, his “basic human rights” were violated and a leprechaun outfit was “not befitting” a grown man.” What is not quite clear here is what protected status might apply in this case: (1) colorful cereal box cartoon leprechaun or (2) terrible acting in the Leprechaun movie (1993). Although leprechauns are known to enjoy a good practical joke, the aide was not amused when he was later terminated from his position for reasons unrelated to leprechaun shenanigans. The takeaway here is for employers to avoid asking employees to dress up as a mythical creature whose principal occupation is mending shoes. It is not befitting.

There’s Some “Dead Wood” Here, And It Ain’t the Acclaimed HBO Series

The obvious and primary definition of dead wood is a branch or part of a tree that is dead. The secondary definition is “people or things that are no longer useful or productive.” A university settled the age discrimination claims brought by two employees after a new supervisor referred to them as dead wood and change-adverse, and commented that dealing with them was like “herding hippos.” The “dead wood” employees were passed over for promotions and essentially forced out of their positions. They received sizeable settlements and an injunction against the university designed to prevent future age discrimination in the workplace.

Firehouse Pranks Alive and Well

In an effort to “lighten the mood and help guys have some fun,” a firefighter thought it would be a good idea to place snap fireworks in the firehouse toilet. Well, as you can imagine, that prank did not go over well when another firefighter’s scrotum was burned by the exploding snap firework. Needless to say, he was not happy with the results of the prank gone awry. He sued the department for his injuries. What happened next, you ask? The court said it could not provide relief because the incident was covered by workers’ compensation. The offending firefighter said the department allowed a “high degree of pranking among on-duty firefighters” and the judge said he did not commit an “intentional wrong.”

Flatulence from Down Under

An engineer in Australia sued his employer alleging his supervisor bullied him by repeatedly farting in his direction. The court, however, dismissed the case noting that flatulence is not bullying. Enough said.

Many workplaces and schools engage in Halloween celebrations, and with good reason.  LCW is no exception:

However, Halloween parties can be scary for risk managers, as they carry the potential to put a few skeletons in an employer’s closet.  Here are some tricks to keep your Halloween party from raising the specter of liability:

  • Employees Should Know They are Free to “Ghost”.  Participation in any Halloween festivities should be entirely optional.  Employees may not feel comfortable celebrating Halloween; for some employees, it may be prohibited by their religious beliefs.  Nobody should be required to take part, and an employer should not tolerate teasing or ostracism of an employee who opts out.  It’s only fun if everyone’s having fun.
  • When Choosing Costumes, Don’t Let the Zombies Eat Your Brain.  Dracula, Frankenstein, Mickey Mouse, Elsa and/or Anna, a cowboy, an M & M, a puppy, any of the three PJ Masks. . . there are nearly unlimited options for inoffensive Halloween costumes.  And yet, every year, some ghouls make the news by wearing costumes that would give any employer nightmares.  Human Resources professionals can reduce this risk by providing common-sense guidance as to what is an appropriate costume for a Halloween celebration at the office:
    • An attempt to “wear” or parody another culture, religion, race, or identity is not a costume; it’s an exhibit in someone else’s lawsuit for harassment or discrimination.  It should go without saying that blackface or brownface is unacceptable.  The same is true of traditional cultural dress.  A good costume does not make one’s colleagues feel caricatured, mocked, or belittled for their protected characteristics.  On the other hand, an employee should not be prohibited from wearing expressions of his or her own identity.  Context matters.
    • At some point, Halloween shifted from being an opportunity for kids to get free candy to an opportunity for adults to free themselves of their inhibitions.  Inhibitions can be a good thing at work.  A Halloween costume should not expose any part of an employee’s body that ordinary work clothes would not.  If a costume is described by the seller as “sexy” or some euphemism therefor, it is probably better saved for a non-work outing.  Bottom line: the provisions of the employer’s dress code related to appropriate attire still apply.
  • No Creepy Behavior.   Despite HR’s best efforts, some employees may wear provocative costumes to the office.  This does not give other employees license to make comments or engage in conduct that would otherwise violate the employer’s harassment or other conduct policies.  If the behavior is beyond the pale, Halloween does not provide a get-out-of-Hades-free card.
  • Stay Safe Out There. If your employees work with equipment that may impact their health or safety, extra care should be taken to ensure that costumes do not imperil employees.  Some Halloween revelers like to accessorize costumes with fake weapons; realistic-looking toys could cause legitimate fear; these should not be allowed.

If an employer utilizes these few simple tricks, the office Halloween party should be a treat, and the only stomachache a risk manager should suffer is from raiding the candy bowl.

This Special Bulletin was written by Ariana Hernandes and Eileen O’Hare-Anderson.

On October 11, 2019, Governor Newsom signed AB 61. This bill expands existing law to allow an employer, co-worker, and employee or teacher of a secondary or postsecondary school to file a petition requesting a court to issue an ex parte gun violence restraining order. This type of restraining order prevents the subject of the petition from having in the subject’s custody, control, or possession a firearm or ammunition.

Existing law only authorizes immediate family members, roommates, or law enforcement to petition the court for an ex parte gun violence restraining order. AB 61 amends and adds Sections 18150, 18150, and 18190 of the Penal Code and will become effective September 1, 2020.

AB 61 expands the types of individuals that can file a gun violence restraining order, but some are subject to certain conditions:

  • An immediate family member of the subject of the petition;
  • An employer of the subject of the petition;
  • A coworker of the subject of the petition, if the coworker has had substantial and regular interactions with the subject for at least one year and has obtained approval of the employer;
  • An employee or teacher of a secondary or postsecondary school that the subject has attended in the last six months, if the employee or teacher has obtained approval from a school administrator or school administration staff member with a supervisorial role; and
  • A law enforcement officer.

AB 61 passed in conjunction with AB 12, a bill that Governor Newsom also signed on October 11, 2019. AB 61 and AB 12 together extend the length of a gun violence restraining order from one year to between one to five years.

The Impact of AB 61 on Public Entities

Public agencies should be aware of their ability as employers to file such petitions against employees who show signs of a significant danger of harm by firearm.  Public agencies may also approve a request from an employee who seeks to file a petition for a gun violence restraining order against one of his or her coworkers.

The Impact of AB 61 on Public Schools

Secondary and postsecondary schools should be aware of an employee’s or faculty member’s ability to file such petitions against students that have attended a school or community college in the six months preceding the petition. Secondary and postsecondary schools may file such petitions against employees who show signs of a significant danger of harm by firearm.  Secondary and postsecondary schools may also approve a request from an employee who seeks to file a petition for a gun violence restraining order against one of his or her coworkers.