Emil Davtyan, Richard S. Rosenberg and Todd B. Scherwin Share Insights on Labor & Employment Law

The Labor & Employment Law panel is produced by the L.A. Times B2B Publishing team in conjunction with Ballard Rosenberg Golper & Savitt, LLP; D.Law, Inc.; and Fisher & Phillips LLP.

With the many unprecedented operational changes and adjustments that businesses in every sector have had to make over the last four years, a whole new landscape has emerged in terms of labor and employment issues. This has left even the most seasoned human resources personnel and C-suiters struggling to find answers to crucial questions, not to mention the confusion among employees themselves.

Are the changes that have emerged trend-driven or here to stay? What should management be focusing on in terms of new standards and laws pertaining to employee relations? What do employees need to know?

To address these issues and concerns, as well as many other topics pertaining to labor and employment hot buttons, the Los Angeles Times B2B Publishing team turned to three uniquely knowledgeable experts for their thoughts and insights about the most important “need to know” trends and updates and for their assessments regarding the current state of labor legislation, the new rules of hiring and firing, and the various trends that they have been observing from both sides of the table.

Q: As we move deeper into 2024, what is the top thing that California employers should be focusing on now from a compliance perspective?

Todd B. Scherwin, Regional Managing Partner, Los Angeles & Woodland Hills Offices, Fisher & Phillips LLP : I sometimes feel like a broken record, but California employers should focus on making sure they understand and comply with the state’s ever-evolving wage and hour laws. The most important laws to understand right now are the rules related to a non-exempt employee’s effective hourly rate for purposes of overtime, bonuses and meal/rest period payments when necessary.

Q: What trends are you seeing with respect to paid time off?

Emil Davtyan, Founder and Managing Attorney, D.Law, Inc.: The landscape of paid time off (PTO) is evolving, reflecting broader changes in work culture and employee expectations. Employers are increasingly adopting flexible PTO policies to attract and retain talent, recognizing that work-life balance is a priority for many workers. This shift is partly driven by the ongoing impact of the COVID-19 pandemic, which has altered perspectives on work, health and personal time. Unlimited PTO policies are becoming more common, offering employees the autonomy to take time off as needed, promoting a culture of trust and accountability. These changes signify a move towards more personalized and flexible work arrangements, understanding that employees have diverse needs and life responsibilities. Such trends not only benefit employees but can also enhance organizational productivity and morale, as well-supported employees are likely to be more engaged and committed to their work.

Q: What are some basic tips for business owners who want to handle pay equity issues?

Richard S. Rosenberg, Partner, Ballard Rosenberg Golper & Savitt, LLP : California’s expansive pay equity law applies to employers with 15-plus employees. Covered employers must establish pay scales and pay ranges for each position and furnish that information to job applicants and employees upon request. The data also must be included in all job postings. These records must be retained for three years after an employee leaves the company. Employers must be prepared to defend wage disparities with objective criteria. It’s recommended that businesses review all job classifications and create wage ranges for each position. Larger employers (100-plus employees) also must submit an annual California Pay Data Report which includes wage data for each job broken down by race, ethnicity and sex, and the median and mean hourly rates for each combination of race, ethnicity, and sex within each job category. This reporting also applies to employers who hire 100-plus employees utilizing a labor contractor.

Q: What should employers consider when deciding whether to have a remote, hybrid or in-person workplace?

Scherwin: One of the main things to consider when having remote employees is how to ensure that employers are accurately tracking and paying for the time that these remote employees are working. Employers should review whether they are properly paying their non-exempt remote employees for all the hours they are working (even off-hours) while also capturing all necessary business expense reimbursements that these remote employees should be paid and are entitled to be paid.

Davtyan: In deciding between remote, hybrid, or in-person work models, employers face a complex set of considerations that balance operational efficiency, legal compliance, employee well-being, and company culture. The choice impacts not just where work gets done, but how it influences productivity, engagement and job satisfaction. A primary legal consideration involves adhering to California’s stringent labor laws, including those governing work hours, breaks and reimbursements for work-related expenses, which apply regardless of the worksite in California. Employers are encouraged to weigh employee preferences; the flexibility of remote or hybrid models can significantly boost morale and retention but may require new approaches to fostering a cohesive company culture. Implementing technology for seamless communication and ensuring robust data security are critical. Ultimately, the decision requires a thoughtful approach that aligns business objectives with the needs and well-being of employees, within the framework of legal obligations.

Rosenberg: Good or bad, it has become clear that remote work in some form (fully remote, hybrid, fixed days in office) is here to stay. This means that employers looking to attract and retain top talent must remain flexible, while considering that remote work implicates a myriad of labor law concerns. Employers should address these concerns with a comprehensive remote work policy and by asking all remote workers to sign remote work agreements. For example, does the employer reimburse employees for all required remote work expenses? Are compliant time records kept? Will the company workers’ compensation policy respond to an injury? Does the company’s business automobile insurance cover injuries to remote workers and third parties? For hourly paid workers: when does the workday begin/end; how is overtime recorded; what’s the expectation about responding to after-hours inquiries; and how does a remote worker log sick days used?

Q: What are the biggest (or costliest) wage and hour mistakes you continue to see California employers make?

Davtyan: There are quite a few mistakes that employers continue to make, and while some of them are simple oversights or carelessness, others may be intentionally done to skirt their responsibilities to employees. There are three very common and costly wage and hour mistakes that we see being made by employers. First, employers often are careless in accounting for employees’ work time spent off-the-clock. This typically happens if the employer is careless in not fully tracking employee’s work time outside of normal working hours, whether right before the official workday starts or ends, during weekends, during lunch breaks and rest breaks. Second, sometimes employers do not properly document business-related expenses (mileage, personal cell phone use, work-from-home expenses) and thus do not reimburse the employee. Third, employers still do not effectively enforce meal and rest break rules.

Q: What are some recent trends when it comes to the use of non-compete and enforceability of non-compete agreements?

Rosenberg: While California law is extraordinarily protective of employee mobility, it also allows an employer the right to vigorously protect its trade secrets and confidential information with non-disclosure agreements. In California, most “non-compete” agreements are unenforceable. Recent changes to strengthen that bedrock principle now make it unlawful for an employer to enter or attempt to enforce an illegal non-compete agreement. Employers that do now face a lawsuit for damages, injunctive relief and recovery of the employees’ attorney’s fees. These new restrictions also extend to agreements signed outside of California for work to be done here and to agreements signed in California covering work to be performed elsewhere. Lawmakers gave California-based employers until February 14, 2024 to send current and certain former employees (i.e., those employed after January 1, 2022) a written and electronic notice disavowing any illegal non-compete agreement that may affect their mobility.

Scherwin: Non-compete agreements have long been unenforceable in California. But taking it a step further, California enacted two statutes that provide for penalties and liability if an employer in California seeks to enforce or require a non-compete. AB 1076 and SB 699, which took effect on January 1, 2024, create extra pressure for employers in California to scrap their non-competes. Importantly, AB 1076 required all employers to send notices to employees and former employees by February 14, 2024 who were employed after January 1, 2022, to inform them that non-compete clauses in any agreement they signed with the employer are void in California.

Q: What are the most common mistakes you see employers make in responding to disability accommodation requests?

Rosenberg: Employers have an affirmative duty to address and manage the concerns of disabled job applicants and employees. Federal and state job bias laws mandate that employers participate in a good faith interactive dialogue with the employee to find out what accommodations will enable the employee to perform the essential functions of their job and to pay for those needed accommodations in most instances. The only exception is where the needed accommodation would pose an undue hardship on the employer or present a safety concern for the employee, coworkers, or members of the public. The law also expects the employer to manage any discontent stemming from coworkers who may elect to view the accommodation as a form of special treatment.

Scherwin: The most common mistakes employers make when responding to disability accommodation requests are twofold. The first is failing to engage with the employee at all, meaning that the employer just continues to keep the employee out on a leave of absence rather than trying to accommodate a modified position or work schedule. The second is when the employer simply informs the employee that their requested leave of absence is denied and therefore the employee is terminated because the employer unilaterally determines that the leave is too long. Employers should ensure before terminating the employee that they have thoroughly examined whether the leave is an undue hardship or has become indefinite.

Q: What are some common mistakes that employees make when it comes to managing their rights in the workplace?

Davtyan: There are a few common mistakes we encounter when consulting with employees. Many employees don’t exercise their reporting rights, which are protected under many California laws. For example, employees can report violations of their rights to their supervisors or higher-ups and provide proper documentation. Understandably, employees avoid reporting in some circumstances out of fear or not knowing the proper routes to submit complaints. However, California laws have many protections against retaliations if the employees who properly not only exercise them but also, more important, document them. Some employees don’t sufficiently document their legal concerns arising out of their work. It’s critical to write down timelines of events when the employees suspect their rights may be violated. Other mistakes include not sufficiently documenting requests for sick time and requests for protected leaves of absence, such as medical leave and disability leave.

Q: What trends are you seeing related to arbitration agreements in the employment context?

Scherwin: As the dust continues to settle on what is enforceable and what is not in employment arbitration agreements, I am seeing more employers implementing mandatory pre-dispute arbitration agreements that contain class action waivers. Because of the federal law passed in 2022 which precludes sexual harassment and sexual assault claims from being arbitrated, I am seeing an increased amount of sexual harassment causes of action being brought by employees against employers.

Q: What are employers’ rights relating to nonemployee union representatives on their premises?

Rosenberg: The National Labor Relations Act is the federal law regulating U.S. labor-management relations, including rules promulgated by the National Labor Relations Board regarding how management may address union organizing. Typically, businesses may enforce a rule that bars any non-employees (including union representatives) from accessing the non-public areas of a business. For example, a manufacturing business may bar union representatives from coming into the factory to speak to workers about unionization because the shop floor is not a public area if the employer enforces the rule as to all non-employees. Other Labor Board rules allow union representatives to enter a business’s private parking lot to meet with workers and to frequent the public areas of businesses which are open to the public such as retail store, restaurant, hotel, entertainment/sports venue (or a similar business) so long as the union representative is not interfering with the employees’ work.

Q: Which pay practices are most likely to result in a company being sued in a wage-hour class action?

Scherwin: Failure to have a policy that provides – and failing to actually provide employees with – an uninterrupted 30-minute meal period before the employee works five hours coupled with failing to accurately record an employee’s time. We still see employers with practices in which employees do not clock out or back in for meal periods or having policies in which employees are automatically clocked out for 30 minutes or more every day for a presumptive meal period. Employers should ensure that they are not auto-deducting any time from an employee’s time card.

Rosenberg: Here is my top 10 list: (1) classifying employees as independent contractors when they don’t qualify; (2) classifying employees as overtime exempt when they don’t qualify; (3) not paying employees the correct minimum wage; (4) not adhering to meal and rest period requirements; (5) timecard rounding; (6) failing to keep proper daily time records; (7) failing to properly reimburse employees for business expenses; (8) failing to include all necessary payments when calculating regular wages, overtime, and meal and rest period violation payments; (9) miscalculating daily and weekly overtime payments; and (10) having employees work off the clock or not paying employees for things like time spent answering emails or texts, attending mandatory trainings, waiting in line to go through security or to use the time clock, logging in/out of a computerized time system, changing into or out of equipment or uniforms, or traveling for business.

Q: What should an employee do first if they feel they have been harassed or discriminated against in the workplace?

Davtyan: The first step should be to document the incidents in detail, including dates, times, locations, what was said or done, and any witnesses. The employee should then review their employer’s anti-harassment and discrimination policies, usually found in the employee handbook, and follow the outlined procedure for reporting the behavior. This often involves submitting a complaint to a supervisor, HR department, or designated company representative. If the situation is not resolved internally or if the employee is uncomfortable reporting the issue within the company, they can consider filing a complaint with the California Civil Rights Department (CRD). CRD offers avenues for mediation and investigation of complaints. It is also advisable for the employee to consult with an employment lawyer to understand their rights and options.

Q: Can employers still test for marijuana in California?

Scherwin: Employers may still test as long as they are following the right protocols outlined by AB 2188 while also ensuring that employees are only disciplined and terminated for being impaired. In other words, employers can no longer automatically terminate an employee who tests positive for marijuana but instead must ensure that the employee was actively impaired by marijuana, under the influence of it, or brought it to the workplace as the reason for discipline/termination.

Q: How would you describe the current climate for employee whistleblowers in 2024?

Davtyan: The current climate for employee whistleblowers in California is relatively supportive, reflecting the state’s strong legal protections against retaliation. California laws safeguard employees who report illegal acts, non-compliance with state or federal laws, or unsafe working conditions. These protections are designed to encourage transparency and accountability by ensuring that whistleblowers can disclose information without fear of retaliation, such as termination, demotion or harassment. Moreover, recent legislative trends and court rulings have generally favored expanding whistleblower protections, recognizing the importance of these individuals in exposing wrongdoing and enforcing compliance with laws. Despite these strong legal frameworks, the effectiveness of protections can vary by case and workplace culture. Some whistleblowers may still face challenges, including subtle forms of retaliation or difficulties in proving their case. However, the legal system and various state agencies remain committed to enforcing these protections vigorously, reflecting a broadly supportive climate for whistleblowers.

Q: What are the most frequent mistakes made by employers when disciplining employees?

Rosenberg: The biggies are: (a) assuming employment “at-will” means you may fire an employee without legal consequence; (b) not documenting performance problems in real time or at all; (c) not giving employees a fair chance to succeed before being fired; (d) not understanding that binding contracts can be made orally and that an employee’s testimony about what you’ve said is valid “evidence” in court; (e) not understanding that employees who complain about workplace matters are often protected “whistleblowers” who enjoy legal protection from any form of retaliation; (f) not being consistent when meting out discipline i.e., not treating likes alike; (g) not understanding that in certain cases like disability or religious accommodation, treating everyone the same can get you in trouble; (h) not understanding that it’s never OK to ask employees to violate the law; and (i) not calling your labor attorney before a difficult termination.

Q: Why is the Private Attorneys General Act important?

Davtyan: California has the strongest wage and hour laws in place to protect workers. Before 2004, labor laws existed in California without employees’ ability to pursue their rights themselves. They had to wait for the government to enforce those laws. The government did not have the resources to enforce all of those laws. This new law was enacted in 2004 – the Private Attorneys General Act (PAGA). PAGA gives the ability to the employees to enforce those laws and file lawsuits. And while doing that, PAGA requires to partially share proceeds with the government for helping to enforce the laws. There is an ongoing effort by billionaire corporations banding together to rewrite PAGA, to take away the rights of employees to pursue those actions themselves. PAGA is paramount for the employees to pursue their wage rights in the court of law, while also helping the government to fund other important services essential to Californians.

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