following is intended to provide basic general information on
employment from an employer’s perspective. For more specific
information, please contact us.
hiring of new employees, legal issues may arise with respect to
||Procedures used in
recruiting and hiring.
||The criteria the
employer uses to select employees;
||Inquires the employer
may have of the job applicant; and,
||Tests and medical
examinations the employer may conduct.
Federal and California laws against discrimination and the
invasion of privacy protect prospective employees. Job
prerequisites therefore should be clearly job-related and be
consistent with the principles of business necessity. Employers
should be cautious about representations made during the
interview process in order to preserve the “at – will”
presumption, as well as generally avoid misrepresentations that
might detrimentally induce an applicant to relocate.
and California laws prohibit employers from discriminating
against employees and applicants for employment on the basis of
characteristics such as race, religious creed, color, national
origin, ancestry, physical or mental disability, medical
condition, marital status, sex, sexual orientation, pregnancy,
addition to being subject to these prohibitions against
discrimination, most employers who choose to contract with the
federal government or State of California for construction work
or to provide goods or services must agree to engage in
affirmative efforts to eliminate discrimination in the
workplace. With some limited exceptions, employers that
contract with the government must develop and maintain written affirmative
action programs and comply with record keeping
requirements. However, such “affirmative efforts” must be
carefully undertaken to avoid claims of “reverse
Immigration Reform and Control Act of 1986 (IRCA) was enacted,
in part, to ensure that employers do not knowingly employ
unauthorized aliens. To control the unlawful employment of
aliens in the US, it imposes civil, and in some instances
criminal, penalties on those persons or entities that hire, or
that recruit, or refer for a fee, unauthorized aliens. IRCA
requires that employers keep records showing the eligibility to
work in the US for each employee hired after November 6, 1986.
Additionally, IRCA contains provisions designed to ensure that
implementation of the new hiring requirements does not result in
discrimination against qualified applicants because of the
national origin or citizenship.
The use of
independent contractors initially appears attractive because the
business may enjoy substantially lower personnel costs due to
savings from mandated contributions
(e.g., social security,
unemployment tax) and discretionary
fringe benefits (e.g. medical insurance, vacation leave), as
well as greater flexibility.
there are disadvantages to employing independent contractors
including loss of control, loss of continuity and the fact that
the employer bears the risk of misclassification. If the
employer misclassifies a service provider as an independent
contractor, and a government agency determines that the service
provider is an employee, the employer may be responsible for
fines, penalties, and unpaid taxes and the “responsible person”
for the employer may be subject to personal liability and
Wage and Hour Laws
federal Fair Labor Standards Act (FLSA) and the California
Industrial Welfare Commission (IWC) regulates the payment of
minimum wages, premium pay for overtime and restricts child
exempts from its overtime rule any employee employed in a “bona
fide” executive, administrative, or professional capacity or an
outside salesman. The FLSA specifically defines the
requirements for each exemption.
employees must be paid twice per month. Nonexempt employees
must, with certain exceptions, be paid for time worked in excess
of 40 hours per workweek at a rate at least one and one-half
times their base pay. Generally, an employee cannot be required
to work more than six days in seven.
under the age of 18 and 16 are restricted in the hours they can
work and, in some instances, the industries where they can be
Vacations, Family and Medical Leave, and Other Time Off
employee has no right to take paid vacation unless the
employer has agreed to provide vacation time. Once offered, in
California, vacation pay vests as it is earned, and vacation
earned cannot be taken away. An employer may cap accrual of
additional vacation time after a specific amount has been
accrued. Generally, upon termination, employees must be paid
for accrued vacation time.
vacation leave, paid sick leave is available to employees
at the discretion of the employer. It need not be paid upon
termination because its availability is contingent on the
employee being sick. Once offered, an employer must allow
employees to use sick leave for the purposes allowed by statute
including to attend for an ill child, spouse or parent.
employers are not required to permit their employees to be
absent from work (with or without pay) on holidays.
must give each female employee up to four months of pregnancy
disability leave whenever she becomes disabled by pregnancy,
childbirth or a related medical condition.
and California family and medical leave law requires
employers to permit employees to take up to 12 weeks leave
during a 12-month period for certain specified purposes
including newborn child care, to care for a newly adopted child,
to care for a child, spouse or parent, and due to the employee’s
own illness or incapacity. Thus, the California Family Rights
Act (CFRA) also grants up to 12 weeks for leave to care for a
newborn child, which may be in addition to pregnancy disability
employers must reasonably accommodate requests for time off for
religious beliefs, due to a disability, for substance abuse
rehabilitation programs, for school visits, to vote and to crime
victims. Employers are prohibited from discriminating against
employees who take time off for military duty, to serve as
jurors or witness, or as volunteer firefighters or emergency
Disability in the Work Place
Americans with Disabilities Act (ADA) strictly limits employers
from making any employment decision that adversely
affects those individuals because of their disability, unless
||Is job related,
||Is a business necessity,
be remedied by reasonably accommodating the individual’s disability.
limited exceptions, the ADA covers all employers with 15 or more
Posting Notices and Record Keeping Requirements
federal and California statutes and regulations impose posting
and record keeping requirements on California employers.
Mandatory postings require many square feet of bulletin board
space. Likewise, the various records that employers must create
and retain can consume a significant amount of employer time,
resources and storage space. Nonetheless, compliance with these
often-burdensome requirements is essential because violations
can result in civil and criminals penalties, loss of government
contracts, adverse findings in litigation and administrative
proceedings, and other serious consequences.
companies grow, the need for uniformity in the application of
policies and procedures becomes sufficiently important to
warrant the time and effort required to create a handbook.
about unstated policies and benefits can lead to employee morale
problems, unwanted union organizing, and lawsuits.
publication of written policies enhances the credibility of
decisions based on those policies and deters discrimination
claims of arbitrary or inconsistent treatment in similar
circumstances. Furthermore, a well-crafted handbook reserves
for the employer the right to deviate from the stated policy in
the appropriate circumstances.
are often useful resources for new employees in understanding
the company’s policies and procedures. They also serve to
educate supervisors and managers and are a ready resource to use
in resolving complaints about policies and conflicts over
biggest concern for employers who adopt employee handbooks is to
ensure that the policies it sets forth are followed. A major
cause of employers failing to follow policies is the employer’s
belief that the policy is outdated, either because the law has
changed or the employer’s business has changed. Since the
failure to follow its stated policies increases the likelihood
of liability to an aggrieved employee, periodic review and
revision is necessary as circumstances warrant.
Traditionally, employers have viewed employment contracts as
providing more protection to employees than employers, but the
recent erosion in the employment-at-will doctrine may favor
increasing use of employment
contracts for the protection of the employers. The execution of
a carefully drawn employment contract may increase an employer’s
control over an employee, at least when the contract
specifies the term of employment, the standards for employee’s
performance, and the conditions under which termination will be
permitted. Another reason employers may favor employment
contracts is the importance of preventing valuable employees
with special skills or knowledge from being lured away by other
Trade Secret Protection
law generally does not permit an employer to contractually
prevent a former employee from resigning and going to work for a
competitor. However, an employer may take steps to prevent the
misappropriation of trade secrets. Furthermore, employers
(including officers, directors and investors) who knowingly
participate or ratify the misappropriation of trade secrets
through the hire of a competitor’s employee may be liable for
claiming a trade secret must establish that it undertook
“reasonable” efforts to maintain secrecy. At a minimum, the
employer should require all employees, consultants, suppliers,
licensees, customers, governmental agencies and anyone who will
be exposed to trade secrets to sign a written nondisclosure,
confidentiality, anti-solicitation agreement at the beginning of
the employee relationship, if possible. An employee’s
non-disclosure agreement often includes an assignment of an
employers may consider testing, surveillance, and methods of
employee investigation an aid to efficient operations, from the
employee’s perspective these activities may be seen as invasion
of privacy. As voicemail, e-mails, modems, and integrated
computer networks have become fixtures in the workplace, new
concerns about the right to privacy have come to the forefront.
Areas for concern with respect to privacy include:
||Credit and background
checks during the hiring process;
||The confidentiality of
information in personnel files;
||Drug and alcohol issues;
||The security of desks,
lockers, and other personal workspace; and
||Attempts to regulate
federal Occupation Safety and Health Act (OSHA) and the
California Occupational Safety and Health Act (Cal-OSHA) govern
work place safety. Cal – OSHA mandates that “every employer
shall furnish employment and a place of employment (including
practices, means, methods, operations, and processes) that are
safe and healthful for the employees therein. Cal – OSHA
establishes standards for regulation of various hazards and
provides procedures for inspections, citations, penalties and
reporting of injuries and illness.
California promulgated a progressive new approach to workplace
safety. Rather than issue a set of specific rules, the new
approach provides that every employer develop and maintain
written workplace injury and illness prevention program (IIPP)
that identifies the particular workplace hazards of that
particular business and addresses those risks in a “common
sense” fashion. It is important that all California employers
familiarize themselves with the specific requirements for
establishing, implementing, and maintaining an effective IIPP
because the law provides for criminal as well as civil penalties
for failure to do so.
workers’ compensation laws, for an employee injured on the job
to recover he had to prove fault, then he could recover tort
damages, including pain and suffering. The purpose of workers’
compensation laws is to provide swift
and timely benefits to offset the potentially disastrous
economic consequences of a disabling injury. In return the
employer is freed from costly and time-consuming litigation or
tort liability. However, employers are liable regardless of
fault. The recovery is predetermined by formula.
employers must secure payment of compensation for workers’
compensation liability and comply with reporting requirements.
Employers are prohibited from retaliating against employees who
file workers’ compensation claims. An employer who discriminates
against a disabled employee due a job-related injury may be
subject to tort damages including punitive damages.
Employer Liability for Acts of Employees
employer can be held liable for the tort of its employees under
1. The injuries caused by its employees
can be attributed to the acts or omissions of the employer.
This includes instances in which the employer has directed,
authorized or ratified the employee’s action; or where the
employer was negligent in hiring, retaining, training or
supervising an employee.
An employer can be held vicariously
liable under doctrine of respondeat superior. The justification
for employer liability without direct fault rests on the
sentiment that it would be unjust for an employer to avoid
responsibility for injuries occurring in the course of its
business when the employer is in the best position to insure
against the risk as a cost of doing business. The employee must
be acting within the “scope of employment" for liability to
employer may be liable for the contracts entered into by
employees if the employee has actual authority (conferred by the
employer or implied by the employee’s position), implied
authority or the contract is subsequently ratified by the
employer (e.g., accepts benefits).
Discrimination and Harassment
Federal Age Discrimination in Employment Act (ADEA) and the
California Fair Employment Act (FEHA) prohibit discrimination
due to age in employment. People over forty are protected.
Employers need to be careful during downsizing. It is illegal
to replace a person over 40 with a person under 40, if age is
individuals are protected from discrimination by the Federal
Americans With Disabilities Act (ADA) and the California Fair
Employment and Housing Act (FEHA). These laws make it illegal
for an employer to discriminate against a qualified individual
with a disability in “terms or conditions of employment.”
an employer has an obligation to make a “reasonable
accommodation” if a disabled person can otherwise perform the
duties on the job.
employer retaliates against an employee for filing a worker’s
compensation claim, the employee can also file a claim for
additional compensation to punish the employer under California
law. If the employee is fired when the employee can do the job,
the employee can also file a claim for discrimination.
illegal under both Federal and State Law to discriminate in the
“terms or conditions of employment” on the basis of a person’s
race or color. Race is generally defined as a person’s
ancestry, ethnic characteristics or color.
Discrimination may be based on treating a person differently
because of a “protected class” (disparate treatment) or due to
some policy that excludes certain individuals (“disparate
Sex, and Sexual Orientation Discrimination
Title VII of the Civil Rights Act of 1964 and the FEHA prohibit
sex discrimination based on the “terms or conditions of
employment.” It is illegal in California for an employer to
discriminate against an employee because of that employee’s
It is also
illegal to make employment decisions based on “stereotypes”
regarding gender, such as caring for children.
Immigration Reform and Control Act, (IRCA) prohibits employment
discrimination because of national origin against U.S. citizens,
U.S. nationals, and authorized aliens. (Also Title VII)
Discrimination against pregnancy is illegal under both the
California Fair Employment and Housing Act (FEHA) and the
Federal Title VII laws. Even the discrimination based on the
potential for pregnancy is illegal.
specifically gives pregnant employees the right to take a leave
of absence for a reasonable period of time, not to exceed four
months. The employer does not have to pay his employee during
this time. In addition, as pregnant employee may also be
eligible for up to 12 weeks of medical leave under the Federal
Family and Medical Leave Act (FMLA). Employers generally cannot
force a pregnant employee to go on pregnancy leave unless the
woman absolutely cannot do the job and there is no “reasonable
two types of sexual harassment, “quid-pro-quo” (this for that)
and “hostile environment.”
“Quid-pro-quo” harassment arises when the employer makes a sex
prerequisite to getting something in the workplace.
environment” sexual harassment is a situation in which the
employer, supervisor, or co-worker does or says things that make
the victim feel uncomfortable because of his or her sex.
Hostile environment sexual harassment does not need to include a
demand for an exchange of sex for a job benefit. It is the
creation of an “uncomfortable environment.”
workplace environment harassment also may involve racial,
national origin or ethnic discrimination.
Discipline and Termination
in California is presumed to be terminable “at will.” Three
basic sources of exceptions to the employer’s unrestricted right
to terminate at will have evolved over time.
Public policy limitations, and
federal and state statutes limit an employer’s right to
terminate or discipline an employee. For example, employers are
prohibited from discharging an employee because of their race,
color, national origin, sex, age, disability, marital status,
medical condition and religion. Whistleblower statues prevent
employers from retaliating against employees for reporting
employer’s right to terminate an employee is limited by public
policy considerations because the threat of termination could be
used to coerce the employee into committing fraud or other
crimes, concealing wrongdoing or taking action harmful to the
oral and written contracts may limit the employer’s right to
terminate at will. Written contracts may include executive
contracts, offer letters, employment applications, handbooks and
policies, stock option agreements and collective bargaining
agreements. Express oral agreements take the form of promises
of “permanent” employment.
absence of an express contract, an employee may be able to
establish from company policies and practices an implied-in-fact
contract not to terminate for “good cause”.
employer need not actually terminate an employee to incur
liability for wrongful termination. An employer can be liable
under theory of constructive termination if the employer compels
the employee to resign due “intolerable working conditions.”
can minimize the risk of exposure to wrongful termination by
adopting policies that enunciate the employment-at-will
presumption, drafting well crafted offer letters, employment
agreements and handbooks, and otherwise adopting practices,
policies and checklists that ensure the uniform, fair and
consistent treatment of all employees.
reduction in force and plant closings can give rise to a host of
legal issues. For example, a reduction in force often brings in
its wake claims of discrimination. In addition, there may be
notification requirements under the Worker Adjustment and
Retraining Notification Act (WARN) and a duty to bargain if
unionized under National Labor Relations Act (NLRA).