• Top 10 "Unique" California Employment Laws
  • June 22, 2009 | Author: Martha Schreiber Doty
  • Law Firm: Alston & Bird LLP - Los Angeles Office
  • Just how "unique" is California employment law?

    We asked our panel of experts to come up with their TOP 10 list of uniquely California employment laws, rules, and regulations.  Here were the first ten to pop to mind:

    1) VACATION PAY– Unlike virtually every other state, California does not allow employers to have “use it or lose it” vacation policies.  Instead, California requires employers to either cash out their employees’ accrued vacation at the end of the year or allow them to carry it over up to a “reasonable cap” on accrual.

    2) FINAL WAGES – When a California employer terminates an employee, it must have the employee’s final paycheck (including all accrued vacation pay) ready on the day of termination.  Failure to do so subjects the employer to “waiting time penalties” for every day it fails to get the final paycheck to the employee.  (Cal. Labor Code Section 203.)  This is often difficult for out-of-state employers whose payroll functions are in a state other than California and requires advance planning – something that’s not always possible when employee terminations are involved.

    3) COVENANTS NOT TO COMPETE – Restrictive covenants are generally not permitted in California.  (Cal. Bus. & Prof. Code Section 16600.)  Accordingly, employers generally cannot prevent employees from working for a competitor after they are terminated or quit, even if the employee has knowledge of the former employer’s trade secrets.  Out-of-state employers who utilize employment agreements in California containing non-competes risk not only a ruling that the agreement is unlawful, but a finding that the employer has violated the California Labor Code prohibiting employers from requiring employees to sign unlawful employment agreements.  (Cal. Labor Code Section 432.5.)

    4) DIFFERENT OVERTIME REQUIREMENTS AND ALTERNATIVE WORKWEEK SCHEDULES – Unlike the FLSA and many other state laws, California requires the payment of overtime after 8 hours in a day, not just after 40 hours in a week. (Cal. Labor Code Section 510.)  However, California does permit employers to implement an Alternative Workweek Schedule of four 10-hour days without the payment of overtime, following a secret ballot election and a 2/3’s vote of the employees in the work unit.  (Cal. Labor Code Section 511.)

    5) REASONABLE ACCOMMODATION/INTERACTIVE PROCESS – California case law imposes a very broad requirement on employers to search for other vacant positions within their entire organizations after they have determined they can’t reasonably accommodate a disabled employee in his or her prior position.  For a multi-state employer, this means checking all other operations for a vacant position, or establishing that during the interactive process the employee was only willing to re-locate within a limited radius.  This rule contrasts with the more lenient federal rule requiring generally that an employer only demonstrate that it “engaged in a good faith effort to identify a position.”

    6) GENEROUS "PREGNANCY DISABILITY LEAVE" STATUTE – California has a separate statute governing leaves of absences based on pregnancy-related disabilities that provides up to 4 months of leave.  This PDL is available to an employee regardless of how long she has worked for the employer and does not run concurrently with baby-bonding leave provided under California’s version of the FMLA.  Therefore, a woman disabled by pregnancy may be entitled to job protection for up to 7 months – 4 for the pregnancy disability and 3 for the baby-bonding.  (Cal. Gov’t. Code Section 12940, et seq.)

    7) PRIVACY RIGHTS – California is one of only seven states that provide a constitutional right to privacy.  California has specific statutory protections governing the retention and disclosure of personnel records, medical information, credit information, criminal records, and social security numbers, among other things.

    8) NO RECORDING CONFIDENTIAL CONVERSATIONS – Unlike many states that permit one party to record a conversation with another person without obtaining the other’s permission, under California’s Penal Code a person may not generally record the confidential communication with another without that other person’s consent.  (Cal. Penal Code Section 632 and 637.2.)  This statute has provided a surprising number of opportunities in employment cases to file cross-complaints against employees who unwittingly violate the statute by secretly recording their supervisors, managers and/or Human Resources personnel.

    9) NO ELLERTH/FARRAGHER DEFENSE TO SEXUAL HARASSMENT CLAIMS – California rejected the holding of the U.S. Supreme Court in the Ellerth and Farragher cases that, if a woman does not complain about harassment and give the employer a chance to investigate and remediate it, her claim is barred.  Instead, California law simply uses a woman’s failure to complain as a limitation on her damages under an “avoidable consequences” rationale.
    10) CALIFORNIA'S WARN ACT THRESHHOLDS ARE LOWER – California has its own version of the federal Worker Adjustment and Retraining Notification (WARN) Act that has some lower threshholds for triggering the advance notice required for mass layoffs and plant closings as well as some different definitions of the types of events that constitute such layoffs and closings.  (Cal. Labor Code Section 1400, et seq.)  Any out-of-state employer planning to conduct reductions in force in California must proceed carefully to ensure compliance with both federal and California law in this area.

    What are your favorite California L&E eccentricities?