Update on Proposed Bereavement Leave Bills from the U.S. Senate and California Assembly

I previously posted about two proposed laws that would provide job-protected bereavement leave for employees.    Since then there have been changes related to these two bills.

S. 1358: Parental Bereavement Act of 2011

This bill, which will add bereavement for a child as a protected leave under the Family Medical Leave Act, is now co-sponsored by Senators Daniel Akaka [D-HI], Mark Begich [D-AK], Sherrod Brown [D-OH], Richard Durbin [D-IL], and Claire McCaskill [D-MO] and remains in the Senate Health, Education, Labor and Pensions committee.  Track the progress of S. 1358 through govtrack.us.

California Assembly Bill 325

On October 9, 2011 Governor Brown vetoed AB 325 which would have provided up to three days of job-protected bereavement leave to employees for the death of an immediate family member.  Governor Brown issued a veto statement.

This post was written by Cara Panebianco, Esq.

Filing Your Statement of Information: Simple Enough To Do Yourself

This post is going to address a simple post-incorporation task that any client can simply do on their own and, frankly, I wouldn’t bother paying a lawyer to do it for you. In the state of California, whether you are an LLC or a Corporation, you will need to regularly file a Statement of Information with the state.

A Statement of Information is a simple form (and usually, after filing the first one, you can e-file) that lists the company’s managers, agent for service of process and general type of business. It’s a quick form to fill out and it makes some very general information available to the public.

Every corporation (including foreign ones) must file a Statement of Information with the California Secretary of State, within 90 days after filing of the initial Articles of Incorporation, and annually thereafter during the applicable filing period. The applicable filing period for a corporation is the calendar month during which the initial Articles of Incorporation were filed and the immediately preceding five calendar months (this means if you incorporation in July of a given year, you have to file your Statement of Information from February to July of the following year). A corporation is required to file this statement even though it may not be actively engaged in business at the time this statement is due.

The only difference in the rules above for Limited Liability Companies (LLC’s) is that you have to file a statement of incorporation bi-annually.

A quick note on foreign corporations: starting January 1, 2012, the same rules will apply. However, if you file your initial Statement and Designation by Foreign Corporation prior to the end of this year, you do not have to file your Statement of Information within the 90 day window and can do it in the month you filed your initial statement (and the 5 months prior) in 2012.

All the information you need (including the appropriate forms) can be found on the Secretary of State site.

Bills in Congress and the California Assembly Aim to Provide Bereavement Leave

Under  federal and California law, it is legal for an employer to terminate an employee if he or she took time off because of the death of a parent, grandparent, grandchild, sibling, spouse or child.  This year legislation has been introduced that would allow employees time off for bereavement without putting their jobs at risk. However, the legislation introduced is very different and gives varying amounts of protection.

Congressional Bill S. 1358

In the federal arena bereavement leave is focusing on the leave for a parent when a child dies with S. 1358,the Farley-Kluger Amendment to the Family Medical Leave Act (FMLA) of 1993. S. 1358 seeks to amend the FMLA to include bereavement for the death of a son or daughter as a protected leave.  If passed, an eligible employee would be entitled to a total of 12 workweeks of unpaid leave during any 12-month period due to the death of a child. This is the same amount of leave provided for the birth or adoption of a child, the serious health condition of the employee or immediate family member, and for military exigency. It does not provide additional time off for bereavement, so if the employee had taken FMLA leave prior to the death of the child, for instance if the child had been ill prior to death, there would be less than the full 12 weeks.  S. 1358 does not provide leave for the death of a spouse, sibling, grandparent, grandchild or domestic partner.  This bill was introduced by Senator Tester in July, does not have a co-sponsor and has been referred to the Committee on Health, Education, Labor, and Pensions.

Assembly Bill No. 325

In the State of California, Assembly Member Lowenthal introduced Assembly Bill No. 325 seeking to add Section 230.5 to the California Labor Code to add the right of employees to “inquire about, request, and take time off for bereavement leave.”  The bill would prohibit employers from discriminating against an employee who asks about, requests, or takes bereavement leave for the death of a spouse, child, parent, sibling, grandparent, grandchild or domestic partner.  In its current form, the bill provides 3 days of unpaid leave within 3 months of the date of death of the qualifying family member.  The bill requires that the employee has worked for the employer for at least 60 days prior to the commencement of leave. The bill would apply to all employers in California, unless there is a valid collective bargaining agreement or memorandum of understanding in place. The bill has been amended multiple times and was last amended on August 16, 2011.

Comparison and Overlap

While the federal bill provides for a large amount of time, it only applies when a child dies and the parent has worked at a relatively large employer for approximately a year.  On the other hand, the California bill provides only 4 days, but applies to all employees who have worked for an employer at least two months and covers more family members.  The leave in both bills is unpaid unless there is vacation time or paid time off that the employee chooses to use.

If both bills are enacted, there will be slight issues of overlap for California employees covered by the FMLA.

For questions about the existing protected classes as defined by the FMLA, contact us.

This post was written by Cara Panebianco, Esq

Contract Law 101: Top 10 Sections (You Should Actually Pay Attention To)

I’ve seen it countless times, a non-lawyer sees a contract and by page two is glossy eyed and half asleep. Obviously, as a corporate and contract attorney, I love drafting, negotiating and reviewing contracts. I also understand that it’s not everyone’s cup of tea. With that in mind, I would like to talk about the most important parts of a contract that you should absolutely read and understand no matter how much legalese they contain.

1. Party Names/Contract Date. In business agreements, you want to make sure you’re entering into a contract with the business not an individual.

2. Services. You want to, as clearly as possible, state what the contract is actually about.

3. Intellectual Property. This is usually bulky and full of long legal lists – it’s also very important: you can generally fix almost any issue, but an improper or accidental grant of rights you didn’t want to grant can be a huge problem (and one you can’t always fix).

4. Payment. How much? When is it due? What happens if a party fails to pay?

5.  Limitations of Warranty/Liability/Indemnity. Ok, so this is three sections in one, but they are all related. They tend to be long and verbose but these days there are almost always limitations and they definitely have practical implications.

6. Confidentiality. Not only does this section relate to the intellectual property one, but you want to clearly understand what the confidentiality rules are with respect to you and your employees and consultants.

7. Term and Termination. Frequently, this is unclear or getting out of an agreement is much harder than you think it will be. Unfortunately, this lesson is learned when you try to get out of an agreement.

8. Governing Law. You don’t want to accidentally agree that Alabama law will apply to your California contract.

9. Conflict Resolution. Arbitration? Litigation? Binding mediation?

10. Signature Block. Does the person signing have authority? Are they or you signing on behalf of the company?

This post written by Katia Bloom, Esq.

“Formerly Incarcerated” as the Next Protected Class in San Francisco?

The City and County of San Francisco Reentry Council is seeking to have people who have been previously incarcerated considered a protected class in the same way that race, gender, age, sexual orientation, transgender, disability and weight are all protected from discrimination in housing and employment within the City and County of San Francisco.

This proposed ordinance would expand the prohibition that already applies to hiring for City of San Francisco jobs and housing provided by the San Francisco Housing Authority.

The ordinance would make it illegal to ask anyone about their criminal past on an initial job or housing application. However, sex offenders and perpetrators of some violent crimes would not be covered.

The next step in the process is approval by the San Francisco Human Rights Commission. It in the midst of  public forums on the proposal. The public forum focusing on the housing aspect of the ordinance occurred July 14, 2011, and the forum related to the employment aspect is set for 4:00 pm at City Hall on July 25, 2011.  Now is an ideal time to comment on the proposed ordinance and how it would affect you as an tenant, landlord, employer or employee in San Francisco.

More information and the document released by the Human Rights Commission can be found here.

For questions about the existing protected classes as defined by San Francisco law, contact us.

This post was written by Cara Panebianco, Esq.

A Day Late on Final Pay Makes Employers a Dollar Short


The California Labor Code (Labor Code) has specific requirements as to when and how employees must be paid their wages upon termination or resignation.   The Labor Code also has penalties for failing to follow these requirements.

A Day Late

Discharged Employees

When an employee is discharged all earned wages are due immediately.  This includes employees hired for a specific period who have worked through the end of the period.  These employees must be paid at the place of discharge or by employee-authorized direct deposit.

Resigning Employees

When an employee resigns after providing at least 72 hours (3 days) notice, all earned wages are due at the end of the last day of employment.  If an employee quits without providing 72 hours notice, all earned wages are due on her (or his) last day.   Employee should be paid at the office of the employer in the county where she (or he) performed work, or by employee-authorized direct deposit.  If the employee requests to receive the final payment by mail, and provides a mailing address, this is allowed.  The date the check is mailed is considered the date of final payment.

If an employee elects to receive the final check by mail, the employer will be responsible for proving the employee chose to receive it by mail and actually received it.  Because of this, employees should not be surprised if the employer has employee complete a form in order to be paid by mail and then sends the check by certified or registered mail or another carrier.

Commissions and Bonuses

Sometimes wages are earned but not calculable on the last day of employment, such as performance bonuses or commissions, in this case, the employer must pay them as soon as calculable.

A Dollar Short

If an employer fails to follow the rules on final pay, the Labor Code makes the employer liable for a penalty equivalent to the employee’s daily wage for every day final pay is late up to 30 days.

This means that if a final check fails to pay any part of all normal wages, all overtime pay, all accrued vacation or paid-time-off, all calculable commissions or all calculable bonuses, then for every day any portion is not paid, the employer will be liable to the employee for a day’s wages.

In the Real World

A perfect storm for these rules is when employees are misclassified as overtime exempt, but after termination the employee discovers the misclassification.  In such a case, the employee is not only owed overtime for any overtime worked in the past three years, but also waiting time penalties for up to a month.  These costs can add up quickly, and if an employee elects to pursue a claim in civil court, the costs are increased by the employer’s liability for attorney’s fees.

An example of how much this can cost is Sue an administrative assistant that makes $80,000 per year and works for XCo, Inc.  When XCo, Inc. hired Sue it assumed that she met the administrative exemption under California law and as such was not owed overtime, so she was paid a salary of $80,000. Sue worked 10 hours a day, five days a week. Sue worked for XCo, Inc. for six months before she was laid-off in restructuring.  On her last day of work August 1, she was paid her salary for the pay-period and cashed out the three days of vacation pay she had accrued.  Sue was upset that restructuring had taken place so close to when she was hired, so she contacted an attorney. The attorney asked Sue about her position and concluded Sue should have been paid overtime for all time worked over eight hours in a day (two hours a day, five days a week for 24 weeks).  Sue was owed $15,000 in unpaid overtime.  In addition, XCo, Inc. owed Sue a day’s pay for every day she was not paid the $15,000. Given that it took Sue some time to speak with an attorney and then additional time for the attorney to send a demand letter plus time for XCo, Inc. to consult with an attorney about the demand, by the time XCo, Inc. realized their mistake and paid Sue it was October 1.  As a result, in addition to the $15,000 XCo, Inc. owed Sue for overtime, it also owed her $9166.67 for 30 days of wages in late penalties.   In all, XCo, Inc. owed Sue over $24,000 for only six months of work.  Now imagine if Sue was one of 10 misclassified administrative assistants who all worked 10 hour days at XCo, Inc. and most of the administrative assistants had worked at XCo, Inc. for at least three years.  The cost of compensating all 10 administrative assistants plus attorney’s fees would add up quickly.

This example shows how misclassification of employees as overtime exempt plus the waiting time penalties that apply can add up to significant numbers.

Contact us for answers to your questions about overtime exemption and waiting time penalties.

This post was written by Cara Panebianco, Esq.


Why Are Written Contracts Important?

This may seem like a rather obvious blog post and, for a lawyer, it is. However, in the last few months I have, to my surprise, run across a number of people (many of whom successful and experienced small business owners) who seem to be rather lax about getting important agreements in writing.

One of the most common explanations I hear is that the other party is a friend, trusted business person the owner has worked with before or just a “really nice guy.” The reality is that, in many cases, the owner is right and things will flow smoothly. The problem is that it only takes one misunderstanding to cause financial, time and emotional stress.

It is important to note that oral contracts can, sometimes, be enforceable. There are law firms specializing in just oral contracts. Also, if there has been an email exchange of some sort, even without the word “contract,” it is possible that indeed a contract exists. Performance in it of itself can create a contract. However, these situations can be gray with room for debate and potential for a “who said what” situation which equals headaches and expenses.

In the most primitive way, a written contract assures that both parties are on the same page. I often ay that even with the most trusted friend, why risk having a fight because one of you thought you were going to deliver a product in a month and the other thought it was in six months? My experience is that people are generally nice and want to do the right thing. However, the reality is that a large bulk of litigation is based on misunderstandings with each side being convinced they heard and understood the agreement in the right way. On an interesting note, a lot of contract disputes are among family members and close friends.

Additionally, a written contract gives the parties a framework for determining and negotiating potential future pitfalls. Just as an example, while it is not always the most pleasant conversation, it is much more pleasant to talk about arbitration versus mediation before a dispute arises.

I have also found that getting a written agreement has as instant psychological effect: a written contract makes both parties more serious about their actions. At times, one party’s desire to have something in writing may scare off the other party. However, I always find that this is a great barometer of whether you want to be doing business with this person (even if it is your best friend).

I do recommend getting lawyers involved – but the right lawyer. A good attorney can help you navigate through some of the more complex parts of an agreement (I have yet to meet a non-lawyer who enjoys reading indemnity and warranty provisions). More importantly, you need to find a lawyer that is a deal-maker and not a deal-breaker. Fundamentally, lawyers as a profession are risk averse. I have met numerous people who regretted getting a lawyer involved because the agreement was basically done and when the lawyers came in it fell apart. This absolutely happens. That is why you need an attorney who will clearly understand and prioritize what is a nice to have, need to have and must have in every agreement they prepare.

This post written by Katia Bloom, Esq.

Is a Critical Tweet Grounds for Termination?

The National Labor Relations Act (NLRA) and the National Labor Relations Board (NLRB are two things to which most private employers pay little attention.   If the private employer does not have a union in the workplace, it probably fails to think about it at all.   But in the wake of the numerous actions by the NLRB this year against private employers, some of which have no union, this should be changing.

This year there have been at least four publicized incidents where the NLRB has gotten involved when an employee faced termination or other disciplinary action for social media posts, specifically Facebook and Twitter.

While the employers have been located throughout  the country and in variety of industries (BMW Dealership, Social Services Non-Profit, Publishing, and Medical Emergency Response), the common thread is that the employees have used Facebook or Twitter to criticize the terms and conditions of employment and arguably to connect to other employees in making these criticisms. For example, the NLRB’s stance is that a Chicago-area car salesman’s posting of comments and pictures critical of his employer’s use of Sam’s Club bottled water and hotdogs to celebrate the release of a new BMW  related to the terms and conditions of employment.  The case will be heard by an administrative law judge in July.

So can employees post criticisms and negative comments about employers without concern? No, but employees can post comments about their employer when those comments regard the terms and conditions of the employment.

Employees should continue to use discretion and best judgment when posting something on a social media site such as Facebook or Twitter. The NLRB has issued a Memoranda stating that employees may be “terminated for posting inappropriate and unprofessional tweets, after having been warned not to do so” with the key being that the postings were not criticisms of the terms and conditions of employment.

However, employers would be advised to review their social media policies, train their managers and supervisors accordingly, and think twice before taking action against an employee for a social media communication.

This post was written by Cara Panebianco, Esq.


Incorporating in California: Be Aware of Extremely Long Processing Times

This will be a rather short, sweet and to the point blog post: California’s Secretary of State takes an incredibly long time to process any incorporation documents you submit by mail. Just as an example, for formation documents submitted by mail, the Secretary of State is currently processing documents received on March 21, 2011. On the other hand, the Secretary of State is processing documents submitted in person on May 20, 2011. While this may be frustrating, it is the reality and something to keep in mind when you are thinking of incorporating your business.

If time is of the essence, consider either driving to Sacramento or Los Angeles to submit the documents in person or hire someone to do it for you. It may be more expensive and/or time consuming for you, but well worth it if you want to incorporate sooner rather than having to wait an additional two months.

This post written by Katia Bloom, Esq.


There’s an App for that, and it is from the U.S. Dept of Labor

The new Apple compatible application (app) “DOL-Timesheet” from the U.S. Department of Labor (DOL) was released May 9, 2011.  The free app provides timesheets that allow employees to track the time they work and calculate how much they are owed, including overtime.

The app has received some coverage in both the employment law sphere and the wider sphere of general news with an AP article and some others as a result of the DOL press release.

How is it Significant?

According to the press release, “the new technology is significant because, instead of relying on their employers’ records, workers now can keep their own records.  This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.”

While the ability to track time from a phone and then calculate pay is nice, it is not revolutionary.  Employees have always had the resource to track their own hours, either by entering the information into the calendar function of their phone or just writing it down on a paper calendar. Additionally, there are apps that individuals can purchase or companies can purchase for employees to track time. How the DOL app is actually different is that it allows the user to locate DOL offices and contact the DOL directly using the app.

Why was it Developed?

This app is not meant to, and it should not be used to, substitute for the records an employer keeps to track employee time. Instead, the app is part of the DOL’s larger efforts to increase enforcement of wage and hour provisions of the Federal Labor Standards Act, especially unpaid overtime.

The DOL’s purpose behind this app is to encourage employees to maintain their own records of time worked so that in the instance of a dispute there is a time record.  While employers most often have a time clock system, sometimes these systems are altered without employee consent or the records are not maintained for the required amount of time.  Another instance in which time records are either missing or inaccurate is misclassification of an employee as overtime-exempt.  In a case where the employer believed an employee is exempt, the employer may not even create time records or fail to maintain them.

The release of this app aligns with other recent actions by the DOL such as the hiring of 300 additional investigators in the Wage & Hour division.

How does it Work in California?

The first thing to remember about this app is that it is based on Federal wage and hour law, not California law.  The app is set to calculate breaks as 15 minute breaks, instead of the California required 10, and to calcuate overtime at 1.5 times the normal rate of pay, instead of either 1.5 or 2 times depending on the situation as per California, use of the application will inevitably result in miscalculation of wages owed for work performed here.

The California Labor Commissioner can still consider the record of time worked an employee keeps using this app, or any other method, but the total owed as calculated by the app will be incorrect.

Are there Additional Implications?

The release of this app could increase the attention of employees and/or employers as to the importance of accurate time records and preserving these records. If employers become concerned that employees are maintaining their own separate time records and demand to see either the app or other method of maintaining the record, it may implicate issues of privacy or retaliation, depending on how it is handled. Even more complicated is what will happen when an employee installs this app on an employer-owned device.

So What?

Wage and hour issues are complicated on their own.  While this app has the potential to simply certain instances, it may also raise entirely new ones related to technology in the workplace.  For answers to questions about your specific situation, contact us.

This post was written by Cara Panebianco, Esq.