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Working Life Episode 194: Two Hollywood Tales—A Union Win in California, A Florida Progressive Aims to Fire Debbie Wasserman-Schulz

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Today the show is all about Hollywood. Hollywood, California and Hollywood, Florida. Hollywood, California is in a rumble. For most performers in the entertainment business, residuals are the foundation to making a living—either a solid middle class living or somewhat less than that. Over many decades, residuals have been tied to various things such as repeat showings of a movie in syndication or sales of DVDs. Now, it’s all about streaming.

For performers, this is a huge change and it’s really about a fight to make sure generations of performers, some not born today, will be able to earn a respectable living. How do performers get paid in a streaming world? The performers’ union, SAG-AFTRA, just scored a big streaming deal win for performers—as well as locking in a big #MeToo step forward to protect actors from harassment. I dig into all this with the union’s president Gabrielle Carteris, who has a long career in film as an actor in film, TV and stage (most prominently in Beverly Hills 90210) and as a producer, and Ray Rodriguez, SAG-AFTRA’s Chief Contracts Officer.

Florida’s 23rd Congressional district is a strongly Democratic district currently represented by the odious Debbie Wasserman-Schultz. In a world of dishonest, morally corrupt, vain and narcissistic politicians, Wasserman Schultz stands out. That’s where Jen Perelman comes in. Jen is challenging Wasserman-Schultz in the Democratic primary which wraps up next week with Election Day after thousands of Floridians have already cast early-voting ballots. Jen’s website is jen2020.com. She joins me from the campaign trail as she was out talking to voters.

This blog originally appeared at Working Life on August 12, 2020. Reprinted with permission.

About the Author: Jonathan Tasini is a political / organizing / economic strategist. President of the Economic Future Group, a consultancy that has worked in a couple of dozen countries on five continents over the past 20 years


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Historic Child Care Organizing Victory in California a Win for AFSCME, SEIU

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Working people across the United States have stepped up to help out our friends, neighbors and communities during these trying times. In our regular Service + Solidarity Spotlight series, we’ll showcase one of those stories every day. Here’s today’s story.

In a union election victory 17 years in the making, child care providers across California voted overwhelmingly to be represented by Child Care Providers United (CCPU). The organizing campaign was a joint effort of United Domestic Workers/AFSCME Local 3930 and SEIU locals 99 and 521, with 97% of represented workers who voted choosing to join CCPU. “This has been a long time coming,” UDW Assistant Executive Director and AFSCME Vice President Johanna Hester said Monday. “This win gives 40,000 family child care providers in California the opportunity to bargain for higher pay, better training and increased access to care for every child who needs it.” With AFSCME’s and SEIU’s strong support, Gov. Gavin Newsom signed into law the Building a Better Early Care and Education System Act (A.B. 378) in September, paving the way for this historic victory, one of the largest union organizing wins in America so far this century.

This blog originally appeared at AFL-CIO on July 31, 2020. Reprinted with permission.

About the Author: Aaron Gallant is a contributor for AFL-CIO.


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California Hospital Workers Strike, Fracturing Pandemic’s Uneasy Labor Peace

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Despite nationwide shortages of personal protective equipment (PPE) and working conditions that have often been life-threatening, there have not been major strikes of hospital workers in America since the coronavirus pandemic struck. Until now.

More than 700 employees of Santa Rosa Memorial Hospital, a regional trauma center in California’s Sonoma County, held a five-day strike that concluded on Friday. Foremost among the motivating issues were cuts in health care and paid sick leave that the hospital, owned by Providence St. Joseph Health, was pushing on employees during a contentious contract bargaining campaign. The employees are members of the National Union of Healthcare Workers (NUHW).

“The biggest reason is because we’ve been out of contract for over a year, and the hospital is trying to force us into a pretty bad contract,” said Steven Batson, an anesthesia tech and 10-year veteran of the hospital, speaking from the picket line last week, where he was joined by hundreds of his coworkers. The company wants to significantly increase health care premiums, Batson said, and to take paid time off away from senior workers and shift it to newer workers as a recruitment tool. Batson, a shop steward, said the contentious bargaining over this contract is “absolutely” the worst he has experienced in his ten years.

Chuck Desepte, an X-ray technician who has been at Santa Rosa for 13 years, agreed. “It’s the takeaways that I’m not accepting,” he said. “They can afford this. We don’t want to go backwards. We’ve been here for this community over and over again.”

In May, the New York Times reported that Providence Health, which received a bailout of more than $500 million from the federal government in the CARES Act, has a $12 billion cash pile and sizable investments in hedge funds and venture capital. “Last year, Providence’s portfolio of investments generated about $1.3 billion in profits, far exceeding the profits from its hospital operations,” the Times wrote.

Though the strike was not directly caused by the fallout of the coronavirus, the pandemic is playing an unavoidable role. Batson said that although the union held a strike authorization vote in February that passed overwhelmingly, it held off on taking action once the pandemic hit. He said that the hospital was slow to require universal masking, and that to this day, housekeeping staff and outpatient lab technicians who do coronavirus testing are not given adequate PPE, like N95 masks. “The hospital has definitely used this pandemic as a weapon against us,” he said, including by trying to portray the workers as irresponsible for going on strike.

In a statement on the first day of the strike, the hospital wrote that “we are deeply disappointed that NUHW has decided to hold a five-day strike given that the number of COVID-19 cases is on the rise in Sonoma County and the potential for a significant increase in hospitalizations remains.” The company also hastened to paint employees as selfishly exploiting current events. “The union has made clear in communications to our caregivers that this is not a strike about personal protective equipment (PPE) or workplace safety. Instead, this is an ordinary dispute over the terms of our labor contract,” the hospital wrote. “It is unfortunate and unfounded that the union is using COVID-19 as a platform for its negotiating tactics. We never deny a caregiver PPE.”

The company itself is playing hardball. It tried to dissuade the strike with preemptive economic threats, posting ominous fliers warning that, “If NUHW submits a strike notice, our current wage offer of an annual 3% increase will be lowered to 2%, to account for the significant expense of a disruptive strike, and the current offer will be pulled off the table.” (Time will tell whether that threat stands as negotiations continue.) As soon as the strike was called, the company stopped deducting union dues from workers’ paychecks, a move that serves to annoy and hassle the union, making it much more time-intensive to collect dues. Contracted replacement workers from an outside agency were brought in for the five-day duration of the strike.

Though every labor action is unique, the fact that NUHW was willing to go through with the strike in the face of the inevitable attacks about responsibility during the pandemic could signal that the fragile labor peace that has mostly reigned in the healthcare sector—an industry afflicted with more than its share of dissatisfied and endangered union workers—may be buckling. Unions that have been cautious about going on strike over contract issues during this crisis will sooner or later be forced to decide whether they will allow employers (who may have multi-billion-dollar investment portfolios) to make them swallow concessions they would not have otherwise accepted. The employees at Santa Rosa, who worked through major wildfires in their area in 2017 and 2019 before facing the Covid outbreak this year, will soon find out if their bold action pays off.

It was not an easy decision. “We’re health care workers,” said Desepte. “We want to take care of people.”

This blog originally appeared at In These Times on July 27, 2020. Reprinted with permission.

About the Author: Hamilton Nolan is a labor reporter for In These Times. He has spent the past decade writing about labor and politics for Gawker, Splinter, The Guardian, and elsewhere. You can reach him at [email protected]


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People of the State of California v. Uber & Lyft

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NELP and other workers’ rights advocates urge court to stop Uber and Lyft’s independent contractor misclassification.

On July 17, 2020, NELP, in collaboration with Legal Aid at Work and other California-based workers’ rights organizations, urged the San Francisco Superior Court of California to stop Uber and Lyft’s illegal misclassification of their drivers as independent contractors.

Though they proudly wear the label of innovative “technology” companies, Uber and Lyft are no different than any other company that routinely violates labor and employment laws to boost its profits at the expense of its workers.

By misclassifying their hundreds of thousands of drivers as independent contractors, Uber and Lyft dispossess their workers of basic labor protections, such as minimum wage, overtime pay, workers’ compensation, unemployment and state disability insurance, and other critical rights intended to cover most workers in our society.

Calling a driver an “independent contractor” does not make it so, and managing employees through an online application does not transform them into self-employed entrepreneurs. Drivers for Uber and Lyft are not running their own separate businesses; they are integral to the companies’ businesses. They are Uber and Lyft’s employees.

Misclassification is not unique to app-based employers—it occurs in every industry where a company might feel the itch to cut corners and boost profits. But in Silicon Valley, the practice has its peculiarities. Companies like Uber and Lyft have flourished in a venture capital fever dream in which regulations are disrupted and the dignity of human labor processed via algorithm and code. Through their gospel of “flexible work,” Uber and Lyft have taken an illegal practice familiar to bad employers everywhere and turned it into the “future of work.”

As described in the amici brief, by subverting labor laws and disabling industry regulations, the two companies have been able to steal wages, duck accountability, offload risk, sabotage worker power, and worsen income and wealth inequality.

Driving for Uber and Lyft must be seen for what it really is: Employment for a company that unilaterally dictates the material terms of work for people who are not running their own business.

NELP urges the San Francisco Superior Court of California to correctly enforce state law, so that drivers for Uber and Lyft, already providing the core transportation service for the companies, may access their employee rights under California law.

This blog originally appeared at NELP on July 20, 2020. Reprinted with permission.

About the Author: Brian Chen is a Staff Attorney at the National Employment Law Project. He primarily focuses on building power for workers who are exploited in “nontraditional” work structures, such as independent contractors, temp, and gig workers. Through litigation and policy campaigns, he aims to support workers’ efforts to democratically self-determine their material conditions.


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Parents are ready to return to work, but where will their kids go?

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The resurgence of California’s economy — the fifth largest in the world — could rest on one sector shattered by the pandemic: child care.

SACRAMENTO, Calif. — The resurgence of California’s economy — the fifth largest in the world — could rest on one sector in particular that’s been shattered by the pandemic: child care.

Steep revenue losses and costly new health and safety requirements are putting beleaguered child care programs out of existence in the high-cost state just as more parents return to the workplace. Even a relatively small percentage of closures could have an outsize effect given pre-pandemic shortages, experts say.

That could sideline workers and hamper recovery efforts, particularly in California’s signature tourism, entertainment and dining sectors where remote work is simply not possible. States across the country are experiencing the same challenge as more parents are ready to return to work but may have few options for their children.

“I really feel like we can’t reopen the economy until we open our child care centers, and I would extend that to K-12 as well,” said California Assembly Speaker Anthony Rendon, who ran an early education nonprofit before entering politics.

In sectors such as leisure and hospitality, as well as many jobs in health care, construction and manufacturing, “there is very little ability to work from home and be able to juggle your hours around child care,” said Elise Gould, a senior economist at the Economic Policy Institute in Washington, D.C.

The situation also has a disproportionate effect on women, she said, who remain more likely to assume the burden of caring for children and elders, even if they work outside the home.

Further complicating the child care equation is the K-12 school system, which educates some 6 million children in California. The state Department of Education suggested last week that schools could reopen for as few as two days a week to maintain smaller group sizes and social distancing.

The availability of before- and after-school programs will be critical, said Rachel Michelin, president of the California Retailers Association. “If that doesn’t happen, it’s going to be a mess because that really provided a lot of affordable child care for a lot of folks,” she said.

The CARES Act provided an additional $3.5 billion to help child care programs weather the pandemic, of which California received $350 million. Some child care centers also managed to receive federal aid under the Paycheck Protection Program, buying them time to figure out a plan. But advocates say more is needed from Washington, along the lines of a new, $50 billion proposal from Reps. Rosa DeLauro (D-Conn.), Bobby Scott (D-Va.) and Sen. Patty Murray (D-Wash.).

“The airlines got a huge subsidy,” said Eric Sonnenfeld of the Tulare County Office of Education, which runs 22 early childhood education programs in the heart of California’s Central Valley. “We’re looking to something of the same degree.”

In California, 72 percent of home-based day cares surveyed in late April reported they had remained open through the pandemic, caring for children of essential workers, according to a late April poll of child care providers by the University of California, Berkeley’s Center for the Study of Child Care Employment. 

But just 34 percent of the state’s licensed centers — which, combined, have roughly twice the capacity as home-based providers — kept their doors open this spring, it found.

Those reductions came on top of widespread closures of campus-based child care for school-age children as California districts ended physical classes in mid-March.

California on Friday allowed a wide array of sectors to reopen, which is sure to increase demand for child care. But centers that closed abruptly in March are figuring out if, when and how to reopen with cohorts of just 10 children, as the CDC has recommended. In many cases, that’s half the number of children that once shared a classroom. 

Like K-12 schools, child care centers face a difficult choice to maintain social distancing, especially in a recession. They could hire more staff and acquire additional space. Or they could reduce their enrollment. Both come with cost pressures, either through greater expenses or lower revenues, in a sector that historically has operated on the thinnest of margins.

Programs across the country are in the same precarious position as they try to adapt to the costly new requirements, said Beth Bye, a former Connecticut state senator who now leads that state’s Office of Early Childhood.

“The economic model doesn’t work that well,” Bye said of child care programs generally. “Now you take a business that was barely holding on and say, ‘You can take half as many kids.’ The math just doesn’t work.”

Sonnenfeld says he has been getting calls from Tulare County parents, wondering when they can once again send their kids to his county’s state preschool and Head Start programs. He still doesn’t have a firm answer.

“Businesses are reopening, restaurants are reopening, retail is reopening again,” he said, “but our county superintendent has been very adamant that it has to be safe — not only for students, but for staff — to return.”

While many regions will lack enough child care to meet demand, some providers say they can’t easily replace long-enrolled families choosing to stay home.

In addition to the continuing spread of the virus — and a lack of data on the transmission of Covid-19 by asymptomatic children — is a problem of reliable demand: Some parents might keep their children home as a health precaution or because they’re out of work. 

Yessika Magdaleno stayed open when the pandemic hit, caring for the children of nurses, fast food workers and grocery store employees at her home in the Orange County city of Garden Grove. But earlier this month she said nine of the 16 children who had been in her care before the pandemic had not returned. 

“I don’t know after June how we’re going to survive if more than half of my children are not here,” she said. 

Some parents haven’t even heard from their children’s programs amid the chaos of the pandemic, said Mary Ignatius, a longtime organizer for Parent Voices, a parent-led organizing effort. 

“Just figuring out who’s going to be open when everything goes ‘back to normal’ is going to be a test,” Ignatius said. “I think that’s been a lingering pit in every parent’s stomach: ‘I don’t know what is going to happen. I don’t know what this new normal is going to look like.'”

In California, child care has some important allies in the Legislature, including Rendon (D-Lakewood). He said he first met Sen. Holly Mitchell (D-Los Angeles), now the state Senate’s budget chair, 20 years ago at a rally for early education funding. 

Legislative leaders rejected Gov. Gavin Newsom’s proposal to cut reimbursement rates for state-subsidized child care by 10 percent, a move the governor himself would cancel if federal leaders provide budget relief. Assemblymember Kevin McCarty (D-Sacramento) called that cut “a nonstarter,” saying in an interview that it would “be a death knell for a lot of these programs.”

Newsom in April waived certain eligibility restrictions for state child care assistance to help essential workers who may not have previously qualified for subsidies. He also introduced an online portal to help connect families with child care, Mychildcare.ca.gov, that allows parents to search for child care facilities by ZIP code, including hundreds of new “pop-up” centers the state established in response to the pandemic.

Several lawmakers, anticipating child care challenges, are advancing bills to expand job-protected leave for working parents who need to stay home and care for their children, arguing that parents shouldn’t be forced to choose between their children’s safety and keeping their jobs.

Rendon said he worries about the effect on children’s development if they stay home from school much longer. Hand-washing and other health protocols have long been embedded in child care programs, he said, making them better positioned than other settings to open with proper precautions. 

Still, he said, “People are still quite scared. And to drop off your child, that’s a tremendous leap of faith.”

This blog originally appeared at Politico on June 11, 2020. Reprinted with permission.

About the Author: Katy Murphy covers consumer regulations with a focus on data privacy for POLITICO California. Before joining the team, she was a one-woman Capitol bureau for the The Mercury News and East Bay Times and previously covered K-12 and higher education for more than a decade, based in the Bay Area.


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AB 5 repeal could land on 2022 ballot

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AB 5 enshrined in law the California Supreme Court’s test for distinguishing employees from independent contractors. 

Voters could get a chance to dissolve California’s controversial worker classification law in 2022.

Assemblyman Kevin Kiley (R-Rocklin), one of the measure’s most ardent opponents in the Legislature, announced he will try to qualify a ballot initiative to repeal the law. It’s too late to run a referendum suspending AB 5, so Kiley would aim to strip its language from statute in the 2022 election.

AB 5 enshrined in law the California Supreme Court’s test for distinguishing employees from independent contractors. While organized labor backers have called that a boon to workers, Kiley has highlighted stories of Californians who have lost work as a result and sought unsuccessfully to repeal it with legislation.

The law is already likely to be on the 2020 ballot, with app-based gig companies like Uber and DoorDash qualifying a measure to keep their workers independent contractors. Kiley said in an interview that his measure would be far broader than one focused on the tech industry.

“The supporters of AB 5 from the beginning have demonized two companies and used that as their main rationale for the law,” Kiley said in reference to Uber and Lyft, but his proposed initiative “is not about one or another company but about the principle of economic freedom and the right to earn a living and the hundreds of professions in California that have been wiped out because of this law.”

A ballot committee Kiley launched last month does not yet have any money in it, and Kiley said he has yet to line up financial backers. He said he hoped his effort would provide an impetus for the Legislature to make a deal — a tactic that has not worked for the tech industry.

This blog originally appeared at Politico on June 2, 2020. Reprinted with permission.

About the Author: Jeremy B. White co-writes the California Playbook and covers politics in the Golden State. He previously covered the California Legislature for the Sacramento Bee, where he reported on campaigns, myriad nationally significant policy clashes and multiple FBI investigations of sitting lawmakers.


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California Authorities Take Steps to Protect Workers’ Health and Rehiring Post-Quarantine

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State and local governments in California have recently signed into law several measures aimed at protecting workers. At the state level, Gov. Gavin Newsom signed an executive order offering additional paid sick leave to food sector workers. At the local level, both the County and City of Los Angeles have now adopted worker retention and right of recall ordinances protecting the jobs of certain service sector workers. While the potential harm to workers resulting from COVID-19 remains great, these measures should provide some comfort to vulnerable workers at a time of financial insecurity. 

Food workers entitled to additional paid sick leave for reasons related to COVID-19

The statewide measure pertaining to food workers was signed into effect by Gov. Newsom on April 16, 2020. Executive Order N-51-20 points out that food service workers are far less likely to stay home from work when they’re sick if they do not have available paid sick leave. If workers feel they have no choice but to work while sick, there is a greater risk that the infection will spread to all coworkers.

The order addresses these concerns by mandating that employers of food service workers must offer supplemental paid sick leave related to COVID-19 to food service workers. Workers become eligible for this leave when: the worker has been ordered to quarantine or isolate by a federal, state, or local order; the worker is told by a healthcare worker to self-quarantine or self-isolate; or, the worker has been barred from working by their employer based on concerns of transmission of COVID-19. The amount of paid sick leave to which workers are entitled will vary based on the number of hours the employee worked. Workers considered to be “full-time” employees or who were scheduled to work an average of 40 hours per week for the two weeks prior to taking COVID-19-related leave will be entitled to 80 hours of COVID-19 supplemental sick leave. For those working fewer hours per week, the worker will be entitled to take the number of hours of paid leave across two weeks as they would have normally been scheduled to work in that time.

Los Angeles County workers now have a right to rehire and to be retained by new owners

Many laid-off workers fear that, due to the struggling economy, their positions may be filled by new and inexpensive workers rather than the experienced, possibly older, workers who held the position previously. After similar ordinances were signed into effect by City of Los Angeles Mayor Eric Garcetti, the County of Los Angeles has now enacted two ordinances designed to assure laid-off workers in the service industry that they have a right to be rehired when businesses reopen. The City’s orders offer protections to those working at airports; as janitorial, maintenance, or security workers at commercial properties; and at large event centers, hotels, and hotel restaurants. The City’s orders go into effect on June 14, 2020. The County’s orders cover only those who work at commercial properties and hotels, and go into effect on May 12, 2020. Both measures offer workers a right to pursue legal action if they believe their rights have been violated under these ordinances.

The City’s Worker Retention ordinance and the County’s Right of Retention ordinance each mandate that, upon the sale of a business to a new owner, any laid-off employees of that business have a right to be kept on as an employee under the new ownership. The former owner must provide a preferential hiring list of the business’ employees to the new owner. The new owner must hire from that list for six months after the business is again open to the public. In order to be eligible for inclusion on this list, the worker must have worked for the business for at least six months, must have been primarily employed by that business, who is directly employed by or works for someone who has contracted with the former owner, and who worked for the former owner after March 4, 2020 and before the business was sold. These ordinances do not include managerial, supervisory, or confidential employees. Workers rehired by a new owner must be retained for at least 90 days unless the employer can show cause for firing the worker.

The City and County ordinances related to the Right of Recall state that workers laid off on or after March 4, 2020 must be prioritized when businesses begin to rehire workers. The worker must have performed at least two hours of work for that employer each week to be eligible, and have worked for the employer for at least six months prior to layoff. Workers are entitled to an offer for open positions with their former employer if they held the same position previously, or if they could become qualified for the position after completing the same amount of training that a new worker would need. If two workers are eligible for the same position, employers must offer the more senior employee first right of refusal.

About the Author: Kurt R. Mattson is the President of Union Legal Research. He has spent more than 30 years in the legal services industry as a research attorney, writer, editor, and marketer. 


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California lawmakers blast ‘atrocious’ UI system overloaded with 4.9M claims

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SACRAMENTO — California state lawmakers unleashed their frustrations about the state’s unemployment system Thursday, demanding answers from an agency director about the problems their jobless constituents have endured trying to access the financial lifeline during the pandemic. 

“We’ve never heard the type of suffering people are experiencing right now,” said Assemblyman David Chiu (D-San Francisco). “The feedback we’re getting is atrocious.”

The comments at a budget subcommittee hearing came hours after the U.S. Department of Labor released data showing California’s number of pandemic-induced unemployment claims had climbed to nearly 4.9 million — about 25 percent of California’s pre-pandemic workforce. The avalanche of claims has overwhelmed the state’s Employment Development Department and its aging technology systems, sending many desperate residents to lawmakers for help.

Lawmakers told the agency’s director, Sharon Hilliard, that their staff had been flooded with calls from constituents struggling to learn about the status of their claims or unable to reach EDD staff to have their questions answered. They cited a litany of problems, from delayed claims updates — provided by regular mail — to a lack of capacity to assist workers who speak languages besides English and Spanish, which Chiu said was a civil rights concern. 

Constituents desperate for a lifeline will call the department, make their way through an automated menu and then get “hangups, for Pete’s sake,” said Assemblyman Tom Lackey (R-Palmdale).

“Even from some of the live calls we have hangups,” he added, referring to residents being dropped mid-call. “That’s really unacceptable.”

Hilliard did not refute the criticism, but explained that the agency — staffed earlier in the year for an unemployment rate of a mere 3.9 percent — had to rapidly escalate its operations.

“I don’t like it either,” she said. “I totally agree with you. It’s not acceptable.”

She said agency leaders expect to hire some 1,700 people in the next two weeks and upgrade the IT system as was planned before the pandemic, choosing a new vendor this fall. In response to lawmakers’ questions, she said the department was considering ways to send certain notifications by email and how to alert people more quickly if there were errors or missing information on their applications that could delay payments. 

Assemblyperson Buffy Wicks (D-Oakland) said she had some sympathy for the department. But, she said, “I have more sympathy for the folks in my district, many of whom were already living on the brink of poverty.”

This blog originally appeared at Politico on May 21, 2020. Reprinted with permission.

About the Author: Katy Murphy covers consumer regulations with a focus on data privacy for POLITICO California. Before joining the team, she was a one-woman Capitol bureau for the The Mercury News and East Bay Times and previously covered K-12 and higher education for more than a decade, based in the Bay Area.


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California Assembly Bill 9 Expands the Statute of Limitation for Discrimination Claims

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Statutes of limitations, are designed to ensure that an alleged victim does not delay in making a claim for damages or other relief.  A long delay can deprive the defendant of the evidence necessary to fight the claim. By failing to act with reasonable diligence to pursue a claim, relevant document may be lost and witnesses’ memories may fade.

With respect to claims under the California Fair Employment and Housing Act (“FEHA”), employees must file a complaint with the Department of Fair Employment and Housing (“DFEH”) and obtain a right-to-sue letter before filing in court.  Until January 1, 2020, employees had one year to initiate this process to exhaust administrative remedies.  Following the passage of California Assembly Bill 9, which amends Government Code sections 12960 and 12965, employees now have three years to file these claims with the DFEH.  But, AB 9 is not retroactive.  Old claims are not revived by the new law.

What Does AB 9 Do for Employees?

AB 9 represents a significant expansion of employee rights in California. The one-year statute of limitations will continue to apply to claims made under the Unruh Civil Rights Act, Ralph Civil Rights Act of 1976 and under Civil Code provisions addressing “Blind and other Physically Disabled Persons.”

AB 9 also includes four expansions of the three-year filing deadline for cases brought under the FEHA.

  • First, the statute of limitations is tolled (or temporarily stopped) for up to 90 days following a person’s discovery of the facts of the alleged discrimination.
  • Second, the statute is tolled for up to one year in situations where one first discovers the identity of the employer after three years have passed.  Thus, for example, the true employer might be disguising its identity within a maze of companies.  AB 9 provides a limited tolling under such circumstances to permit an employee to substitute the actual employer into the claim.
  • Third, the statute is tolled for up to one year in cases brought under Civil Code § 51.7 (Ralph Civil Rights Act of 1976) from the date the employee learns the identify of the person liable for the discrimination.
  • Fourth, the statute is tolled for up to one year after the person aggrieved by the discrimination reaches their majority (18 years).

How Does Exhaustion of Administrative Remedies Under the FEHA Work?

Filing a discrimination complaint with the DFEH requires the employee to complete an online form that identify themselves, their employer and the violations they allege occurred.  A failure to include all of the claims available or to sufficiently describe the claims being asserted can deprive the employee of the right to pursue the claims at the DFEH or in court.

After completing the complaint form, the employee is asked whether they wish to have the DFEH investigate the claims or to issue an immediate right-to-sue letter.  Generally, an employee should not ask for a right to sue letter unless they are represented by an attorney. Once the employee obtains a right-to-sue letter, the DFEH will stop any investigation.  The employee has one year to file a lawsuit based on the allegations set out in their complaint.

AB 9 is Not Meant to Encourage Delays

Although an employee in California now has three years to file a complaint with the DFEH, an employee being subjected to unlawful discrimination, harassment or retaliation at work should not delay too long to challenge those unlawful conditions.

Unreasonable delays can be used by the employer to argue that conditions must not have been very bad if the employee continued to work there.  In addition, evidence of the discrimination can be lost to time as witnesses move on to new places and new jobs.

Finally, delay often means that the employee will continue to labor under conditions that are intolerable.  While filing a complaint with the DFEH is not a fix-all solution to discrimination at work, initiating the complaint process can lead to positive changes there.  It is also a way for an employee to take back some of the power they have lost in the hostile environment.

Reprinted with permission.

About the Author:  Patrick R. Kitchin is the founder of Kitchin Legal APC, a San Francisco, California employment law firm. He has represented thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. Patrick also represents employers requiring guidance in California employment law. Patrick is a graduate of The University of Michigan Law School and rated AV-Preeminent by Martindale-Hubbell, its highest ranking for legal knowledge, skill, experience and ethics.


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How Does the Passage of AB 5 in California Affect Me and Others in the Gig Economy?

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Today Governor Gavin Newsom signed into law Assembly Bill 5.  The untitled new law will have a significant impact on the gig economy in California.  It will be increasingly difficult to lawfully classify California workers as independent contractors.  With the exception of several significant carveouts, which I discuss below, the definition of “to employ” announced by the California Supreme Court last year in Dynamex v. Superior Court (2018) 4 Cal.5th 903 will define the relationship between the hired and the hirer moving forward.  The core of the new law takes effect January 1, 2020.

Dynamex is Now the Law of the Land (Most of the Land, At Least)

Assembly Bill 5 codifies the ABC Test adopted in Dynamex for most California workers currently classified as independent contractors.  The ABC Test states that a hiring party “employs” a person (as an employee) unless it can prove each of the following:

  • The hired person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  • The hired person performs work that is outside the usual course of the hiring entity’s business.
  • The hired person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

This three-pronged definition of “to employ” describes the prototypical independent contractor relationship:  a plumber, for example.  First, when I hire a plumber to fix a leak in my office, I do not exert any control of the performance of their work.  The plumber does their job based on their best judgment using their own tools.  Second, the plumber is not performing tasks that are within the scope of my law firm’s work.  While my legal practice is broad in scope, plumbing repairs is not something Kitchin Legal offers to any client.  Third, when the plumber finishes their work at my office, they will drive away in their company truck to another plumbing job for another client.  They are engaged in an independent trade.

But there are significant exceptions under the new law.  For a wide range of professionals exempted under AB 5, an older test of the employer-independent contractor will apply.  However, even the exemptions themselves have multiple requirements.

The Existing Borello Test Will Still Apply to a Substantial Number of Workers in California

Prior to the passage of Dynamex last year, California courts relied on the “economic realities test” or “Borello Test” to determine whether someone was engaged as an independent contractor or as an employee.  This test was announced in 1989 by the California Supreme Court in a case called S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341.  In Borello, the high court set out a multiple-factor test for evaluating the relationship between the hirer and the hired.  While the most important indications of an employer-employee relationship under Borello are the hirer’s right to control the work of the hired person and the hirer’s right to terminate the worker at will, other factors are relevant to the determination as well:

  1. Whether the person performing work is engaged in an occupation or business that is distinct from that of the company;
  2. Whether the work is part of the company’s regular business;
  3. Whether the company or the worker supplies the equipment, tools, and the place for the person doing the work;
  4. The worker’s financial investment in the equipment or materials required to perform the work;
  5. The skill required in the particular occupation;
  6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the company’s direction or by a specialist without supervision;
  7. The worker’s opportunity for profit or loss depending on his or her own managerial skill (a potential for profit does not include bonuses);
  8. How long the services are to be performed;
  9. The degree of permanence of the working relationship;
  10. The payment method, whether by time or by the job; and
  11. Whether the parties believe they are creating an employer/employee relationship.

Are You Excluded from the New Definition of “To Employ”?

Labor Code §2750.3 lays out the exceptions to the ABC Test for which the Borello Test will continue to apply.  Exempted from the new definition of “to employ” are insurance brokers, doctors, dentists, lawyers, architects, engineers, private investigators, accountants, human resource professionals, investment agents, marketing professionals, certain salespeople, commercial fishermen, repossession professionals, construction sub-contractors, referral agencies, motor clubs (think roadside assistance) and real estate professionals.  Freelance media-makers, including journalists, also are carved out of the ABC Test if they limit their contributions to any one media outlet to 35 pieces a year.  AB 5 directs the courts to use the Borello Test definition of “to employ” in cases involving these professionals, and not the ABC Test.

Who Will be Affected by AB 5?

The media are reporting that up to two million workers will be affected as they are reclassified under the law from independent contractor to employee.  While the media have focused primarily on the hundreds of thousands of Uber, Lyft and DoorDash workers who will affected, it is likely that the vast majority of affected workers currently work for small companies across the state.

Based on my experience representing misclassified workers in California, I have found that small companies, particularly tech start-ups, frequently classify workers as independent contractors because they believe it is easier and less expensive than hiring employees.  These employers fail to factor in the cost of the wage and hour lawsuit that may follow.

What Do Misclassified Workers Have in Common?

In all of my employee-side, misclassification cases, my clients were trained and controlled by the employers.  Their work hours were often scheduled by the employers.  They were subject to discipline if they failed to perform as expected.  They performed work directly related to the core business of the employers.  Many of them worked full time, had company business cards, company email addresses and in one case, a company credit card.  Almost all of them were paid by the hour.  One of them earned performance bonuses.  But, none of them was entitled to unemployment benefits based on their time working for these employers none was provided with workers compensation insurance coverage.

All of these workers ended their relationships with the employing parties because of a dispute over what and how they were paid, or over their opportunity to take meal and rest breaks.  While some of them had issues about how they were scheduled for work, most of them accepted fairly strict control over their work schedules in exchange for their earnings.  They all looked a lot like employees.

Finally, none of these clients fully understood the scope of the damages and penalties they were entitled to under California law until they spoke with an employment attorney.  Their hirers’ decisions to classify them as independent contractors led to a wide range of violations and valuable claims.

What Do Companies That Misclassify Employees Have in Common?

I also have represented a number of employers in several different industries who faced misclassification claims.  Based on my own experience, discussions with colleagues and the rich case law on the subject of the meaning of “to employ,” it is clear that companies that misclassify workers also share a number of characteristics.

First, most of these companies think they are saving money by avoiding the expenses of employing workers.  Second, many of these companies fail to put into place wage and hour policies that comply with California law.  Third, these companies typically do not have mandatory written sexual harassment and retaliation policies, and do not provide sexual harassment training to their workers as required by California law.  Fourth, most do not provide their workers with paid sick leave in compliance with state and/or local laws.  Fifth, these companies do not provide workers compensation insurance coverage.  Fifth, these companies fail to reimburse their workers for business expenses, including cell phone plans, internet costs and transportation costs.  Sixth, these companies do not comply with federal and state tax laws.  Seventh, all these companies are vulnerable to costly lawsuits and governmental audits.

What Do I think About the Law?

Subject to the section 2750.3 exceptions, classifying someone else as an independent contractor who performs work within your business establishment and within the usual course of your business operations still most likely violates the Borello TestIt certainly violates AB 5 and Dynamex.

Similarly, having someone perform work within the usual course of your business from a home office also likely creates an employer-employee relationship.  Under the ABC Test, it makes no difference whether the person signed an independent contractor agreement, sets their own hours, works relatively independently from direction or works from home.   The focus of the inquiry is much more limited.

As an employment attorney, I have always been suspicious of companies that have more independent contractors working for them than they have employees.  A disproportionate number of independent contractors might be evidence of an illegal scheme designed to avoid providing workers the benefits of employment: possible subterfuge.  Under the Borello Test (i.e., Economic Realities Test), the court should take into account what relationship the parties themselves were attempting to form when they entered into the working arrangement.  But the parties’ intentions do not matter under the ABC Test.  Even under Borello, however, the Supreme Court warned parties to classify workers with care. “The label placed by the parties on their relationship is not dispositive, and subterfuges are not countenanced.”

Finally, I have found that the harder it is to justify a decision to classify someone as an independent contractor, the more likely it is that the person is actually an employee entitled to all of the benefits given to employees under the law.

What Should a Misclassified Worker Do Now?

Claims for unpaid wages are governed by a three-year statute of limitations.  Under certain circumstances, a worker can reach back four years to recover unpaid wages pursuant to a misclassification claim.  If a person has been working as a misclassified worker for more than one year and has not been paid for all work time, and/or has worked overtime hours without overtime pay, and/or has not been provided meal and rest periods, and/or has not been provided complete and accurate paystubs, and/or has terminated for complaining about any of these things, that person should speak with a lawyer.

If a person is currently working as an independent contractor and wishes to make a smooth transition to becoming an employee of the hirer, they should also speak with an attorney.  As we move through this transition in California’s workforce, some employers are going to make efforts to pressure workers to sign illegal waivers of their right to obtain unpaid wages and penalties for past violations.  At this moment in our history, workers in transition should reach out to a competent lawyer for advice.

What Should an Employer Do Now?

The first step every employer who regularly relies on independent contractors should do is to consult with an employment lawyer.  This is a critical juncture for employers in California where risks that were once delayed for all sorts of reasons are at the door.  Assembly Bill 5 did not radically alter the law.  If a worker is deemed to be an employee under AB 5, it is most likely they will be deemed to have been an employee last week and last year in a lawsuit.

If hiring an employment attorney is not feasible, then employers should read about the new law.  Check with industry groups about the effect of AB 5.  Visit the website of the Division of Labor Standards Enforcement (“DLSE”) at https://www.dir.ca.gov/dlse/ I expect the DSLE will be issuing advisories he help in this transition.

Will AB 5 Slow “the erosion of the middle class and the rise of income inequality,” as it Promises in the Preamble?

By passing AB 5 into law, California has taken a substantial step in addressing the burgeoning gig economy and its impact on workers’ rights.  The law is based on the assumption that most workers are better off as employees than independent contractors.  Guaranteed minimum wage, paid sick and family leave, workers compensation coverage, unemployment benefits will be seen by many as a fair trade for giving up a little, or a lot, of scheduling flexibility.

Major critics of the law dispute this assumption and argue that this new law will be a jobs killer and will undermine the flexibility and profitability of the on-demand economy.  In June, Uber CEO Dara Khosrowshahi and Lyft co-founders Logan Green and John Zimmer, co-wrote an op-ed piece for the San Francisco Chronical in which they stated, “…, most drivers prefer freedom and flexibility to the forced schedules and rigid hourly shifts of traditional employment; and second, many drivers are supplementing income from other work.”  The new law, they have argued will require them to undertake a fundamental change in their business model and they warn of adverse effects on their operations and profits.

I am not certain who will be proved right over time.  This is only day one, but I am leaning heavily in favor of any law that provides additional benefits to workers and helps to level the economic playing field.  What is certain is that AB 5 is now one of the most complicated labor laws on California’s books.  The core of the new law, Labor code § 2750.3, is nearly 4,000 words long, has a total of 109 separate paragraphs and makes reference to a host of other California codes and regulations.  AB 5 also defines two distinct employment tests by reference to two California Supreme Court decisions separated in time by 30 years.  Borello has a lengthy citation history as appellate courts have wrestled with its meaning and application.  Already, Dynamex has been cited in nearly a hundred court decisions.  Of course, no matter how clearly written, no appellate decision is immune from different interpretations by parties advocating from different positions over different interests.

The way these two pivotal cases and Assemble Bill 5 are applied to the thousands of employee misclassification claims that will be made in the coming years will define the nature and scope of the employment relationship in California with every-increasing clarity—at least many of us hope for that.

 

 

About the Author: Patrick R. Kitchin is the founder of Kitchin Legal APC, a San Francisco, California employment law firm. He has represented tens of thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. According to retail experts and the media, his wage and hour class actions against Polo Ralph Lauren, Gap, Banana Republic, and Chico’s led to substantial changes in the retail industry’s labor practices in California. Patrick is a graduate of The University of Michigan Law School and is personally and professionally committed to the protection of workers’ rights everywhere.

 


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