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DOL’S 2024 WHITE COLLAR EXEMPTION RULES INVALIDATED

The Fair Labor Standards Act of 1938 (“FLSA”) requires covered employers to pay employees at least the federal minimum wage. It also requires that overtime be paid to employees who work over 40 hours in a week. However, Congress created several exemptions to these requirements, including an exemption for executive, administrative, and professional employees (aka “EAP employees”). The so-called EAP exemption provides that the FLSA’s minimum wage and overtime requirements do not apply to “any employee employed in a bona fide executive, administrative, or professional capacity,” as those terms are “defined and delimited” by regulations of the U.S. Department of Labor (“DOL”).

In 2024, the DOL adopted a new rule that materially changed the minimum salary level EAP employees must be paid to qualify as exempt under the FLSA. It represents the second increase in the salary level test within five years and is the first time in 85 years that the salary level was increased when there has been no change in the federal minimum wage. In doing so, the DOL caused more than a million employees to lose their exempt status under the FLSA and established future increases that would cause millions of others to lose their exempt status over several years, consistent with the goals of the Biden Administration. (As explained in Chapter 10 of the 2024 edition of the Wage and Hour Manual for California Employers by Attorney Richard J. Simmons, the FLSA standards are less rigid than California’s standards for the white collar exemptions.)

1. The Federal Challenges To The DOL’s 2024 Rule

The DOL’s 2024 rule was challenged in federal district court by the State of Texas and a coalition of trade associations and employers referred to in the case as “Business Organizations,” in two consolidated cases State of Texas v. U.S. Department of Labor and Plano Chamber of Commerce, et al. v. U.S. Department of Labor (E.D.Tex Nov. 15, 2024). In a decision released on November 15, 2024, the court concluded the DOL’s 2024 rule was unlawful based on the FLSA.

In examining the statute, the court determined that the FLSA text does not specify any minimum salary for an employee to qualify for the EAP exemption, nor does it include any language concerning compensation level associated with the exemption. However, since the FLSA’s enactment in 1938, the DOL has promulgated various regulations defining and limiting the EAP exemption. Those regulations have always included a minimum salary level for EAP employees.

2. The DOL’s 2024 Rule

In State of Texas v. U.S. Department of Labor, the Federal District Court for the Eastern District of Texas was asked to consider a rule recently issued by the DOL that raises the minimum salary at which EAP employees can be exempt from minimum wage and overtime pay under the FLSA, thereby changing the exemption status of millions of employees. The rule was codified at 29 C.F.R. Sections 541.0 – 541.710 and implements changes to the exemption in three stages.

First, the 2024 rule raised the minimum salary level from $684 per week to $844 per week starting on July 1, 2024. According to the DOL, this change rendered about 1 million employees non-exempt who were previously exempt, with no change in their duties. Second, the rule raises the salary level from $844 per week to $1,128 per week starting on January 1, 2025. The DOL estimates that this change will render about 3 million additional employees non-exempt who were previously exempt, with no change in their duties. Third, the rule implements a mechanism to automatically increase the salary level triennially based on contemporary earnings data. The DOL estimates that these automatic updates will result in millions more employees becoming non-exempt. Because millions of employees whose duties did not change and remained exempt would lose their exempt status under the new salary conditions, the rule was challenged as a change to the exemption to elevate the salary level requirement over the duties test in the FLSA.

3. The Basis Of The Challenge

The State of Texas and a coalition of trade associations and employers contended that the changes to the salary level exceeded the DOL’s authority under the FLSA. They argued that the increased minimum salary for the exemption essentially made an employee’s duties, functions, or tasks irrelevant if the employee’s salary fell below the new minimum salary level, and unlawfully made salary rather than an employee’s duties the determinative factor for the exemption.

The court agreed. It cited the Fifth Circuit’s decision in Mayfield v. DOL, 117 F.4th 611, 619 (5th Cir. 2024), which stated the DOL had authority, within limits, to impose a salary level test. It then concluded that the motions for summary judgment filed by the Business Organizations and the State of Texas should be granted. It also concluded that the cross- motion filed by the DOL should be denied.

4. The Rule Was Vacated

The district court determined that the 2024 rule plainly exceeds the DOL’s authority under the FLSA. Although the July 1, 2024 change to the exemption has gone into effect, the centerpiece of the 2024 rule is not scheduled to go into effect until January 2025, and the automatic indexing mechanism will not directly impact employees and employers until 2027. In sum, the court determined that courts should generally nullify and revoke illegal agency action and such relief was appropriate in the case before it. The 2024 rule impacts millions of employees in every facet of the economy, as well as state and local governments, and will impose billions in costs on employers. And considering the volume and variety of the trade organization members who are entitled to relief, it would be impractical, if not impossible, to fashion party-tailored relief. Therefore, the court found the proper remedy is vacatur of the 2024 rule and remand to the DOL for further consideration.

The court therefore granted the Business Organizations’ and Texas’ motions for summary judgment and set aside and vacated the DOL’s 2024 rule. The court found that the rule it invalidated effectively eliminated consideration of whether an employee performs bona fide executive, administrative, or professional duties in favor of what instead amounts to a salary-only test.

The DOL is reportedly evaluating next steps. This could be impacted by the election of President-Elect Trump and changes in Administrations. It is important to note that California’s exemption standards and salary requirements are more rigid than the federal rules and are not impacted by this case. Employers covered by the California rules must continue to adhere to their standards regardless of the State of Texas decision. Employers should consult with their counsel regarding the ramifications of the federal district court decision in the states where they conduct business.

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About The Author

Richard J. Simmons is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles. He represents employers in various employment law matters involving litigation throughout the country and general advice regarding state and federal wage and hour laws, employment discrimination, wrongful discharge, employee discipline and termination, employee benefits, affirmative action, union representation proceedings, and arbitrations. Mr. Simmons received his B.A., summa cum laude, from the University of Massachusetts, where he was a Commonwealth Scholar and graduated in the Phi Kappa Phi Honor Society. He received his J.D. from Berkeley Law at the University of California at Berkeley where he was the Editor-in-Chief of the Industrial Relations Law Journal, now the Berkeley Journal of Employment and Labor Law.

Mr. Simmons argued the only case before the California Supreme Court that produced a victory for employers and business in 2018. He was recently recognized as the Labor and Employment Attorney of the Year by the Los Angeles Business Journal and was inducted into the Employment Lawyers Hall of Fame. He has lectured nationally on wage and hour, employment discrimination, wrongful termination, and other employment and labor relations matters. He is a member of the National Advisory Board to the Berkeley Journal of Employment and Labor Law, published by Berkeley Law at the University of California at Berkeley. He was also appointed by the California Industrial Welfare Commission as a member of three Minimum Wage Boards for the State of California.

EMPLOYERS MUST COMPLY WITH DOL AND USCIS RULES WHEN LAYING OFF H-1B VISA EMPLOYEES

Terminating an H-1B worker requires the employer to take additional steps beyond the normal termination process. The general rule is that visa sponsorship does not alter the at-will employment relationship, however, the employer does have wage and reporting obligations with sponsoring H-1B’s. What are an employer’s obligations and what issues should they be on the lookout for?

1. Overview Of The Employer’s Obligations

First, employers should offer to pay employees for one-way return airfare to their home country. This is a U.S. Department of Labor (“DOL”) requirement. If the employee declines the offer, the employer is relieved of this obligation.

Second, after termination, employers must withdraw the Labor Condition Application (“LCA”) that was filed with the DOL and notify U.S. Citizenship & Immigration Services (“USCIS”) to withdraw the H-1B petition. Until the petition is withdrawn from the USCIS, the DOL does not consider a bona fide termination to have taken place.

In an H-1B layoff, there should be a clear termination date. The offered wage must be paid up until the termination date. Furthermore, the DOL considers there to be a continuing wage liability until the USCIS is notified to withdraw the petition, thereby creating a “bona fide termination.”

The LCA must be withdrawn on-line from the DOL after the termination date.

2. Return Airfare Obligation

Employers must offer to pay the one-way return airfare to any H-1B worker that is terminated before the petition expiration date. This would be for the reasonable airfare to their home country. There is no obligation to pay for H-4 family members.

An employer should document that it offered the return airfare reimbursement in writing to the foreign national at the time of termination.

The government regulations do not provide any specifics on return airfare. The DOL regulations merely state that the return airfare is a USCIS requirement. The USCIS regulations merely state the general rule and do not provide any additional guidance.

Some employers advise the H-1B worker that if they purchase an airline ticket for a departure within 60 days of termination they will reimburse the former employee at that time.

However, if an employer does not want to worry about any misunderstandings, employers could pay the one-way return airfare at the time of termination to resolve this issue. This is the lowest risk option.

3. Continuing Wage Liability

The DOL takes the unusual position that the employer has continuing wage liability until the LCA and H-1B petition are formally withdrawn, even if the foreign national has been terminated and is off the payroll. Proper steps to effectuate a bona fide termination would include:

1. The employee is notified in writing of the termination so that no allegation of benching can be made.

2. The employer offers the H-1B employee in writing to pay the return airfare back to their home county.

3. The employer notifies the USCIS in writing of the termination including the employee’s name, I-129 receipt number, etc.

4. The LCA is withdrawn with the DOL. The attorney who filed the H-1B can withdraw it, or the company can e-mail and notify the DOL directly.

5. Maintain the Public Access Folder (“PAF”) for one year beyond termination, and notate in the Public Access Folder that the individual left the company on x date.

4. Severance Paid After Termination With Extended Paystubs

Some employers want to help the foreign national with severance paid out over one to two months after termination, with the severance being less than the offered wage on the LCA. Unfortunately there is still some risk to the employer, albeit low.

Grace Period: If the individual finds a new employer to sponsor them for an H-1B and they file a new I-129 H-1B Petition within 60 days of termination, the USCIS will likely issue them a new I-94 as long as they have 60 days or more left on their current H-1B validity/I-94. If not, they will make the individual leave the U.S. and re-enter with a new visa stamp. Since they already have an H-1B, they are not subject to the quota, assuming they have time left on the 6-year H-1B clock.

Extended Paystubs and Garden Leave: In some cases, as a courtesy, an employer will provide severance through several extended paystubs to allow the individual more time to find a new H-1B employer and not have to return home to pick up a new visa. With a more recent paystub, they can show the USCIS that their termination was within 60 days of filing their new I-129 H-1B filing. But severance should be for time after termination so that the employee is paid the offered wage on the visa petition up until termination. However, until the USCIS is notified of the withdrawal, the employer can be on the hook by the DOL for full wages.

While the risk of the employee filing a complaint with the DOL is minimal since they want the severance to create extended paystubs over a period of time so they have more time to look for new work, the employer should know that there is still some risk that if the former employee complains to the DOL, the employer could be asked by the DOL to pay full wages up until the point that the USCIS is notified of the withdrawal (also known as the point of Bona fide termination).

I-539 Change of Status to B-2 Visitor: In some cases the USCIS will approve an I-539 change of status application to B-2 visitor for the purpose of winding up one’s affairs etc. It is discretionary by the USCIS and whether to file an I-539 should be reviewed on a case-by-case basis.

Overstay: Under no circumstances should an H-1B who is terminated remain in the U.S. 180 days or more without status as if they subsequently depart the U.S. they would be subject to a 3 year bar from returning to the U.S., and if they were 365 days or more out of status, then they will be subject to a 10 year bar. Staying for 60 days after termination to wind up one’s affairs is reasonable and is within the USCIS recognized grace period. An employer is not responsible if a former employee overstays their authorized stay.

Green Card Sponsorship Issues: If the employer has already sponsored the employee for a green card through PERM labor certification and an I-140 Immigrant Petition has been filed by the company and approved by the USCIS, then the priority date of the labor certification can be used by a future employer with a labor certification.

However, if no I-140 Immigrant Petition was approved, then the employee cannot recapture the old priority date. The priority date is the place in the queue vis-à-vis the government’s annual quotas for green cards. As a courtesy, most employers leave the I-140 alone and do not withdraw it, thereby allowing the individual to obtain new H-1B employment in 3 year increments. If there is a pending 9089 PERM application at the DOL, that cannot be used for a future immigration benefit unless it is certified and an I-140 petition is filed.

AC-21 I-140 Portability: If the employee already has an I-485 green card pending for 180 days or more, he or she can port to another company or be self-employed in a same or similar position.

Compelling Circumstances EAD: The beneficiary of an approved I-140 who is not eligible to file for an immigrant visa based on their priority date not being current may be eligible for an EAD if they are facing compelling circumstances, like losing their job in a lay-off and substantial harm will affect them or their dependents. The USCIS has stated that if a compelling circumstances EAD application is filed during the 60-day grace period after being laid off, the foreign national will not accrue unlawful presence while the application is pending. The EAD would be issued for one year.

5. Conclusion

Terminating an H-1B worker requires the employer to follow certain protocols with the DOL and the USCIS. Counsel should be notified prior to termination to review all checklist items with Human Resources and General Counsel. Other visa categories have post termination requirements as well.

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About The Authors

Greg L. Berk is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in the firm’s Orange County office. He leads the Firm’s immigration practice and is a Certified Specialist in Immigration and Nationality Law by the State Bar of California Board of Legal Specialization>. He has over 25 years of experience advising on all aspects of U.S. immigration matters. He assists employers worldwide with the hiring and retention of foreign national executives and highly talented individuals that are needed in their U.S. workforce. He also works with investors on E-2, L-1, and EB-5 matters. He also handles I-9 and other immigration compliance matters.

Greg frequently lectures on immigration issues and is a regular contributor to the California Labor and Employment ALERT Newsletter and Sheppard Mullin’s Labor & Employment Law blog. Mr. Berk received his J.D. from Western State University College of Law, his M.B.A. from George Washington University and his B.A. from California State University.

Christine L. Doyle is Special Counsel in the Labor and Employment Practice Group with Sheppard, Mullin, Richter & Hampton LLP in the firm’s Orange County office. Christine has experience in a broad range of immigration law, with a focus on employment-based immigrant and nonimmigrant visa petitions. She has numerous years of experience counseling employers and their employees on U.S. immigration, global immigration, and I-9 compliance matters.

Christine is a regular contributor to the California Labor and Employment ALERT Newsletter and Sheppard Mullin’s Labor & Employment Law, French Desk Law, and Latin American Law blogs. She received her J.D. from Pepperdine University and her B.A. from Boston College. She also served as an extern at the Los Angeles Immigration Court and Department of Justice.

DISABILITY DISCRIMINATION CLAIM FAILED WHERE EMPLOYEE COULD NOT PERFORM ESSENTIAL JOB FUNCTIONS

California and federal law prohibit discrimination against qualified individuals with physical or mental disabilities and require, in appropriate circumstances, that employers make reasonable accommodations for known disabilities. The federal law is embodied in the Americans With Disabilities Act (“ADA”) while the California law is set for in the California Fair Employment and Housing Act (“FEHA”). Significant differences between the state and federal laws exist that are explained in the new 2024 edition of the Employment Discrimination and EEO Practice Manual for California Employers by Attorney Richard J. Simmons of Sheppard Mullin, which is published by Castle Publications, LLC.

1. The Miller v. Department Of Corrections Case

The requirements of the FEHA were examined by the California Court of Appeal in its September 23, 2024 decision in Miller v. California Department of Corrections and Rehabilitation, __ Cal. App. __ (2024). In Miller, the plaintiff had been employed as a correctional officer with the California Department of Corrections and Rehabilitation (“CDCR”) at the California Institute for Women since 2008. In 2016, she was injured as the result of a slip and fall incident while working off-site in a temporary assignment assisting with officer recruitment. In 2018, the CDCR placed her on an unpaid leave of absence after her wage replacement benefits in the worker’s compensation system were exhausted. Eventually, the CDCR offered her an alternative position that would accommodate her work restrictions. However, she did not accept the position offered, informed the CDCR that she suffered from a previously undisclosed mental disability that prevented her from returning to work while receiving treatment, and has remained on an unpaid leave of absence since that time.

a. The Lawsuit And Summary Judgment Motion

In 2020, Miller filed suit under the FEHA, alleging, in part, (1) disability discrimination, (2) failure to accommodate, (3) failure to engage in the interactive process, (4) failure to prevent discrimination, and (5) retaliation. The trial court granted summary judgment in favor of the CDCR after concluding that Miller was not qualified because she could not work. After Miller appealed the judgment, the Court of Appeal affirmed.

b. The Undisputed Facts

It was undisputed that Miller incurred a physical injury after a slip and fall incident in June 2016; she did not return to work while receiving treatment for her injuries; she received wage replacement benefits through June 2018 while on leave receiving treatment; and she was placed on an unpaid leave of absence in July 2018. It was also undisputed that her physician determined in 2018 she had reached “maximum medical improvement” and would be subject to permanent work restrictions as a result. The restrictions precluded lifting, pushing, or pulling items over 30 pounds; repetitive bending, twisting, or stooping; and kneeling or squatting. It was further undisputed that the essential functions of a correctional officer required the physical ability to run, climb, lift and carry, stoop, crawl and crouch, push and pull, brace, and twist. Finally, Miller did not dispute she was disabled as the result of her physical injuries and the impact those injuries had on her mental health.

c. Miller’s Physician

The employer deposed the physician who treated Miller’s physical injuries. The physician confirmed that as of August 2018, he determined that Miller had reached “maximum medical improvement” and ordered permanent work restrictions consisting of: (1) no lifting, pushing, or pulling items over 30 pounds; (2) no repetitive bending, twisting, or stooping at the waist; and (3) no kneeling or squatting. The physician was shown a document outlining the essential work functions of a correctional officer and identified several functions he believed Miller was incapable of performing given her permanent restrictions.

2. The Legal Analysis

The Court of Appeal explained that each of Miller’s five causes of action that were the subject of summary judgment were premised upon alleged FEHA violations. The court recognized the FEHA prohibits several employment practices relating to physical disabilities.

First, it prohibits employers from refusing to hire, discharging, or otherwise discriminating against employees because of their physical disabilities. Second, it prohibits employers from failing to make reasonable accommodation(s) for the known physical disabilities of employees. Third, it prohibits employers from failing to engage in a timely and good faith interactive process with employees to determine effective reasonable accommodations. Fourth, it prohibits acts of retaliation against employees who engage in various forms of protected activity associated with its provisions.

3. An Employee Must Show The Ability To Perform The Essential Functions Of The Job

The Court of Appeal found no error in the trial court’s grant of summary adjudication as to each cause of action. In an interesting passage, the court observed that, instead of litigating the employer’s reasons for the action, disputes in disability cases focus on (a) whether the employee was able to perform essential job functions, (b) whether there were reasonable accommodations that would have allowed the employee to perform those functions, and (c) whether a reasonable accommodation would have imposed an undue hardship on the employer.

a. Employees Must Be Qualified

The court explained that this analysis occurs because, unlike other forms of unlawful discrimination, the FEHA “specifically limits the reach” of its proscription against discrimination on the base of disability, “excluding from coverage those persons who are not qualified, even with reasonable accommodation, to perform essential job duties.” In other words, the employer’s motive for any alleged adverse employment action becomes subject to scrutiny only after the employee meets the burden to show the ability to perform the essential functions of the job.

b. The Burden In Disability Cases

The court next stated that an employer could either (1) present evidence to show that its motivation for any adverse employment action was unrelated to the plaintiff’s alleged disability, or (2) present evidence to show that it was not prohibited from taking an adverse employment action because the plaintiff’s disability rendered her unable to perform the essential duties of her job.

The court determined that the CDCR met its initial burden on summary adjudication, but that Miller failed to meet her corresponding burden in opposition to the motion. Specifically, Miller did not show a material dispute of fact with evidence regarding her ability to perform the essential duties of her job with or without an accommodation. Based on this finding, each of her remaining claims fell sequentially under the court’s analysis. As one example, the court found her claim that she could sue the employer for “not preventing discrimination” was illogical where there was no discrimination to begin with. It determined there was “no logic that says an employee who has not been discriminated against can sue an employer for not preventing discrimination that didn’t happen.”

4. Conclusion

The Court of Appeal concluded that the trial court properly granted summary adjudication on each cause of action alleged by Miller. It thus affirmed the judgment and authorized the employer to recover its costs on appeal.

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About The Author

PROP 32’S MINIMUM WAGE INCREASE DEFEATED AT BALLOT BOX

California has exhibited an ongoing willingness for many years to increase the state minimum wage despite the obvious ripple effects and economic impact on goods, services and job opportunities. In fact, Governor Newson has backed numerous minimum wage increases, including special industry-wide increases in the restaurant and health care industries that assuredly would lead to increased costs for consumers and, in many cases, layoffs and business closures. Numerous cities and counties have also bowed to the political goals of organized labor representatives and some segments of the population to increase the minimum wage rates through local measures adopted by cities and counties.

The appetite for minimum wage hikes and their consequences appears to have run into some logical limitations. Finally, California voters pushed back in November by narrowly defeating the proposed state minimum wage increase contained in Proposition 32, a ballot measure that would have increased the state minimum wage from $16 to $17 an hour immediately and to $18 an hour as of January 1, 2025. California already has one of the highest minimum wages in the country at $16 an hour. That is more than twice the federal minimum wage of $7.25 an hour. Opponents of the proposition raised concerns that businesses would pass on the extra wage costs to customers by raising prices and would also reduce employees’ hours, seek to eliminate jobs through automation, and layoff employees. For the first time in years, California voters appeared to have gotten the message at a time when inflation, costs of living, and the economy are in plain view for all to observe.

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About The Author

OSHA ANNOUNCES PROPOSED NATIONAL HEAT INJURY AND ILLNESS PREVENTION STANDARD

The July 2024 edition of the ALERT covered California’s new “Heat Illness Prevention in Indoor Places of Employment” standard, the first indoor heat regulation in the country. However, other states may soon be joining California, following the federal Occupational Safety and Health Administration’s (“OSHA”) announcement of a proposed rule requiring certain employers to prepare and implement a written heat injury and illness prevention plan for indoor and outdoor workplaces.

1. Background

In April 2022, OSHA issued its National Emphasis Program titled Outdoor and Indoor Heat Related Hazards. In July 2023, OSHA announced a three-year National Emphasis Program to address heat-related workplace hazards in warehouses, processing facilities, distribution centers, and high-risk retail establishments. On July 2, 2024, OSHA announced its proposed rule and published its Notice of Proposed Rulemaking for “Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings” on August 30, 2024. The public has until December 30, 2024 to submit comments on the proposed rule.

2. Overview Of The Proposed Rule And HIPP

The proposed rule is broad and covers employers with employees who work indoors or outdoors where the heat index reaches 80°F or higher for more than fifteen minutes in any sixty-minute period. Covered employers must evaluate heat risks, create and implement a written heat injury and illness prevention plan (“HIIPP”), and implement various measures to prevent and minimize the risk of heat illness. The HIIPP must include a comprehensive list detailing the types of work activities covered and include necessary policies and procedures to comply with the proposed rule. It must also include the heat metric used for monitoring heat conditions. Employers must regularly review and update the HIPP. Furthermore, employers are obligated to assess and update the HIIPP’s effectiveness whenever a heat-related illness requiring medical attention results in an absence from work.

The proposed rule also calls for the development of acclimatization plans for new or returning workers unfamiliar with working in high-heat conditions. Employers must provide training on the HIIPP, establish procedures for responding to signs and symptoms of heat-related illnesses, and take immediate measures to assist workers in heat emergencies. Additionally, employers must designate “heat safety coordinators” and provide employees with emergency contact numbers and clear instructions on what to do if someone shows symptoms of a heat-related illness.

3. Monitoring Heat Exposure

The proposed rule requires employers to evaluate and monitor heat exposure levels. For outdoor work areas, employers have the option to use local heat index forecasts or conduct on-site measurements to determine when the initial and high heat triggers are met. For indoor workplaces, employers must identify potential high-heat exposure areas and develop a comprehensive monitoring plan to ensure timely activation of protective measures. Employers must monitor and document their chosen metric–heat index in their HIIPP.

Under the proposed rule, there are two separate triggers for initiating certain protective protocols: an “initial heat trigger” and a “high heat trigger.” The initial heat trigger occurs when the heat index reaches 80°F, while the high heat trigger requires a heat index of 90°F. The proposed rule outlines an employer’s requirements under both heat triggers. Employers may skip the monitoring requirement if they assume that heat exposure exceeds both triggers and act accordingly.

4. Specific Requirements For Initial Heat Trigger

Employers must comply with the following requirements when the initial heat trigger (80°F heat index) occurs:

• Hydration: Employers must provide drinking water to employees as close as possible to their working area. Employers must supply at least one quart of water per employee per hour at no cost to employees. The water must be kept at a reasonably cool temperature. Employers may use water coolers, food-grade jugs, or bottled water.

• Rest Breaks: Employers must allow and encourage employees to take paid rest breaks in designated shaded or air-conditioned break areas. At indoor worksites, the proposed rules require break areas to be air-conditioned or equipped with a combination of increased air movement and, where necessary, dehumidification. At outdoor worksites, employers must ensure conveniently located break areas that are easily accessible and equipped with either shade or enclosed air-conditioned spaces. Shade can be either natural or artificially created and employers should consider the movement of shade throughout the day. In contrast, air-conditioned break areas must be sufficiently spacious and accessible.

• Acclimatization: The proposed rule requires employers to implement an acclimatization protocol for new employees and employees absent for more than 14 days. The proposed rule offers two options to ensure workers adjust safely to heat exposure. Option A requires adherence to high heat trigger measures like 15-minute breaks (discussed below) every two hours, monitoring for heat-related illness symptoms, and providing hazard alerts, regardless of gradual exposure. Option B allows for a gradual introduction to heat, starting with 20 percent exposure on the first day and increasing daily. Exceptions to these requirements exist if employers can demonstrate that an employee has worked in similar or hotter conditions recently and is already acclimated.

• Observation: Employers must train all employees on recognizing the signs and symptoms of heat-related illnesses and emergencies, emphasizing the importance of immediate action in such cases. The proposed rule outlines three methods for employers to monitor employees for signs and symptoms of heat-related illness, including a buddy system, observation by a supervisor or heat safety coordinator, and a communication protocol for employees working alone. Under the buddy system, employees work in pairs within the same area, using visual and verbal cues to monitor each other for heat stress symptoms. Alternatively, a supervisor or heat safety coordinator can observe no more than twenty employees, ensuring they are in close enough proximity to effectively monitor and communicate with the employees under their watch. For lone workers, employers are required to maintain effective two-way communication, checking in at least every two hours to ensure their safety.

• Communication: The proposed rule emphasizes the necessity for effective, two-way communication between employers and employees once the initial heat trigger is reached. Employers must maintain regular, effective communication, which could involve direct voice communication, hand signals, or electronic means such as handheld transceivers or phones, ensuring timely responses to any reported issues. This includes a requirement for a method of communication for workers who operate alone.

• Personal Protective Equipment: Employers are not required to supply cooling personal protective equipment to employees. However, if they choose to do so, they must ensure its cooling properties are consistently maintained during use.

5. Specific Requirements For High Heat Trigger

In addition to complying with the above, employers must comply with the following requirements when the high heat trigger (90°F heat index) occurs:

• Rest Breaks: Once a high heat trigger is met, employers must provide a fifteen-minute paid rest breaks for every two hours of work. These breaks are in addition to other requirements, such as allowing additional rest if needed to prevent overheating and must be taken in designated break areas.

• Hazard Alert: Employers must notify employees about key safety measures against heat hazards, including the necessity of hydration, the right and requirement to take rest breaks, how to respond in heat emergencies, and the location of break areas and water for mobile work sites. A hazard alert must be issued before the work shift begins if high heat conditions are expected from the start, or as soon as such conditions are recognized during the workday. Employers have the flexibility to use various communication methods to issue these alerts, including electronic means, verbal communication, or posting signs, ensuring the information is accessible and understandable to all employees. The proposed rule also requires employers to install warning signs at indoor work areas where ambient temperatures frequently surpass 120°F.

6. Recordkeeping

For indoor work areas where employees might be exposed to heat at or above the initial trigger level, employers must create and maintain written or electronic records of on-site temperature measurements. These records must be kept for a minimum of six months.

7. Training

Employers must provide comprehensive initial training for all employees exposed to heat hazards before they undertake any work that could expose high heat. This training should cover the prevention of heat-related illnesses and injuries, ranging from understanding heat stress hazards, recognizing the signs and symptoms of heat-related illnesses, the importance of hydration and rest breaks, and the proper use of personal protective equipment. Training must be conducted in a language that is understandable by employees.

The proposed rule also requires supplemental training in several instances, such as when employees are assigned new tasks that change their exposure to heat. An annual refresher training is also mandated to ensure that all employees, including supervisors and heat safety coordinators, remain informed about heat hazards, especially before the start of a high heat season.

8. Takeaways

Employers who wish to submit comments on the proposed rule have until December 30, 2024 to do so. Although the proposed rule will not take effect until 2025 at the earliest, employers should proactively consider what heat triggers are associated with their workplace(s) and whether they will need to comply with the new rules. Additionally, certain protocols in particular, like providing water and a cool-down area, may require substantial time and effort to set up. Employers with any questions about compliance should consult with experienced employment law counsel.

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About The Author

Robert K. Foster is an Associate with Sheppard, Mullin, Richter & Hampton LLP in the firm’s San Diego (Del Mar) Office. Mr. Foster represents employers in various types of employment litigation, including class action wage and hour claims; PAGA claims; and discrimination, wrongful termination, harassment and retaliation lawsuits. In addition, he also provides strategic advice to employers on a wide range of employment issues, including wage and hour compliance, employee classification, and OSHA matters. He is a frequent contributor to the California Labor and Employment ALERT Newsletter and several other articles and is the co-author of the Employer’s Guide to Workplace Violence Prevention.

Robert litigates actions involving trade secret claims, unfair competition and enforcement of restrictive covenants and non-competes. He also handles various commercial litigation disputes, including breach of contract, breach of fiduciary duty, fraud, tortious interference with contract, unfair competition and shareholder derivative claims.

CAL/OSHA ISSUES LONG-AWAITED GUIDANCE AND MODEL WORKPLACE VIOLENCE PREVENTION PLAN

The November 2023 edition of the ALERT provided an overview of SB 553, California’s new workplace violence prevention law, and the January 2024 edition of the ALERT identified practical considerations of the new law for employers. The latest update on the new law comes from California’s Division of Occupational Safety and Health (“Cal/OSHA”), the agency responsible for enforcing the new law’s requirements, which released its “Cal/OSHA Workplace Violence Prevention Guidance and Resources” webpage. The webpage contains guidance and educational materials on the new law and workplace violence prevention, a model WVPP, fact sheets, and other resources for employers and employees.

1. General Impact Of Cal/OSHA Guidance

Cal/OSHA frequently publishes guidance, including model plans, to assist employers with compliance on safety regulations that require written plans and programs (such as California’s Injury and Illness Prevention Program regulation). Although employers are not required to use the model plans, they can serve as a “fillable template” and provide the basic framework for various required procedures and policies. That said, the plans usually are written in a way to make them broadly applicable to all employers. Moreover, because they are written with employee safety as the ultimate focus, some provisions may go above and beyond what regulations require.

2. Summary Of Cal/OSHA’s Guidance

The newly created Cal/OSHA Workplace Violence Prevention Guidance and Resources webpage on Cal/OSHA’s website contains various types of guidance and educational materials on the new law and workplace violence prevention. The website also includes FAQs on the new requirements of SB 553 and other related information.

Cal/OSHA’s model WVPP is nineteen pages long and includes the following:

• A brief overview of the new law;

• Directions on drafting the plan;

• The WVPP itself, including definitions for key terms and various sections covering the requirements of the new law; and

• A Violent Incident Log form.

Cal/OSHA also published two fact sheets: one for employers and one for employees. The employer fact sheet is a three-page document that provides an overview of the various requirements for employers under SB 553 (codified as new California Labor Code Section 6401.9). Specifically, the employer fact sheet lists the various items employers must include in their WVPP, information that employers must include in their violence incident logs, training topics, additional employer responsibilities, and related regulations. Cal/OSHA also created a Cal/OSHA Workplace Violence Prevention for General Industry (Non-Health Care Settings) webpage that contains much of the same information. The fact sheet for employees explains what constitutes workplace violence and identifies the four types of workplace violence. It also identifies training that employers must provide, explains how employees can help prevent workplace violence, and identifies what rights employees have under the new law.

3. Substantial Customization Of The Model WVPP Is Necessary

In some instances, an employer can utilize Cal/OSHA’s model plan without having to add much. However, Section 6401.9 requires employers develop and implement various procedures to respond to and investigate workplace violence incidents, acts, threats, concerns, and emergencies. The type of response and risk of potential exposure to workplace violence can vary by workplace, location, industry, etc. Consequently, the model WVPP contains suggestions, questions, and examples for employers to consider as they assess potential risks in their workplaces. For example, the model WVPP includes a lengthy list of hazards (e.g., whether employees have cash on hand, whether employees are exposed to hostile situations) and potential corrective action (e.g., installation of surveillance systems, controlling access by non-employees). Cal/OSHA notes that an employer’s use of the model WVPP by itself does not ensure compliance with Section 6401.9 and that employers are still liable for any violations of Section 6401.9 regardless of their use of the model WVPP. In other words, the model WVPP is merely a starting point for employers to build upon, and employers still must identify, add, and implement sufficient procedures themselves.

4. Some Areas Of Focus In Cal/OSHA’s WVPP

Notably, the model WVPP asks employers to describe procedures involving employees, specifically: (i) how employees can report concerns or incidents; (ii) how employees will be trained; (iii) how employee compliance will be ensured; (iv) how investigation findings will be delivered to employees; (v) how anything related to workplace violence will be communicated to employees; and (vi) how employees will be rewarded for contributing to making the workplace more secure. Thus, a WVPP that generically addresses the requirements of Section 6401.9 without providing any specifics may result in further investigation by Cal/OSHA.

The model WVPP also places a large emphasis on employees’ involvement in developing the WVPP, likely stemming from the law’s requirement that the WVPP include “[e]ffective procedures to obtain the active involvement of employees and authorized employee representatives in developing and implementing the plan, including, but not limited to, through their participation in identifying, evaluating, and correcting workplace violence hazards, in designing and implementing training, and in reporting and investigating workplace violence incidents.” As such, employers should ensure they do not just pay that requirement lip service and actually take some steps to involve employees in the process of developing their WVPP.

5. Conclusion

Although California employers still have a few months until Section 6401.9 becomes effective on July 1, 2024, they should begin drafting their WVPP soon if they have not done so already. The model WVPP reflects that the procedures required by Section 6401.9 are industry and worksite-specific, and thus an employer’s WVPP will be unique and require some level of attention and customization to ensure compliance. Employers with any questions or concerns about compliance should consult with experienced employment law counsel.

For more information on this new legislation and guidance on creating a workplace violence prevention plan, readers can consult the new 2024 Employer’s Guide to Workplace Violence Prevention by Richard J. Simmons and Robert K. Foster of Sheppard Mullin.

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About The Author

BRIEFING COMPLETED IN TIME ROUNDING CASE

In Camp v. Home Depot, the case currently before the California Supreme Court that is set to decide whether rounding employees’ time is lawful, all briefing is complete. Home Depot filed its reply brief on September 25, 2023, and several amici curiae filed briefs in support of the parties’ positions on October 25, 2023. One of these briefs was filed by Sheppard Mullin to advance the position of employers that rounding should be allowed.

As a refresher, in October 2022, the Sixth District of the California Court of Appeal found Home Depot’s “total time” rounding practice for its non-exempt employees was unlawful. In so holding, the court held, “if an employer, as in this case, can capture and has captured the exact amount of time an employee has worked during a shift, the employer must pay the employee for ‘all the time’ worked.” Camp v. Home Depot U.S.A., Inc., 84 Cal.App.5th 638, 660 (2022). The court rejected at least half a dozen prior appellate opinions approving of neutral rounding systems, which date back to the 2012 Court of Appeal decision in See’s Candy Shops, Inc. v. Superior Court, 210 Cal.App.4th 889 (2012).

The California Employment Law Council and the Employers Group are employer trade associations that advocate on behalf of employers. They hired Richard J. Simmons and Tyler J. Johnson of Sheppard Mullin to draft the employer-side amicus brief in Camp. This brief was filed on October 25, 2023. It advocates that rounding should be permissible based on the federal rules and standards established since 1955. Rounding has been recognized across the country as a practical and efficient method to effectively calculate work time and pay employees fairly. Contrary to the Court of Appeal’s reasoning in Camp, there have not been any technological advances or changes in the law that compel the conclusion that rounding should be outlawed. Certainly, the law was not amended since See’s Candy approved rounding in 2012 and the state and federal enforcement agencies authorized it.

Now that briefing is complete, the next step is for the California Supreme Court to set oral argument. Based on data from past years, the average amount of time between the close of briefing and oral argument is approximately 250 days. This would put the oral argument around the beginning of July 2024. The ALERT will report further developments.

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About The Author

Tyler J. Johnson is an associate in Sheppard Mullin’s Labor and Employment Practice Group in the firm’s Los Angeles office. Mr. Johnson represents employers in every stage of the litigation process, from prelitigation disputes to class certification hearings and trials. He represents businesses of every size, and has extensive experience in the healthcare, agricultural, fashion, and temporary staffing industries. Tyler defends employers against claims of discrimination, harassment, and retaliation, and has prevailed at trial in a pregnancy discrimination case. Tyler also routinely represents businesses in complex litigation, including proposed class actions and representative actions under the Private Attorneys General Act. Tyler has defeated class certification in a number of cases and frequently obtains summary judgment for employers.

Tyler is a co-author of the Private Attorneys General Act (PAGA) Litigation and Compliance Manual as well as a contributing author of the ALERT Newsletter.

Mr. Johnson received his law degree from the Pepperdine Caruso School of Law and his undergraduate degree from University of Maryland.

EEOC UPDATES GUIDANCE ON WORKPLACE HARASSMENT

On October 2, 2023, the Equal Employment Opportunity Commission (“EEOC”) issued “Proposed Enforcement Guidance on Harassment in the Workplace” (the “Guidance”). If finalized, the Guidance will mark the first time the EEOC has updated its guidance on workplace harassment in nearly 25 years.

The EEOC continues to treat harassment as a serious workplace concern. According to the EEOC, between 2018-2022, 35 percent of the charges of employment discrimination filed with the EEOC included an allegation of harassment based on race, sex, disability, or another protected characteristic. The Guidance accounts for changes in the law and workplaces over the last two decades, and supersedes five earlier versions of EEOC guidance.

Now that the comment period has closed, employers should take note of the detailed Guidance and actively ensure that they taking the necessary steps to prevent harassment.

1. Federal EEO Laws

In 1986, the U.S. Supreme Court held in Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57 (1986), that workplace harassment can constitute unlawful discrimination under Title VII of the Civil Rights Act of 1964. The Guidance presents a legal analysis of standards for harassment and employer liability applicable to claims of harassment under the federal equal employment opportunity (“EEO”) laws that prohibit discrimination by employers, including Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Genetic Information Nondiscrimination Act.

As the Guidance emphasizes, these EEO laws prohibit work-related harassment based on sex, race, national origin, color, religion, disability, genetic information, and age (40 or over). For more information regarding state and federal laws relating to discrimination and best practices, readers can consult the Employment Discrimination and EEO Practice Manual by Richard J. Simmons of Sheppard Mullin.

2. Guidance On Sex-Based Harassment

Traditionally, harassment based on sex was largely understood to include unwanted sexual attention or coercion, such as demands or pressure for sexual favors, sexual assault, or sexual remarks/epithets. The Guidance makes clear that the EEOC also considers sex-based harassment to include harassment based on (i) sexual orientation and gender identity, including how that identity is expressed; and (ii) pregnancy, childbirth, or related medical conditions.

a. Sexual Orientation And Gender Identity

The U.S. Supreme Court’s decision in Bostock v. Clayton Cnty., 140 S.Ct. 1731 (2020), held that Title VII’s prohibition on sex discrimination includes discrimination based on gender orientation and sexual identity. In the EEOC’s view, while Bostock only concerned allegations of discriminatory discharge, its reasoning “logically extends” to claims of harassment.

Examples of harassment based on sexual orientation or gender identity include:

•Physical assault;

•Harassment because an individual does not present in a manner that would stereotypically be associated with that person’s gender;

•Intentional and repeated use of a name or pronoun inconsistent with the individual’s gender (misgendering); or

•Denial of access to a bathroom or other sex-segregated facility consistent with the individual’s gender identity.

In fact, under the Guidance, harassment against an employee by “customers” who “intentionally misgender” the employee may be considered as part of an employee’s harassment allegation against the employer, particularly where the employer “did not address the harassment and instead reassigned her to duties outside of the view of customers.”

b. Pregnancy, Childbirth, And Related Medical Condition

The Guidance reiterates that harassment based sex may be based upon pregnancy, childbirth, or related medical conditions, which includes lactation. This may also include harassment based on a woman’s reproductive decisions, such as decisions about contraception or abortion. The EEOC explains that harassment based upon abortion-related decisions can include adverse employment actions against an employee based upon her decision not to have, or to have, an abortion.

3. Guidance On Genetic Information Harassment

In the Guidance, the EEOC states that harassment on the basis of genetic information includes harassment based on a complainant’s, or a complainant’s family member’s, genetic test or family medical history. As examples, the EEOC deems harassing an employee because the employee carries the BCRA gene, which is linked to an increased risk of breast and ovarian cancer, or because the employee’s mother has cancer, as harassment based on genetic information.

4. Guidance On Causation

To establish harassment, the complainant must demonstrate that harassing conduct was because of the complainant’s characteristic(s). This is a critical component of a harassment charge, as the EEO statutes do not prohibit harassment that is not based on a protected characteristic.

The EEOC instructs that in determining whether harassment is based on a protected characteristic, it is necessary to examine the “totality of the circumstances.” Certain indicators of harassment because of a protected characteristic as set out in the Guidance include:

•Facially discriminatory conduct, which explicitly insults or threatens an individual based on a protected characteristic, such as a racial or sex-based epithet or graffiti;

•Stereotyping, or harassing conduct based on social or cultural expectations be they positive, negative, or neutral regarding how persons of particularly protected groups usually act or appear. This includes sex-based assumptions about family responsibilities or suitability for leadership roles or the expression of sexual orientation or gender identity.

•Contextual clues, such as harassment that begins or escalates after the harasser learned of the protected status and disparate treatment between individuals in different protected groups.

5. Guidance On Hostile Workplace Harassment

For an employer to be liable under an EEO statute for workplace harassment based on a protected trait, the harassment must affect a “term, condition, or privilege” of employment. This can take the form of (1) an explicit change to the terms or conditions of employment that is linked to harassment based on a protected characteristic, such as firing an employee because the employee rejected sexual advances; or (2) conduct that constructively changes the terms or conditions of employment by creating a “hostile work environment.”

To create a hostile work environment, the harassment must, as a whole, be “sufficiently severe or pervasive,” both objectively and in the mind of the complainant. Whether conduct creates a hostile work environment depends on the totality of the circumstances, and no one factor is determinative.

a. Single Incident Hostile Work Environment

The Guidance sets out certain examples of a hostile work environment based upon a “single incident” of harassment:

•Sexual assault;

•Physical violence or the threat of physical violence;

•The use of symbols of violence or hatred, such as a swastika, image of a Klansman’s hood, or a noose;

•The use of animal imagery that denigrates individuals sharing a protected characteristic;

•A threat to deny job benefits for rejecting sexual advances; and

•A supervisor’s use of a racial epithet in the presence of an employee in that protected class.

b. Objectively Hostile Conduct

In addition to be “subjectively hostile,” that is, conduct the complainant personally believes is hostile, to be actionable, the conduct must also be “objectively hostile.” Again, the EEOC instructs employers to consider the impact of conduct in the context of “surrounding circumstances, expectations, and relationships.” This determination, the EEOC explains, requires “an appropriate sensitivity to social context.”

In the context of religious expression, employers must balance their duty to accommodate with their duty to avoid a hostile work environment. While employers must accommodate employees’ sincerely held religious beliefs and practices absent undue burden, the Guidance clarifies that they are not required to accommodate religious expression that creates a hostile work environment. For instance, if a religious employee attempts to persuade another employee of the correctness of his beliefs, the conduct is not necessarily objectively hostile. But, if the employee objects to the discussion yet the other employee nonetheless continues or escalates, that could be found to be hostile conduct.

c. Technology And The Virtual Work Environment

A hostile work environment claim may include conduct that occurs in a work-related context outside an employee’s regular workplace. The Guidance provides that conduct also occurs within the work environment if it is conveyed using work-related communication systems, such as e-mail, video technology, or instant messaging systems. Conduct within the virtual work environment, such as a video meeting, is no different in the EEOC’s eyes than conduct in the physical work setting.

Harassing conduct in the virtual work context can include:

•Sexiest comments during a video meeting;

•Racist imagery that is visible in an employee’s workspace while the employee participates in a video meeting; or

•Sexual comments made during a video meeting about a bed being near an employee in the video image.

The Guidance further sets out how conduct that does not occur in a work-related context, such as on personal social media pages, can affect terms and conditions of employment by impacting the workplace. As an example, if an employee is the subject of ethnic epithets that a coworker posts on a personal social media page, and either the employee learns about the post directly or other coworkers see it and discuss it at work, then that post can contribute to a racially hostile work environment.

6. Guidance On Effective Anti-Harassment Policy

The EEOC emphasizes how an employer’s ability to demonstrate that it exercised reasonable care to prevent and correct promptly any harassment and that an employee unreasonably failed to use those preventative measures can provide a defense to liability or damages in many types of harassment cases. To help satisfy the employer’s duty to show reasonable care that the employee failed to use, the Guidance considers the existence of an effective anti-harassment policy to be a critical factor.

The Guidance also lays out the EEOC’s views on what makes an anti-harassment policy effective:

•It defines the prohibited conduct;

•It is widely disseminated;

•Is comprehensible to workers;

•Requires that supervisors report harassment they are aware of;

•Offers multiple avenues to report harassment;

•Clearly identifies accessible points of contact to whom reports should be made; and

•Explains the employer’s complaint process, including anti-retaliation and confidentiality protections.

But beyond an effective policy, the Guidance discusses how additional factors go into evaluating whether an employer implemented reasonable and effective measures to prevent and correct harassment, such as: regularly providing effective training on the policy, removing barriers to filing complaints, promptly investigating complaints of harassment, taking appropriate corrective action, ensuring no retaliation, and monitoring the workplace to ensure ongoing adherence to the policies.

7. Guidance On Temporary Employment Agencies

The Guidance also addresses the differing responsibilities an employer has where an individual is assigned by a temporary employment agency to work for a client. If the worker complains about harassment to the client and temporary employment agency, the EEOC instructs that both entities would be responsible for taking corrective action, but do not need to take duplicative action.

As to temporary employment agencies, the EEOC’s Guidance directs that corrective action may include:

•Ensuring the client is aware of the alleged harassment;

•Insisting the client conduct an investigation and take appropriate corrective action on its own;

•Working with the client to jointly conduct an investigation and/or identify appropriate corrective measures;

•Following up and monitoring to ensure that corrective measures have been taken; and

•Providing the worker with the opportunity to take another job assignment at the same pay rate, available.

8. Conclusion

The EEOC’s Guidance is not yet final and still technically subject to change. Even so, the Guidance provides employers with insightful information and detail from the federal agency charged with enforcing federal EEO laws on how it understands, enforces, and interprets those very laws. Employers should take heed of the agency’s Guidance and actively ensure that they have strong, effective, and lawful anti-harassment policies and procedures in place.

To read more articles like this one, subscribe to the ALERT Newsletter today!

About The Author

Tyler Z. Bernstein is a Partner with Sheppard, Mullin, Richter & Hampton LLP in the firm’s Orange County Office. Mr. Bernstein represents employers of all industries in state and federal court. Tyler’s practice extends to the business law context, as he has extensive experience successfully defending against “bet the company” commercial litigations and arbitrations. Tyler regularly defends employers in wage and hour class actions and representative litigations and has extensive experience defending against claims of discrimination, harassment, retaliation, wrongful termination, breaches of contract, and other related matters. Tyler also provides general preventative advice and counseling to employers relating to labor and employment issues.

CALIFORNIA’S MINIMUM WAGE INCREASE FOR HEALTH CARE WORKERS IS ON THE HORIZON

On June 1, 2024, nearly all health care facilities in California will be required to increase the minimum wage paid to health care workers, ranging anywhere from $18 per hour up to $23 per hour depending on the type of health care facility. Below we address the key questions these facilities should be asking to evaluate their current and future compliance with this new law.

1. Is your entity a covered health care facility?

Almost all health care facilities in California are covered, including general acute care hospitals, psychiatric hospitals, integrated health care delivery systems, urgent care clinics, physician groups, skilled-nursing facilities that are owned, operated or controlled by a hospital or integrated health care delivery system, dialysis clinics, surgical clinics, outpatient clinics, and even a patient’s home when health care services are being provided by an entity owned or operated by a general acute care hospital or acute psychiatric hospital. There are very few health care facilities excluded from coverage. These include hospitals owned, controlled or operated by the Department of State Hospitals and certain tribal clinics.

2. Does your covered health care facility have employees subject to the new minimum wage?

Like a “covered health care facility,” a “covered health care employee” is also defined broadly and is not limited to employees performing patient care services. A person is a covered health care employee if they are an employee of a facility that provides patient care, health care services, or other services supporting the provision of health care. This includes not only patient care employees such as nurses, physicians, caregivers, medical residents, interns, and fellows, but also employees providing support services to the provision of health care, such as janitors, housekeepers, groundskeepers, guards, clerical workers, nonmanagerial administrative workers, food service workers, gift shop workers, technical and ancillary services workers, medical coding and medical billing personnel, schedulers, call center and warehouse workers, and laundry workers.

Additionally, contracted and subcontracted workers and temporary service workers contracted through a temporary services employer may also be covered if the health care facility is controlling their wages, hours, or working conditions, or the worker is performing work primarily on the premises of the facility to provide health care services or services supporting the provision of health care.

There are very few workers who are excluded from the definition of a covered health care employee. These include those employed as outside salespersons, those who perform work in the public sector where the primary duties performed are not health care services, those who perform delivery or waste collection work if certain requirements are met, and those who perform medical transportation services if certain requirements are met.

3. What is the new minimum wage for your covered health care employees?

Under the new law, health care facilities are divided into the following four categories: (1) health care facilities that employ 10,000 or more full-time employees; (2) hospitals with a high or elevated governmental payor mix, and rural independent health care facilities; (3) clinics; and (4) other health care facilities. The applicable minimum wage depends upon which type of health care facility employs the workers.

• With respect to health care facilities in the first category, covered health care employees must be paid at least $23/hour beginning on June 1, 2024. Thereafter, the minimum wage will increase by $1/hour annually, ultimately reaching $25/hour on June 1, 2026. Starting January 1, 2028, the minimum wage will increase annually at the lesser of 3.5% or the Consumer Price Index.

• For health care facilities in the second category, beginning June 1, 2024, covered health care employees must be paid at least $18/hour. Thereafter, the minimum wage increases annually by 3.5%, reaching $25/hour on June 1, 2033. Starting January 1, 2035, the minimum wage will increase annually at the lesser of 3.5% or the Consumer Price Index.

• With respect to health care facilities in the third category, beginning June 1, 2024, and continuing to May 31, 2026, covered health care employees must be paid at least $21/hour. Between June 1, 2026 and May 31, 2027, these employees must be paid at least $22/hour. And starting on June 1, 2027, these employees shall be paid at least $25/hour. Starting January 1, 2029, the minimum wage will increase annually at the lesser of 3.5% or the Consumer Price Index.

• For health care facilities in the fourth category, beginning June 1, 2024, and continuing to May 31, 2026, covered health care employees must be paid at least $21/hour. Between June 1, 2026 and May 31, 2028, these employees must be paid at least $23/hour. And starting on June 1, 2028, these employees shall be paid at least $25/hour. Starting January 1, 2030, the minimum wage will increase annually at the lesser of 3.5% or the Consumer Price Index.

Health care facilities should review the Department of Health Care Access and Information page to determine which of the above categories applies to them. Importantly, health care facilities in the first category include both individual facilities with 10,000 or more full-time employees, as well as health care facilities that are part of a health care system that collectively employs 10,000 or more full-time employees. Those who believe they have been misclassified must file a request to be reclassified with the Department no later than January 31, 2025.

4. What if you have covered health care employees who are exempt, salaried workers?

Health care employees paid on a salary basis shall be paid a salary of no less than 150% of the applicable health care minimum wage, or 200% of the generally applicable state minimum wage per Labor Code Section 1182.12, whichever is greater. For health care facilities in the first category above, employees must make at least $71,760 annually (i.e., 1.5x health care minimum wage of $23/hour) to be considered exempt in 2024. On the other hand, health care facilities in the second, third and fourth categories must pay employees at least $66,560 annually (i.e., 2x the state minimum wage of $16/hour) to be considered exempt in 2024. It is important for health care employers to check this amount annually to ensure all exempt employees are satisfying the salary basis test.

5. What if a local government creates a higher minimum wage for covered health care employees?

SB 525 prevents a local government from passing a higher minimum wage for covered health care employees through January 1, 2034. However, a local government may pass a higher minimum wage that would apply uniformly to all employees (including non-health care employees) across all industries at any time, and that higher minimum wage would apply.

6. Can you seek a waiver from the new minimum wage?

Certain covered health care facilities may be able to seek a waiver of the minimum wage increase from the Department of Industrial Relations. However, the facility will be expected to demonstrate that compliance with the new law would raise doubts about its ability to continue to operate.

7. Takeaways

In light of this convoluted new law, health care employers should consult legal counsel to ensure that they are appropriately classifying themselves and their workers, as this determination will drive the type or category of minimum wage increase that will apply to them. Once it is determined which minimum wage increase applies, health care employers should continue to work with their counsel to implement a compliance plan as necessary before June 1, 2024. Health care employers may also consider whether they qualify for a waiver, and should be cognizant of the timing of each wage increase in the coming years.

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About The Authors

Kristi L. Thomas is an associate in the Labor and Employment Practice Group with the law firm of Sheppard, Mullin, Richter & Hampton LLP in the firm’s Orange County office. Kristi’s practice involves representing employers in the defense of complaints for class action and single-plaintiff matters. Kristi has handled all aspects of civil litigation defense, including taking and defending depositions, law and motion practice, mediation, arbitration, and second-chairing multiple trials to defense verdict. Kristi also provides day-to-day counseling on a wide variety of labor and employment law issues, including wage-and-hour issues, disability and family/medical leave issues, discipline, and termination. She conducts supervisor and non-supervisor trainings on behalf of clients regarding sexual harassment and workplace behavior.

Kristi received her J.D. from Widener University School of Law, and her B.A. from University of Pittsburgh.

Tyler is a co-author of the Private Attorneys General Act (PAGA) Litigation and Compliance Manual as well as a contributing author of the ALERT Newsletter.

CALIFORNIA’S NEW HEAT ILLNESS PREVENTION STANDARD FOR INDOOR WORKPLACES IS NOW EFFECTIVE

The March 2024 edition of the ALERT provided an update on the status of California’s proposed “Heat Illness Prevention in Indoor Places of Employment” standard. Following revisions to the regulation, it was adopted by California’s Occupational Safety and Health Standards Board on June 20, 2024, and became effective on July 23, 2024. The new regulation applies to most California workplaces where the indoor temperature reaches 82°F or higher (e.g., warehouses, distribution centers, manufacturing plants, and restaurants). The standard requires those employers to implement a written indoor heat illness prevention plan that includes procedures for accessing water and cool-down areas, acclimatization, training employees, and emergency response measures. Covered employers who have not already drafted and implemented their plan should do so immediately.

1. Approval Of The Standard

The adoption of an indoor heat illness prevention standard has been on the “to-do list” of California’s Division of Occupational Safety and Health (“Cal/OSHA”) for a long time. After exempting state-run correctional facilities, the Department of Finance allowed the regulation to proceed to a vote. In addition to approving the “Heat Illness Prevention in Indoor Places of Employment” standard (California Code of Regulations, Title 8, section 3396) (“Section 3396”), the Board requested that the Office of Administrative Law (“OAL”) (1) expedite approval of the new indoor heat illness prevention standard and (2) make the standard become effective immediately after approval due to increased safety concerns stemming from higher summer temperatures. On July 23, 2024, the Office of Administrative Law obliged the Board’s request, issuing its approval and making the regulation effective immediately.

2. Covered Employers

The language in Section 3396 that determines whether an employer’s workplace is covered by the new regulation can be confusing. Ultimately, there are two main temperatures that matter for employers under the new regulation: 82°F and 87°F. The requirements that apply under the new regulation depend on those temperatures, which can result in two different situations.

a. Indoor Workplaces that Are 82°F or Higher

Employers with an indoor workplace where the temperature/heat index is 82°F or higher when employees are present must implement a written Indoor Heat Illness Prevention Plan that includes procedures for accessing water and cool-down areas, acclimatization, and emergency response measures. Additionally, training must be provided to all employees (and their supervisors) who perform “work that should reasonably be anticipated to result in exposure to the risk of heat illness.”

b. Indoor Workplaces that Are 87°F or Higher and Certain Workplaces that Are 82°F or Higher

On top of complying with the above, employers must comply with additional requirements where the temperature/heat index is 87°F or higher, or where the temperature/heat index is 82°F but employees are (1) wearing clothing that restricts heat removal or (2) working in high radiant heat areas. The standard defines what qualifies as “clothing that restricts heat removal” and “radiant heat”. The extra requirements include measuring and recording the temperature and heat index and implementing control measures where feasible, as discussed below.

c. Exceptions on Compliance

The requirements under Section 3396 do not apply in the following situations:

• Workplaces with brief or incidental heat exposure where an employee is exposed to a temperature/heat index at or above 82°F and below 95°F for less than 15 minutes in any 60-minute period. This exception does not apply to vehicles without effective/functioning air-conditioning.

• Employees who telework from a location of the employee’s choice that is not under the control of the employer.

• Emergency operations directly involved in the protection of life or property.

3. Written Indoor Heat Illness Prevention Plan Requirement

Section 3396 mandates that covered employers establish, implement, and maintain an Indoor Heat Illness Prevention Plan (“IHIPP”) with specific required elements and procedures. The IHIPP must be in writing and in the language understood by the majority of the employees. It must be made available at the worksite to employees and to Cal/OSHA upon request. The IHIPP may appear as a standalone section in the employer’s Injury and Illness Prevention Program or as a separate document. If utilizing a separate document, the IHIPP procedures can be combined with an employer’s existing Heat Illness Prevention Plan for outdoor workplaces.

The IHIPP must include the following procedures:

• Provision of Drinking Water: Covered employers must give employees free access to clean, cool drinking water as close as practicable to their work area. If a continuous water supply is not possible, employers must provide enough water (i.e., one quart of drinking water per hour) for each employee.

• Provision of Cool-Down Rest Periods: Covered employers must allow and encourage employees to take a “preventative cool-down rest” in a cool-down area when employees feel the need to do so to protect themselves from overheating. Access to cool-down areas must be permitted at all times and employers must ensure there are one or more cool-down areas that are maintained at a temperature below 82°F, blocked from direct sunlight, and shielded from other high radiant heat sources to the extent feasible. The standard instructs that employees must not be ordered back to work until any signs or symptoms of heat illness have abated, and in no event less than five minutes in addition to the time needed to access the cool-down area. Notably, employers who fail to provide a preventative cool-down rest must provide employees with one hour of premium pay at the regular rate of pay, similar to where an employer fails to authorize or permit a compliant rest period.

• Acclimatization: Acclimatization is the process of allowing individuals to adjust to hot environments over time, reducing their risk of heat-related illnesses. Covered employers must closely observe employees who are newly assigned to high heat conditions for signs of heat stress during their first 14 days of work in these conditions. Additionally, during a heatwave, if employers cannot reduce indoor heat using methods like air conditioning or fans, they must have a supervisor closely observe employees for any heat-related issues.

• Emergency Response Procedures: Covered employers must have a plan for responding to symptoms and/or signs of heat illness and heat illness related emergencies.

4. Assessment and Control Measures for Certain Indoor Workplaces

Where the indoor temperature/heat index is 87°F or higher, or where the temperature/heat index is 82°F but feels hotter because employees are (1) wearing clothing that restricts heat removal or (2) working in high radiant heat areas, employers also must comply with the following requirements:

• Temperature and Heat Index Assessment: When it is “reasonable to suspect” that the temperature/heat index either reaches 87°F (or 82°F with employees wearing heat restrictive clothing or working in a high radiant heat area), employers must measure and record the temperature and heat index, noting the higher of the two, along with the date, time, and place of each reading. Measurements must be taken again when they are reasonably expected to be 10 degrees or more above the previous measurements. Employers must maintain these records for 12 months or until the next measurements are taken, whichever is later. The records must be made available to employees, designated representatives, and Cal/OSHA upon request. However, employers do have the option of bypassing the requirement to measure the temperature and heat index by assuming that the threshold temperature/heat index has been reached and moving on to implementation of control measures to minimize the risk of heat illness.

• Evaluation and Implementation of Control Measures: Employers must use control measures to minimize the risk of heat illness. The selection of control measures must be based on the environmental risk factors for heat illness present in the work area. Control measures may include engineering controls (e.g., installing air conditioning, adding heat-reducing insulation, using reflective coatings or materials to block heat radiation from equipment or the sun) and/or administrative controls (e.g., adjusting work schedules to avoid the hottest parts of the day, rotating employees to cooler tasks to limit heat exposure, increasing the frequency and duration of breaks in cool areas). If both feasible engineering and administrative controls are not enough to decrease the temperature and minimize the risk of heat illness, then “personal heat-protective equipment” should be provided (e.g., vests filled with ice packs, uniforms with fabrics that wick away sweat and allow ventilation, providing portable battery-operated fans).

5. Required Employee Training

Section 3396 requires employers to provide comprehensive training on the IHIPP and heat illness risk factors to supervisory and non-supervisory employees “before the employee engages in work that should reasonably be anticipated to result in exposure to the risk of heat illness.” Specifically, the training must cover:

• The environmental and personal risk factors for heat illness;

• The employer’s procedures for complying with the standard’s requirements;

• The importance of frequent consumption of small quantities of water;

• The concept, importance, and methods of acclimatization;

• The different types of heat illness, the common signs and symptoms of heat illness, and appropriate first aid and/or emergency responses to the different types of heat illness;

• The importance of reporting symptoms or signs of heat illness; and

• The employer’s procedures for responding to signs or symptoms of possible heat illness, contacting emergency medical services, transporting employees to a point where they can be reached by an emergency responder if necessary, and ensuring that clear and precise directions to the worksite can and will be provided as needed to emergency responders.

Employers must provide additional training for supervisory employees on the following topics:

• How the supervisor is expected to comply with the standard’s requirements as determined by the employer;

• The procedures the supervisor is to follow when an employee exhibits signs or reports symptoms consistent with possible heat illness, including emergency response procedures; and

• Where the work area is affected by outdoor temperatures, how to monitor weather reports and how to respond to hot weather advisories.

6. Cal/OSHA Guidance

Presumably in support of the push to expedite the standard’s effective date, Cal/OSHA already published guidance for employers, including a comparison of the outdoor and indoor standards. The guidance also includes a combined indoor and outdoor heat illness prevention model plan and FAQ guidance. Importantly, the FAQ guidance notes that an IHIPP that “is little more than a restatement of the safety orders does not satisfy the standard; instead, it must be specific and customized to the employer’s operations.”

7. Next Steps

Employers who have not done so already should measure the temperature and heat index in the workplace to determine if the new standard may apply. If it does, the employer should begin to take active steps to ensure compliance by:

• Reviewing employees’ access to water and cool-down areas, the need and process for acclimatization, and applicable emergency response procedures;

• Identifying how to measure and maintain temperature/heat index records and what control measures to implement (if these additional requirements must be satisfied);

• Drafting the written IHIPP; and

• Preparing and conducting training for supervisors and employees.

Employers with any questions or concerns about compliance should consult with experienced employment law counsel.

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