For years, Silicon Valley Middle Market employers have faced a continuing stream of claims alleging that employees have been misclassified as exempt from overtime compensation rules. Most misclassification claims have involved the so-called “white collar” exemptions. Claims alleging misclassification under the inside sales exemption have received less attention than most other claims, but the inside sales exemption is not well understood by many employers, resulting in frequent misclassifications and potential liability.  Continue Reading Inside Sales Exemption Misunderstood by Many Employers

Most Silicon Valley Middle Market company employers know that the California Labor Code and the Wage Orders generally require an employer to provide certain meal periods and rest breaks to non-exempt employees during their work day and that failure to do so results in a penalty equal to an additional one hour of pay for each violation.  According to California law, an employee must be relieved of all duties during their meal period and their rest breaks and this must include the ability to leave the employer’s premises.

In a recent decision involving Taco Bell’s discounted meal policy, through which it provided discounted food and drinks for any employee who worked a shift of at least two hours under the condition the employee not leave the premises during the break, the California Supreme Court rejected the employees’ arguments that the requirement they remain on premises if they purchased discounted food or drink meant that they were not relieved of all duties. Continue Reading Employers Catch a Break – California Supreme Court Sides with Them in Taco Bell Case

Employers who adopt English-only policies in the workplace expose themselves to a risk of claims for discrimination.  Since the circumstances in which an English-only policy might be justified are quite narrow, employers should not adopt such a policy before conferring with counsel, and any such policies should be carefully drafted and narrowly tailored.  Continue Reading Middle Market Employers: California’s Fair Employment and Housing Council Adopt New Regulations Regarding English-only Rules

Many California Middle Market employers, especially those in Silicon Valley, utilize independent contractors to fulfill job openings, to generate payroll savings for their businesses, and to avoid the administrative hassles associated with the traditional employment relationship.  Whether a worker can be validly classified as an independent contractor depends on certain legal criteria, however, not merely the desires of the parties.  In the wake of the California Supreme Court’s decision last week in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, the circumstances in which employers can classify workers as independent contractors are now more limited.  Continue Reading Silicon Valley Middle Market Companies: Are Your Contractors Now Employees?

On April 13, 2018, U.S. Senator Cory Gardner, a Republican representing Colorado, announced that he was assured by President Trump that the Trump administration would not be taking any actions that would negatively interfere with Colorado’s legal cannabis industry. Additionally, Senator Gardner stated that President Trump pledged to support a federalism-based legislation solution that would give Colorado ultimate authority to create its own policies on the issue.

White House spokeswoman Sarah Huckabee Sanders confirmed Senator Gardner’s account as being accurate. Continue Reading President Trump’s U-Turn toward Cannabis: His Promise of Noninterference with Colorado’s Legalized Cannabis Programs

Last Friday President Donald Trump signed a $1.3 trillion spending bill.  In doing so, he averted a federal government shutdown – and renewed protections for medical cannabis patients and providers.

Renewed Protections

The spending bill includes the Rohrabacher-Blumenauer provision.  This provision prohibits Department of Justice funds from being used to prevent U.S. states and territories “from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.”

U.S. Attorneys’ offices and the Drug Enforcement Administration both operate under the Department of Justice, so the Rohrabacher-Blumenauer restrictions apply to them.

Attorney General Jeff Sessions

On the other side of this issue, Attorney General Sessions has taken actions over the past year in line with his longstanding anti-cannabis position. Continue Reading Trump Signs Spending Bill, Renews Medical Cannabis Protections

Startup companies and their investors can breathe a little easier.  The tax reform bill working its way through the legislative process is likely to include provisions that, if passed into law, could help early stage companies.

Background

In November 2017 the House passed its tax reform bill, H.R. 1 – also known as the Tax Cuts and Jobs Act.  It received significant media attention for, among other things, lowering the corporate tax rate to 20%.  This stands to benefit for-profit corporations of all sizes.

Yet to members of the startup community, the bill shows something perhaps even more interesting – a focus on promoting innovation and entrepreneurship.  New companies often do not have revenues, and their investors take significant risks.  Because of these characteristics, these companies arguably deserve tax treatment that is different from that of established businesses.

House Majority Leader Kevin McCarthy, along with the vast majority of his fellow House Republicans, supported the bill.  He said in a November 1 Financial Times piece that “we need a dynamic tax code that promotes the competition, risk-taking and innovation that is the foundation of the 21st-century economy.”[1]

Continue Reading New Tax Bill Gives a Friendly Nod to Startup Companies

Middle Market employers in Silicon Valley need to be familiar not only with the state minimum wage, but also any local minimum wage laws that may be applicable to them, and on July 1, a few cities, including San Jose, San Francisco and Emeryville, had new minimum wages go into effect:

City Minimum Wage
San Francisco $14 per hour
San Jose $12 per hour
Emeryville $14 per hour for employers with 55 or fewer employees; $15.20 per hour with 56 or more employees

California’s minimum wage rose earlier this year to $10.50 per hour for employers with 26 or more employees.  In recent years, however, many cities and counties have enacted their own minimum wage rules. Compliance with local ordinances can be complicated, because some ordinances apply only to businesses that are based in the city in question, while others apply to all employees who work some minimum number of hours in the city.

What Should Employers Do Now? Continue Reading Some Silicon Valley Cities Increased Minimum Wage on July 1

Employers in California, especially those in the Middle Market, are all too familiar with the tidal wave of wage and hour litigation they have confronted over the past decade plus – claims alleging misclassification, unpaid overtime, meal period and rest break violations, and pay stub violations, to name just a few.  A new decision from the California Supreme Court addresses claims based on long-ignored Labor Code statutes regarding days of rest.  Although the decision is favorable for employers in many respects, it nevertheless could foretell another species of wage and hour claim on the horizon.  In the wake of this decision, employers should consider adopting policies on days of rest and should be careful to avoid requiring non-exempt employees to work seven days within a single work week unless they work no more than 30 hours during the week and no more than six hours in any single day. Continue Reading California Supreme Court Clarifies Rules Regarding Days of Rest

In the wake of a recent California Court of Appeals decision, the Vaquero case, employers who pay employees on a commission basis should assure that they comply with the following rules in order to avoid potential liability: Continue Reading Rules Regarding Commission Compensation Just Got More Complicated