E-Blasts

Another Employer-friendly Nod from Trump

By: Adrian Hoppes

President Trump tapped Eugene Scalia, son of the late U.S. Supreme Court Justice Antonin Scalia, to fill the Labor Secretary vacancy at the Department of Labor (“DOL”) created when Alex Acosta stepped down this past July. Scalia is a long time management-side employment attorney. If Scalia is confirmed, he will bring with him years of expertise in challenging several administrative regulations, including at the DOL. Scalia has worked in the trenches on a large number of labor issues for years and brings a significant level of understanding on how to enact President Trump’s agenda. Scalia faced many tough questions on Thursday September 19th during his hearing before the U.S. Senate Health, Education, Labor, and Pension Committee but overall, his performance did not suggest that there will be a road block from sending his nomination to the Republican-controlled Senate.

Today, Governor Newsom signed AB 5 which limits employer’s use of independent contractors. In signing the bill, Newsom said that the law “will help reduce worker misclassification — workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits.” (LA Times article here.) You can read more about AB 5 in our previous e-blast, available here.

COUNSEL TO MANAGEMENT:

AB 5 has far reaching effects for California employers. If you have questions about how this law impacts your business, contact the experts at Dowling Aaron Incorporated to help you navigate this complex area of law.   

PAGA-Heavy News Week

This week, the California Supreme Court issued a favorable ruling to employers on the PAGA front, holding that a private Plaintiff may not seek to recover underpaid wages under Labor Code Section 558. You can read our e-blast on that decision here.

In more PAGA news, a case filed by California trade group California Business & Industrial Alliance challenging whether the PAGA is constitutional faced a setback this week. The case claims that the PAGA strips away due process rights from employers and allows Plaintiffs and their attorneys to use the law for their own personal gain and exploits California employers. The case, California Business & Industrial Alliance vs. Becerra is pending in Orange County Superior Court. Just this week, the Superior Court Judge issued an order agreeing with the State that the PAGA does not impede businesses due process rights, explaining that “a PAGA action is a civil action with the parties, both plaintiffs and defendants, afforded all of the rights and remedies available to parties in civil actions.”  The trade group’s counsel, however, said that it would move ahead on its claim that the PAGA violates the equal protection clause and keep fighting the statute. You can read more about the setback here.

Today the California Supreme Court reigned in the increasing “deputy” power of workers by ruling that workers cannot collect civil penalties on underpaid wages under the Private Attorneys General Act (PAGA). As a refresher, PAGA allows individual workers to seek civil penalties for Labor Code violations on behalf of the state. Lab. Code § 2699(a). In other words, PAGA “deputizes” employees to enforce Labor Code violations against their employers as if they were the Labor Commission itself.

While the Dynamex decision and the “ABC Test” it created has been a concern for businesses (including those that operate as independent contractors) since 2018, employers found solace in the fact that the California Supreme Court took steps to limit the impact of its decision by focusing on various things specific to the Dynamex case.  As a result, for a significant period of time certain state agencies made it clear that the pre-Dynamex analysis would be used in investigations and enforcement actions.  Unfortunately, it appears that new California legislation will soon step in to tip the scales against employers.

HOUSING CRISIS INTENSIFIES WITH H-2A PROGRAM INCREASES.

Coastal communities are facing increasing pressure from local residents as employers of H-2A workers increase the demand for nearby housing. This increased demand has displaced many local residents. This pressure raises two questions: how did we get here, and how is local government responding?

As a refresher, the H-2A program brings foreign workers to the United States on a temporary basis to work in agricultural jobs. Just this year, the Department of Labor has approved over 10,000 applications with California among the top five largest states by H-2A workforce. The H-2A program requires employers to provide housing and so employers are often willing to pay above market rates for H-2A workers to live nearby to worksites. In response, landlord and property management have increased rent making housing unaffordable to local residents.

Understanding the how, we turn to the response. Cities like Santa Barbara are grappling to manage local residents displaced by H-2A employee housing and at the same time local businesses who rely on the H-2A program. City officials are looking at options to loosen regulations on new building projects as well as protections for local residents to stay in current housing.

For an in-depth conversation on this topic click here.

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