In a groundbreaking decision, the California Supreme Court adopted a new legal standard today that will make it much more difficult for businesses to classify workers as independent contractors, drastically changing the legal landscape across the state.
The decision will directly affect the trucking and transportation industry because the workers involved in the case were delivery drivers, but also has the potential to affect nearly every other industry—including the emerging gig economy. Specifically, the court adopted a new standard for determining whether a company “employs” or is the “employer” for purposes of the California Wage Orders.
Under the new “ABC” test, a worker is considered an employee under the Wage Orders unless the hiring entity establishes all three of these prongs:
A. the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
B. the worker performs work that is outside the usual course of the hiring entity’s business; and
C. the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
This decision not only expands the definition of “employee” under the California Wage Orders, it also imposes an affirmative burden on companies to prove that independent contractors are being properly classified. As a result of today’s decision, all California businesses with independent contractors will need to conduct a thorough evaluation of such workers to determine whether they are properly classified.
This decision is a seismic shift for California wage and hour law and class litigation. The court now imposes a burden on businesses to defend their classification of workers as independent contractors. Misclassification of such workers can result in significant legal exposure with respect to wage and hour compliance.
For more information, contact Jennifer at Premier Personnel at 916.989.7776
California AB156 prohibits all employers from requesting applicants to disclose prior compensation and benefits.
This New law taking effect January 1st, 2018 prohibits all California employers from seeking or relying on information about applicant’s prior compensation and benefits.
AB 168 was approved by Governor Brown on October 12, 2017 which prohibits employers from seeking or taking into consideration an applicant’s prior compensation and benefits when determining whether to hire the applicant, and in setting the applicant’s compensation and benefits. The new law creates Labor Code section 432.3. This Friday’s Five covers five issues of the new law that employers must understand:
1. The law applies to all employers, regardless of size, effective January 1, 2018.
2. Employers may not rely on salary history information of an applicant in determining whether to offer employment and in determining the about of compensation to offer.
3. Employers may not seek salary history information, which includes compensation and benefits, about the applicant.
4. Upon a reasonable request, an employer must provide the “pay scale” for the position to an applicant.
5. Nothing in the law prohibits employees from voluntarily disclosing salary history to a prospective employer.
Employers should start taking steps to comply with the new law by the beginning of the new year to ensure compliance.
Some steps to consider include:
• Train hiring managers about new law and that they are not to seek information from applicants regarding prior salary and benefits history.
• Remove any requests or questions about salaries at prior employment on applications or other documents provided to candidates.
• Prepare a set “pay scale” for the positions the employer is hiring for. The law does not set forth what information must be included on the pay scale. In addition, the law does not explicitly require that this information must be provided in writing to the applicant. However, employers should consider whether the pay scale should be done in writing in case there is a dispute about whether the pay scale was provided to the applicant and what information was conveyed to the applicant.
New "ELD" law for trucking companies
As of December 31, 2017, the Federal Motor Carrier Safety Administration (FMCSA) will require all transportation companies using AOBRD’s (automatic onboard recording devices) to use the Electronic Logging Device (ELD). The ELD rule sets performance and design standards, and requires ELDs to be certified and registered with FMCSA. This new device is intended to help create a safer work environment for drivers, and make it easier, faster to accurately track, manage, and share records of duty status data (RODS).
This rule applies to most carriers and drivers who are required to maintain RODS. The ELD Rule impacts Carriers and Drivers who are subject to the rule must install and use ELDs by the appropriate deadline:
• Carriers and drivers who are using paper logs or logging software must transition to ELDs no later than December 18, 2017.
• Carriers and drivers who use AOBRDS prior to the compliance date must transition to ELDs no later than December 16, 2019.
Drivers must understand and be able to use ELDs by the required deadline, including how to annotate and edit RODS, certify RODS, and collect required supporting documents. You will also need to know how to display and transfer data to safety officials when requested.
The ELD rule also applies to commercial buses as well as trucks, and to Canada and Mexico domiciled drivers. The ELD rule allows limited exceptions to the ELD mandate, including:
• Drivers who operate under the short-haul exceptions may continue using timecards; they are not required to keep RODS and will not be required to use ELDs.
• Drivers who use paper RODSs for not more than 8 days out of every 30-day period. • Drive-away/tow-away drivers (transporting an empty vehicle for sale, lease, or repair).
• Drivers of vehicles manufactured before model year 2000.
If you have any questions, please contact me at 916-989-7776.