A New Era of Salary Transparency Could Lead to Headaches for Employers

There has been a major culture shift in this country in the way we discuss pay; once a subject rarely discussed will become easily accessible on the internet at least with respect to larger companies. California’s Gender Pay Transparency Act, Assembly Bill (AB) 1209, if signed by Governor Brown this October would require private employers with 500 or more employees to compute the wage differences by gender for exempt employees and board members located in California and file a report with the California Secretary of State who would then publish the information on a public website.  AB 1209 has passed both houses and is on its way to Governor Jerry Brown’s desk to be signed or vetoed. If signed, the Act would require employers to collect and compute the difference between wages of male and female exempt employees in California using the mean and median wages in each job classification or title; the difference between the mean and median wages of male board members and female board members located in California, and the number of employees used for these determinations and report this information every two years beginning January 1, 2020. The proponents of AB 1209 argue that transparency requirements increase awareness of pay gaps and result in shrinking the gaps. Opponents including the California…

Mind Your Business: Part 2 – Initial Financing and Capital Structure

Once you have selected and formed your business entity by filing the necessary documents with the Secretary of State, the next most obvious questions are: how does the company get money and how do I secure my piece of it? There are a myriad of options for financing your business depending on your particular needs. It is crucial to work with your accountant and attorney to fully understand the implications of the various options. If you have additional concerns, it is prudent to hire an attorney who specializes in taxation to advise. Interest in the company is referred to as a “security.” There are two basic ways to acquire a security in the company – equity and debt. Equity is basically an ownership interest in the company. In a corporation, equity can be common stock, preferred stock, or a hybrid of both. Preferred stock has a senior position to common stock and has a liquidation preference, meaning the holders of preferred stock get their money out first in the event of dissolution. Equity In an LLC, the equity is referred to as “membership interests.” These can have similar characteristics to common and preferred stock with the creation of classes of membership interest (e.g. Class A and Class B). Partnership equity is the percentage ownership interest…

From Breast Milk to Salary History: San Francisco Reminds Us that Employment Law in California Varies County to County

San Francisco is known for mission burritos, the golden gate bridge, and some of the most progressive employment laws in the nation. That last point was proven twice over in recent months as Mayor Ed Lee signed two ordinances. The first sets forth requirements for employer-provided lactation locations at the work site. The second goes above and beyond the California Equal Pay Act in prohibiting employers from asking about and using employees’ salary history. Lactation in the Workplace Ordinance Employers in the City and County of San Francisco already had an obligation under California law to ensure that every employee seeking to pump breast milk at the workplace has a reasonable time and place to pump. Effective January 1, 2018, San Francisco will take that requirement a step further and will require employers to ensure the pumping location is: (1) safe, clean, and free of toxic or hazardous materials, (2) has a surface for placing a breast pump and personal items onto, (3) has seating, and (4) access to electricity. Further, employees must have access to a refrigerator and sink in “close proximity to the employee’s work area.” The ordinance does have an express exemption when the employer shows that the requirements would “impose an undue hardship by causing the employer significant expense or operational…

Overtime Controversy Over, For the Time Being

Last week, a federal judge declared unlawful the Obama-era Department of Labor rule that attempted to broadly redefine the class of workers eligible for overtime pay across the United States.  The rule was controversial from its inception, but that controversy has, for now, come to a close.   The final rule itself, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” was promulgated May 23, 2016, for the purpose of updating and specifying which U.S. workers would and would not be exempt from the federal overtime pay requirements established by the Fair Labor Standards Act of 1938 (“FLSA”).   In addition to establishing overtime pay requirements, the FLSA exempts employers from paying overtime to “any employee employed in a bona fide executive, administrative, or professional capacity.”  Commonly referred to as the “EAP” exemption, this provision’s specifics were left by Congress to be defined and determined by the U.S. Department of Labor.   A 2004 regulation, promulgated by the Bush administration and still currently in effect, determines the class of exempt employees based on a three-part test. It classifies exempt employees as those (1) paid on a salary basis, (2) over a minimum salary level, (3) who perform executive, administrative, or professional capacity duties.  The 2004 rule sets the minimum salary…

A Primer on Beer Tastings: Know Your Options

There are a couple of different ways a brewer can get their beer out to a wider audience outside of their brewery. One of course is through distribution to retailers. Another, that has the benefit of getting a lot of people to try your product for the first time, and with built-in goodwill, is to conduct tastings. Be sure you are aware of the regulations governing tastings before you get started to avoid any potential adverse consequences to your license. On-premises tastings: You can hold tastings on your own licensed premises either with or without charge, but not on any portion of your premises that are licensed with a retail license. You may only offer tastings of beer produced or bottled by or for your brewery. Off-premises tastings at nonprofit events: Your beer manufacturer’s license allows you to conduct tastings of your beer off of your licensed premises only for events sponsored by a nonprofit organization. The event must be one attended only by persons affiliated with that nonprofit (each of whom may bring up to three guests to the tasting), and you may not sell or solicit sales of your beer “in that portion of the premises where the beer tasting is being conducted.” (B&P Code § 23357.3(a); CCR 53.5.) You may however, distribute…

Ninth Circuit Affirms Summary Judgment for BNSF Railway Company in FEHA Case

BNSF Railway Company recently obtained a decisive victory in the Ninth Circuit Court of Appeals, with the Court affirming a grant of summary judgment in its favor on an employee’s FEHA claim. The case, Alamillo v. BNSF Railway Co., was decided August 25, 2017, and underscores the importance of the three-step burden-shifting analysis for employment discrimination cases set forth by the Supreme Court in McDonnel Douglas Corp. v. Green.  In Alamillo, not only was the plaintiff unable to establish a prima facie case of discrimination, the court found that even if he had been able to do so he had presented no evidence that the employer’s stated non-discriminatory reasons for its employment actions were pretextual.   The case is interesting because Alamillo, an “extra board” or on-call locomotive engineer, was subjected to discipline for missing calls to work before he obtained a diagnosis of obstructive sleep apnea, which he then claimed explained his failure to hear and answer his employer’s calls to his cell phone. The district court granted summary judgment to BNSF, concluding that BNSF could not have discriminated against Alamillo based on his disability at a time when Alamillo had no diagnosis. The Ninth Circuit agreed, pointing out that the FEHA prohibits employers from taking adverse employment actions against an employee because of…