Revision to California Meal Break Regulations

On April 6, 2005, the Division of Labor Standards Enforcement issued modified proposed regulations which, if they are passed into law, would alter California 's meal break rules for non-exempt employees. Under current law, non-exempt employees cannot work more than 5 hours without taking a 30 minute work-free meal period (unless they work 6 hours or less). With these proposed regulations, the Division of Labor Standards Enforcement hopes to clarify existing law and provide additional flexibility to both employers and employees.

Under the proposed regulations, employers would be required to educate non-exempt employees about their right to take an uninterrupted 30 minute meal period and provide them with the opportunity to take it. This education process would be documented in writing with an employee acknowledgement. The key difference is that under the proposed regulations, employees would no longer be required to take their meal period if they choose not to. The proposed regulations also provide an additional sixth hour within which a meal break may be taken. (Under current California law it is unclear when during the workday a meal period must be taken.) A second meal period must be provided if the work period commencing after the end of the initial meal period exceeds five hours. This second meal period may be waived by the mutual consent of both the employee and the employer if the employee did not waive the first meal period and the employee does not work longer than five hours after the first meal period. California law requiring employers to maintain accurate time records would be unchanged.

If these new regulations become law employers will no longer be in the awkward position of policing employee meal breaks. Employees would be able to decide for themselves whether they wish to take advantage of their meal period or waive their meal period to meet their personal schedules. Finally, the new regulations would clarify that additional monies due to employees when a meal period is missed constitute penalties, not wages. This clarification, if enacted, is a huge victory for employers, shortening the statute of limitations for employee claims from three years to one.

We will notify you as soon as these proposed regulations are passed into law. At present we estimate a three month period for the conclusion of the regulatory process.

Supervisor Sexual Harassment Training

As of January 1, 2005, California employers with over 50 employees must provide all supervisors with two hours of sexual harassment training every two years. Supervisors employed as of July 1, 2005, must receive training by January 1, 2006. Employees who are hired, transferred or promoted into supervisory positions after January 1, 2005, must receive training within six months of placement into a supervisory position. After January 1, 2006, supervisors must receive two hours of sexual harassment training every two years.

What if you just trained all your employees?
Don't worry. Supervisors trained after January 1, 2003 are not required to comply with the January 1, 2006 deadline.

How do you know if your training is compliant?
The training must include information and practical guidance regarding federal and state laws, including the prevention and correction of sexual harassment and the remedies available to victims of sexual harassment. The training and education must also include “practical examples aimed at instructing supervisors in the prevention of harassment, discrimination and retaliation.” The training must be presented by trainers or educators with knowledge and expertise in the prevention of harassment, discrimination, and retaliation. The training should take place in a classroom or utilize another effective “interactive” training method.

Will video-based training comply?
At this point, no one knows for sure. The law as written is silent on this point. However, we do know that the training must be interactive, so video-based training must include a question-answer or test section to comply. We recommend that employers provide classroom-style “live” training whenever possible.

Will training provide a new defense for employers?
No, but it will help meet the employer's obligation to take all reasonable steps to prevent and correct harassment and discrimination. Failure to train may result in an order from the Fair Employment & Housing Commission requiring that the employer comply. Failure to comply will not in and of itself result in employer liability to any present or former employee or applicant.

What if our company employs over 50 employees, but less than 50 work in California?
You need not comply with the mandatory training requirements. However, under existing California law, every employer has an on-going duty to prevent and correct harassment and discrimination. Training supervisors and employees is objective proof of an employer's efforts in this area. Training supervisors and employees will stop harassment before it starts.

What about state employees who already receive 80 hours of training per year?
The two hours of sexual harassment training is incorporated into the existing 80 hour requirement for state employees.

Training
If your company employs 50 or more employees, California law now requires that you provide all supervisors with two hours of sexual harassment training by January 1, 2006. At the request of many of our clients, Downey Brand's employment law group is offering training that meets the requirements of this new law. Please contact Jennifer Randlett Madden for more information.

USERRA Changes and New Model Notice

The Department of Labor issued a press release on March 10, 2005 providing guidance regarding certain recent amendments to the Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA"). President Bush signed the amendments into law on December 10, 2004, as part of the Veterans Benefits Improvement Act. Employers should be aware of these two important changes:

Domestic Partners

Effective January 1, 2005 a new California law went into effect providing domestic partners with the same rights, protections and benefits as are granted to spouses under California law. Discrimination based on domestic partner relationships is prohibited to the same extent as marital status. Employers are advised to update all employment policies, including leaves of absence, sick leave, health benefits and any other policies that previously provided rights, protections or benefits to spouses of employees.

Qualified Retirement Plans Must Comply With Automatic Rollover Rules For Distributions After March 28, 2005

Effective for distributions made on or after March 28, 2005, qualified retirement plans must comply with the automatic rollover provisions of Internal Revenue Code section 401(a)(31)(B). Many 401(k) plans and other qualified retirement plans provide for immediate distribution of account balances or accrued benefits of less than $5,000, without the participant's consent. The new rules provide that any distribution of more than $1,000 must be deposited in an individual retirement account for the participant's benefit, unless the participant consents to receive the distribution in cash or have it rolled over to another plan.

Plan sponsors may choose to comply with the new rules or may choose to require participant consent for all distributions over $1,000. Plans must comply with the new rules in operation for distributions made on or after March 28, 2005. Plans must be amended to either comply with the new rules or to eliminate cash out distributions of amounts greater than $1,000 by the end of the first plan year ending on or after March 28, 2005 (for calendar year plans, amendments must be adopted by December 31, 2005).

We are also very pleased to announce that employee benefits lawyer James C. Paul joined Downey Brand on March 10th. Jim's move provides the region's employers with a new option for employee benefits counseling. A former shareholder at Chang, Ruthenberg & Long PC, Jim joins Downey Brand as a partner. Jim brings more than 17 years of experience and his practice includes working with qualified retirement plans, nonqualified deferred compensation plans, welfare plans, stock based compensation plans, and all aspects of employee benefits law. Jim's experience also includes pension and welfare benefits litigation, fiduciary litigation and representation of Taft-Hartley trust funds.

Please contact us if you have questions or want more information. Please note that the information contained in this newsletter is not intended to provide specific legal advice. You should consult with an attorney and not rely on any information contained herein regarding your specific situation.