In most layoff situations, especially these days, the layoff is legitimate and a necessary evil in cutting costs.  However, just because an employee has not been wrongfully terminated in a layoff does not mean they have no California employment law rights.  One common example is receiving all unpaid vacation pay.

Vacation Pay

Under California employment laws, once employees have accrued vacation time, they must either be allowed to use it to take time off or have it paid out at termination.  This is commonly referred to as California’s “no use-it-or-lose-it” rule.

Employees should also be aware that even if an employer calls it “Paid Time Off (PTO)” or a “personal day” instead of “vacation” it most likely must still be paid out.  Under California law, vacation pay is defined as any hours an employer provides an employee to take off for any reason.

One example of something which might not qualify as vacation pay is sick pay, which most employers only allow use of when an employee is sick.  Otherwise, most forms of PTO is the same thing as vacation pay.

Payment Must Be Made on Exact Termination Date

Whether you are owed accrued vacation pay, hourly wages, salary, commissions, or some other form of wages, an employer who terminates an employee MUST pay ALL money out on the last day of employment-no exceptions.

If this is not done, then an employee is entitled to “waiting time” penalties equal to one day of wages for each day the wages remain unpaid, including weekends and holidays, up to a maximum of thirty days.  These issues come into play even where the employer does not dispute that the employee is owed money.  For example, if the employer puts the check in the mail or does not pay all of the wages until the next payday, the employee is automatically entitled to penalties from their last day until they actually receive the check.

For example, if your employer does not pay out all of your vacation pay and you make $60,000 per year, after thirty days you would be entitled to approximately $7,000 in penalties even if the vacation is eventually paid out to you.

These are tough times for many laid-off employees.  They should make sure they receive all of the wages they are owed, since every dollar counts in making it through their unemployment.

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California Employment Law | Vacation Pay | Wages and Hours

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This is our second post in a series on employees’ rights when they get laid-off from work.  In our last post, I pointed out that even though an employee may have been “laid-off” with several other employees, that does not necessarily mean they were not wrongfully terminated in being chosen for layoff.  This post deals with the situation where a large group may be “singled out” for wrongful termination.

For example, one of the most prevalent forms of class action employment law claims following a layoff is based on age discrimination.  A company often decides that the best way to cut costs in a layoff is to get rid of those with the most seniority, because they are usually the ones with the highest compensation.

However, California employment laws state that where an employer terminates an employee because of their high compensation relative to other employees, that is proof of age discrimination where the high compensation is a result of that employee’s age.

In other situations, the “decider” of who stays and who goes in a layoff may have their own biases (conscious or unconscious) against certain groups of people based on race, gender, national origin or other protected characteristics.

The easiest way to prove this sort of discrimination is through statistics.  I have seen many layoffs where only those over 40 are laid off and then later replaced by new employees fresh out of college.  Similar evidence can be used where a male decision maker only lays off the females because the men have families at home.

Sometimes the only way to tell if this sort of thing is occurring at the time without the benefit of statistics is through anecdotal evidence.  However, under federal employment law if you are part of a mass layoff and over 40 your employer in most cases must provide you with a list of all other employees being laid off, including their ages and position.

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Age Discrimination | California Employment Law | Discrimination | Family Status Discrimination | Gender Discrimination | National Origin Discrimination | Race Discrimination | Wrongful Termination

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It seems like every day another company announces mass layoffs in the United States.  While we are fielding more calls from potential clients than usual, they have not increased quite as much as overall unemployment.

I think part of this might be attributable to a common employment law misconception among employees, which is that they somehow have less rights if they are “laid off” than if they had been “terminated”.  The only real difference, though, is that when someone is being laid off it usually means several employees are being terminated at the same time.

In wrongful termination cases this does give the employer a bit of an advantage in mounting a defense by pointing out that the employee in question was not singled out but instead terminated as part of a “restructuring” or “downsizing” along with several others.

However, someone still has to decide who to layoff and if that person has biases against older workers, working mothers, employees with disabilities, etc. that can often show through in trends after examining the characteristics of who was let go versus who was kept.

Personal vendettas can also come into play by supervisors who, for example, may not like how one of their employees complains about working long hours without overtime pay and on that basis alone selects them for layoff.

The most important thing a laid-off employee can do to protect their employment law rights is to objectively look at the situation and consider whether it makes sense that they were laid off, but their peers were kept.  For example, who has the most seniority?  Where do they rank in sales performance?  Are their performance reviews better or worse than the others?

The next step is to consider whether there is any illegal reason the decision maker (or someone with their ear) would want them to be terminated instead of another, less-qualified employee.  If there is such a reason and it makes more sense than simply selecting them as the most logical person to be laid off, the employee might want to contact an employee rights attorney to run the situation by them.

The best barometer I have found in employment law cases is that if the employee can look at the situation objectively and feels in their “gut” that something is “fishy,” that usually ends up being the case when we start digging deeper.

Tags

California Employment Law | Discrimination | Retaliation | Wrongful Termination

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A few days ago I happened upon an article about Littler Mendelson, P.C.  They are a large employment law defense firm and have offices in every major metropolitan area of California.  I would bet that if I looked at all of the cases our firm has handled over the years, Littler is the firm we are most often pitted against.

Except for a few bad experiences (every company has some bad apples and law firms are no exception), I have found most opposing counsel at Littler to be professional and relatively pleasant to deal with under the circumstances.

You will not often hear me singing the “enemy’s” praises, but Littler recently received a perfect score (100) on the 2009 Corporate Equality Index.  This rating is given each year by the Human Rights Campaign Foundation, which is an advocacy group for gay, lesbian, bisexual and transgendered (”GLBT”) Americans.

I find it refreshing that a law firm dedicated to defending employers who have been accused of violating their employees’ rights has taken the steps necessary to discourage discrimination “at home”.

Employment defense counsel are always “talking the talk” to me about how their clients are committed to diversity, non-discrimination, etc. and would have “never” done what we are accusing them doing.

It looks as though Littler actually “walks the walk” (even if their clients do not always follow their example).  Congrats on a job well done.

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Discrimination | Harassment | Policy : Opinion | Sexual Orientation Discrimination

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Over the past couple of months I have been dealing with a case against a major national bank on behalf of one of its former employees.  The case involves his “discretionary” annual bonus, which most employers would say is just that-discretionary.  However, the term discretionary is misleading because except in some very limited circumstances a party to a contract does not have absolute discretion.

This is because all contracts in California have an “implied covenant of good faith and fair dealing”.  This is one of the least sexy concepts in contract or employment law, so I will summarize it quickly.  This doctrine acts as a check on parties in contracts where one side has the right to exercise broad discretion that effects the other party’s rights.  The law says that in such a case when the party exercises their discretion it generally must be done “fairly”.

This is especially important in our case because on Wall Street investment bankers and other professionals are usually paid a (relatively) small salary and then an extremely large annual bonus at the end of the year.  In our case, the employee was used to making over $750,000 and suddenly his employer decided at the end of last year to give him a bonus of less than $50,000 for 2007 with no warning whatsoever and despite the fact that he was performing better than his peers.

It turns out that the employer was planning to lay him off in a few weeks, so they decided to give his usual bonus to his co-workers.  This is the classic case where the implied covenant comes up in California employment law cases.  If an employee performs acceptable work during the year with the expectation that he would receive a bonus similar to his peers and what he received in prior years, the employer does not exercise discretion in “good faith” by paying him hundreds of thousands of dollars less than they do to similar employees.

This might be an extreme case for most employees, but the same concepts can be applied to any bonus and even Christmas bonuses in certain circumstances.

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Bonuses | California Employment Law | Cases | Employment Contracts | Wages and Hours

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