California employment law is almost infinite. Its multi-faceted nature is indicated by the fact that employment is regulated by more than a dozen federal and state agencies. But most employment problems occur at the beginning and the end of the work relationship between Boss and Worker. This article flags some of the more common issues that arise at those two key points in time.
THE BEGINNING… OF WHAT?
An awful lot of later trouble would be avoided if, at the start of their relationship, Boss and Worker answer the following questions, preferably in writing.
1. What Kind Of Relationship Is This Anyway?
When Boss hires Worker, surprisingly often they fail to ask each other this fundamental question: is Worker an independent contractor or an employee? If Worker is an employee, is he or she an “exempt” employee (one who entitled to premium pay for overtime work) or a “nonexempt” employee? If worker has been sent from one employer to another, or from a temp agency to Boss, is Worker the employee of the sender, the receiver or both?
2. How Long Is This Relationship Going To Last?
Is Worker hired indefinitely or for a specified length of time? Can Boss terminate Worker at will or only for cause? In the absence of an agreement to the contrary, Worker is presumed to be hired at-will.
3. What’s In It For Worker?
Boss is asking for trouble if he/she/it doesn’t state in writing at the outset what and when Worker will be paid. If the compensation to be paid includes commissions, California law requires a written agreement detailing how these commissions will be computed and paid. Any benefits that have economic value (such as paid time off or health plan benefits) should likewise be stated in writing.
THE ENDING: “GOODBYE” OR “SEE YOU IN COURT”?
Litigation between Boss and Worker doesn’t usually occur while Worker is still on the job. The great majority of employment cases begin after Worker’s employment has ended, What can be done to keep the end of the employment relationship from becoming the start of open warfare? At the end point, like at the beginning, a lot of turmoil can be avoided by anticipating potential issues and resolving them before they become problems.
1. If Worker’s Employment Is At Will: “Hey, What’s The Problem?”
It is often assumed that employment at will gives Boss the right to fire Worker for any reason. Not so. Employment at will gives Boss the right to fire Worker for any reason except an illegal one, and many reasons for firing a worker are illegal. For example: firing Worker on the basis of one of the many forms of discrimination that the law has outlawed. At the present time 18(!) forms of discrimination are illegal. It is also illegal for Boss to fire Worker in retaliation for exercising workplace rights or in violation of an employment contract with Worker
As a practical matter, it’s not a good idea for Boss to fire Worker without doing a Risk Assessment. In short, look before you leap. Questions that should be addressed include: What exactly is the reason why Boss fired Worker? What is Worker’s side of the story going to be? What are the chances that Worker will sue? If Worker does sue, are the costs of litigation and the risk of a bad outcome acceptable to Boss?
Even if Boss could fire Worker without incurring potential liability for wrongful termination, it is still open to Worker to assert a multitude of other claims. For·example, Worker may assert claims based on the wage and hour laws, such as claims for overtime pay, missed meal breaks, or missed rest break s.
2. OK, So What’s The Solution?
Rather than firing Worker, most often it is in Boss’s interest to offer Worker a separation agreement. In that agreement, Boss provides Worker with something of value (for example, severance) and in exchange Worker provides Boss with a release of claims. Getting a separation agreement takes Boss longer and costs more than firing Worker, but once the agreement is done Boss knows he or she has obtained as much protection from employee claims as the law allows, For Worker, getting a separation agreement gives him or her the power to leave on more favorable terms, and with more dignity, than she or she would have if he or she was just fired. (For a more detailed discussion of separation agreements, see my blog entitled “Avoiding Wrongful Termination Liability.”
3. What If Worker Just Quits?
The best way for Boss to avoid subsequent claims by an employee who quits is to take two steps. First, make sure that all employees have been properly informed of their employment law rights, many of which are covered in the poster all employers are required to put up. Second, promulgate a policy that not only permits or welcomes employees to report violations of those rights, but requires them to do so. Once such a requirement is in place, any Worker who contemplates asserting employment law claims against Boss will either have to give Boss an opportunity to address them before quitting or have a credible excuse for failing to give Boss such an opportunity.
Andrew Wolfe is Of Counsel to Monty White LLP, and can be reached at firstname.lastname@example.org