Cal-Peculiarities: How California Employment Law is Different 2022 Edition

244 | 2022 Cal-Peculiarities ©2022 Seyfarth Shaw LLP  www.seyfarth.com Enforcement : Most ordinances empower not only local enforcement officials but also employees to sue the employer for violations of the ordinance. Notice : The ordinances usually require employers to post a notice in a conspicuous spot at the workplace, to provide a copy of the notice to employees, or both. Sunset : Most ordinances were set to expire 90 or 120 days after the ordinance took effect. But some cities, such as South San Francisco, linked the sunset date to California’s Blueprint for a Safer Economy: once a pre- designated reopening tier applies, the ordinance sunsets. While most hazard pay ordinances are similar, a few have special quirks. For example: South San Francisco required employers to pay employees up to four hours for time spent obtaining a Covid-19 vaccine. (As of March 29, 2021, the California Supplemental Paid Leave law, see § 2.14, March 29, 2021, also has covered paid leave for vaccinations.) San Francisco caps hazard pay. Covered San Francisco grocery and drug store employers had to pay all employees an additional $5 per hour, up to a maximum of $35 per hour. So an employee who already earned $33 per hour would be entitled to hazard pay of only $2 per hour. San Francisco narrowly defined covered employers as grocery and drug stores with at least 500 employees nationwide and at least 20 employees in San Francisco, but also covered third-party janitorial and security contractors whose employees work in covered grocery and pharmacy retail stores, regardless of how many employees the contractor has. So if a small security contractor serviced a large grocery store, then the security contractor had to comply with the ordinance. 7.18 Tips In America generally, employers may use a “tip credit” by which they can count the amount of tips that customers leave for employees toward payment of the employee’s minimum wage: federal law and many state laws permit an employer to pay a tipped employee a sub-minimum base wage as low as one-half the minimum wage, provided that the amount of tips brings the actual wage up to the minimum wage . 396 In California it’s different. A California statute forbids any employer to take any “gratuity or a part thereof … left for an employee by a patron, or … require an employee to credit the amount … of a gratuity against … the wages due the employee.” “Every gratuity” is the “sole property of the employee” for whom it was left. ” 397 Accordingly, employers of California service employees encounter a triple whammy. First , the state minimum wage is considerably higher than the federal minimum wage (see § 7.2). Second , the tip credit permitted by federal law is forbidden under California law: every “gratuity” becomes the sole property of the employee to whom it is paid, regardless of the base rate of pay, which means that the employee must receive at least the minimum hourly wage in addition to how many tips the employee receives . 398 T hird , certain limitations apply to any “tip pooling” schem e. 399 For example, tips from the pool must not go to any “agent” of the employe r. 400 The California Supreme Court has held that service employees lack a statutory right to sue for unlawful tip- poolin g, 401 but suggested that employer diversion of gratuities might be tantamount to actionable conversio n. 402 And a 2019 Court of Appeal decision suggested further remedies, including a claim for restitution under the Unfair Competition Law . 403 In that case food and beverage banquet service employees alleged that the banquet facility’s “mandatory service charge” of 21 percent should have gone exclusively to service staff but instead went to the employer and to managers and other non-service employees, even though the customers paying this charge