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

©2022 Seyfarth Shaw LLP  www.seyfarth.com 2022 Cal-Peculiarities | 251 Nonetheless, in a 2019 wage and hour case, the Court of Appeal rebuffed efforts to impose joint employer status on the owner of premises where another company has employed a worker. The Court of Appeal affirmed summary judgment for a gas station owner that was sued for unpaid wages and unprovided breaks by a station manager who worked for the owner’s operating company. The Court of Appeal held that the gas station owner was not a joint employer because the operating company alone made decisions on recruiting, interviewing, hiring, disciplining, promoting, and discharging employees, had sole control over payroll functions, and had its own employee handbook and set its own meal and break policies. The gas station owner could ask the operating company to “remove” an employee from a station “for good cause shown,” but the operating company had sole authority to discharge employees. It was immaterial that the gas station owner provided operation manuals and conducted station inspections that were given to the operator. The Court of Appeal concluded that (1) the operating company had sole control over the plaintiff’s wages and hours, (2) the gas station owner had no right to fire him and no role in either allowing him to work or preventing him from working, and (3) the gas station owner lacked the right to control the manner and means by which the plaintiff did his work . 446 ABC test not extended to joint employer issue. The Supreme Court, in the context of whether a worker hired by a company is its employee or independent contractor, has adopted an “ABC test” that heavily tilts toward employee status. (See § 19.6.) Both the Court of Appeal and the Ninth Circuit have rejected plaintiffs’ efforts to apply the ABC test to issues of joint employment. In 2019 the Court of Appeal stated: “the ABC test in Dynamex does not fit analytically with and was not intended to apply to claims of joint employer liability. ” 447 Similarly, the Ninth Circuit stated that Dynamex “has no bearing here, because no party argues that Plaintiffs are independent contractors.” Thus, while a defendant must satisfy the ABC test to defend its classification of a worker as an independent contractor, it need not satisfy the ABC test in resisting a claim that it is a joint employer . 448 The California Supreme Court thus far has declined to address this issue. In Vasquez v. Jan-Pro Franchising International , the high court rebuffed the plaintiff’s effort to expand the review of whether the Dynamex ruling is retroactive to the further question of whether Dynamex ’s ABC test governs issues of joint employment . 449 “Client employers.” The Legislature has created special liability for “client employers.” A client employer is an entity that obtains workers from a labor contractor to work within the entity’s usual course of business—for example, payroll, temporary staffing, and employee leasing agencies. Client employers share with their labor contractors “all civil legal responsibility and civil liability for all [non-exempt] workers supplied by that labor contractor,” in connection with the payment of wages and the securing of workers’ compensation coverag e. 450 Thus, if a client employer’s labor contractor fails to pay all wages or fails to procure sufficient workers’ compensation coverage for the contractor’s own non-exempt employees, the client employer can also be liable for these failures. The statute defines “wages” expansively, by reference to Labor Code section 200, to include incentive compensation, bonuses, and vacation pay. Client employers also have non-delegable responsibilities for worksite occupational health and safety. Of course, client employers can seek contractual indemnity against labor contractors that create liability for the client employer. Payroll companies. The Court of Appeal stemmed the tide toward expanding notions of joint employment in Goonewardene v. ADP, LL C , 451 w here a plaintiff suing for unpaid wages, wrongful termination, and inadequate wage statements sued her employer’s payroll company on a theory that the payroll company was her joint employer. The Court of Appeal, citing prior authorit y, 452 rejected the plaintiff’s contention that the payroll company was her joint employer, because the payroll company did not control her wages or her working condition s. 453