Employer Requirements for Lactation Accommodations

Posted by on Feb 5, 2018 in Newsflash | 0 comments

The California Labor Commissioner recently published a Frequently Asked Questions (FAQ) Memo regarding lactation accommodations under Labor Code Section 1030.  While the FAQ memo does not contain any new concepts, it does clarify the following principles: California employers must provide a net 10-minute paid rest period for every four hours worked (or major fraction thereof). To the extent practicable, the break shall run concurrently with the rest time authorized for the employee by the applicable wage order; A “net” of ten minutes, means that the rest period begins when the employee reaches an area away from the work area that is appropriate for rest; An employee is entitled to one hour of pay at the employee’s regular rate for each workday that a rest period is not provided; Employers are required to provide suitable resting facilities that shall be available to employees during working hours in an area separate from toilets. The room or location may include the place where the employee normally works if it otherwise meets the requirements of the law. Note, that federal law prohibits employers with 50 or more employees from requiring employees to express breast milk in a bathroom; An employer must allow an employee to leave the work area to pump, but the employer does not have to pay for pumping time, beyond the standard break time; As an employer, you are not allowed to require the employee to submit any documentation regarding her need to pump; An employer may not require an employee to remain on premises during a rest period; An employer may not require that an employee remain in radio communication during a rest period; An employer is not required to provide an employee break time for purposes of lactating if doing so would seriously disrupt the operations of the employer. The Labor Commissioner advises employees that they may file claims if their employers fail to meet their break obligations.  If you have any questions regarding accommodations for lactation or any other employment issues, the attorneys at Navigato & Battin are here to...

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Is it Appropriate to Use Electronic Transmission for Shareholder Communications?

Posted by on Feb 5, 2018 in Newsflash | 0 comments

In today’s age, the vast majority of people and businesses communicate through email versus old fashion mail.  However, when it comes to official shareholder communications, the California Corporations Code has specific requirements for the right to transmit information electronically. Under California Corporations Code, Section 20, the Code permits the use of electronic transmissions for communications under or pursuant to the Corporations Code only if: The recipient has provided an unrevoked consent to use those means of transmission for such communications; and The transmission creates a record that is capable of retention, retrieval, and review, and that may thereafter be rendered into clearly legible tangible form. Additionally, if the transmission is to a shareholder who is a natural person, the consent to the transmission must be preceded by or include “a clear written statement to the recipient as to (a) any right of the recipient to have the record provided or made available on paper or in nonelectronic form, (b) whether the consent applies only to that transmission, to specified categories of communications, or to all communications from the corporation, and (c) the procedures the recipient must use to withdraw consent.” Several sections of the Corporations Code clearly allow communications (including notices of shareholder meetings, notices disclosing actions taken by written consent of shareholders, and the delivery of annual financial reports) to be made by electronic transmission, but only if they are compliant with Section 20. While remote, a non-compliant transmission may give disgruntled shareholders a basis for a valid objection, which may invalidate the notice and the subsequent meeting and at a minimum be disruptive to business. Given the stringent requirements of Section 20, sending notices through regular mail may be the most reliable and efficient way to comply with the law. If you have questions regarding any of the shareholder meetings or need assistance with any corporate governance issue, the attorneys at Navigato & Battin are here to...

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Equipment Leasing – the Good, the Bad, and the Ugly

Posted by on Jan 3, 2018 in Newsflash | 0 comments

The New Year provides an opportunity for reflection for both individuals and businesses alike.  For businesses, it is a time to reassess operations and determine if any changes should be made.  Whether it be moving your company, updating your office technology, or renewing or entering into new equipment leases, many companies use this time to plan for the next year. Typically, companies have three options when acquiring new office equipment technology: (1) pay cash; (2) obtain a loan to finance the equipment; or (3) lease the equipment.  Most companies have chosen the last option at some point in their business lives, with eight out of ten American companies using leasing as their preferred method of acquiring office equipment.  One of NavBat’s clients has been offering office machine leasing to Southern California businesses for more than three decades.  So we asked the President of Velocity Imaging Products, John Stavola, to provide a summary of the advantages and pitfalls of equipment leasing.  Here is what he had to say: There are numerous benefits to leasing, such as: (1) it requires little to no cash out of pocket at the time of acquisition; (2) depending on the type of lease, leases may be considered an operational expense (rather than a capital expense); however, it is always best to consult with your tax professional concerning the means by which you expense an equipment lease; (3) leasing allows a business to hedge against the risk of equipment obsolescence and provides the ability to upgrade equipment as needs change; and (4) customers typically receive much faster customer service when problems arise with the leased equipment than they would if they owned the equipment. While equipment leases have many significant advantages, business owners should also be equally aware of the common pitfalls that may occur with these leases.  At the outset, it is important for customers to understand that equipment leases are commercial leases, meaning they do not have to comply with the truth in lending laws.  This is significant because it means that commercial leases can require a business to provide the leasing company with a “letter of intent” within a specific window near the end of the lease in order to avoid automatic lease renewal.  In the event this letter of intent is not sent to the leasing company, the lease will go into “evergreen” status (automatic renewal) for a period of time.  An example of such language is as follows: “this agreement will renew for 90 days unless you provide a written notice to us between 90 and 150 days prior to the end of the lease with your intent to either purchase the equipment or return it to the leasing company.” Furthermore, the “letter of intent” most likely needs to be sent to the leasing company (with whom the business owner has probably never had any interaction) and not the service provider of the leased business equipment (e.g., a copier/printer).  The good news is that these pitfalls can be avoided so long as the business owner reads and understands the terms of the equipment lease before signing it.  Make sure to keep a fully executed copy of the written lease agreement to help navigate the proper termination of the lease and the rights and obligations of the business during the term of...

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California’s New Employment Laws – 2018

Posted by on Jan 3, 2018 in Newsflash | 0 comments

As has become the norm in California, a slew of new employment laws will go into effect this year that will dramatically affect certain businesses throughout the state.  It is advised that all California employers review the new laws below and implement the necessary changes, or speak with Navigato & Battin to find out how such laws may affect your operations in 2018 and beyond. Minimum Wage Increase Beginning on January 1, 2018, California employers with 25 employees or less are required to pay a minimum wage of $10.50/hour.  For those employers with 26 employees or more, the minimum wage is set at $11.00 an hour.  The minimum wage in the City of San Diego will not increase in 2018 and instead will remain at $11.50.  If your business is located within the San Diego city limits, make sure you are complying with the increased minimum wage and not California’s lower standard, regardless of the number of employees your company employs. AB 1008 – “Ban the Box” Effective January 1, 2018, employers may no longer ask applicants for employment, either in writing or orally, about their conviction history until a conditional offer of employment is made. After an offer of employment is made conditioned on a background check, the employer may conduct a criminal history background check.  If the background check reveals a criminal conviction, and the employer wants to deny the applicant the position at least in part because of the conviction, the employer must engage in an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that would justify denying the applicant the position.  Such assessment is not required to be in writing, but the assessment should consider: the nature and gravity of the conduct, the time that has passed since the criminal activity, and the nature of the job sought.  Thereafter, the employer must notify the applicant of its decision in writing which must include the conviction(s) which formed the basis for disqualification, a copy of the conviction history report, and an explanation of the applicant’s right to respond to the preliminary decision.  The applicant then has at least five business days to respond to the preliminary decision.  The employer must consider the information provided by the applicant before making a final decision.  If a final decision to deny employment is made, the employer must again notify the applicant in writing and explain any existing procedure the employee has to challenge the decision or request reconsideration.  The notice must also disclose that the employee has the right to file a complaint with the Department of Fair Employment and Housing. Additionally, employers may not consider or disseminate information about the following at any time: (a) an arrest which did not result in a conviction, excepting in extremely limited circumstances; (b) referral to or participation in a pretrial or post-trial diversion program; or (c) convictions that were expunged or sealed. SB 396 – Harassment Prevention Training Regarding Gender Identity, Gender Expression, and Sexual Orientation For many years, California has required those employers with 50 or more employees to provide two hours of sexual harassment prevention training to all supervisory employees within six months of their assumption of a supervisory position and once every two years thereafter....

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The Necessity of Revising (or Creating) Sexual Harassment Policies

Posted by on Dec 1, 2017 in Newsflash | 0 comments

Over the course of the past few months, sexual harassment allegations in Hollywood, mainstream media, national politics, college and professional sports, and other high-profile areas have become hard-to-avoid front page stories.  The #MeToo campaign has also quickly picked up steam, with women (and men) of all backgrounds and all professions sharing their stories of abuse and harassment.  It is estimated that #MeToo has been retweeted almost 2 million times across 85 countries. With such heightened scrutiny, employers should create or revisit their sexual harassment policies to ensure that their companies are not only abiding by the law but also protecting their employees.  As one can imagine, harassment results in low employee morale, decreased productivity, and low retention rates.  Additionally, in terms of the monetary costs of harassment in the workplace, the U.S. Equal Employment Opportunity Commission reports that employers paid over $160 million to victims of sexual harassment in 2016—a number that is likely to grow substantially in 2018 given the high-profile events dominating the news. Now more than ever, employers must have a comprehensive harassment policy in place.  Below we have included some tips to consider when drafting or revising your sexual harassment policy. Drafting a Sexual Harassment Policy Pursuant to California’s Fair Employment and Housing Act (“FEHA”) regulations, employers with five or more employees must create detailed written policies for preventing harassment, discrimination, and retaliation.  Under the regulations, the written policy must: (1) list all of protected classes under FEHA; (2) allow employees to report to someone other than a direct supervisor; (3) instruct supervisors to report all complaints; (4) state that all complaints will be followed by a fair, complete, and timely investigation; (5) state that the employer will maintain confidentiality to the extent possible; (6) state that remedial action will be taken if any misconduct is found; (7) state that employees will not be retaliated against for complaining or participating in an investigation; and (8) state that supervisors, co-workers, and third-parties are prohibited from engaging in unlawful behavior under the FEHA. Training Personnel California state law requires employers to provide supervisory employees with two hours of interactive sexual harassment training and education every two years. (Cal. Gov. Code §12950.1.)  This requirement applies to any company that employs 50 or more employees in any 20 consecutive weeks in the current or preceding calendar year.  There is no requirement that all of the employees work in one location or even reside in California.  Among other things, the training must cover certain defined topics, must take place at least every two years and within six months of an employee assuming a supervisory position, must detail the company’s policy and the complaint procedure, and must be conducted by trainers that meet certain requirements.  For more information on the required training, visit the California Legislative Information website. Even though California does not currently mandate this training for employers with 49 employees or less, all employers should still consider providing training on their harassment policies to both employees and supervisory employees.  Among other things, the training should include: what constitutes harassment, how to report harassment complaints, how supervisors should respond to harassment complaints, and the employer’s investigative process. Communicating Policies All harassment policies must be distributed to employees.  Even if your company has already distributed its policy and is not making...

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What is a UCC-1 Financing Statement and Why Should I File One?

Posted by on Dec 1, 2017 in Newsflash | 0 comments

The Uniform Commercial Code (“UCC”) is a set of laws governing commercial transactions, such as the sale of goods, secured transactions, and negotiable instruments.  For the purposes of this article, we are focusing on secured transactions under Article 9 of the UCC.  Broadly, a “secured transaction” occurs whenever a party gives an interest in personal property to secure payment or performance of an obligation. A UCC-1 financing statement (“UCC-1”) is a document that provides notice to interested parties that the secured party has a security interest in the debtor’s personal property.  It is the most common of the several ways to “perfect” a security interest, i.e., to ensure that the secured party’s claim to the collateral has priority over later secured transactions, liens or even claims by purchasers.  Any person or entity that lends money to an individual or entity that is secured by the borrower’s personal property should file a UCC-1 or take other steps to perfect its security interest, to increase the chances that the collateral will be available to satisfy the debt, if necessary.  Despite the best of intentions, the plain fact is that borrowers sometimes encounter financial distress, making it difficult to repay their lenders.  The borrower may even die prior to paying off the loan.  In such circumstances, without a UCC-1 in place, you may lose all or part of your rights in the collateral. Properly and timely filing a UCC-1 establishes you as a perfected secured party.  This means that if the debtor goes bankrupt or dies, you have a “place in line” when the court distributes assets.  As a perfected secured creditor, you are at the front of the line, only potentially behind certain governmental and priority claims or those creditors who have filed a UCC-1 before you.  Failure to file a UCC-1 means that you are unperfected and thus placed in the “back of the line,” behind other secured creditors who perfected their interest, regardless of when those transactions occurred.  Therefore, this simple action greatly improves your chances of recovering all, or at least part, of your money. A UCC-1 should be filed with the secretary of state’s office in the state where the debtor is incorporated or lives.  A UCC-1 does not expire until the loan is paid in full, but in many jurisdictions including California, it must be renewed every five years.  If you need any assistance in filing a UCC-1 or have any questions about them, the attorneys at Navigato & Battin are here to...

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Under a New Law, Employers Can No Longer Ask an Applicant for Salary History

Posted by on Nov 1, 2017 in Newsflash, Uncategorized | 0 comments

A bill which takes effect January 1, 2018 will prohibit California employers from asking prospective workers about their salary history.  The bill, AB 168, was signed by Gov. Jerry Brown on October 12th and, according to proponents, will help close the gender wage gap.  For those following the legislative trend, AB 168 is no real surprise.  Two years ago, Brown signed the California Fair Pay Act, a comprehensive law requiring employers to pay men and women equal salaries for “substantially similar” work.  A subsequent law made it illegal to base compensation solely on a worker’s past salary. The new law applies to both men and women but, as one might imagine, it is mainly aimed at countering discrimination which can follow a woman from job to job.  According to the bill’s principal author, Susan Talamantes Eggman (D-Stockton), AB 168 “gives women the power to determine for themselves where they start negotiating.” California employers of all sizes need to carefully review their recruiting and hiring practices to make sure they are compliant.  Employers should review all recruiting and hiring documentation, including employment applications and written interview questions or outlines.   Also, employers should avoid interview questions which, while not directly asking about salary history, may elicit that information. Some elements and effects of the law which California employers should keep in mind: Applicants are free to volunteer information on prior pay and benefits, and if they do, employers may consider previous compensation in their offers. Employers are required to provide applicants, upon request, with a salary range for the jobs they seek. The prohibition against asking for salary history applies to communications “orally or in writing, personally or through an agent” – potentially extending, for example, to recruiting firms. Employers should confirm with any recruiting firm, in writing, that the firm will not ask for salary history in any of its requests for information from an applicant. Multi-state employers will need to decide whether to remove any reference to salary history from their current recruiting/hiring processes, or set up a different set of processes for California (and other states which adopt similar laws). The bill only applies to jobs within the state but employers should assume that it will apply to employers soliciting Californians for jobs out of state. California continues to be a daunting place to be an employer.  If you need assistance reviewing your current employment policies for compliance with new and existing state and federal laws, feel free to contact the attorneys at Navigato & Battin,...

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Will Your Electronic Signature Hold Up In Court?

Posted by on Nov 1, 2017 in Newsflash, Uncategorized | 0 comments

A frequent question we get asked is whether electronic signatures are binding.  Electronic signatures are those signatures executed through a signature service company, such as DocuSign, Adobe, or a company’s internal system.  For the purposes of this article, electronic signatures do not include those signatures whereby the signer actually signs a document and emails or faxes the signed document to the receiving party. However, the issue is not whether electronic signatures are binding, they clearly are.  It is whether a particular signature can be “authenticated.”  In other words, can it be demonstrated that the person who is alleged to have signed the document was actually the signatory?  Due to the increasing use of electronic signatures, the federal government enacted the United States Electronic Signatures in Global and National Commerce (ESIGN) Act and the Uniform Electronic Transactions Act (UETA) (collectively referred to as the “Acts”) to address electronic signature issues.  The Acts have four major requirements for an electronic signature to be recognized as valid (and authenticated) under U.S. law: Intent to sign – electronic signatures are only valid if each party intends to sign. Consent to do business electronically – both parties must consent to do business electronically. Association of signature with record – the system used to capture the transaction must keep an associated record that reflects the process by which the signature was created, or generate a textual or graphic statement (which are added to the signed record) proving it was executed with an electronic signature. Record retention – the electronic signature records must be capable of retention and accurate reproduction for reference by all parties or persons entitled to retain the contract or record. California’s Uniform Electronic Transactions Act is equally concerned with the authentication issue for electronic signatures and provides that “[a]n electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.” (Civ. Code, § 1633.9, subd. (a).) Signature service companies such as Adobe and DocuSign have certain processes in place to ensure the authentication process and courts have recognized that a DocuSign-executed agreement is presumptively authentic. (See Newton v. American Debt Services, Inc. (N.D. Cal. 2012) 854 F.Supp.2d 712, 731, aff’d (9th Cir. 2013) 549 Fed.Appx. 692.)  In Newton, the plaintiff argued that “there is no proof that the electronic signature on the … contract [containing the arbitration provision] is hers.” (Id.)  The Newton court explained the DocuSign authentication process: In the instant case, the ADS contract was signed using DocuSign, a company that is used to electronically sign documents in compliance with the U.S. Electronic Signatures in Global and National Commerce Act (ESIGN). Under ESIGN, electronic records and signatures that are in compliance with ESIGN are legally binding. Are Electronic Signatures Legal?, DocuSign, https://www. docusign.com/content/are-electronic-signatures-legal (last visited Jan. 24, 2012); see also 15 U.S.C. § 7001 (2006). DocuSign permits a company to send documents to a customer for their signature. The customer opens the document for review containing areas marked for the signatory to execute. The signer creates a signature and must click a button saying “Confirm Signing” once...

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HOW TO REVIVE A SUSPENDED BUSINESS ENTITY IN CALIFORNIA 

Posted by on Oct 2, 2017 in Newsflash | 0 comments

Several months ago, we posted an article titled: Failure to File a Statement of Information or Pay California’s Franchise Tax May Result in the Loss of Your Company’s Name, discussing the importance of complying with the California Secretary of State and California Franchise Tax Board’s (“FTB”) requirements to ensure your company remains in good standing.  As we explained, an entity may be suspended by the Secretary of State for failing to file its Statement of Information on time or by the FTB for failing to file tax returns, pay taxes, or pay the yearly $800 FTB tax.  However, if your company has gotten suspended, it can be revived (with some additional stress and money…of course!). Reviving an Entity Through the Secretary of State Entities labeled as “SOS Suspended” are suspended by the California Secretary of State for failing to file a Statement of Information.  These entities can be revived by paying a penalty, which is typically $250, and filing the missing Statement(s) of Information.  Often times, the Secretary of State will assess the $250 penalty prior to suspending the entity, so your company may still be “Active” on the Secretary of State’s website and still owe the penalty.  Once the penalty has been incurred, in order to avoid suspension it must be paid. Reviving an Entity Through the Franchise Tax Board Reviving an entity that is “FTB Suspended” is a bit more complicated.  First, unless you are aware of why the FTB has suspended your entity, you will need to call the FTB to determine the reason for the suspension.  Second, the entity must file an Application for Revivor, which is Form 3557 on the FTB website.  This form must be submitted by an owner, officer, or a majority of the company’s board of directors or managers.  With this form, the entity must file all delinquent tax returns and pay all delinquent taxes, including penalties and interest.  Depending on the company’s specific situation, this process can take anywhere from a couple of weeks to a couple of months.  Upon compliance with the FTB’s requirements, the FTB will check with the Secretary of State to ensure the name is still available (companies lose rights to their names when suspended).  After that, the FTB will issue a Certificate of Revivor, which reinstates the entity.  The Secretary of State will then change the entity’s status back to “Active”. Potential Problems with Contracts As discussed in our previous article on the topic (referenced above), when an entity is suspended, contracts entered into by the entity during that time are voidable.  Reinstatement does not change this fact.  If a contract was voided during the period of suspension, it will remain voided after the entity is revived.  Additionally, if a contract was entered into during the suspension but was not voided during the suspension, it can still be voided by the other party after reinstatement. Luckily, entities can protect themselves against this consequence, but like all things in California, it will cost you.  Relief can be obtained by filing the Relief From Contract Voidability, Form 2518 and paying a penalty of the lesser of: (1) $100 per day; or (2) an amount equal to the amount of the taxes due for that year (less any interest or penalties assessed with the taxes).  Once the form...

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FLSA’S SALARY EXEMPTION INCREASE OVERTURNED

Posted by on Oct 2, 2017 in Newsflash | 0 comments

In May 2016, President Obama signed into law a measure that would increase the salary requirements relating to the federal white-collar overtime exemption under the Fair Labor Standards Act (“FLSA”).  The law was supposed to take effect on December 1, 2016, and aimed to prevent workers from being denied overtime pay under the white-collar exemption if they made less than $913 per week (or $47,476 per year) as a full-time employee.  However, on November 22, 2016, a federal district court judge in Texas placed an injunction on the Department of Labor’s overtime rule revision, thus delaying the revision’s December 1st effective date. On August 31, 2017, the federal district court in Texas granted summary judgment for the plaintiffs in the case, who were comprised of various business groups and 21 states.  Judge Mazzant ruled that in doubling the salary required under salary test, the Obama administration’s proposed alteration of the FLSA was not “reasonable” and therefore did not warrant the “deference” otherwise shown by courts to regulatory actions under the Chevron precedent.  “The Department has exceeded its authority and gone too far with the Final Rule,” he ruled.  “Nothing in [FLSA] Section 213(a)(1) allows the Department to make salary rather than an employee’s duties determinative of whether a ‘bona fide executive, administrative, or professional capacity’ employee should be exempt from overtime pay.” It is unlikely that the Trump administration will appeal this ruling.  Therefore, for the time being, the federal “salary test” under the FLSA remains at $23,660 annually ($455/week) for exempt employees.  But before you start slashing your payroll, please note- similar California law still requires a significantly higher minimum salary for an employee to be classified as “exempt” under state law, and employers in California are required to comply with both sets of laws.  If you have any questions concerning whether your company’s employees are being properly classified as “exempt” or “non-exempt” or any other employment-related questions, the attorneys at Navigato & Battin are here to offer you assistance....

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