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Mid-year review for California employers

It’s the Law

Posted: July 11, 2008 1:02 a.m.
Updated: September 11, 2008 5:02 a.m.

It has been a busy year for the courts and the legislature when it comes to changes in employment laws, and we have only completed the first six months. With additional landmark cases on the horizon, and a number of pending pieces of legislation, we could see a number of additional changes in the law over the last half of 2008, as well. The following are just a few of the new rules that employers should be aware of.

In May, President Bush signed into law the Genetic Information Non-Discrimination Act of 2007, or GINA for short. GINA prohibits covered employers and insurance companies from using genetic tests or test results when making decisions regarding employment, health care coverage, premium levels or enrollment eligibility in an employer-sponsored benefit program.

The changes will affect a number of other compliance-based laws, including ERISA, HIPAA, and FEHA. What this means for California employers is that no record or document reflecting the genetic information of the employee should be collected, maintained or distributed to a third-party. Failure to abide by the provisions of GINA could result in claims of discrimination, harassment and/or retaliation based upon genetic classifications.

Business travel
In order to accommodate the rising costs of fuel and costs of travel to employees, the IRS has (once again) increased the standard mileage rate for business travel reimbursement by eight cents, to 58.5 cents per mile, effective July 1.

While the California Division of Labor Standards Enforcement requires an employer to reimburse an employee for the business use of his or her personal vehicle, at or above the IRS approved rate, the California Supreme Court has held that the IRS rate is not “conclusively adequate” to compensate employees.

This means that California employers are responsible for making sure that their employees are not losing money by traveling for business without being compensated.

All employers are encouraged to begin reimbursing employees for business-related mileage traveled on or after July 1 at the new reimbursement rate, which could increase again if gas rates keep rising.

Drivers and cell phones
All employers should also be aware that as of July 1, California law prohibits drivers from using a handheld wireless telephone while operating a motor vehicle, unless using a “hands-free device.” However, in no case may a driver under the age of 18 use a wireless telephone or hands-free device while operating a motor vehicle.

While the Vehicle Code citation will be given to the driver for a violation of this law, if an accident is caused by an on-duty employee, performing work in the course and scope of his employment, and he or she is not in compliance with this new law, the likelihood that the employer will be held liable for injuries or damage arising out of the accident increases.

It is imperative for every employer to have an express, written policy prohibiting employees that drive while on company time from operating a cell phone without an authorized hands-free device.

Court decisions
The first half of 2008 has seen a number of court rulings that have interpreted existing laws.

n To change the standard for discrimination and retaliation lawsuits (the burden lies with the employee to prove the acts by an employer were not made for a “legitimate non-discriminatory purpose”)

n To define who may be sued for wage and hour violations (businesses, not individuals making the employment decisions)

n To determine when an arbitration agreement in an employment context is permitted (only when drawn very specifically, and the employee understands his rights)

State legislature
On the legislative front, a bill failed to pass through the Assembly Labor and Employment Committee that would have permitted employers with fewer than 25 employees to opt for a four-day, 10-hour per day work week, without violating the state overtime laws, or maneuvering through a difficult red-tape barrier.
In an era of astronomical gas prices, this bill would have alleviated the driving burden on employees and the costs of doing business for employers.

With all of the changes seen so far this year, and with a number of big changes yet to come, this is the time for employers to ensure they have a trusted source for advice for employment and labor issues. If a business fails to comply with these new requirements, the result can be a very expensive and time-consuming lawsuit in a system that frequently favors the employee over the employer.

Brian E. Koegle is an attorney with the law firm of Poole & Shaffery, LLP, a law firm which provides general counsel and litigation services to businesses and management personnel. His column represents his own views, and not necessarily those of The Signal. “It’s the Law” appears Fridays and rotates between members of the Santa Clarita Valley Bar Association,


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