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Client Alert – New California Employment And Sexual Harassment Prevention Training Requirements

April 2, 2020

As many of you know, California’s new AB5 Law is in full swing. It has taken California, and especially Los Angeles based small businesses, by storm forcing many of these businesses to employ workers who were previously classified as independent contractors. To alleviate some of the burden, our attorneys have compiled all of the required (and optional) steps and documents to comply with state and federal employment laws. We call it the “2020 California Employer Compliance Kit” and is available upon request. Who Must Comply? The presumption is that all workers are employees. This means that any new worker that a California business aims to bring on board will be presumed to be an employee unless the employer can prove all of the following (in other words, to classify someone as an independent contractor, the business must prove all three of the following tests): (1) Worker is free from control and direction while performing his/her work (2) Worker performs work that is outside the usual course of your business (3) Worker is customarily engaged in an independently established trade, occupation, or business of same nature (with preferably other clients and having a license to perform the services). If you cannot satisfy all of the above tests, and therefore must classify the worker as an independent contractor, you must have all of the employment requirements in place to protect your business from stiff penalties. Some of the most common requirements include Wage and Hour laws, but do not neglect others such as an employee handbook, overtime/medical leave policies/procedures, offer letter with at-will language, training and posting requirements, etc. Please note that there are exceptions to AB5 that are buried within the law. Call us with any specific questions. Sexual Harassment Prevention Training Requirement In addition, another new law that affects small businesses is the Sexual Harassment Prevention Training requirement also effective January 1, 2020. Any business with five or more employees, including temporary or seasonal employees, must provide sexual harassment prevention training within 30 days of hire or within 100 hours worked if the employee will work for less than six months. The law requires at least two hours of training for supervisors and at least one hour of training to all non supervisory employees. Compliance is required by January 1, 2020 and once every two years thereafter.

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What California Employers Should Know to Comply with the New Coronavirus Emergency Paid Leave Laws

March 23, 2020

By: Ofer Barlev On Wednesday, the President signed the emergency paid leave law after it expeditiously moved from the U.S. House of Representatives to the Senate without much opposition.  The legislation provides much-needed help to those affected by the crisis.  Aside from providing free testing for the Coronavirus, the new law provides paid sick leave and paid family leave for workers.  In addition, the Treasury Department will also propose a direct cash payment to taxpayers, $300 billion in small business loans, $50 billion for the airline industry, and $150 billion to other distressed industries. The new law’s Paid Sick Leave component will require employers with fewer than 500 employees to provide their employees with two weeks (10 work days) of emergency paid sick leave pay resulting from Coronavirus absences.  If the employee is part-time, the wages paid will equal the number of hours the employee works on an average two-week period.  The employers may not require their employees to first exhaust other forms of paid leave (such as sick leave or paid time off) before allocating this Coronavirus paid sick leave. There are specific payment structures and caps attached to the law that must be examined for each situation.  Importantly, the law does not carry-over and will terminate on December 31, 2020.   Please note, the law allows the Secretary of Labor to exempt health care providers, emergency responders, and employers with less than 50 employees.  Such entities must wait until the Secretary of Labor provides this exemption through additional regulations. Posting Requirements, Compliance, and Caps The law also requires employers to post a notice in the workplace of the paid sick leave rights (and the Secretary will provide language for the notice within seven days).  If employers fail to comply with this new law, they will be subject to penalties similar to those issued for minimum wage violations.  Any employer who provides the paid sick leave wages to its employees due to the Coronavirus will receive payroll tax credits quarterly if they are above the required Social Security taxes the employer ordinarily owes.   The paid sick leave wages are capped at $511 per day (or $200 per day if the leave is to care for a child or family member) for up to 10 days per employee in each calendar quarter. Employers who must also offer emergency Family and Medical Leave Act (“FMLA”) wages would be entitled to tax credits equal to the entire amount paid per calendar quarter.  Such Emergency FMLA tax credits are capped at $200 per day for each individual up to $10,000 in the aggregate per calendar quarter.  Please note that regular FMLA applies to private employers with 50 or more employees and the employees are eligible (eligibility for benefits requires that the worker has worked for the employer for at least 12 months, has worked at least 1,250 service hours for the employer during the 12-month period immediately preceding the leave, and works at a location with at least 50 employees that is within 75 miles.)  California’s Family Rights Act provides additional protections. If the Employer Closes the Office, What Legal Requirements Must be Followed? If […]

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Lessons Learned by Los Angeles Business Attorneys

October 8, 2019

With access to skilled talent, and seemingly unlimited venture-funding, it is no surprise that California leads the nation in the number and successful launching of companies.  Over the last several years, California healthcare and technology startups have raised almost $10 billion annually.  California has Silicon Valley, Silicon Beach, incubators, accelerators, coworker spaces, and leading venture capital firms.  Each week, business attorneys are busy guiding entrepreneurs from idea to implementation and from startups to emerging growth companies.  They connect creative individuals with savvy consultants and corporate strategists.  At Citron & Deutsch, we pride ourselves on being the go-to law firm for technology and healthcare startups for local entrepreneurs.  Having provided effective, timely, and comprehensive counsel to 1,000s of companies, our startup attorneys are able to leverage that experience to guide and connect nascent companies en route to successful funding rounds and sustainable expansion.  Through our decades of representation, we noticed trends and learned lessons.  Now, we embark to offer some of those to our clients. (1) Business Plans: Critical Component of a Promising Startup As one of the first critical steps in any startup endeavor, business plans and decks should be carefully crafted.  Founders should be continuously involved in the drafting and polishing of these plans and solidify their “elevator pitch.”  Our firm is often used as a sounding board to review business plans, draft business plans, and provide early-stage advice. The process of drafting the business plan is crucial because it forces the participants to look at the business in an objective, critical, and unbiased manner. Entrepreneurs must analyze all the elements, from different angles, that are necessary to make the business successful.  They must then articulate the need that the product or service aims to meet or the problem that it seeks to solve – preferably in a straight-forward and concise manner.  The process of preparing the business plan will showcase missing components in the organizational structure, require a deep analysis of competitors and the market, and project expenditures, such as for selling, general, and administrative (SG&A), research and development (R&D), and intellectual property protection. The process of creating and refining the plan of the owners or founders of the business leads to a realistic appraisal of the business’s chance of success before committing time and money to it. (2) Importance of Compensation Allocation: Set Reasonable Salary and Equity Expectations Compensation decisions may have a serious impact on a startup’s ability to attract investors and raise capital. Based on our experience, most founders of startups are paid less than $100,000 in annual salary, with many receiving $50,000 or less.  Therefore, those who start companies should bear in mind the savings required to adequately sustain the early phase of a company’s evolution.  To lead by example, lower salaries for founders and senior executives set similar expectations for other employees. Before any substantial fundraising may start, business owners should determine the nature and amount of compensation for founders and management executives, considering that the lower salaries and overhead will be more attractive to investors.  At the same time, what attracts talent are equity grants, incentives compensation based on milestones, and other […]

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California Adopts Stricter Test for Independent Contractors

April 1, 2019

On April 30, 2018, the California Supreme Court, in the c a s e Dynamex Operations West, Inc. v. Superior Court, adopted a new, stricter test for determining whether workers are employees or independent contractors under California wage orders. Under the new standard (the “ABC test”), workers are presumed to be employees unless the employer demonstrates each of the following factors:

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AVOIDING LIBEL & SLANDER IN THE WORKPLACE

April 1, 2019

A California employer who terminates an employee may face, among other things, a lawsuit from the terminated employee in the form of an action for libel or slander, or for violation of the California Labor Code. Libel and Slander. In the employment context, “libel” is a false and unprivileged writing which has a tendency to injure the person in his occupation; and “slander” is a false and unprivileged oral statement which imputes a general disqualification of the person’s capacity in his office, profession, trade or business.

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