UPDATES FOR CALIFORNIA EMPLOYERS – JULY 2017
Current Drug Use Not Protected Under ADA
A recent federal court decision is a good reminder that applicants or employees who currently use illegal drugs or marijuana or abuse alcohol are not protected under the Americans with Disabilities Act (ADA) or the Fair Employment and Housing Act (FEHA). Conduct is key: The disease of addiction may be protected but misconduct is not (Scott v. Harrah’s LLC. (D. Nev. 2017)).
The case involved an employee of Harrah’s Hotel and Casino who had worked there about nine years. The employee informed management that he suffered from drug addiction and voluntarily sought treatment and rehab. Harrah’s accommodated his treatment program by adjusting his schedule.
Harrah’s suspected that the employee was under the influence of drugs on several occasions after going through rehab. In November 2015, the employee went back to rehab. The next month, Harrah’s drug tested him, and the results came back positive. The employee admitted that he used marijuana a couple of weeks before the test. Harrah’s allegedly informed the employee that he was not taking rehab seriously and fired him. The employee sued for disability discrimination.
The court dismissed the employee’s lawsuit on the ground that current users are not protected under the ADA. The employee claimed his disability was that he is a drug addict. However, the ADA protects only individuals with a record or history of drug addiction who are not currently using drugs and have been successfully rehabilitated. Employers can prohibit illegal drug and alcohol use in the workplace.
“Current use” is broader than just using drugs on the day of a drug test. Courts have held that using drugs in the weeks and months prior to discharge qualifies as current use.
The Labor Commissioner Fined a General Contractor Nearly $250,000 for Wage-and-Hour Violations Committed by its Subcontractor
This is the first time that the Labor Commissioner has held a general contractor responsible for wage theft by its subcontractor by issuing citations under AB 1897 (section 2810.3 of the Labor Code), which took effect on January 1, 2015.
AB 1897 holds business entities responsible for wage-and-hour violations of their subcontractors, staffing agencies or other labor contractors that supply workers. In brief, if a labor contractor fails to pay its workers properly or fails to provide workers’ compensation coverage for those employees, the “client employer” can now be held legally responsible and liable.
In this particular matter, a general contractor hired a drywall and framing subcontractor for a hotel construction project in Southern California. According to the Labor Commissioner, the subcontractor shorted its workers, not paying them for four weeks.
The wage theft came to light after several of the subcontractor’s workers walked off the job and filed wage claims with the Labor Commissioner for nonpayment of wages. The Labor Commissioner’s investigation revealed that the subcontractor paid the workers from an account with insufficient funds and skipped several pay periods for the majority of the workers.
Investigators also learned that the subcontractor failed to pay overtime wages to many of the workers, who worked up to two overtime hours per day.
The Labor Commissioner’s Office issued citations against both the general contractor and the subcontractor for unpaid overtime and minimum wages, waiting time penalties, rest period premiums and civil penalties for work performed over little more than a one-month period.
The subcontractor did not challenge the citations, but the general contractor contested its liability for the subcontractor’s wage theft. However, on May 16, the hearing officer affirmed that the general contractor was responsible as a “client employer” and owed $249,879 for overtime and minimum wages, liquidated damages, waiting time penalties and civil penalties.
Penalties Just Got Very Costly for Los Angeles Employers
The Los Angeles City Attorney’s Office and the City’s Office of Wage Standards (OWS) announced this week that they are demanding $1.45 million in penalties from Carl’s Jr. Restaurants for the alleged failure to comply with the city’s minimum wage laws at several Los Angeles locations.
On July 1, 2016, of last year, the City of Los Angeles implemented a minimum wage rate of $10.50 per hour for employers with 26 or more employees and $10 per hour for employers with 25 or fewer employees. These rates will increase this week.
The OWS can investigate and take administrative action to enforce the minimum wage.
The city launched an investigation after receiving a complaint from a Carl’s Jr. employee. The investigation into the company’s financial records revealed that 37 employees were allegedly not paid the required minimum wage from July 1, 2016, to December 31, 2016.
Carl’s Jr. was also cited for allegedly failing to post the mandatory Los Angeles minimum wage and paid sick leave poster at two Los Angeles locations. Employers must post the OWS’ Wage and Sick Time Notice in a conspicuous place at any workplace or job site in English and any other language(s) spoken by at least five percent of the employees at the workplace or job site.
“LA law is clear: employees must be paid at least the minimum wage. Anything less is a slap in the face to workers struggling to make ends meet. This is a major corporation that should know the rules,” said City Attorney Mike Feuer, in a written statement. “Our offices will always aggressively stand up for workers to ensure they get the wages they’re owed, and all the protections and benefits the law demands.”
The penalty being sought is high: The City is demanding that the company pay $910,010 in penalties to the 37 employees identified in the investigation by July 24, 2017. The City is seeking an additional $541,423 in penalties and fines for allegedly violating the City’s minimum wage law, failing to post the required notice and failing to provide investigators access to interview employees at two locations.