Thursday, December 1, 2011

Employers - Incentives That Work

During these recessionary times, I often counsel frustrated business owners trying to find ways to give their employees incentives other than money but that are also effective in promoting the behavior and results that the business is looking for.


For instance, the owner of a yoga studio wanted her employees to sell more yoga apparel but she was already giving employees a 20% discount without requiring them to meet any sales goals to receive that discount. Our solution: revamp the program to give the employee discount only after a certain level of clothes sales had been met. It’s a win-win with employees receiving the discount and the business receiving increased sales.

Keep in mind that different incentives work for different employees. What’s important to one employee is not necessarily important to another and, thus, the solution oftentimes is to offer more than one type of incentive program. The goal, however, is to find a win-win solution that gives the employees something they want and at the same time the business gets what it wants.

Some other examples of non-monetary incentives include:

1. Recognize and thank good performance; don’t wait for a performance review to acknowledge good performance. Many employees truly appreciate the recognition and the business gets a continuation of the good performance.

2. Give employees extra time off with pay (assuming you or other staff can cover) but make sure you tell the employee(s) in advance; nothing ruins extra time off faster than simply springing it on employees and they have not had a chance to plan or make necessary arrangements with family and the like. Even a few days advance notice is usually adequate.

3. Seek employees’ opinions and ideas. According to many experts, a large proportion of employees leave their jobs not because of low wages, but because they feel overlooked and neglected; that their voices are not being heard. Take advantage of your employees’ experience and ask for input.

Just because employees are staying in their jobs doesn’t mean businesses are getting full productivity from them. Most businesses are continuing to function on bare minimum staffing but that doesn’t mean business owners can’t be creative in providing incentives to get the most out of their staff. And in doing so, employees can be given the opportunity to get what’s important to them.

For more assistance and ideas tailored to your particular business, contact Rhonda Shelton Kraeber, Esq. at Alvis Frantz & Associates, (925) 516-1617. I have been assisting employers with these types of issues as well as all aspects of the employer-employee relationship for 20 years.

It's Cheaper to Prevent it than to Defend it

Many, many employers practice an ostrich approach to employee relations; they stick their heads in the sand and hope for the best. Of course, this leaves another part of their anatomy exposed, but for some this strategy works just fine for years. But then that employee happens—and we all know who that employee is—and the gig is up. Employers MUST be pro-active and implement appropriate policies and procedures BEFORE that employee happens.


Employment litigation is one of the most expensive types of lawsuits. Additionally, the California labor laws are “gotchas.” Employers are either in compliance or they’re not, and there’s no grey area. For example, employers either strictly comply with the overtime pay requirements or that employee will eventually bring a claim before the Labor Commissioner who will look back at three years of payroll records and potentially cause an audit of all employees’ payroll records.

Typically, an employer that is out of compliance with one aspect of their employee relations is out of compliance with many. Recently, a woman employed by an upscale retail establishment reported her employer was violating the laws related to overtime pay, meal and rest breaks, frequency of pay, and itemization of pay, and had then fired her for filing a claim with the Department of Labor. Similarly, employers routinely confide they are operating without employee handbooks, without the required postings, without a solid system for documenting employees’ hours worked, and the like.

While most employers are not purposefully violating labor laws, the effect is the same—you pay. Defending against these claims and ultimately paying for years of transgressions is almost always a very expensive proposition and has been the downfall of many businesses. The solution is to get your ship in order NOW, before that employee comes along. In fact, that employee may already be working for you.

For more assistance tailored to your particular business, contact attorney Rhonda Shelton Kraeber, Esq. at Alvis Frantz & Associates, (925) 516-1617 or Rhonda@alvisfrantzlaw.com. As the only employment law specialist in East Contra Costa County, I have been assisting employers with implementation of appropriate policies and procedures, as well as all aspects of the employer-employee relationship, for 20 years.

"Hot" off the Press from the Courts - Another Victory for Employers

California employers have enjoyed some relatively rare victories in recent months. Most recently, in June 2011, the California Supreme Court – in a unanimous decision no less – sided with employers on an issue involving employer liability for employee actions at work. In so doing, the Court also provided a helpful primer on the history and rationale behind tort liability / comparative fault system.
In Diaz v. Carcamo, Docket No. S181627, filed June 23, 2011, the California Supreme Court ruled that when an employer admits vicarious liability for the negligent act of its employee, the plaintiff is precluded from also pursuing a negligent entrustment claim against the employer.
Plaintiff Dawn Diaz was severely and permanently injured when the vehicle she was driving on southbound Highway 101 in Ventura County was struck by a truck driven by defendant Jose Carcamo, an employee of Sugar Transport of the Northwest, LLC. The Carcamo/Sugar Transport truck had come across the center divider after it had been struck by a vehicle driven by defendant Karen Tagliaferri. Diaz sued Carcamo, Sugar Transport, and Tagliaferri, alleging 1) negligent driving by Carcamo and Tagliaferri; and 2) vicarious liability for employee Carcamo’s negligent driving and direct liability for its own negligent hiring and retention by Sugar Transport.
Before closing argument, Sugar Transport stipulated with plaintiff to vicarious liability for employee-driver Carcamo’s negligence, if any. Over Sugar Transport’s objections, the trial court admitted evidence of Carcamo’s driving and employment history (which included two prior accidents – one occurring only 16 days before the Diaz accident – Carcamo’s illegal immigration status, use of a “phony” Social Security number, lies on his employment application, and negative information garnered from reference checks).
The jury awarded over $17.5 million in economic damages and $5 million in non-economic damages, finding Carcamo and Tagliaferri had both driven negligently and that Sugar Transport had been negligent in hiring and retaining Carcamo as a driver. The Court of Appeal affirmed. Because of a conflict with prior decisions [Jeld-Wen, Inc. v. Superior Court (2005) 131 Cal.App.4th 853 and Armenta v. Churchill (1954) 42 Cal.2d 448], the California Supreme Court granted the petition for review of defendants Sugar Transport and Carcamo.
In reviewing the history of tort liability, the Court noted that when Armenta was decided in 1954, the California courts imposed tort liability on an “all-or-nothing” basis; that is, if the plaintiff contributed in any measure to his/her own injury, recovery was barred. Similarly, once an employer admitted vicarious liability for an employee’s tortuous conduct within the scope of employment, it didn’t matter whether it was submitted to the jury on a negligent entrustment claim and/or on a negligence claim against the employee. Either way, the employer would be liable for 100% of a plaintiff’s damages, or else not liable at all.
The “all-or-nothing” system was replaced with the comparative fault system in 1975. Under comparative fault, a plaintiff’s negligence merely reduced the damages awarded in proportion to the amount of negligence attributable to plaintiff, and damages among tortfeasors were now apportioned on a comparative negligence basis.
Finally, in 1986, California voters adopted Prop. 51 (as codified by Civil Code Sec. 1431.2) that limited the scope of joint liability amongst tortfeasors. More specifically, in cases based upon principles of comparative fault, each defendant is liable for all of the plaintiff’s economic damages, but only his/her/its proportionate share of the non-economic damages. Thus, non-economic damages are to be apportioned amongst the universe of tortfeasors, including non-joined defendants.
One group of defendants excluded from allocations of fault under Prop. 51 are employers who face only vicarious liability under the respondeat superior doctrine for torts committed by its employees in the scope of employment. In such cases, the universe of tortfeasors does not include the employer; rather, the employer’s share of liability corresponds to the share of fault allocated to the employee.
In reaffirming its holding in Armenta, the Court expressly disagreed with the plaintiff’s argument that an employer can potentially be held responsible for two shares of fault; one based on the employee’s negligent driving in the scope of employment (vicarious employer liability) and one based on the employer’s own negligence in hiring or retaining (direct employer liability). The Court reasoned that assigning to the employer a share of fault greater than that assigned to the employee whose negligent driving was a cause of the accident would be an inequitable apportionment of loss.
In a noteworthy footnote, however, the Court allowed that it could conceive of instances in which the employer may be liable for its own negligence independent of its employee’s acts. The example given was if an employer provides a driver with a defective vehicle. However, when, as in Diaz, the plaintiff’s theory of employer liability was based solely on a negligent hiring/retention, the admission of vicarious liability precluded a separate claim for direct negligence on the part of the employer.
Thus, to recap, when an employer admits to various liability for the negligent act (if any) of its employee, the plaintiff is precluded from also bringing a negligent hiring/retention/entrustment claim against the employer.

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Rhonda Shelton Kraeber has practiced in all areas of employment law, including wrongful termination and discrimination and harassment litigation, since 1991. Formerly with Shapiro Buchman Provine, Rhonda counsels employers and employees on all aspects of the employer-employee relationship, including compliance with the many state and federal laws that apply in the employment context, and drafts, reviews, and negotiates all types of employment-related agreements such as severance agreements, employment contracts, and confidentiality agreements. Rhonda has also practiced general commercial litigation, including real estate disputes, contract issues, and corporate control disputes, and is licensed to practice in both California and Oregon.

Thursday, November 10, 2011

What should you know about discrimination in the workplace?

The employment arena as for some time, and continues to the present, to be confusing and complex, especially when attempting to navigate the waters of discrimination in the workplace.  This is true from the perspective of both the employer who wants to know "Why can't I do that?" and the employee who wants to know "Can they do that to me?"

There are many state and federal schemes that bar employment discrimination based on specified characteristics, such as race, sex, religion, national origin, or age. There are both similarities and differences in these various schemes.  The following is a brief overview of the various avenues currently available to individuals who believe they may have been the victims of workplace discrimination, as well as a general roadmap for employers who wish to be aware of the myriad of options available to employees, applicants, and former employees.

In California, the primary state antidiscrimination statute is the Fair Employment and Housing Act (FEHA).  Under Federal law, the major players are Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act of 1967 (ADEA), the Americans with Disabilities Act of 1990 (ADA), and the Equal Pay Act of 1963 (EPA).

However, as a general proposition, to establish that an employer is liable for workplace discrimination, an individual must demonstrate that the employer is subject to the law (for example, large enough to be subject to a particular law), and that the individual was adversely affected in his or her employment as a result of discrimination based on a classification protected by the law (such as race, se, religion, or age).  The claimed discriminatory conduct on the part of the employer can be either intentional or merely have a discriminatory effect.

CALIFORNIA LAW
In California, the FEHA permits an employee, prospective employee or former employee who believes himself or herself to have been aggrieved by a violation of FEHA to file a civil action against his or her employer (once certain administrative remedies have been exhausted).  In brief, the FEHA makes it an unlawful employment practice or an employer to discriminate against any person in recruiting, hiring, training, promotion, compensation, discipline or discharge, or any other term, condition, or privilege of employment, because of that person's race, religious creed, color, national origin, ancestry, physical or mental disability, medical condition, marital status, sex, or sexual orientation.  The FEHA also prohibits discrimination in employment gainst persons over 40 years of age or against female employees because of pregnancy, childbirth, or related medical conditions.

To be covered by the FEHA, employers must regularly employ five or more persons (except for harassment claims that only require regular employment of one or more persons).

To proceed with a civil claim against an employer based on the FEHA, the individual must first file a complaint with the Department of Fair Employment and Housing (DFEH) within one year of the most recent act of discrimination, and receive from the DFEH a so-called "right-to-sue" letter.

FEDERAL LAW
Title VII prohibits an employer from failing or refusing to hire, or to discharge, or to limit, segregate, or classify an individual (or otherwise discriminate) with respect to his or her compensation, terms, conditions, or privileges of employment, because of that persons' race, color, religion, sex, or national origin. Typically, Title VII cases fall under one of two theories of liability--"disparate treatment" (employer treats employees differently because of race, color, religion, sex or national origin) or "disparate impact" (otherwise neutral employment practice impacts on a group protected by Title VII more harshly than others).

As with a claim under California FEH, prior to filing civil litigation under Title VII, the aggrieved employee or applicant must file a timely complaint with Equal Employment Opportunity Commission (EEOC) and obtain a "right-to-sue" letter.  Also, employers subject to Title VII are those with 15 or more regular employees.

The Age Discrimination in Employment Act (ADEA) protects individuals who are at least 40 years of age and provides similar protections to this class of individuals as does Title VII for the classifications enumerated in that law.  An EEOC complaint is likewise required before one may proceed with civil litigation under this Act.  However, the EEOC's procedures and enforcement tools differ from the Title VII-based complaints as compared to ADEA complaints.  Also, covered employers are those with 20 or more employees. 

The Americans with Disabilities Act (ADA) has garnered considerable press since its entry onto the scene in the early 1990's.  It remains in a state of flux with the courts continuing to struggle to interpret its various ambiguous provisions.  Indeed, cases are sometimes published on almost a daily basis interpreting this law.
In its simplest terms, the ADA prohibits discrimination against disabled persons by employers and the like.  More specifically, an employer is prohibited from discrimination on the basis of disability with regard to recruitment, job application procedures, hiring, promotion, tenure, demotion, termination, rates of pay, job assingments, seniority, leaves or absence, sick leave, fringe benefits, training, and social and recreational programs sponsored by the employer.  Further, the ADA prohibits, in some contexts, pre-employment medical examinations, and requires employers to "reasonably accommodate" disabled persons.  Employers covered by the ADA are those with 15 or more employees.

Finally, the Equal Pay Act (EPA) prohibits wage discrimination on the basis of sex.  That is, the EPA prohibits wage differentials based on sex for jobs requiring equal skill, effort, and responsibility, and are performed under similar working conditions (i.e. equal pay for equal work).  Unlike its federal counterparts, the EPA does not require that an aggrieved employee file a complaint with the EEOC before the individual may bring an EPA claim to court.  Also, the EPA essentially applies to every employer.

Authored by Rhonda Shelton Kraeber  



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Copyright © 2011 Alvis Frantz and Associates.

Wednesday, June 15, 2011

BEWARE SMALL EMPLOYERS - TOP 10 WAYS TO AVOID BEING SUED

Lawsuits can be death for small businesses. In more than 20 years of legal advice to employers and employees, I have seen repeated mistakes by employers, most of which could have been avoided. Don’t despair if you recognize yourself in this list; most employers stumble on more than one. The solution is to change your procedures NOW, before a disgruntled employee takes action.

DO NOT:

1. Hold an employee’s final check “hostage” until return of uniform, cell phone, keys, and/or other company property.

2. Automatically characterize all employees as “exempt” from the overtime laws and pay them a salary.

3. Pay employees in cash. You still have to take withholdings, itemize, and document.

4. Allow employees to work through breaks and leave early.

5. Hire “independent contractors.” Most workers do not qualify as independent contractors and various taxing authorities are watching this closely.

6. Loan money to employees and then deduct whatever is still owing from final paychecks.

7. Have a “use it or lose it” vacation policy.

8. Fail to document your employees’ hours worked.

9. Ignore complaints that an employee is being “bothered.” Red flag. This is code for sexual harassment.

10. Fail to have an employee handbook. All employers should have one, even small employers.

While these may be my “top 10,” unfortunately there are many more ways that employers—especially small employers—can run afoul of the labor laws, sometimes with catastrophic results. Your best strategy is to be pro-active and get solid policies and procedures in place with the help of a knowledgeable professional. As the only employment law specialist in East Contra Costa County, I can help: Rhonda@alvisfrantzlaw.com or (925) 516-1617.

By: Rhonda Shelton Kraeber, Esq.

Disclaimer: The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.

Monday, March 28, 2011

I started a new business.... now what?

Yay! The economy is moving, you’re starting up a new business, now what?  I have probably helped over 700 businesses start up since I started practicing law over 30 years ago. It has been my specialty. People back in the 70’s said, “nine out of ten businesses fail in their first few years. How are you ever going to survive?” I always had a standard reply. “Wow, if it’s that scary, imagine how they feel.”

I have dedicated my legal career to helping business owners, because I am passionate about business. Good thing, because running a law practice is a business as well, and it has a couple of complications like a Trust account to go along with it. I was overwhelmed by the paperwork, the questions about what to do first, and bringing in that first money, all while actually practicing law. It’s one thing to have information, it’s another to actually “do the business.”

One of my invaluable resources which is free, is the Small Business Administration’s “Business Information Center”. There are three in northern California: San Jose, Oakland and San Francisco. These Centers have books on all of the aspects of starting, running and growing a business. They have classes for a nominal amount of money, and they have retired executives who can guide you.

The one thing they don’t provide is legal advice, and depending on your type of business, you may need a fair amount of that… what structure do you take, what should your contract with your customers look like, how do you hire your first employee.

I’ve noticed that in your first 9 months there are so many legal questions. Lawyers charge out at between $300 and $450 per hour. I wanted my clients to call me as much as possible, but I hated charging them for every phone call or letter. So our firm established the “Corporate Start Up Plan” to help new business owners in their first 9 months of “incubation.” Check out our website http://www.alvisfrantzlaw.com/ for more details or give us a call.

Be sure to follow us on facebook as well: http://www.facebook.com/alvisfrantz

To find out more about business law or corporations, call Alvis Frantz and Associates, A PC at (925) 516-1617. HAVE A LEGAL QUESTION YOU WANT TO SEE ANSWERED HERE? Go to our website and “Contact Us”.