As a result of the ongoing COVID-19 pandemic, many employers are being forced to lay off, furlough, and/or reduce employee hours as a result of slow or nonexistent business. If you find yourself out of work, or working a reduced work schedule through no fault of your own, you may be entitled to unemployment insurance (UI) benefits and should file a claim with the California Employment Development Department (EDD) https://edd.ca.gov/ Benefits range from $40 to $450 per week depending on your earnings history within the base period, and other factors, such as whether you are receiving any wages or pay. Although there is normally a one week waiting period for unemployment benefits, the order issued by the California Governor waived that period.

To be eligible for unemployment benefits, you must meet the eligibility requirements including that you:

• Earned enough wages during the base period to establish a claim;
• Have legal authorization to work in the U.S.;
• Are totally or partially unemployed;
• Are unemployed through no fault of your own;
• Are physically able to work;
• Are available for work;
• Are ready and willing to accept work immediately; and
• Are actively looking for work (note: this may not apply if you are working reduced hours)

Reduced Hours

If your employer reduces your hours due to COVID-19, you may be entitled to unemployment benefits. Even if you are still working some hours, you may be entitled to partial wage replacement. If you expect to return to work with your employer within a few weeks, you must meet the eligibility requirements listed above, but you are not required to actively seek work each week. However, you must able and available to work during each week that you receive unemployment benefits.

Generally, to be eligible for partial unemployment benefits, your hours must be reduced by at least 50%. However, because of the continuing developments, we suggest that if you have suffered any wage loss due to your hours or pay being cut, you should file an unemployment claim to determine if you are eligible.

Pandemic Unemployment Assistance

Under the recently passed federal Coronavirus Aid, Relief and Economic Security (CARES) Act, which was enacted on March 27, you may be eligible for an additional $600 per week, on top of the regular unemployment amount, through the end of July. In addition, the CARES Act extended unemployment benefits from 26 weeks to 39 weeks.

It is unclear how this benefit will be paid, and to date, the California EDD is awaiting guidance from the Department of Labor. We recommend that you continue to check for updates on the EDD website: https://edd.ca.gov/about_edd/coronavirus-2019.htm

Independent Contractors

Typically, independent contractors are not eligible for unemployment benefits (and their employers don’t pay unemployment insurance payroll taxes).

Under the recently passed federal CARES act, independent contractors may be eligible for unemployment insurance as well as the additional $600 per week provided for under that new law.

In addition, there have been a lot of changes to the law on who can properly be classified as an independent contractor in California. If you have been classified as an independent contractor, it may be that this was inappropriate and you may be reclassified as an employee, and therefore entitled to receive unemployment benefits.

At the moment, California’s EDD website has not been updated to include the new provisions for independent contractors, but if you are out of work, or working a reduced work scheduled due to COVID-19, you should apply for unemployment insurance.

Self-Employed Workers

As with independent contractors, normally self-employed workers are not entitled to unemployment insurance (and do not pay unemployment insurance payroll taxes). However, under the CARES Act, many self-employed individuals will qualify for unemployment insurance as well as the additional $600 per week benefit for up to four months.

At the moment, California’s EDD website has not been updated to include the new provisions for independent contractors, but if you are out of work, or working a reduced work scheduled due to COVID-19, you should apply for unemployment insurance.

Undocumented Employees

Unfortunately, undocumented workers are not eligible for unemployment insurance. However, under California law undocumented workers may be entitled to income from State Disability Insurance (SDI) (https://www.edd.ca.gov/disability/), Paid Family Leave (https://www.edd.ca.gov/disability/paid_family_leave.htm), Workers’ Compensation (https://www.dir.ca.gov/dwc/) and Paid Sick days (https://www.dir.ca.gov/dlse/paid_sick_leave.htm)

Quit Your Job?

Normally, if you quit your job, unless you did so for very limited reasons, you will not be entitled to unemployment insurance benefits. However, under the expanded coverage of the CARES Act, employees who quit because they contracted COVID-19, or because they were required to leave their job to provide full-time care to family and other relatives but did not have access to paid leave benefits, may be entitled to unemployment insurance benefits. Prior to quitting your job, you should see, what other possibilities may be available to you including FMLA/CFRA, Paid Family Leave, and the expanded child care leave under the FFCRA. Blog Article: New Protections for Workers Under the Federal Families First Coronavirus Response Act Because changes are occurring daily, we recommend that you continue to check the EDD website for updates at https://edd.ca.gov/about_edd/coronavirus-2019.htm

This sounds like the beginning of a very typical workplace claim. However the Court brought the civil claims to a very atypical, and I must say, poorly reasoned and dangerous, ending.

The Workers Compensation Act claim went to a hearing first and the Administrative Law Judge found that the employer’s actions were “non-discriminatory, good faith personnel decisions.” Based on this finding in an administrative hearing, where there is no civil discovery, the impetus to put on witnesses and gather evidence is different, and, among many other differences, the legal standard is different, the Court of Appeals held that the employees’ civil claims were barred.

The Court acknowledged that workers’ compensation is not the exclusive remedy for discrimination in the workplace, but went on to hold that where “plaintiff’s elected to pursue both remedies… the workers compensation decisions have a reclusive effect.”

In other words, the Court is making an employee who dares to bring two claims face an unnecessary and unwarranted risk. Employees must carefully consider whether to file in two forums and which case is likely to be decided first.

Jody I. LeWitter

The distinction in being classified as an independent contractor or an employee is an important one. Numerous laws protect the rights of employees, but do not protect independent contractors. For example, California’s minimum wage, overtime, meal period, and rest break laws apply to employees, but do not apply to independent contractors. Many employers misclassify their workers as independent contractors instead of employees to avoid having to comply with the many laws and regulations that protect employees – usually to shift costs onto the worker and off of the company.

Although the employee vs. independent contractor debate has raged on for many years, it has been in the spotlight with the explosion of the so-called “gig economy.” A number of decisions have come down through the courts and through the regulatory agencies, and depending on which law applies, different tests apply for how an employee is classified. However, the California Supreme Court has now definitively adopted a new test for determining whether a worker is an employee or an independent contractor under the California Wage Orders in Dynamex Operations West, Inc. v. Superior Court (Lee).

Dynamex is a same-day delivery company that hires drivers to carry out the deliveries. In 2004, the company changed the drivers’ status from employees to independent contractors. After being reclassified, the drivers had to provide their own vehicles, pay for their expenses (tolls, fuel, maintenance, insurance), taxes, and workers’ compensation insurance. Dynamex controlled how the workers were given delivery jobs and drivers were not guaranteed any number of deliveries. The drivers filed a class action lawsuit alleging wage and hour violations, claiming that they were required to do the same duties as independent contractors as they had while they were classified as employees.

The California Supreme Court held that the appropriate test for purposes of wage orders is the “ABC” test. Under the ABC test, a worker is only properly considered an independent contractor (and thus wage orders do not apply) if the hiring company establishes:

1. That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
2. That the worker performs work that is outside the usual course of the hiring entity’s business; and
3. That the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.

Importantly, this test “presumptively considers all workers to be employees, and permits workers to be classified as independent contractors” only if they satisfy each of the three requirements of the ABC test.

Adoption of this standard is long overdue and is welcome relief for workers throughout the state of California. For purposes of wage and hour laws, workers are presumptively considered employees under the ABC test and the employer will have to prove otherwise. This is likely to extend protections to a significant number of employees throughout the state who have been, up until now, been classified as independent contractors.

If you believe you have been misclassified, please contact our office for a consultation.

Jean Krasilnikoff

This case is equally important to employment cases, where we often find that defense attorneys challenge perfectly fair jurors based on their race/national origin/gender/age and other identifying information that is similar to that of the plaintiff, and thereby deny the plaintiff in employment cases a jury of their peers.

The California Supreme Court sent a message that under People v. Wheeler (1978) 22 Cal.3d 258 (Wheeler) and Batson v. Kentucky (1986) 476 U.S. 79 (Batson) a trial court must seriously scrutinize the rationale and motivation presented by any side using its jury challenges to challenge a legally protected and cognizable group. Here the court noted that 10 out of 16 challenges were used against Hispanics and 10 out of 12 Hispanics who took a seat in the jury box were challenged by the prosecutor. The Supreme Court warned that, “excluding by peremptory challenge even a single juror on the basis of race or ethnicity is an error of Constitutional magnate”. The Supreme Court made clear to the lower courts that it is their duty to make sure the parties do not use their peremptory challenges in a discriminatory manner, and that the court must make a “sincere and reasoned attempt to evaluate” the explanations proffered by the party bumping the jurors.

This is good news for employees and their lawyers, who often see defense lawyers bump jurors who would permit the employee to receive a fair jury by his or her peers. Take note, the California Supreme Court is watching!

Jody LeWitter

The case went to jury, and the jury found in Ms. Rogers’s favor on both claims, awarding her $356,000. However, that wasn’t the end of the story. Unfortunately for Ms. Rogers, the Court of Appeal reversed the jury’s award on both claims. First, the Court of Appeal found that, in order for Ms. Rogers to bring a claim for interference, in which she claimed that she should have been reinstated to the same or a comparable position, she needed to have taken a leave of absence protected by CFRA. Since CFRA provides for leaves of 12 weeks or less, simply put, her 19 week leave of absence left her flat out of luck on her claim for reinstatement or interference.

Then the Court of Appeal addressed Ms. Rogers’s second claim, for retaliation. It held that the employer presented evidence that the transfer was part of an overall plan to reorganize the Executive Office. When the employer made the decision to transfer Ms. Rogers, she had only been on a leave of absence for one month, and there was no evidence that the decision maker was aware that the leave would be for an extended period of time. Although the trial court noted that the jury may have doubted the employer’s motive, the Court of Appeal found that all the evidence was undisputed and that this doubt was not enough. In other words, the Court of Appeal voted for the employer on this issue based upon a lack of evidence.

This case should serve as a cautionary tale for employees who take family or medical leaves. First, if it is at all possible medically, return to work within the time frame protected under the statute, i.e. for CFRA or FMLA, twelve weeks. Second, with a CFRA retaliation claim – just like other retaliation claims – the more evidence of discriminatory motive or pretext there is, the more likely the retaliation claim will survive. And, remember, as with any other case, the trial judge or the appellate court, whether it should or not, may come in and act as the thirteenth juror and take away an employee’s victory.

Jody LeWitter February 16, 2012