Labor and Employment Issues

California Assembly Bill 1867 (signed by California Governor Gavin Newsom on September 9, 2020) and Senate Bill 1383 (signed on September 17, 2020) significantly expand the rights of California employees to both paid and unpaid leave.  In addition, and especially as they relate to Senate Bill 1383, these laws will require California employers to promptly revise their policies and procedures when it comes to reviewing employee requests for unpaid leave.

Assembly Bill 1867

To recap, the Families First Coronavirus Response Act (“FFCRA”) provides that employees are entitled to up to 80 hours of paid sick leave for reasons related to COVID-19.  FFCRA, however, applies only to employers with fewer than 500 employees.  Like many ordinances adopted after the passage of FFCRA, AB 1867 attempts to fill the gap left by FFCRA by applying to employers with 500 or more employees.

AB 1867 fills this gap in two ways.  First, it creates new California Labor Code section 248, which mirrors Governor Gavin Newsom’s prior Executive Order N-51-20.  Section 248 requires entities with 500 or more employees to provide their “food sector workers” with up to 80 hours of “COVID-19 food sector supplemental paid sick leave.”  Second, it also creates new Labor Code section 248.1.  This section applies more broadly than section 248 as it requires that employers with 500 or more employees provide all employees with up to 80 hours of “COVID-19 supplemental paid sick leave.”

This post was guest authored by Stoel Rives employee benefits attorneys Bethany Bacci and Abbey Hendricks.

If you use union employees in your projects, you may contribute to a multiemployer pension plan—perhaps a few cents or few dollars per hour worked. However, some employers are surprised to learn they could be assessed with “withdrawal liability” that greatly exceeds their negotiated contribution rates in certain circumstances. Here’s what you need to know about a special exemption that may help avoid large payments to a multiemployer plan following the cessation of negotiated contribution obligations.

Under the Employee Retirement Income Security Act of 1974 (ERISA), when an employer ceases to contribute to a multiemployer plan, that employer must generally pay “withdrawal liability.” The withdrawal liability rules under ERISA are designed to spread the unfunded pension liability across all participating employers—so that the employers that continue to contribute to the plan are not stuck footing the bill for those that previously exited. A withdrawal liability assessment can be very expensive; some of our clients have received initial assessments in the multimillions.

An employer might cease to contribute to a multiemployer plan for a variety of reasons: a project ended and union employees are no longer needed, operations in a local union’s jurisdiction ended, or an employer phased out its construction business to focus on other types of work. In the building and construction industry, frequent initiation and cessation of projects is the norm. Fortunately, Congress recognized that withdrawals by individual employers in the building and construction industry actually have a minimal effect on the contribution bases of multiemployer plans. This is because, once a project ends, employees often resume work with a different employer in the same area that continues to contribute to the plan. Due to this unique aspect of the building and construction industry, Congress provided for a special statutory exemption to complete withdrawal liability.

Let’s break down the statutory requirements for the special exemption:

  1. The employer must be a building and construction industry employer.

While there is no statutory definition of what it means to be a “building and construction industry” employer, courts and the Pension Benefit Guaranty Corporation (PBGC) generally look to the Labor Management Relations Act of 1947 (also known as the Taft-Hartley Act) for guidance. As interpreted under the Taft-Hartley Act, the term refers to work performed at the site of a building or other structure in connection with the erection or alteration of the building or other structure. Other activities fall outside that scope. For example, an employer that merely manufactures or transports construction materials that are then installed by other contractors on a worksite is likely not considered a building and construction industry employer.

While it is permitted for a building and construction industry employer to have employees who perform work in other industries, “substantially all” of the employees for whom the employer is obligated to contribute to the multiemployer plan must perform work in the building and construction industry. The PBGC has not defined “substantially all” for this purpose; however, court cases have found 85% to be “substantially all.”

  1. The multiemployer plan must be a building and construction industry plan.

A recent California Court of Appeal decision upheld the state’s complex rules for compensating piece-rate employees.  In Nisei Farmers League v. California Labor & Workforce Dev. Agency, 2019 Cal.App. LEXIS 10 (Cal.Ct.App. Jan. 4, 2019), the Court held that the Labor Code’s requirement that piece-rate employees be separately compensated for “nonproductive time” was not unconstitutionally vague.  With California’s “productive vs. non-productive time” rubric firmly in place, employers must take great care to track and compensate piece-rate employees’ time, or face stiff penalties.

What Does “Piece-Rate” Mean, And Why Might An Employer Chose It?

Piece-rate compensation plans are very popular in some industries.  They can incentivize employee productivity, while giving an employer greater control over labor costs. Under a piece-rate compensation system, the worker is paid a fixed amount of money for each unit produced or action performed, regardless of the number of hours worked. Industries that pay employees on a piece-rate basis include:

The Washington Department of Labor & Industries, Division of Occupational Safety and Health, is considering changes to Washington’s fall protection regulations. These are rules intended to protect construction workers from injury caused by falls on a jobsite.  The Division has been interested in this topic since 2013, when the federal Occupational Safety and Health Administration

Continuing its aggressive enforcement of California wage and hour laws, the Labor Commission issued wage theft citations of $1.9 million to Fullerton Pacific Interiors, Inc. for failing to pay minimum wage and overtime and failing to provide rest periods to 472 workers on 26 construction projects throughout Southern California.

Fullerton Pacific Interiors provided drywall work

In February 2018, the Oregon Legislature attempted to push through House Bill 4154, which would have made a general contractor liable for unpaid wages, including benefit payments and contributions, of an employee of a subcontractor at any tier, after that employee files a wage claim and the Commissioner of the Bureau of Labor and Industries

Construction projects, both big and small, pose a host of safety risks and challenges and, as a result, are subject to a number of regulations designed to limit the probability and severity of jobsite accidents. In my latest article for the Daily Journal of Commerce, I discuss common violations, some recent regulatory changes, best

On March 24, 2016, the Occupational Safety and Health Administration (“OSHA”) issued its final rule related to admissible exposure to respirable crystalline silica. The new rule, which dramatically reduces the permissible exposure limit (“PEL”) of respirable crystalline silica from 250 micrograms per cubic meter of air to 50 micrograms per cubic meter of air (an

In addition to streamers and fireworks, the new year is occasioned by another tradition:  new laws.  Several new laws affecting Oregon contractors and developers took effect on January 1, 2016.

Paid sick leave:  Most Oregon construction employers must now provide employees with one hour of paid sick leave for every 30 hours worked.  Employees

A question left open in Stoel Rives’ recent Washington lien law treatise relates to the lien rights of employee benefit plans. The rights granted in RCW 60.04.011(4) (where benefit plans are included in the definition of “furnishing labor”) were called into question by two Washington Supreme Court decisions barring employee benefit plans from pursuing lien-like