California labor law is a dynamic force in the economics of the state. Employers and their HR staff must, by necessity, stay informed and in compliance.
The following is a brief round-up of some key Califorina labor law updates regarding classes of California workers who are often overlooked and, many times, underpaid.
McDonald's Settles its First Ever Labor Lawsuit with U.S. Franchise Workers
McDonald’s has agreed to pay $3.75 million to settle a lawsuit claiming it was liable for labor law violations by a California franchisee. This marks the first time the company has settled legal claims by a group of U.S. workers at one of its franchises. It also establishes the McDonald’s is considered a “joint employer” of franchise workers.
The settlement came about after lawyers, representing about 800 employees at five restaurants owned by a single franchisee, filed suit in the U.S. district court in San Francisco in October 2016,. The court eventually ruled that Illinois-based McDonald’s would pay the workers $1.75 million in back pay and damages and $2 million in legal fees.
While the settlement must first be approved by a federal judge, it also comes as McDonald’s faces claims before two U.S. agencies that it is a “joint employer” of workers at franchise restaurants. This is a legally significant designation that could make the company liable for legal violations by franchisees. It also sets a disturbing precedent for other national frachises operating in California.
McDonald’s corporation disagrees with the designation.
“We entered into this mutually acceptable resolution to avoid the costs and disruption associated with continued litigation,” said McDonald’s spokesperson Terri Hickey.
The 2014 lawsuit claimed McDonald’s and the franchisee, Smith Family LP, violated California law by failing to pay overtime, keep accurate pay records and reimburse workers for time spent cleaning uniforms. The franchisee previously settled the claims for $700,000.
Last year, a judge ruled that McDonald’s was not the plaintiffs’ joint employer under federal and state laws. However, the judge stipulated that the company could still be held liable if the workers believed McDonald’s was their employer.
The settlement would also require McDonald’s to train Smith Family, the franchisee, on the use of corporate software designed to ensure compliance with California’s uniquely strict employment laws, according to the court filing.
Currently, McDonald’s is also in a trial at the National Labor Relations Board that could determine whether the company is a joint employer under the federal law governing union organizing.
California Labor Law Expanded to Protect Janitors
California lawmakers have recently expanded California labor law to provide increased protections for the over 220,000 janitorial workers in the state. Many of these are often vulnerable workers and at risk for sexual harassment and assault.
The new law signed by California Governor Jerry Brown on September 15, 2016, sets up registration and training requirements to help workers in the janitorial industry protect themselves against sexual harassment and assault. Employers who violate the new California labor bill could wind up losing their registration. The law is written entirely to serve the janitorial services industry.
The bill requires all employers to register annually and pay a $500 registration fee. If the employers are found to have violated California labor law, they can have their registration denied.
