House Passes Bill in Support of 40-hour Work Week under ACA
On January 8, 2015, the U.S. House of Representatives passed the Save American Workers Act on a 252-172 vote. The legislation, which would run into a promised veto from President Barack Obama should it pass the Senate, would ease the Affordable Care Act’s definition of full-time work from 30 hours or more per week to a 40-hour threshold.
The ACA requires organizations with 50 or more full-time employees to provide healthcare coverage; the requirement went into effect in 2015 for employers of 100 or more workers and is delayed until 2016 for employers of 50 or more. A tax penalty will be imposed for noncompliance: the so-called employer mandate.
The bill is aimed to fix a potential flaw in the ACA that might cause workers to lose hours and drop from “full-time” status so that their employers can avoid supplying benefits. Supporters argue that a 40-hour threshold would cover more employees and, at the very least, make different workers vulnerable to having their hours trimmed. The opposition points to a Congressional Budget Office report on January 7 that found that the bill would cost more than $50 billion over 10 years and shift as many as 1 million Americans from employer-provided insurance to Medicaid or ACA exchanges.
Another goal of the legislation is to reduce paperwork hassles for companies that face complex tracking and reporting obligations under the employer mandate, which was previously delayed by the White House because of those concerns.
Please contact the attorneys at Carlson & Jayakumar if you have any questions about the Affordable Care Act.
California Appeals Court Approves Keeping Workers “On Call” During Rest Breaks
On December 31, 2014, a California appeals court vacated an $89.7 million judgment against facilities management company ABM Industries Inc. for keeping thousands of security guards “on call” during rest breaks, holding that California law does not require employers to relieve workers of all duties during rest breaks. The case, Augustus et al. v. ABM Security Services Inc., was first filed in 2005, in which the plaintiffs alleged that the ABM policy that required the guards to carry radios during breaks violated the state’s Labor Code because an employee that is “on call” is not on a break. Los Angeles Superior Court Judge John Shepard Wiley found in favor of the security guards and awarded them $89.7 million in July 2012.
ABM appealed, arguing that the ruling, if upheld, would require companies to force employees to take their rest breaks off their work sites and without their personal cellphones.
The three-judge panel unanimously reversed the summary judgment ruling and vacated the award. “Here, although ABM’s security guards were required to remain on call during their rest breaks, they were otherwise permitted to engage and did engage in various non-work activities,” the ruling states. “The issue is whether simply being on call constitutes performing ‘work.’ We conclude it does not.” The court noted that the state’s Industrial Welfare Commission wage order covering rest breaks does not include the requirement that an employee be “relieved of all duty,” as opposed to the section covering meal breaks.
This case does not come as a surprise since time spent on rest breaks is compensable under California law. Nevertheless, employers should periodically review their meal and rest break policies to ensure compliance with California law.
California Supreme Court Says Guards on 24-Hour Shifts Should Be Paid for Sleep Time
On January 8, 2015, the California Supreme Court ruled that employers have to pay workers for all time spent on a job site, even if they are “on call” or sleeping. In Mendiola v. CPS Security Solutions, Inc., the court ruled that CPS will have to pay its security guards for all the time they spend overseeing construction sites, even when they are sleeping in the residential trailer, because CPS stands to gain from the security guards staying on-site.
The guards brought an action against their employer alleging that the time they spend “on call” and sleeping constituted “hours worked.” CPS had promised its construction clients that a guard would be present overnight on weekdays and for 24 hours on weekends. While “on call” in their trailers, CPS’s guards were not allowed to have pets or children present, visit with friends or drink alcohol. During nighttime “on call” hours, the company usually only paid the guards for time spent actively investigating.
In July of 2014, an appeals court partially reversed a Los Angeles Superior Court injunction that ordered CPS to compensate its live-in construction-site guards for all “on call” time spent in their trailers. The appellate panel agreed that on weekdays, when the guards were on patrol for eight hours and “on call” for eight hours, CPS had to pay them for their nighttime hours on the job site, but said that the company could deduct 8 hours of sleep time on weekend days when the guards were on duty for all 24 hours. The Supreme Court rejected this, finding that, because the employees were not free to leave, even for personal emergencies, they must be compensated for all their time on-site, even when they are asleep.
This ruling highlights the dangers of limiting what employers may and may not do while off the clock. Employers should consult with counsel before imposing such restrictions.