And On The Seventh Day…
In Mendoza v. Nordstrom, Inc., the California Supreme Court answered some unsettled questions regarding the state’s day of rest statutes. In short, these provisions of the California Labor Code provide that employees are entitled to at least one day’s rest out of seven. Specifically, section 551 of the Labor Code states that “[e]very person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.” Section 552 states that “[n]o employer of labor shall cause his employees to work more than six days in seven.” Section 556 provides an exception to sections 551 and 552, stating that they “shall not apply to any employer or employee when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.”
At the behest of the federal Ninth Circuit Court of Appeals, the Supreme Court considered three questions, each of which is discussed below.
(1) “Is the day of rest required by sections 551 and 552 calculated by the workweek, or does it apply on a rolling basis to any seven-consecutive-day period?”
Considering the text and history of sections 551 and 552, the Industrial Welfare Commission’s (“IWC”) wage orders, and the statutory scheme of the day of rest provisions, the Supreme Court concluded that employees are entitled to one day of rest each work week (as defined by the employer) rather than one day in seven on a rolling basis. Thus, the Court acknowledged that an employee could be required to work up to twelve consecutive days without violating sections 551 and 552. For example, if an employer defines a workweek as Sunday through Saturday, then an employee could be given a day of rest on the Sunday of Week 1, could be required to work 12 consecutive days, and then could be given off the Saturday of Week 2.
(2) “Does the section 556 exemption for workers employed six hours or less per day apply so long as an employee works six hours or less on at least one day of the applicable week, or does it apply only when an employee works no more than six hours on each and every day of the week?”
With respect to this question, the Court held that the exemption set forth in Section 556 applies only to those employees who never exceed six hours of work on any day of the workweek. If on any one day an employee works more than six hours, a day of rest must be provided during that workweek. Continue reading “And On The Seventh Day…”
Romaine Calm: FSVP is Approaching
Does FSVP Apply to You?
Are you the importer, consignee, or agent for food imported into the United States? If so, the Foreign Supplier Verification Program for Importers of Food for Humans and Animals (FSVP), a key element of the Food Safety Modernization Act (FSMA), likely applies to you. Implementation of the FSVP will begin on May 30, 2017, but categories of companies or foods may be subject to later compliance deadlines. Where do you fit?
The FSVP regulations aligns with key components of the FDA’s overall food safety plan for facilities that manufacture, process, pack or hold food which must now establish and follow the regulations regarding current good manufacturing practice (CGMP) and hazard analysis and risk-based preventive controls for human food and animal food (Preventive Controls or PC).
What Is FSVP? Continue reading “Romaine Calm: FSVP is Approaching”
Can Charitable Remainder Trusts Avoid the Self-Dealing Rules?
A pillar of the conventional wisdom of planning with charitable remainder trusts (CRTs) is that these very flexible split-interest trusts are subject to the private foundation excise tax on self-dealing transactions. But a recent IRS ruling has shaken that pillar and questioned the conventional wisdom.
Some (but not all) of the private foundation excise taxes apply to CRTs pursuant to Internal Revenue Code section 4947(a)(2), which provides that in the case of a trust which is not exempt under Code section 501(a) (i.e. a tax-exempt organization), not all of the unexpired interests which are devoted to one or more charitable purposes (i.e. a split-interest trust like a CRT) and which has amounts in trust for which a charitable deduction was allowed, Code section 4941 (excise tax on self-dealing) shall apply as if such trust were a private foundation.
In Private Letter Ruling 201713003, the grantor established a charitable remainder unitrust, but did not claim a charitable income tax deduction under section 170. The IRS ruled that because no charitable deduction was allowed, section 4947(a)(2) does not apply and the CRT is therefore not subject to any private foundation excise taxes, including self-dealing.
Continue reading “Can Charitable Remainder Trusts Avoid the Self-Dealing Rules?”
Due Your Duty
With the ever-increasing scrutiny being brought to compliance and the payment of duties on imported goods by Customs and Border Protection (CBP), it is worth commenting that any duties which are due when an entry liquidates may, in fact, end up having to be paid even if the related protest remains pending due to the legal and contractual relationship between the importer and his surety company. Simply put, if a surety insists on receiving payment of any amounts demanded by CBP upon liquidation, the importer does not have any solid grounds to object. Why would the surety do so if a protest is pending? Because the surety is looking to mitigate its risk. If the importer does not pay, the surety will have to do so, at least up to the face amount of any bonds it has written, and sureties try their best not to be put in that position. Continue reading “Due Your Duty”
Buy American Executive Order
On April 18th, President Trump issued an Executive Order (“EO” or “Order”) focused on the Buy American laws and regulations. See Buy American EO. This EO directs federal government entities to review their procurement rules so that, to the extent legally permitted, preference is given to American made goods. Section 2 specifically states: “[i]t shall be the policy of the executive branch to buy American and hire American”. At the same time, the EO confirms: “[n]othing in this order shall be construed to impair or otherwise affect … existing rights or obligations under international agreements”. So, what does this EO mean to the private sector when it comes to government contracting?
First, it is important to keep in mind the review triggered by this Order applies only to federal procurement. States and other governmental entities have their own rules. They cannot contradict the federal rules, but they can be different.
Next, nothing in this Order has any impact on privately funded projects. The typical example given in the general press is the Keystone Pipeline. Nonetheless, the point is you are only impacted if you are providing or intend to provide goods to a U.S. government entity. Continue reading “Buy American Executive Order”
Where’s The Rest Of My Pay?
Commission-Only Employees Must Be Paid Separately for Rest Periods April 18, 2017 By Brian M. Ragen In Vaquero v. Stoneledge Furniture LLC, a California Court of Appeal recently held that inside sales employees who are paid on a 100% commission basis must be separately compensated for their rest periods. Though inside sales persons are exempt from overtime (provided they earn at least 1.5-times minimum wage … Continue reading Where’s The Rest Of My Pay?
DOJ Defines Compliance
In the span of the last 18 months, the topic of corporate compliance programs has gotten considerable attention from the Department of Justice (“DOJ”) and now finally, DOJ has published significant details about how it is likely to measure the sufficiency of any company’s compliance program.
First, some background. In September 2015, the Yates memo was published, see DOJ Sets Its Sights on Officers and Directors for more details. In short, then Deputy Attorney General Yates reminded the DOJ offices nationwide, if a corporation has violated the law, its level of cooperation will be measured, in large part, by whether it provides “all” the relevant details, which means did the company identify the individuals whose actions or inactions resulted in the violations under consideration, and provide supporting documentation to show what happened and how those individuals were involved. If the company did not do so, it does not get full credit under the Sentencing Guidelines. Continue reading “DOJ Defines Compliance”
Implementation of Executive Order Imposing Temporary Travel and Refugee Ban
By Benjamin Lau and David Rugendorf
On March 6, 2017, President Trump reissued
the Executive Order, “Protecting the Nation from Foreign Terrorist Entry into the United States,” with an effective date of March 16, 2017. The previous Executive Order 13769 of January 27, 2017, will be revoked on March 16, 2017, and replaced with this reissued Order.
The new Executive Order bans immigrant and nonimmigrant entries for nationals of six designated countries – Syria, Iran, Libya, Somalia, Sudan, and Yemen – for at least 90 days beginning on March 16, 2017. The new Executive Order specifically removes Iraq from the list of designated countries. Continue reading “Implementation of Executive Order Imposing Temporary Travel and Refugee Ban”
U.S. Immigration to Suspend Premium Processing for All H-1B Petitions
By Stephen Blaker and Howard Shapiro
U.S. Citizenship and Immigration Services (USCIS) announced that as of Monday, April 3, 2017, it will not accept Premium Processing requests for H-1B visa petitions for a temporary period expected to last up to six (6) months. This applies to all H-1B visa petitions, including extensions, amendments, cap-exempt and new employment petitions, such as those to be submitted in the FY18 Bachelor’s and Master’s Caps. USCIS has indicated that the suspension is required to eliminate the backlog on long-pending H-1B visa petitions. Starting on April 3, 2017, USCIS will reject any H-1B visa petition that is filed with a Form I-907 and one (1) combined check for the I-129 filing fees and the I-907 filing fee. Continue reading “U.S. Immigration to Suspend Premium Processing for All H-1B Petitions”
Data Breaches: An Employer’s Duty to Protect Employees’ Personal Information
By Aaron Wais
It is tax season, which means that criminals are busy trying to steal people’s tax information (e.g., names, addresses, social security numbers, income information), which they can use to file fraudulent tax returns and steal tax refunds.
As an employer, you likely maintain your employees’ tax information and, thus, are a target. Indeed, criminals regularly target employers and hack their databases or pose as company executives and send a phishing email asking for all employees’ W-2s for accounting purposes.
As such, it is important to understand your duty to protect your employees’ personal information, as well as potential liability for failing to do so. Most states, including California, make clear that employers have a legal duty to protect their employees’ personal information. These courts also make clear that whether an employer has legally compliant, written policies for protecting private information and responding to data breaches will heavily inform whether and the extent of an employer’s liability for a data breach.
Continue reading “Data Breaches: An Employer’s Duty to Protect Employees’ Personal Information”
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