Labor Law Standards Subject to Interpretation
California employers are once again left with uncertainty regarding the Division of Labor Standards Enforcement (DLSE) Enforcement Policies and Interpretations Manual following a California Supreme Court ruling earlier this month.
The state high court’s March 5 ruling in Alvarado v. Dart Container Corporation of California dealt mainly with how an employer must calculate overtime compensation for an employee who earns both an hourly rate and a flat sum nondiscretionary bonus.
In its analysis, the Supreme Court also provided lengthy discussion on whether the DLSE’s manual was binding authority on the courts. The Supreme Court concluded that the DLSE Enforcement Manual is a void underground regulation and not entitled to any deference. However, the Supreme Court held that it still could consider the DLSE’s interpretation if the court was independently persuaded that the interpretation was ultimately correct.
In this case the Supreme Court was persuaded and adopted the DLSE’s method of calculating overtime on flat sum bonuses. The DLSE’s method was more favorable to the plaintiff than the federal standard used by the employer.
This is not the first time that the California Supreme Court has opined about the validity of the DLSE manual. More than two decades ago, the California Supreme Court discussed the legitimacy of the DLSE manual in Tidewater Marine Western, Inc. v. Bradshaw (December 19, 1996).
In Tidewater, the Court was tasked with deciding whether the DLSE manual constituted regulations within the meaning of the Administrative Procedure Act (APA).
If a policy constitutes a regulation under the APA, it must follow specific protocols to be adopted. The APA outlines a technical process that requires public participation to “ensure that those persons or entities whom a regulation will affect have a voice in its creation as well as notice of the law’s requirements so that they can conform their conduct accordingly.”
If a regulation is not properly adopted per the APA requirements, it will be deemed unlawful. Notably, the DLSE manual has never been adopted through the APA process.
Procedures Not Identical
Although the Labor Code does include procedural protections for adopting some regulations “analogous to those in the APA,” the procedures are not identical to the APA. The procedures also apply only to the Industrial Welfare Commission and not the DLSE manual.
Ultimately, the Tidewater court held that because the DLSE manual provided interpretation of the law itself in its policy manual, the manual is actually regulatory in nature. And since “[n]o state agency shall issue, utilize, enforce, or attempt to enforce … a regulation” without complying with the APA’s notice and comment provisions, the DLSE manual was found to be a void underground regulation.
The Tidewater court went on to say that the DLSE manual is simply “one among several tools available to the court,” stating that “[d]epending on the context, it may be helpful, enlightening, even convincing,” or “[i]t may sometimes be of little worth.”
So, where does this leave employers? Employers are still in the same position they have been in for decades. Tidewater and now Alvarado v. Dart have unfortunately not changed a thing. The DLSE will continue to interpret and enforce state labor laws and employers still will not know in advance whether the courts will uphold the DLSE’s interpretations—potentially subjecting an employer to a retroactive interpretation and penalties and/or damages, as seen in Alvarado v. Dart.
Businesses need more certainty that they’re correctly applying the law and shouldn’t be left to guess. For now, employers should still rely on legal counsel when making difficult employment decisions and should assume that the courts will continue to utilize the DLSE manual as “one among several tools available to the court” when interpreting California law.
The Oxnard Chamber of Commerce Ambassadors are a carefully selected group of highly respected individuals from all facets of business. They are an extension of the Oxnard Chamber Board and staff as they take on the role of welcoming committee. Ambassadors are an essential component of the Oxnard Chamber’s growth and success, and their feedback is invaluable and incorporated in Chamber programs and events.
What does an Ambassador do?
Does this sound like something for you? If so, then come to a Chamber Ambassador meeting and meet everyone! Meetings are held on the first Tuesday of the month at 12:00PM at the Chamber office. Want more information? Contact Sharen Strong, Director of Member Services at firstname.lastname@example.org or call (805) 983-6118. We look forward hearing from you!
Big Brothers Big Sisters of Ventura County (BBSVC) is proud to recognize Mr. Steven M. Greenwood for his many ongoing contributions to the agency, which have ranged from the generosity of annual giving, to his prior service as a long time member of its Board of Directors, to a serving as a Big Brother, a mentor to a youth facing adversity. In recognition of his commitment of service, BBSVC will present Mr. Greenwood with its Outstanding Community Partner award.
The Lewis Greenwood Foundation, of which Mr. Greenwood is an associate, delivers a substantial gift to BBSVC every year. The funds donated by the Foundation directly provide BBSVC resources it needs to identify, screen, train, and match adult role models – mentors, or “Bigs” – in Ventura County who can be matched with youth facing adversity. In serving community youth, mentors help break negative cycles such as drug or alcohol abuse, poverty, or gang violence, and help their mentees – or “Littles” – discover a brighter future through education, career goals, and, of course, fun activities that they may bond over.
“Steve has been a hands-on advocate for BBSVC for many years, and truly understands the importance and impact of our mentoring programs in the community,” says BBSVC CEO Lynne West. “His service has gone above and beyond his extraordinary generosity, including a long tenure as a Board Director, and one of the most important roles that one can hold in our agency: he has been a Big Brother not once, but twice.”
The BBSVC Board of Directors, Presidents’ Council, and staff offer their most heartfelt congratulations and thanks to Steve for all of his support of Big Brothers Big Sisters of Ventura County.
About Big Brothers Big Sisters of Ventura County
Big Brothers Big Sisters of Ventura County (BBSVC) has been connecting Bigs and Littles in professionally-supported, one-to- one mentoring relationships in Ventura County and neighboring communities since 1970. Facilitating more than 1,500 mentoring matches annually between community or school-based volunteers and youth ages 6-21 years old, BBSVC is committed to bringing their life-changing program to every child in Ventura County who needs it. BBSVC is an independent 501(c)3 nonprofit organization that depends on private donors for 75% of its funding.
California’s corporate tax base may increase by up to 12% as a result of federal tax reform legislation, according to a study recently released by the State Tax Research Institute (STRI).
This means that revenues from California’s corporate income tax could increase by as much as $1.3 billion—without any action by state lawmakers to increase corporate tax rates or income definitions.
Larger tax revenues will result from the new tax reform law, which limited deductions and changed foreign tax rules. The federal tax law imposed new restrictions on companies’ ability to deduct interest payments, exchange property without paying capital gains taxes, deduct some fringe benefits and immediately write off future research costs. At the federal level, those changes were far outweighed by the rate cut.
According to Karl Frieden, vice president and general counsel at the Council on State Taxation, the study’s sponsor, “The state tax increase for corporations is totally inadvertent.”
The windfall from federal tax reform will likely produce even more revenue than would a recently proposed constitutional amendment to impose a 10% surcharge on corporate net incomes of more than $1 million.
The avowed purpose of that measure is “to share with ordinary California taxpayers the economic gains provided by federal income tax cuts for corporations with over one million dollars ($1,000,000) in net income.”
It turns out that federal tax reform will accomplish that goal without the Legislature casting a vote.
“The Impact of Federal Tax Reform on State Corporate Income Taxes” was prepared for STRI by Ernst & Young. STRI is the 501(c)(3) research affiliate of Council on State Taxation, a nonprofit trade association of multistate corporations.
The Collection invites guests of all ages to participate in spring fling family activities
Hop on the bunny trail and celebrate the arrival of spring by hunting for golden eggs, taking photos with the bunny and other happenings at The Collection at RiverPark.
Beginning March 22 - 31, guests of all ages are invited to search The Collection to find the coveted golden egg. Guests can redeem the golden egg at Guest Services on Park View Court for a variety of different prizes such as: Passes to the Santa Barbara Zoo, $20 gift cards to IT’SUGAR, Menchies, movie passes and more. For additional information on what prize will be featured each day, visit The Collection at RiverPark Facebook page.
Have a hoppin’ good time and start your spring fling off right with the Easter bunny at The Annex. Bring the little ones and capture those special close-up moments with photos with the bunny. Photo packages are available for purchase. For photo packages, prices and more information please visit TheCollectionRP.com.
WHAT: Photos with the Bunny
WHEN: Mar. 29 from 3 – 7 p.m., Mar. 30 from 3 – 7 p.m., and Mar. 31 from 10 a.m. – 7 p.m.
WHERE: The Annex at The Collection at RiverPark
About the Collection (TheCollectionRP.com):
The Collection at RiverPark is a 750,000 square foot, open-air specialty retail center located in the heart of West Ventura County. Inspired by the beauty of the California coast, The Collection reflects the unique atmosphere of the surrounding seaside communities. The Collection is built around a town grid of retail streets, each of which has its own personality-a carefully crafted assortment of established and contemporary designer shops, distinctive dining, and signature entertainment venues. Anchors include Target, Century RiverPark 16, REI, Whole Foods Market, H&M, 24-Hour SuperSport and The Container Store. Restaurants include Yard House, Larsen’s Grill, Gen Korean BBQ, Lazy Dog Restaurant & Bar, Maria’s Italian Kitchen and more. Follow us on the web, Facebook, Twitter, Snapchat and Instagram at TheCollectionRP.