How to Say "You’re Fired"

Just FiredIf you’ve ever watched reality TV, you know the producers go for a big shock factor on each show. Nothing shocks someone more than hearing those two dreaded words:

“You’re Fired!”

There’s one show in particular, on which the “boss” actually utters those words and makes a cobra-like gesture when he let’s a contestant know they been fired.

Queue the dramatic music. Cut to the scowl on the face of the “boss.”  Pull the camera back to catch the look of shock on the face of the “employee.”

It’s good television for sure.

But in real life that is a dangerous scene.

In real life, in real business, that scene should never happen.  Any time an employee is separated from his position, there should be an orderly process void of snap judgments and surprises.

There are four main reason people lose their jobs:

Reason 1:  A Reduction in Force

Reason 2: Elimination of a Position

Reason 3: Poor Performance

Reason 4: Misconduct

Just about every job termination can be fit into one of these categories so let’s look at the business implications of each of them.

Quick reminder: This is not legal advice. You pay for legal advice. These workplace observations are free.  Always consult an attorney (preferably me) before making a decision on terminating the employment of any employee.

1. Reduction in Force

Sometimes you have more employees than you need. Maybe sales have slowed. Maybe you have a seasonal shift in demand. Maybe you just hired too many people and you cannot pay all of them.

Regardless of the reason, if you have more employees than you can afford, it may be time to reduce the size of your workforce.

In this case, you can and should prepare written notification for each employee whose position is eliminated.  The documents should be personalized and they should contain the specific dates when employment will be discontinued. They should also detail what, if any, severance pay and benefit packages are available.

You want to take great care to be fair and consistent in the methodology you use to calculate any severance or continuing benefits.

You also want to have your attorney review any documents the employee will need to sign as he departs. This is particularly the case for large workforce reductions, but certain Federal laws may apply, requiring notice and severance revocation periods.

If there will be some positions eliminated and some positions retained within one job classification, you definitely want to make sure you review each employee being retained and each employee whose position is eliminated, with your attorney.  This should be done for a number of reasons (cough avoiding a discrimination lawsuit cough) not the least of which is fairness.

2. Elimination of a Position

Similar to a reduction in force, eliminating a position requires a legal review to test for fairness and objectivity.

You may need to prepare similar paperwork detailing the date the work period ends and what, if any, severance pay and benefits are available.

One of the things you want to focus on when you eliminate a position is how you will redistribute the workload from that position. Many employers expose themselves to liability when they simply change the title of the job but all the responsibilities remain the same.

Eliminating a position is not a shortcut to terminating a problem employee. It should only be done when a position is no longer required or when a job has drastically changed. Using that excuse for firing a poor performing employee can result in a wrongful termination lawsuit in which your defense (poor performance) looks like pretext or retaliation. It’s also cowardly.

3. Poor Performance

When an employee is not performing up to standard, his employment can be discontinued.

While it may not be required, it is always a good idea to have a documented discussion with the employee about his performance prior to job termination. This provides an opportunity for the employee to improve and it helps show your desire to correct the situation without additional disciplinary action.

Documentation should be carefully worded and you should always have your attorney review it before you present it to the employee.

In the event the employee’s performance does not improve, you have a record of the previous conversations and it should come as no surprise to the employee.

The key in addressing poor performance with an employee is to have a process in place and make the employee aware of the process at the outset of his employment. But that being said, you have to simultaneously make clear that the process is ideal, but not required, before a termination can occur. It’s a tricky line to walk, so a good handbook and training for you HR staff is key.

4. Misconduct

Rarely, you may need to address an incident of misconduct that warrants job termination. Incidents such as theft, harassment, dishonesty, violence and discrimination require immediate action. In fact, ignoring such conduct and not terminating right away can create serious liability issues for you as the employer. So take these things seriously and act swiftly.

These incidents almost always require the involvement of or guidance from an attorney. Other people’s rights may be implicated. Or you may get an excuse from the employee for his behavior (such as a disability) that make things tricky. You want to connect with your lawyer to review what to say, how to say it and what documentation to prepare and deliver to the employee.

In some cases, you may need to gather facts and investigate before making a final determination. Again, it is best to have an attorney involved in the matter to advise you on how to conduct and document this investigation.

The law, as it relates to employees, is complex and it varies from state to state. The best time to review these laws and address them with your attorney is before you hire your first employee. The second best time is right now.

Nobody likes surprises when it comes to employee issues. Let’s leave the drama to reality television.

Reach out to me today to discuss my Employer Protection Package. My employment law team and I will review your current state and make recommendations for improvement before they become expensive litigation matters.

Vacation and Sick Pay


Vacation Pay

There are not any California labor laws that require employers to provide its employees with a vacation policy, either paid or unpaid. However, if an employer does offer a vacation policy as part of its employment package, certain restrictions are placed on the employer as to how they offer pay vacation time. Additionally, employers should ensure that they create a uniform vacation policy and apply it uniformly to all employees to avoid charges made by any employees of discrimination or disparate treatment.

Weekly Timesheet

According to the Division of Labor Standards Enforcement (DLSE), earned vacation time “is considered wages, and vacation time is earned, or vests, as labor is performed.” For example, if an employer offers three weeks (15 business days) of vacation per year, after six months of work the employee will have earned 7.5 vacation days. Vacation pay accrues as it is earned and cannot be forfeited upon termination, even if the employee was fired. However, the employer is permitted to place a reasonable cap on vacation time, so employees cannot accrue over a certain amount of vacation hours or days.

At the time of termination, the employer must pay all earned and unused vacation time to the employee within 72 hours of termination, at his or her final rate of pay, unless otherwise stipulated by a collective bargaining agreement. From time to time, a former employee will come back to an employer and file a claim, stating he or she was not paid out in full for vacation hours earned or other fringe benefits, such as business travel reimbursement, bonuses, unpaid overtime, etc.

Sick Pay

Beginning July 1, 2015, California employers will be required to offer paid sick leave.

The new law permits any employee who works in California for 30 or more days within a year from the beginning of employment to receive paid sick leave. Employees earn one hour of paid leave for every 30 hours worked. An employer may increase the hours accrued by their own internal policy. However, they must meet the state minimum. Temporary and part-time employees also accrue sick days. Accrual for each employee begins on the first day of employment or July 1, 2015, whichever is later. Certain and limited employers are excepted from this law.

It is also important to note that an employer can limit the paid sick leave each employee can use in one year to 24 hours or roughly, three days. Employers can also cap each employees accrual at 48 hours or six days. Like vacation time policies, policies such as these must be clearly defined and uniformly enforced. However, unlike vacation time, sick days are not paid out at the end of an individual’s employment. Each employee must essentially “use it or lose it,” unless your company has an internal policy stating otherwise.

If you are unsure whether or not you owe former employees money, Bellatrix PC can advise you how to proceed with the claim. If we determine that the claim has merit, we can help your business find the most cost effective method of handling the claim.

California Division of Labor Standards Enforcement (DLSE) Claims


The DLSE: Employee Complaints and Workplace Discrimination

In addition to maintaining supervisory authority over labor standards and the issuance of permits and certification, the DLSE is also the California government agency before which employees can file claims against their current or former employer.  Employees are permitted to seek wages and penalties for up to three years back from the filing date of the claim.  Such claims typically include, but are not limited to, the following matters:

Welcome to Sacramento sign

The DLSE also doubles as the California version of the federal Equal Employment Opportunity Commission (EEOC). Disgruntled employees can and will file discrimination complaints with the DLSE, including but not limited to complaints involving:

Employees often choose to file a claim with the DLSE, as it is cheaper and faster than filing a lawsuit in Superior Court. Additionally, the DLSE will help employees with their claims, so employees may not need to retain a California labor law attorney.

The DLSE also handles retaliation complaints, in which a former employee alleges that his or her employer took any improper actions in response to the employee’s conduct.  Employer conduct which potentially constitutes retaliation includes firing, suspending, demoting, or otherwise disciplining an employee because the employee gave information to a government agency or “blew the whistle” on workplace conditions, alleged wage violations, and so forth.

Employees generally have up to six months to file a retaliation claim, counting down from the date the violation supposedly occurred.  However, complaints involving certain Health and Safety Code violations must be filed within 90 days, while complaints pertaining to certain parts of the Labor Code may be filed up to a full year after the incident.

If your business is on the receiving end of one of these complaints, be prepared to commit to a time-consuming process.  Unfortunately, the procedures through which the DLSE handles the former employee’s case are quite lengthy, sometimes taking up to nine months.  Working with an attorney can help to keep the process as streamlined and time-efficient as possible.

The DLSE has prosecutorial powers over businesses it believes are violating the California Labor Code — as well as the ability to award extensive penalties and pursue judgments on employees’ behalves.  Having an experienced employment law attorney on your side can increase your business’ chances of obtaining the desired outcome while protecting your company’s bottom line and professional reputation.

Commercial Lawyers for Business Defense

Bellatrix PC has helped a number of California business entities fight DLSE claims against former employees.  While it is often best to negotiate toward a mutually agreeable settlement during the DLSE conference, Bellatrix PC is prepared to see the claim through to the end, including prepping and representing your business at the DLSE hearing (trial) before the Labor Commissioner.

In addition to handling litigation matters, an experienced commercial attorney from Bellatrix PC can handle all of your business’ day-to-day legal needs.  By establishing an ongoing relationship with our firm, we can act as outsourced general counsel for all of your company’s legal questions and regulatory concerns. Establishing a relationship with experienced counsel can ensure that when an issue or lawsuit arises, your company will know where to turn for dependable legal advice.

To begin discussing your compliance or regulatory concerns in a confidential legal consultation, call our law offices today at (800) 449-8992.  Ask about our Business Risk Review and address simmering issues before they explode and take the business with it.

Layoffs and Reduction in Workforce


Reducing your workforce is never an easy decision. Many employers will do everything they can to cut costs, increase sales, secure loans, etc., in order to keep their workforce fully intact. However, sometimes these adjustments are simply not enough and a reduction in workforce, otherwise known as a layoff, becomes necessary.

Office staff

Before notifying the affected employees of the reduction in force, it is very important to make sure that your business is legally protected. There are a number of laws and acts that protect employees, not employers, in reduction-in-force or layoff situations. It is critically important to keep these regulations in mind when determining how you execute a reduction in force, which employees to include in the reduction, and how to structure severance agreements if you choose to offer them.

Don’t rush your business into a legally and financially disadvantageous situation. Before you commit to a potentially disastrous restructuring of your workforce, contact the experienced employment law attorneys of Bellatrix PC for assistance. We will help your company safeguard its interests, advise you through each stage of the legal process, and most importantly, keep you compliant with state and federal laws. To arrange for a private consultation, call our law offices today at (800) 449-8992.

Does the WARN Act Apply to Your Business?

The main objective of the WARN Act, or the Worker Adjustment and Retraining Notification Act, is to ensure that employees have sufficient time to prepare for the transition between jobs. The WARN Act generally applies to private for-profit businesses and private non-profit organizations, as well as quasi-public entities separate from the government, which employ:

  • A minimum of 100 full-time employees, excluding employees with fewer than six months on the job, as well as employees who work under 20 hours per week.
  • A minimum of 100 employees who collectively work a combined minimum of 4,000 hours per week.

Under the WARN Act, employers are generally required to provide the affected employees with 60 days’ advance notice, which must contain specific information, of the following:

  • The temporary or permanent closing of an employment site where a business intends to lay off 50+ full-time employees.
  • A mass layoff, where there will be at least 50-499 employees laid off at a single employment site and that number of laid off employees will be a 33% reduction in workforce at that employment site.
  • Any reduction in workforce of 500+ employees at a single employment site.

If adequate notice is not given, the employer could be liable for back pay and benefits for the time period of the violation, up to 60 days, which can be reduced by any wages the employer pays over the notice period. Employers can also be subject to civil penalties and paying an opposing party’s attorneys’ fees for WARN Act violations.

There are certain exceptions to providing WARN Act notice, including if a natural disaster is behind the plant closing or layoff, if the business could not have reasonably foreseen within 60 days the events leading to the layoff or closing, and when a business is actively seeking capital to try to avoid layoffs.

Avoiding Employment Discrimination Lawsuits

In California, employers are not permitted to layoff an employee solely based on sex, gender, age, national origin, religion, or sexual orientation. When a reduction in force impacts or targets employees in one of these protected classes, it can lead to claims of discrimination. The most common of these claims are made for age discrimination, when an employee states that he or she was eliminated because of the expense of their continued employment to their employer.

When planning for a reduction in force, employers should analyze their workforce to determine what it looked like before and what it will look like after making the reduction decisions. For example, if the employer statistically had 40% minorities before the reduction and 5% after, the employer needs to have a legitimate business rationale for this result that will withstand a charge of discrimination, if one is made. The employer may want to rethink their method of restructuring in a situation such as this one.

The Older Workers Benefit Protection Act (OWBPA)

The Older Workers Benefit Protection Act (OWBPA) is an amendment to the Age Discrimination in Employment Act (ADEA) directed at protecting the benefits of workers over the age of 40. Generally, whenever employers seek a release from federal age discrimination claims, such as in severance packages or settlement agreements, employers must comply with the OWBPA.

The requirements of the OWBPA are generally triggered in the four following release scenarios:

  • An employee is involuntarily terminated, but does not bring a lawsuit or file a complaint with the Equal Employment Opportunity Commission (EEOC).
  • A release by an employee who was involuntarily terminated in a mass layoff or group workforce reduction, but does not file a lawsuit or complaint alleging age discrimination.
  • A release in the settlement of a disputed claim, including lawsuits and EEOC claims.
  • A release by an employee who voluntarily quit the job as part of an incentive program.

Regardless of the originating scenario, when the OWBPA is triggered, the Act requires that releases be drafted in plain language contain certain provisions, including a written advisory for the worker to consult with an attorney prior to signing the release, state a specified period for the worker to review the release (21 or 45 days, depending on the circumstances), and provide for a seven-day period to revoke the release after signing. If a release is not in compliance with the OWBPA, it can be invalidated, so it is important to ensure that you comply with this Act.

Union Contracts and ERISA Compliance

Employers planning to lay off union workers should review the collective bargaining agreement (“CBA”), as it defines employee rights and ensures that they are not violating provisions of the CBA. Certain parts of the agreement may need to be renegotiated with the union, or you may have to adjust your method of laying off union workers.

Employers should also be aware that some severance and voluntary incentive pay plans may be plans covered by the Employee Retirement Income Security Act, commonly known as ERISA. This act generally establishes minimum standards for pension plans in private industry and gives extensive rules in the area of employee benefit plans.

All members of your management team that are given the responsibility of notifying employees of the reduction in force should be educated to ensure consistency. Your management team should know exactly what procedures to follow in conducting exit interviews, what statements should or should not be made, and how to answer employee questions.

Your team should also conduct the process as quickly as business conditions permit to maintain acceptable productivity levels and employee morale. Human resource administration should continue as normally as possible, administering performance reviews and counseling notices. Do not use selection for layoff as a substitute for incomplete performance management.

If your business is considering a reduction in force, or layoff, receiving advice from an employment attorney is recommended. Bellatrix PC can help ensure that your reduction in force is executed in compliance with all of state and federal laws. We can also help draft or review severance agreements for affected employees.

To arrange for a confidential legal consultation with the experienced business attorneys of Bellatrix PC, call us today at (800) 449-8992. We have offices in San Diego, St. Louis, and Riverside, CA.

Payroll Tax Disputes & EDD Audits


California state payroll taxes are governed by the California Employment Development Department (EDD).  The EDD is California’s third largest taxing agency.  It has the responsibility of administering the collection, accounting, and enforcement functions of four basic employment taxes: unemployment insurance tax, employment training tax, disability insurance tax, and personal income tax.

Audit in red


If your business receives an audit notice from the EDD, all four of these taxes will likely be investigated. If your business has been selected for an EDD audit, it is absolutely critical that you seek legal representation from an aggressive business defense attorney who can negotiate effectively with EDD payroll reporting agents. Without protection from a knowledgeable legal representative, you greatly increase your risk of being burdened with significant  financial liabilities, and if fraud is alleged, you could even find your company at the center of a criminal investigation carried out by EDD’s Investigation Division.

EDD Audit Selection Factors: Independent Contractor Status

Many EDD audits arise when a former worker, which the business classified as an independent contractor, files for unemployment insurance.  Since unemployment insurance only applies to employees, this will likely raise a red flag at the EDD.  The EDD may ask the former worker whom they worked for, if they have a license to do business in the state of California, and related questions in an attempt to determine if the business misclassified the worker as an independent contractor.  If the EDD has enough concern to flag your entity’s file, it may provoke an audit, also known as a “status audit.”

The EDD and IRS follow similar rules when determining whether a worker should be classified as an independent contractor or employee during a status audit or California payroll tax dispute.  However, there are also some significant differences.  For example, while the IRS applies the “right-to-control” test, which focuses on 20 factors that are examined in making a determination, the EDD first applies three statements:

  1. The worker can quit or be terminated at any time, without being legally obligated for failure to complete the job.
  2. The manager (or designated person) assigns, reviews, and supervises the individual’s work.
  3. The worker performs services that are part of the regular operation of the State agency.

If these three statements are found to be true, then the EDD presumes the individual is an employee.  If the veracity of these statements is in question, the EDD turns to a list of 24 elements used to investigate the worker’s status as an employee or independent contractor.  These elements include, but are not limited to:

  • Whether the worker is engaged with a separate company or occupation in addition to their main occupation.
  • Whether the worker relies on his or her own tools, equipment, and/or work environment.
  • Whether or not the worker is typically supervised.
  • How much control the worker has over his or her services.
  • The degree of specialized skill which is required to adequately perform the worker’s services.
  • How long the worker renders his or her services.  This helps the EDD gauge whether the work was done on a single-project, isolated basis (indicating an independent contractor), or was performed continually (indicating employee status).
  • The manner in which the worker was paid.
  • Whether the worker and employer both feel they are engaged in an employee-employer relationship.  While this factor is not considered to be a sufficient gauge in its own right, it can make an impact on the EDD’s determination.
  • Whether the worker has the authority to make business decisions which could result in loss or profit, discounting sheer time investment.

Will the IRS Get Involved?

The EDD tends to be more aggressive than the IRS, due to the absence of a California equivalent to Section 530 of the Revenue Act of 1978, which provides reasonable basis and safe harbor rules for treating workers as independent contractors.  If your business is found guilty of misclassifying employees as independent contractors, paying workers cash “under the table,” failing to file 1099 forms, or making other attempts to conceal the existence of workers, your business can be responsible for paying up to three years of back employment taxes on the incorrectly classified or unreported wages.

It is also very important to keep in mind that there is increasing cooperation between the EDD and the IRS when it comes to status audits and payroll tax disputes. Most of the time, the IRS will not consider or review the results of an EDD audit until it is finalized.  The IRS may choose to conduct a full scale examination on its own, or take the work papers of the EDD audit and base its assessment upon their findings.  When handling an EDD audit, you must always be aware of the possibility of IRS involvement, as well.

Status or California payroll tax dispute audits and appeals are very complicated.  They require knowledge of California tax law, as well as an understanding of the procedures of the EDD.  If your business has received an EDD pre-questionnaire, questionnaire, or audit notice, Bellatrix PC can help.  Our law group can be your voice throughout the audit proceedings, and will explain step-by-step what typically occurs during the California EDD audit process. We will explain potential outcomes and how to handle each possibility.

To arrange for a private legal consultation, call the business defense lawyers of Bellatrix PC right away at (800) 449-8992.

Occupational Safety and Health Act (OSHA)


The Occupational Health and Safety Act of 1970, also called the OSH Act, mandates federal safety regulations which the majority of private sector employers must comply with.  The provisions delineated by the OSH Act are strictly enforced by OSHA, or the Occupational Safety and Health Administration, and if an employee alleges unsafe working conditions by filing an OSHA complaint, the business which is allegedly in OSH Act violation may be assessed considerable civil penalties of up to $70,000 per violation.  OSHA conducts tens of thousands of inspections each year, and if an inspector determines the existence of a hazardous condition, the ultimate result may be litigation in federal court.

Construction workers on site

If you are are a business owner who is concerned about your workplace safety policies, or if an employee has already brought a workplace safety complaint against your company, the experienced employment law lawyers of Bellatrix PC can help.  Whether you’d like to identify vulnerable areas in your current practices through our business risk review service, or you are already facing a lawsuit and need aggressive legal representation, our OSHA attorneys are here to assist.

To arrange for a private legal consultation, call the law offices of Bellatrix PC right away at (800) 449-8992.

What is the Occupational Safety and Health Act?

The OSH Act created OSHA with the purpose of making sure that the safety and health concerns of all American workers were being met.  In order to continuously accomplish this goal, the OSH Act focuses on two broad areas:

  1. Enforcing occupational and public safety laws.
  2. Providing information and assistance to employers, workers, and the public regarding workplace safety and health issues.

Employers must bear in mind that OSHA, which has jurisdiction over private sector employers excluding self-employed persons or sole proprietors and workers on family-owned farms, aggressively enforces compliance with federal safety regulations across a wide variety of industries.  This is particularly true of industries which are known to be statistically prone to injuries and fatalities among workers, such as construction, logging, and manufacturing.

The OSH Act covers private sector employers and their employees in the 50 states and certain territories and jurisdictions under federal authority.  Additionally, the State of California, under an agreement with OSHA, operates its own occupational safety and health program to bolster the federal regulations.  The Department of Industrial Relations administers this program, which is named the California Occupational Safety and Health Program, or Cal/OSHA.  The Division of Occupational Safety and Health, or DOSH, is the principal executor of the plan, which oversees enforcement and consultation.

Cal/OSHA Compliance and Work Site Inspections

Cal/OSHA applies to all public and private employers in the state, with the following six exceptions:

  • Government employees
  • Employees of the United States Postal Service
  • Private sector employers located on Native American lands
  • Maritime activities on the navigable waterways of the United States
  • Private contractors working on land designated as exclusive federal jurisdiction
  • Employers who require federal security clearances

The Cal/OSHA enforcement unit conducts “programmed” and “unprogrammed” inspections of work sites.

A programmed investigation is the result of a) being randomly selected in a specific industry, or as part of a national or local workplace safety and health emphasis program, or b) an inspection of another location operated by the same employer, but was not the reason the first visit was initiated.

An unprogrammed inspection is the result of an accident, complaint, or referral that an alleged incident occurred at a work site that may have violated the health and/or safety of workers.

During the inspection process, the Cal/OSHA inspector will hold an opening conference to explain the reason for and scope of the inspection.  The inspector will then complete a walk-around to view the work site, conduct employee interviews, take photographs, and collect environmental samples to see if a violation has occurred. Once the investigation is completed, the Cal/OSHA inspector will hold a closing conference to discuss any alleged violations and requirements for abatement.

If a citation or notice is received, an appeal may be submitted to the Occupational Safety and Health Appeals Board in reference to the violation, proposed penalty, or abatement requirement.  Any appeal must be made in writing within 15 working days of receipt of the citation.  If an employer fails to notify the Appeals Board of their appeal within the 15 working day limit, and no notice is filed by an employee or employee representative within that time, the citation becomes a final order not subject to review by any court or other agency.

Contact Our Employment Law Attorneys

If your business has received a Cal/OSHA citation or notice, it is wise to seek legal advice from a California OSHA lawyer.  Bellatrix PC is well versed in Cal/OSHA law and can step in at any stage of the violations, from the time the compliance officers first appear at the work site, upon receipt of citations, at the conference with the area director, during discovery and trial, and on appeals before the Occupational Safety and Health Review Commission. Our legal group can also advise you on how to prevent such incidents from occurring again, and/or how to handle them correctly, should they occur in the future.

To begin discussing your matter in a private case evaluation, call Bellatrix PC at (800) 449-8992.  Our California law offices are located in San Diego and Riverside.