Additional Insured Endorsements
This week’s post is a quick lesson on additional insured endorsements, or AIs. If you have an AI on another company’s insurance policy, you are essentially another named insured on the policy. However, make sure you are being named as an AI on the right type of policy when you enter into the business relationship. What I see companies typically do is request to be named as an AI on the Commercial General Liability (CGL) policy only. This is fine if the only potential claim you can forsee occurring down the road is a third party claim. By “third party claim,” I mean that some one else makes a claim against you or sues you. What you need to keep in mind is that CGL policies do not cover your own losses (a first party claim.) They only cover claims by third parties.
Let’s say that your products are temporarily stored at a third party warehouse or distribution center. Make sure you that you are named as an AI on the warehouse or distribution center’s property insurance policy. The warning here is that, if you are only named as an AI on the CGL policy, you cannot make a first party claim for your own damages to the insurance company under that AI.
It is very important that you speak to your insurance agent or lawyer if you have any questions about obtaining or giving proper AI coverage.
Kring & Chung March Newsletter
The newsletter is here, with articles on new 2012 prevailing wage requirements for contractors, how to save money in a divorce, and a $15 mm judgment reversed against U.S. Bank in a wage and hour class action.
A Quick Summary of Meal and Rest Break Law
California’s meal and rest break laws are complex. The following is by no means an exhaustive list of everything you need to know about meal and rest breaks. It is a general overview of some of the most important concepts.
• Nonexempt employees must receive meal periods. The start and ending time of their meal periods must be recorded.
• Employers must provide a meal period to nonexempt employees who work more than 5 hours in a workday. The meal period must start before the beginning of the 6th hour worked. (So if your employee asks you if he can work through lunch so that he can leave early at the end of the 8 hour workday, the answer is no. Whether you choose to let the employee leave early is up to you, but the employee must take a lunch break at the required time.) However, the meal period may be waived by mutual consent of the employer and employee if the employee’s workday does not exceed 6 hours.
• Employers must provide a second meal period to nonexempt employees who work more than 10 hours in a workday. The second meal period must start before the beginning of the 11th hour worked. The second meal period may be waived by mutual consent of the employer and employee if the employee does not work more than 12 hours in the workday and has not already waived the first meal period.
• Meal periods may be unpaid, must last a minimum of 30 uninterrupted minutes, must be free of all duty, and the employee must be permitted to leave the workplace.
• Employers must pay nonexempt employees an hour of pay at their regular rate for each workday that a meal period was not provided.
• Rest periods must be authorized and permitted for every four hours worked “or major fraction thereof.” The DLSE interprets the phrase “authorize and permit” as requiring employers to merely make rest periods available to employees. No rest period is required if the employee’s workday is less than 3 ½ hours. Rest periods should, insofar as practicable, be in the middle of each work period. “Major fraction thereof” means more than 2 hours. For example, an employee who works an 8 hour workday must be authorized and permitted to take 2 paid rest periods, as close as practicable to the middle of each 4 hour segment of the workday.
• Rest periods must be paid and uninterrupted for a full 10 minutes, must be free of all duty, but the employee may be required to remain at the worksite during rest periods. Rest periods may not be combined with another rest period, a meal period, or be taken at the start or end of the workday.
• Employers are not required to document rest periods in their payroll records.
• Employers must pay nonexempt employees an hour of pay at their regular rate for each workday that a rest period was not provided.
Kring & Chung February Newsletter
The February newsletter is here, just in time for you to read to your sweetheart on Valentine’s Day. Just kidding. Articles on new penalties for misclassifying employees as independent contractors; steps to take after a divorce; and courts not enforcing employment arbitration agreements if they are one-sided.
Do You Google Your Employees?
Do you ever Google your employees or prospective employees to find out what kinds of things they say on the web? If so, keep in mind that the law prohibits discrimination when making employment-related decisions. This includes discriminating against employees or job applicants on the basis of their religion, political affiliation, sexual orientation, age, qualified disability, marital status, pregnancy, cancer, etc.
The University of Kentucky ended up paying $125,000 to settle just such a lawsuit against it by a scientist it was considering for a director position. This particular scientist was the number one candidate being considered for the job. However, a review of the scientist’s personal website showed he held rather strong views in favor of the theory of creationism. The university was concerned that the scientist’s public stance questioning the scientific validity of the theory of evolution would not reflect well upon the university’s biology department. Thus, despite the scientist’s otherwise superb qualifications, the university passed him over for the position on the grounds of his creationist religious beliefs.
The moral of this story is that, if you do internet searches of your employees and prospective employees, make sure that you do not make any employment-related decisions with respect to that individual on a legally protected basis.
SB 459, signed by Gov. Jerry Brown in October 2011, prohibits employers from willfully misclassifying an employee as an independent contractor. “Willful misclassification” means that the employer is trying to “avoid employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.” The new law also makes any non-lawyer who advises an employer to willfully misclassify employees jointly and severally liable along with the employer.
Penalties for violation include:
1. $5,000 to $15,000 civil penalty per violation.
2. $10,000 to $25,000 civil penalty for a “pattern and practice of violations.”
3. The court or California Labor and Workforce Development Agency (“CLWD”) can contact the California State Contractor’s Licensing Board and require it to initiate action.
4. Required notice posting, visible to all employees and the public, stating that the employer has committed a serious violation of the law by willfully misclassifying employers and independent contractors; that it has changed it business practice to avoid further violation; that any worker believing he or she is misclassified may contact the CLWD; and that the notice is being posted pursuant to a state order. This notice must be signed by a company officer and must remain posted for one year.
Delay in Requirement to Notify Employees of Right to Unionize
The National Labor Relations Board (“NLRB”) has postponed the effective date of its controversial rule requiring all employers to post notices advising employees of their right to unionize or otherwise demonstrate against their employer. The effective date has been postponed from November 14, 2011 to January 31, 2012.
The NLRB claimed that the reason for the postponement is “to allow for enhanced education and outreach.” However, it is clear that the postponement is due to pressure from impending legal challenges in the United States District Court. Furthermore, the House of Representatives proposed a rider to the NLRB’s 2012 budget which would prohibit the NLRB from allocating any portion of its budget towards enforcing the rule.
The NLRB’s official press release can be viewed here.
