Wage Change and Suitable Seating: Legislation Change in California

Wage Change and Suitable Seating: Legislation Change in California
4-20-2016 | by Dominic Shaw

California has made the news again.  Recently two important pieces of law have been signed by California officials. The first bit of legislation will gradually increase the state’s minimum wage to an unprecedented $15 per hour. This coincides in the midst of very heated debates between the various presidential candidates and may have political ramifications. The effects of this drastic change are still being debated, and can only be speculated at in a state as economically diverse as California.

The second piece of legislation is a bit older and has been debated vehemently. It deals with something referred to as “Suitable Seating.” Suitable Seating refers to the idea that employers must provide adequate seating for employees when the nature of the employee’s work reasonably permits the use of seats. This legislation also is slowly being defined to mean that a company’s need to provide seats that are in reasonable proximity to employees whose work does require standing and that these employees be allowed to use the seats at times when this sitting does not interfere with their duties.

There has been much debate amongst friends, on social media, and even in the courtrooms about what these new laws will mean. We would like to take a look at what they could mean for the various companies both big and small in California.

 

Wage Increase:

This increase in minimum pay has already been openly commended by President Barack Obama, who said, “It’s time for Congress to step up and do what is right for every hard-working American and our economy.” It is very easy to get swept up in his enthusiasm, but we’ve got to approach this change with some trepidation as multiple business groups have warned that wage increases could potentially cost thousands of jobs as employers were forced to give out ever larger paychecks.

These aren’t just the, so-called, “greedy” big businesses that are making claims that the number of jobs will have to be lowered.  Tom Scott, a representative of the California branch of the National Federation of Independent Business has made the statement that this wage increase will have a “devastating [impact] on small businesses.”

Scott’s logic can be very easily followed. For small business owners who work in those fields that are typically associated with lower employee wages, food, retail, etc., having to pay an ever increasing wage to their employees may become unaffordable.  This idea is based on the thought that small businesses’ will continue on their patterns of minimal fluctuation of income. As outgoing cash becomes greater and incoming cash remains essentially constant, these small businesses could rapidly go under.

There is another important facet of the minimum wage debate in California: the cost to taxpayers. One nonpartisan analysis calculated the cost for Californian taxpayers to be as high as $3.6 billion, affecting the 2.2 million Californians now working for minimum wage.  California has had ever increasing taxes over the last decade and as such has the highest outgoing emigration population in the country with approximately 250,000 people leaving between 2013-2014.  As the taxes follow the wage increase, even more California residents could find themselves searching for a home with lower tax rates.

Suitable Seating:

Suitable seating, once an obscure wage rule found in California law books, has now become a heated issue. Court cases against the likes of CVS and JP Morgan Chase & Co., and other corporations have recently made it up through the various levels of the California judicial system. What has made these cases so intriguing is that the court decisions have been increasingly split. Employers are increasingly pushing for an interpretation of the law that will make it more difficult for a plaintiff to seek large damages under this law. Some courts however have considered more substantial payouts to the plaintiff.

A look at earlier cases points to some significant wins for employers. Because of the obscurity of these laws, there was no precedence for what suitable seating might imply. Early court battles saw the employer referring to a company’s goals—efficiency, effectiveness, and even the image that the employer would like to convey—in order to define this vague term. Later cases however have defined the term by stating that an employer must provide a seat for any employee who’s job can be done while seated.

These previous questions have now been answered with more finality as California’s Supreme Court passed a decision on Kirby v. CVS Pharmacy Inc. on April 4th, 2016.

The California Supreme Court answered three questions about this law: What does the “nature of the work” phrase refer to? Is a business’ judgment relevant when defining whether a job can be “reasonably done without a chair? and Must an employee prove that a suitable seat is available in order to show that the employer has violated the seating provision?  Let’s look at their answers.

Does the “nature of the work” phrasing refer to an employee’s entire work day or to individual tasks that may be assigned?  The Supreme Court ruled that each individual task must be accounted for. There cannot be one chair that serves an employee who travels significant distances to complete various tasks. The opportunity to sit must always be present.

Is an employer’s judgment relevant when deciding how they want their employees presented?  The Supreme Court chimed in on this as well, stating that an employer’s business judgment and other limiting factors, such as workplace layout, will be considered but will not be determining factors for whether or not a seat will be required. It will be an overall assessment of all factors which a court’s decision must be based on.

Lastly, the question of whether the employee must prove availability of a seat was promptly answered. It was decided that if an employer argues that there is not a seat available, then the employee must prove availability.

The Supreme Court’s rulings will likely have two effects. The first is that employers will need to reassess their practices and carefully consider whether more seats will need to be provided for employees. This will be especially important for businesses that prize customer service. Most such businesses require their employees to stand, signaling attentiveness to the customer. While ideals such as customer service will be important factors of any class action cases raised against these businesses, they now know that their judgment cannot be taken as the end all.

The second effect will be that of an increased number of such class action law suits raised against businesses. Until further precedence is set, the debate will likely rage on.

Overall, the recent changes in California law have been explained very well by California’s governor. He said, “Economically minimum wages may not make sense, but morally and socially and politically they make every sense.” While this statement refers specifically to minimum wage, it can be carried over into the Suitable Seating cases.  It’s important to care for the citizens of California, but unfortunately these recent changes place all of the responsibility to care for the citizenry squarely on the shoulders of business owners.  These changes may be great morally, but we will have to wait and see how significantly they affect California in the long run.