AB 1513 UPDATE - Temporary Injunction Granted to Prevent California from Enforcing the July 1, 2016 Deadline to Sign Up for "Safe Harbor Defense"

By: Kyle D. Kring

Posted on July 1, 2016

This is to update you on the Nisei Farmers League's constitutional challenge to the AB 1513 affirmative defense, and specifically, the deadline to notify DIR of your co mpany's intention to participate in the affirmative defense.

Yesterday, June 30, 2016 at approximately 4:30 p.m., the court granted Nisei Farmers League's request for a Temporary Restraining Order. Click here to view a copy of the court's order.

Per the court's order, this means that the State of California (DIR, DLSE and LWDA) is temporarily "restrained and enjoined from enforcing the July 1, 2016 deadline to sign up for the so-called "safe harbor" provision under California Labor Code section 226.2(b)(3)". Accordingly, the July 1, 2016 deadline to register with the DIR is "tolled until 10 days after expiration of the TRO", which means until July 28, 2016 at the earliest.

In addition, the court set an Order to Show Cause as to why a preliminary injunction should not be ordered, pending trial in the action, restraining and enjoining the State (DIR, DLSE and LWDA) from enforcing the following:

(1) the July 1, 2016 deadline to sign up for the so-called 'safe harbor' provision under California Labor Code section 226.2(b)(3), thereby tolling the deadline until 30 days after the preliminary injunction expires;

(2) the December 15, 2016 payment deadline under Section 226.2(b)(4), thereby tolling the deadline until 197 days after the preliminary injunction expires; and

(3) any requirements in Section 226.2 dependent on the phrases "other nonproductive time" or "directly related".

What this means is that there will be a formal hearing on July 18, 2016 at which time the court will decide whether a Preliminary Injunction should be ordered pending formal trial on the question of whether a Permanent Injunction will be issued. The Temporary Restraining Order will expire either (1) on July 18, 2016, if the court does not issue a Preliminary Injunction, or (2) upon issuance of a Preliminary Injunction, which will effectively extend the deadline to sign up with the DIR for the affirmative defense until the trial of the case.

Accordingly, this means that if you were considering signing up the for the AB 1513 affirmative defense today, you are not required to sign up today, since you have until at least July 28, 2016 to sign up. While each company's situation is different, we recommend that you immediately contact your employment attorney before signing up for the affirmative defense today, if you have not already signed up on the DIR website. Generally, if you have not already signed up, we recommend waiting until the issue is further clarified at the hearing on July 18th.

Kyle D. Kring is the Founding Partner of Kring & Chung, LLP. He can be reached via email at kkring@kringandchung.com.