The Letter Of The Law March 2016

IN THIS ISSUE:

EMPLOYMENT: The Cost of Doing Business in California for Garment Industry Employers

FAMILY LAW: Transgender Divorce

EMPLOYMENT: SB 588 Creates Personal Liability for Officers, Directors, and Managing Agents of Employers for Wage and Hour Violations

The Cost of Doing Business in California for Garment Industry Employers

By: Kyle D. Kring and Alis M. Moon

The Division of Labor Standards Enforcement ("DLSE") implements certain requirements for garment industry employers before they may begin operating in California. These strict requirements were put into action with the passage of the Garment Manufacturing Act in 1980, which was in response to the California's Legislature's efforts to protect the wages and health and safety standards throughout the garment industry. Recently, on March 11, 2016, the Department of Industrial Relations published a "Summary of Some Basic California and Federal Employment Requirements for Garment Industry Employers," which summarizes what garment industry employers need to do in order to operate in California.

One of the most onerous and often overlooked requirements is the registration requirement, which states that every business engaging in garment manufacturing must register with the DLSE before doing business in California. The DLSE also imposes a duty on all garment industry employers to ensure that those businesses in which it contracts with are also registered with the DLSE. If a garment industry employer contracts with another garment industry employer who is not registered, the employer - even if registered with the DLSE - will be jointly liable for the labor law violations of the unregistered employer for unpaid wages and penalties, which can be substantial.

For a complete list of the requirements, visit http://www.dir.ca.gov/dlse/Garment-Summary_of_Basic_Req.pdf. If you are a garment industry employer that needs assistance complying with these requirements and California law, please contact us immediately.

Transgender Divorce

"May you live in interesting times," is a Chinese curse or proverb, depending upon what authority you rely. Although each generation might proclaim their generation to live in the most interesting of times, I dare say that the millennial transition is turning out to be an ardent advocate and witness to respect for personal rights. This may lead some of us in the 21 st century to look back on civil rights and equal rights with a head scratching pondering of what seems so obvious to us now. The year of 2015 brought the landmark United States Supreme Court decision of In Re Obergefell (Obergefell v. Hughes), more commonly known as Marriage Equality, which summarily holds that no two parties of the same sex (or of any gender or gender identity) shall be deprived of the rights to enter into a legal marriage with all of its benefits and responsibilities. In one admittedly landmark decision, my clientele potentially doubled. Now, as far as legally-protected constitutional rights are concerned, same sex marriages are not to be treated differently than traditional marriages. Insofar as it comes to the divorce process (and unless there is a domestic partnership to dissolve), is the divorce process any different when a transgender party is involved? Let's explore that...

With the metamorphosis of Caitlyn Jenner being broadcast on tabloids and media of all manner, many of us have been able to witness her transition from a biological male and gender-identified male, the infamous Bruce Jenner, to a gender-identified female, Caitlyn Jenner, who is in the process of transitioning to a female in as many aspects as biologically and scientifically possible. We are learning the lingo associated with these transgender individuals and are quickly expanding our legal terminology and processes to encompass and protect their legal rights as well.

If you are interested in this topic enough to be reading this article, let me caution you to make sure that any authority you rely upon is dated after the Obergefell decision which was announced on June 26, 2015. Now, post- Obergefell, each and every state in the United States must recognize the validity of a same-sex marriage or a prior marriage that was valid when entered into. This is essentially now a part of the protection provided by the Fourteenth Amendment to the United States Constitution. Since transgenders are of a biological sex transitioning to a gender-identified sex, how can they not fit into the protections afforded under the Fourteenth Amendment? They do. Regardless of what transitioning is taking place, as long as their marriage was valid when they entered into it, it will continue to be recognized under Obergefell. Any marriage that a transgender enters into after Obergefell will be recognized as valid as long as the state's criteria are met.

So, if the marriage of a transgender is viewed as the same as any other marriage, then a divorce involving a transgender or a same-sex couple will be the same. A uniqueness in California is that, because we had a system in place for domestic partnership prior to Obergefell, any couple that was in a registered domestic partnership in the State of California, will have to dissolve their domestic partnership along with their marriage, should they choose to do so. The domestic partnership is a separate legal entity and continues to be treated separately from marriage and it's step-sister, divorce.

So use caution when googling or researching transgender divorce. Legal information is specific to the state that the author is licensed in (assuming the article is authored by an attorney), and if the information was written before Obergefell then it's no longer relevant from a legal perspective.

SB 588 Creates Personal Liability for Officers, Directors, and Managing Agents of Employers for Wage and Hour Violations

By: Kyle D. Kring

Senate Bill (SB) 588 known as the "The Fair Days Pay Act" went into effect on January 1, 2016. The bill's stated purpose was to enhance the Labor Commissioners ability to enforce California Division of Labor Standards Enforcement (DLSE) judgments. Where a worker wins their case before the DLSE, SB 588 gives the California Labor Commission the right to use any of the existing remedies (such as filing a lien or levy) available to a traditional judgement creditor i.e. plaintiff that prevails in a lawsuit, and to act as a levying officer when enforcing a judgement. In addition, it prevents an employer from closing down its business and reopening under a new name in order to avoid their debts to workers.

Unfortunately, tagged on to the end of this lengthy bill, and not discussed in the legislative history, is a standalone provision that creates personal liability for owners, directors, officers and managing agents of employers for wage and hour violations.

Until the passage of SB 588, there was arguably no individual liability under the Labor Code for state wage and hour violations in California, other than under PAGA (Labor Code 2698, et seq). This meant that employees were not permitted to sue individual managers, officers and directors for the company's violations of provisions of the California Labor Code. SB 588 changed this long-standing rule.

In the very last paragraph of SB 588, a new Labor Code §558.1 was added which, for the first time, creates individual liability for owners, directors, officers, or managing agents of an employer for violations of certain sections of the California Labor Code.

California Labor Code 558.1 provides as follows:

(a) Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, Sections 203 (payment of wages on termination of employment), 226 (paystub reporting requirements), 226.7 (meal period premium), 1193.6 (recovery of attorney fees for lawsuits to recover unpaid minimum wage and/or overtime), 1194 (failure to pay minimum wage for all hours worked), or 2802 (reimbursement of business expenses), may be held liable as the employer for such violation.

(b) For purposes of this section, the term "other person acting on behalf of an employer" is limited to a natural person who is an owner, director, officer, or managing agent of the employer, and the term "managing agent" has the same meaning as in subdivision (b) of section 3294 of the Civil Code.

It will take some time for the courts to determine exactly how Labor Code section 588.1 will be applied and interpreted. For now, it is strongly advised that all employers evaluate their wage and hour compliance and ensure that there are appropriate employment practices, liability insurance and/or directors and officers insurance coverage or excess coverage. For smaller individually owned businesses, simply shutting down and starting a new company may no longer be an appropriate strategy to avoid liability for wage and hour violations.

Jai H. Kim Joins Kring & Chung

Kring & Chung welcomes new Associate, Jai H. Kim to its Irvine, CA office. Mr. Kim practices in the areas of civil litigation, business transactions, estate planning, tax law and bankruptcy. Mr. Kim routinely provides business and labor advice to officers and shareholders, represents clients on employee and business disputes, and represents debtors in bankruptcy litigation, providing a new start to business owners and individuals. To view Mr. Kim's full profile, click here.

K&C Helps Develop Olive Crest Academy's Horticulture Program

In conjunction with Kring & Chung, LLP, Orange County Women Lawyers Association, and the support of other community partners, Olive Crest Academy is expanding upon their horticulture program at their nonpublic, non-profit special education school for grades K-12. While working in their therapeutic school garden and learning about the life cycle of plants, students will gain an understanding of nurturing, problem solving, learning from mistakes, personal responsibility, and compassion.

Olive Crest Academy specializes in providing individualized academic instruction to students with unique needs, including developmental and learning disabilities, emotional and mood disorders, behavioral challenges, dual diagnosis, and Autism Spectrum Disorder.

We kindly ask that you assist us in fostering this beneficial program for the students of Olive Crest Academy, by making a monetary donation, volunteering your time, or providing items needed to make this a successful project. If you are interested in getting involved, please contact us at (949) 261-7700.

Requested items: Mobile storage shed, tables, hose and water wand, watering cans, shovels, gardening gloves, bags of potting soil and garden mulch, spring vegetables and flowers, seeds, plant labels, bamboo stakes, tomato cages and green tape

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