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AB 1825 Sex Harassment Trainer

A free resource for California employers about the sexual harassment training law (AB 1825).

Gift Cards & Tax Hassles

Thursday, February 17, 2011
If you buy AB 1825 training from the California Chamber, they say they'll give a $5 Starbucks gift certificate to supervisors who complete their course. This may sound like a good idea, but it raises a variety of potential problems.

Although the most common problem with "gifts" is the potential for raising “conflicts-of-interest,” that isn't the case when the gift is disclosed to the employer and the employer authorizes the gift to reward an employee.

But any gift -- even a $5 gift certificate -- may create problems because it's:
  1. considered wages for the employee (and thus raises overtime and recordkeeping issues),
  2. taxable to the employee, and
  3. taxable to the employer.

Generally, any monetary or other benefit given to employees for their services is considered "wages." Wages must be recorded, paid timely, and a wage statement (showing applicable deductions) must be provided. Plus, it must be included in non-exempt employees' overtime pay.

For example, the US Labor Department's Opinion Letter (2-14-2001-6) says a $50 finder's fee paid to cashiers for discovering/recovering bad credit cards is included in regular rate and thus raises the overtime premiums owed by the employer. Another Opinion Letter (7-05-2005) says that bonuses paid by an outside vendor (and not employer) are included in the employee's regular rate and thus raises the overtime premiums owed by the employer.

Second, most benefits are considered taxable income. As noted in the IRS Publication 15b: "Any fringe benefit you provide is taxable and must be included in the recipient's pay unless the law specifically excludes it. Section 2 discusses the exclusions that apply to certain fringe benefits. Any benefit not excluded under the rules discussed in section 2 is taxable."

One exclusion is for small gifts (e.g., a turkey at Thanksgiving or Christmas). However, the IRS says these "de minimis" gifts are excludable only when they don’t have a cash value. For example, an IRS technical advice letter (TAM 200437030) indicates that an employer's gift to employees of (1) a holiday turkey is not taxable, but (2) a $35 grocery coupon is taxable. As the “de minimis” section of Publication 15b says, “Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit....”

Finally, the gift is also taxable to the employer. This is true because the employee's receipt of any job-related gift is legally the property of the employer, and thus the employer has legal entitlement (constructive possession) of the gift. According to Labor Code 2860: "Everything which an employee acquires by virtue of his employment, except the compensation which is due to him from his employer, belongs to the employer, whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment." Since the gift "belongs" to the employer, the employer has to account for the cash-equivalent income.

So, while we encourage employers to offer incentives to employees to complete mandatory training courses, it may make more sense to award chocolate, pats-on-the-back and "atta boys!" or PTO rather than a gift certificate with a monetary amount.

Does it violate Title VII to sexually harass a communist?

Wednesday, June 02, 2010
I don't think so (at least not if they're party members).

Although the federal anti-discrimination law Title VII has been interpreted to prohibit sexual harassment as an "unlawful employment practice," the law also contains an express exclusion for Communist Party members. Subsection 2000e-2(f) says:

Members of Communist Party or Communist-action or Communist-front organizations:
As used in this subchapter, the phrase “unlawful employment practice” shall not be deemed to include any action or measure taken by an employer, labor organization, joint labor management committee, or employment agency with respect to an individual who is a member of the Communist Party of the United States....

This appears to exempt any violation of Title VII if it's taken "with respect" (gotta love that) "to ... a member of the Communist Party...."

Now I do not mean that Title VII simply permits discrimination based on the fact that someone is a communist (e.g., "I'm not hiring you because you're a commie"), but that it allows an employer to, for example, sexually harass or racially discriminate against a worker without liability if the worker is a party member.

In other words, Title VII permits an employer to say: "I'm not hiring you because you're a woman, and I may have grabbed your breast, and called you the 'n-word,' but you're a communist so you can't sue me." The fact that a worker is a communist means it's not a violation of Title VII to sexually harass, racially discriminate, ethnically insult, fail to religiously accommodate, or otherwise create a hostile work environment based on their (ordinarily) protected characteristics.

Perhaps unsurprisingly, I haven't seen much online discussion or note of this exception (other than the occasional reference to the text of the law). Likewise, I'm not aware of any case bumping a federal bias/harassment claim because the employee was a card-carrying communist.

(Plus, it's important to remember that California's Fair Employment and Housing Act does not contain a similar exemption. Additionally, harassing a communist may violate state Labor Code sections 1101-1102 as an attempt to coerce an employee's politics).

Even so (and while not wanting to excuse any harassment or discrimination because of the target's politics), Title VII's communist exemption is a potential defense to federal claims for employers who employ — and discriminate against or harass — fellow travelers.

Religious organizations must train

Thursday, December 17, 2009
While religious organizations are exempt from some of the anti-discrimination laws, they are not totally exempt.

For example, federal Title VII does not contain an express exemption for religious organizations. (Even so, courts have carved out a so-called "ministerial exception," recognizing the First Amendment right of religious organizations to determine who may speak on their behalf. For example, see Bias Not a Crisis in the Diocese.) Thus (except for "clerical" positions), religious organizations may be liable for discrimination and harassment under federal law.

California's FEHA has a much broader, but not absolute, exemption for religious associations and corporations. This is true because FEHA's definition of "employer" for both discrimination (Gov. Code §12926(d)) and harassment (Gov. Code §12940(j)(4)) exclude most religious associations and corporations (unless they operate a school or health care facility, in which case they may be covered).

Even so, the AB 1825 law (Gov. Code §12950.1) and regulations have their own separate definition of employer that does not include this exclusion for religious organizations.

Gov Code §12950.1(c) says: "For purposes of this section only, 'employer' means any person regularly employing 50 or more persons or regularly receiving the services of 50 or more persons providing services pursuant to a contract...."

Similarly, the FEHC's AB 1825 regulations also do not exempt religious organizations. Title2 CCR §7288.0(a)(4) says an AB 1825 "employer" includes "any person engaged in any business or enterprise in California, who employs 50 or more employees to perform services for a wage or salary or contractors...."

As a result, religious organizations are AB 1825 "employers" and are not exempt from its training mandate. So, although they may be exempt from most of FEHA, religious organizations must provide AB 1825 training and may be liable under Title VII.

This analysis was confirmed by Ann Noel, the Fair Employment and Housing Commission's Executive and Legal Affairs Secretary (the executive officer and principal legal advisor for the Commission, and its chief administrative law judge) in conversation with this blogger on December 17, 2009. She explained the "carve out" for religious organizations under FEHA is not available under the AB 1825 law or regulations.

More than sexual harassment

Wednesday, October 07, 2009
Should your AB 1825 training include subjects other than "sexual" harassment, and cover harassment based on race, religion, disability, and other protected characteristics? Yes, absolutely.

Although much of the popular focus of AB 1825 (Government Code section 12950.1) is on "sexual harassment" training, the content required to comply with the official AB 1825 regulations issued by the Fair Employment and Housing Commission (FEHC) is more complex.

According to 2 CCR section 7288.0(c), "the training mandated by California Government Code section 12950.1, shall include but is not limited to..." and then goes on to list eleven items. While most of the items refer to issues involving sexual harassment (including: statutes, cases, types of misconduct, remedies, strategies to prevent, practical examples, and company resources), the two hour requirement is not satisfied by sexual harassment alone.

For example, the FEHC regulation specifies the two hours must include "FEHA and Title VII statutory provisions and case law principles concerning the prohibition against and the prevention of unlawful sexual harassment, discrimination and retaliation in employment," the "limited confidentiality of the complaint process," the "employer’s obligation to conduct an effective workplace investigation of a harassment complaint," "[t]raining on what to do if the supervisor is personally accused of harassment," and the "essential elements of an anti-harassment policy...."

As stated in subsection (c)(2), the topics of "discrimination and retaliation in employment" as prohibited by "FEHA and Title VII" must be included, and these laws both forbid job bias not only based on sex, but also on race, color, religion, national origin, etc. Thus, subsection (c)(1) says, "In addition to a definition of sexual harassment, an employer may provide a definition of and train about other forms of harassment covered by the FEHA, as specified at Government Code section 12940, subdivision (j), and discuss how harassment of an employee can cover more than one basis."

Under Government Code section 12940, subdivision (j), harassment is forbidden when based on "race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation." Thus, all these types of harassment are permitted to satisfy the two hour requirement.

Moreover, as the regulation states, "harassment of an employee can cover more than one basis." This has been a growing trend in litigation; for example:
--Harassment Grand Slam
--Sexual & Nonsecular Harassment

Basically, employers should not consider sexual harassment to be so unique a type of misbehavior that it requires special training, while other types of job harassment (racial, religious, disability-related, ageist, etc.) do not. Instead, employers are required to take all reasonable steps to discourage all types of harassment, discrimination, and retaliation (including training), and should take advantage of the AB 1825 regulations to equally provide training to prevent all types of harassment, discrimination, and retaliation.

Thus, Government Code section 12950.1(f) says: "The training and education required by this section is intended to establish a minimum threshold and should not discourage or relieve any employer from providing for longer, more frequent, or more elaborate training and education regarding workplace harassment or other forms of unlawful discrimination in order to meet its obligations to take all reasonable steps necessary to prevent and correct harassment and discrimination."

Preventive education

Thursday, July 23, 2009
How does the federal government inform the public about the anti-harassment laws? The EEOC says bad publicity about sued employers helps.

“The public nature of law enforcement can serve as one effective form of preventative education,” said EEOC Regional Attorney Robert Canino.

Canino was talking about a recent pregnancy discrimination case involving Studio 69, a nightclub in El Paso, Texas. According to the agency, when the club learned a bartender was pregnant, it place her on indefinite “pregnancy leave” – or as the EEOC describes the situation: “it fired Crystal Aguilar from her job.”

The take-away lesson is that treating an employee differently because of her pregnancy violates Title VII when “the employer had neither requested nor received any information from her doctor regarding her physical ability to perform her job duties.”

The EEOC’s announcement cited a fetal-protection chestnut, the 1991 case International Union v. Johnson Controls. “The United States Supreme Court explicitly held that the decision to work while being pregnant was reserved for each individual, not her employer, to make,” explained EEOC lawyer Tisha Dominguez.

New AB 1825 questions

Saturday, July 18, 2009
As we enter the last half of the year (only 166 days left in 2009 as I write this), the AB 1825 train is picking up steam. Here are two AB1825 compliance question from California employers that I answered in the last couple of days.

1. We hired some new supervisors last November (2008) and they completed sexual harassment training in February (2009). Our training years were 2005 and 2007, and we've set a training for everyone in October 2009. Do the new supervisors have to train again this year to join our training year calendar?

Answer: No. AB 1825 requires supervisors be trained:
(1) within six months if they're newly hired or promoted, and
(2) every two years.

As long as these requirements are met, they don't have to be trained twice in any single year. Under the "training year" tracking system, your supervisors can complete the required anti-harassment anytime during 2009 (including in February 2009) and you'll be in compliance with the regulations.

2. Do we have to train supervisors who are "temporary"?

Answer: AB 1825 does not have an exception for "temps" or any other type of supervisor. If someone meets the legal definition of "supervisor," they must be trained, regardless of their classification or employment status.

The AB 1825 definition of "supervisor" is based on the Fair Employment & Housing Act (FEHA) definition at Government Code section 12926(r):
"Supervisor" means any individual having the authority, in the
interest of the employer, to hire, transfer, suspend, lay off,
recall, promote, discharge, assign, reward, or discipline other
employees, or the responsibility to direct them, or to adjust their
grievances, or effectively to recommend that action, if, in
connection with the foregoing, the exercise of that authority is not
of a merely routine or clerical nature, but requires the use of
independent judgment.

Basically, they don't have to even be your employees: if the boss' wife or a powerful shareholder or a non-employee consultant meets the legal description of "supervisor," your company is expected to provide AB1825 training.

Still, it's important to note that the law gives you six months to train new supervisors, so you're not technically out-of-compliance if an untrained supervisor hasn't worked (doesn't work?) for six month. Even so, it may not be "reasonable" to avoid providing training to temps, and (independent from your duty to train under AB 1825), FEHA always requires employers to take every reasonable step to prevent harassment from occurring.

Piercing punitive liability

Monday, June 22, 2009
Although the law protects everyone – both sinner and saint – from sexual harassment, Courts sometimes rule against victims (most often women) when they’ve engaged in sexualized behavior in the workplace.

Often, the Court finds the abuse suffered by these “bad girls” wasn’t enough to interfere with their ability to do their jobs. As explained by the EEOC, to qualify as sexual harassment, misconduct generally must "alter the conditions of the victim’s employment and create an abusive working environment."

However, Courts sometimes limit recoveries for female employees who participate in sexualized behavior at work, ruling the abuse they were exposed to didn't “alter” their working conditions; see the 2008 Brief: Bad Girls Can't Complain.

Last month, a federal Court in Delaware made a similar decision. In Laymon v. Lobby House, waitress/bartender Shannon Laymon sued the Lobby House pub for sexual harassment. She claimed management made sexist remarks and encouraged sexual behavior (including stripping) by female employees. She convinced the jury; they awarded her $500 for sexual harassment, plus $100,000 in punitive damages (which are designed to punish the employer and to serve as a deterrent).

The pub appealed, challenging the amount of punitive damages. After all, Lobby House argued, Laymon herself participated in skeezy behavior at the pub. “While at work, Laymon admittedly displayed her vertical hood piercing to two co-employees,” the Court wrote. It explained in a footnote: “A vertical hood piercing is a piercing in the clitoral area.”

And, based in part on her workplace genital-jewelry display, the Court cut her punitive damage award by 75 percent.

“Balanced against [the employers’ conduct] is testimony that Laymon participated in inappropriate conduct," the Court wrote, "and, that Laymon only complained of sexual harassment after she was confronted by management regarding her negative behavior. In balancing the ... factors, the court believes that reducing the amount of the punitive damages award is warranted, particularly in light of the conduct of both Laymon and Lobby House. As a result, the court will reduce the jury’s punitive damages award from $100,000 to $25,000....” [Laymon v. Lobby House (5/1/2009) USDC Delaware]