State Changes Stand on Leave
Under pressure from business groups, California Labor Commissioner Arthur S. Lujan said in a letter Friday that the state would not sanction employers for forcing white-collar workers to take paid vacations or unpaid time off as companies have in the past.
Lujan’s stance reversed a letter issued May 30 by Miles Locker, the state’s top labor enforcement lawyer, saying it was illegal for employers to force exempt workers to take unpaid leaves of up to a month or to use accrued vacation time.
The commissioner’s move was an attempt to address employers’ demands for relief from the Locker letter, which they attacked as not only legally wrong, but so potentially costly that it could trigger layoffs, which the furloughs were designed to avert.
But employer groups, as well as labor lawyers, said businesses could still face consequences, such as employee lawsuits, if they send exempt workers home on forced vacations or unpaid leave.
“This is still in flux, and it leaves employers in the dark,” said Matt Bartosiak, who manages the help line for the Employers Group, which represents 5,000 California businesses.
Labor lawyer Ted Franklin praised Locker’s opinion as legally correct and said the position was a matter of fairness for employees who frequently are expected to work overtime without pay.
“The law is the law, and Mr. Locker’s letter was an opinion of the law by someone in enforcement in the executive branch,” Franklin said. “Judges may well decide at some point that they agree with Mr. Locker’s interpretation of the law.”
Locker’s letter broke with employers’ long-standing practice of paying exempt workers by the week. In other words, if an exempt employee worked any part of a week, in most circumstances he or she was owed a full week’s salary. According to Locker, exempt employees have to be paid for a full month if they work any part of the month. Also, Locker said employers could not force such employees to use accrued vacation at a certain time.
The opinion was particularly hard on companies such as Sun Microsystems Inc., which said in April that it would save money by shutting down operations the week of July 4 and sending all but the most critical of its 38,000 U.S. work force on vacation.
But the Palo Alto-based company reconsidered in light of Locker’s opinion and said it would encourage--but not require--its exempt California workers to take that week off, taking holiday and four vacation days’ pay.
Locker declined to comment. Lujan was unavailable for comment.
But Stephen J. Smith, director of the Division of Industrial Relations, said state officials believe the Legislature or the Industrial Welfare Commission should address the conflicting interpretations over whether AB 60, the 18-month-old law underlying the controversy, affects white-collar furloughs.
“I suggested to [Lujan] that I thought the law was in a state of flux,” Smith said. “And [Lujan] decided that, in that case, the cleanest way to go was to wait until it gets cleared up. So he just decided to pull the opinion letter. Now we’re looking at the IWC and saying, ‘Fix this guys. And tell us what we are supposed to be enforcing.’ ”
Two of the IWC’s five members have criticized Locker’s opinion, and the panel has scheduled a public hearing for June 29.
Rene Barge, a Fountain Valley lawyer who represents employees, said Lujan was dodging the issue.
“The commissioner is caving in to political pressure,” she said. “Withdrawing the letter is a cop-out because the commissioner is not willing to state what the policy is governing improper docking of pay.”
