Santa Ana Business Law Blog

California enacts new employer training laws

Beginning on the first day of 2020, companies that operate hotels or motels must provide at least 20 minutes of training related to human trafficking. The training must be given to any employee who is likely to be around human trafficking victims, and it can be provided in a classroom setting or any other method deemed effective. By Jan. 1, 2021, companies that have five or more employees will be required to provide two hours of sexual harassment training to all supervisors.

Furthermore, all other workers must be given at least one hour of sexual harassment training by this date. Once the law takes effect, similar levels of training must be provided every two years. The new training rules apply to all workers whether they work for a company throughout the year or on a seasonal basis. California's new requirements were inspired partially by the #Metoo and #TimesUp campaigns aimed at raising awareness of the issue.

The different ways to structure a business

Those who want to start a business in California will need to consider how to structure their companies. A company is deemed to be a sole proprietorship unless its owner files paperwork to make it a partnership or corporation. Sole proprietors can be held personally liable for any damages that their organizations cause. While they retain total control over their companies, sole proprietors may struggle to raise funds, and it may not be possible to sell shares of stock.

Business owners who are looking to minimize their liability may want to consider forming a limited liability company. While members of an LLC may need to pay self-employment taxes, their personal assets are usually considered separate from a company's assets. Corporations are business entities that are completely separate from their owners. One potential drawback is that profits are taxed at the corporate level and then again when distributed to shareholders as dividends.

Fashon Nova the target of DOL investigation

Fashion Nova is a clothing company based in California that markets itself as a brand that any woman can wear. Most of the items that the company produces are advertised by influencers on social media. The brand has 17 million followers on Instagram, and those followers include celebrities such as Kylie Jenner and Iggy Azalea. However, a New York Times report provided details into a Department of Labor investigation of Fashion Nova.

The investigation reportedly found that the company paid workers as little as $2.77 per hour. One woman claimed that she had been paid just $270 after working for 60 hours in a Los Angeles factory. It has also been alleged that the company uses undocumented workers, which makes it harder for those people to defend themselves. A legal representative for Fashion Nova said that the company has been in discussions with the DOL about the issues raised during its investigation.

Potential liability is a consideration in business formation

Entrepreneurship is alive and well in California with many new businesses cropping up every day. Some are large, well-planned and well-funded operations that are years in the making; some are one-person gigs that open for business on a shoestring. One thing these and all businesses have in common, whether the owners realize it or not, is that the type of business formation the enterprise operates as will have a major impact on its future. There are four major types of business entities: sole proprietorships, partnerships, limited liability companies and corporations.

The four types are different, and all have their own pluses and minuses, but in one important respect, sole proprietorships and partnerships are more similar to each other as opposed to a commonality shared by LLCs and corporations. This issue is the potential personal liability of the business owner. Sooner or later, every business is likely to experience a situation where some mistake was made or something did not go as planned, and the business owes money to rectify the matter. Small business advisors caution that in some circumstances, if the liability is greater than the ability of the business to pay, the personal assets of the owner may be at risk to satisfy the debt.

Employee manuals can help prevent disputes

Like many states, California is considered an at-will employment state. This means that absent a specific contract of employment, an employer is free to terminate an employee for any reason or no reason at all. Despite this, many employers believe it is a good idea to have written policies on hiring and firing as well as other employee matters to avoid disputes where possible and maintain workplace stability. To that end, a well-written and comprehensive employee manual can serve to establish the standards of the particular company and serve as notice as to what is expected of the employees.

Among the most important provisions to place in an employee manual are policies and guidelines that involve federal and state law regarding workplace discrimination. Discrimination and harassment need not necessarily be either intentional or overt, but the company can make it quite clear what its policies are and what it will not tolerate under any conditions. Employer and employee experts suggest including further information regarding other government requirements such as family leave programs or workers' compensation where appropriate.

Some supervisors may handle harassment claims poorly

Some California employers may not be sufficiently prepared to deal with allegations of bullying, discrimination, bias and harassment. According to a report by pelotonRPM, a company that develops workplace training, many leaders and managers are falling short when employees report these issues to them.

The company gathered its data from virtual role-playing scenarios with leaders and managers. It found that more than one-third failed to follow up with questions that might identify whether anyone had witnessed the incident reported. More than half failed to discuss the company's policy on harassment, discrimination or retaliation. There was no effort to ask questions or repeat and confirm details and facts for 41%, and 30% did not discuss whether there would be an investigation or what the next steps would be. One-quarter failed to say that the matter would go to human resources.

Overcoming obstacles to a California liquor license

Restaurants, bars and other California businesses know that obtaining and maintaining their liquor licenses are critical to the success of their enterprises. There is a range of city, state and federal laws that can affect liquor license eligibility, and understanding these regulations can help companies have an easier time navigating the rules. In some cases, they may want to buy or transfer an existing license from another firm. If you want to obtain or protect a California liquor license, it can be important to stay up to date on changes to state law on cabaret licenses, entertainment permits and liquor sales.

Under California law, the state retains an exclusive authority to regulate the manufacturing, sales, transportation and purchase of alcoholic drinks. This means a wide range of companies, from delivery firms and golf courses to restaurants, may need to be concerned about how these regulations affect their ability to offer alcohol to patrons. The Alcoholic Beverage Control Act lays out specific provisions that address businesses' ability to obtain the required permits. The experienced lawyers at Blake and Ayaz have represented numerous bars, liquor stores, gas stations, clubs and wholesalers to help them successfully secure the permits that they need.

Business owners need to classify workers correctly

Most businesses in California need to hire workers at some point. When choosing who to hire, employers may want to consider the type of work they need done and for how long.

For shorter projects, sometimes an independent contractor is the better choice, while for steady work, an employee may be the way to go. Whatever owners decide, they must classify and treat each appropriately or face stiff financial consequences.

What California restaurant owners should know about gratuity

It takes courage, knowledge and sweat equity to open and run a restaurant. Whether it’s understanding consumer demands, gaining capital, crafting the perfect menu or hiring the right employees, achieving success can be a constant uphill battle. It’s no wonder why 60% of new restaurants fail in their first year of operation.

Labor costs can be expensive, but restaurant workers are necessary when it comes to producing quality meals and engaging diners. Because of this, it’s important to make sure food staff are compensated properly, and that restaurant owners follow California’s tip and gratuity laws.

A unique approach to hiring could optimize benefits for everyone

When companies in California are looking to hire more employees, they often turn their attention to candidates who fit the mold for the ultimate contributor. While this outlook can provide businesses with qualified employees who are capable of being productive, in some cases this narrow focus can prevent them from recognizing candidates who have a lot to offer. 

One company shared their perspective about how they are transitioning their approach for hiring new workers by opening their options to candidates who are often underestimated in a general search for promising employees. A movement created by the company is designed to provide economic opportunities to workers who were traditionally passed over because of a lack of desirable qualifications. This win-win strategy enables the company to access nontraditional talent that provides diversity and unique ideas, as well as ways of thinking, while also allowing individuals a valuable employment opportunity. 

Put the insight and integrity of Blake & Ayaz on your side today. We are ready to serve you. Call 714-667-7171 or send an email now.

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Blake & Ayaz, A Law Corporation

Blake & Ayaz, A Law Corporation
2107 North Broadway
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Santa Ana, CA 92706

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