Last Minute Court Order Extends Notice Deadline Until at Least July 28, 2016

California’s Court of Appeal and Legislature have in recent years created an unprecedented and potentially crushing interpretation of piece work compensation requirements.  See, Piece Work Compensation is a Wreck Waiting to Happen, The Perils of New Labor Code Section 226.2  (December, 2015) (Piece Work).  Among that statute’s provisions, effective January 1, 2016, California piece work employers (the norm for whole industries, including trucking, agriculture, and vehicle repair) were required to submit a public “safe harbor” notice by July 1, 2016 that they were opting to pay all affected workers additional back pay to mid-2012 under one of two calculation methods.  See, Safe Harbor in Sight, Piece Work Compensation in California (May, 2016) (Safe Harbor).

However, through a suit filed days before that July 1 deadline, Nisei Farmers League (League), a major agricultural trade association, has secured a statewide court order extending that filing deadline until at least July 28, 2016.  See, June 30, 2016 order in Nisei Farmers League v. California Labor and Workforce Development Agency, Fresno County Superior Court No. 16CECG02107. The state’s Department of Industrial Relations (DIR) has since posted a statement on-line:

“Pursuant to an Order of the Fresno Superior Court, the State has been temporarily restrained from enforcing the July 1, 2016 deadline for employers to submit notice of their election to make payments to current and former employees pursuant to Labor Code Section 226.2(b). The Director of Industrial Relations will continue to accept and post these notices through at least July 28, 2016 or further order of the Court.”

This lawsuit throws far more than this “safe harbor” notice deadline into play.   Pointing to key provisions in the statute that may be incapable of any specific definition, the suit seeks to declare Labor Code 226.2 unconstitutional.

Thus, the only thing now certain regarding section 226.2 is uncertainty.  The suit also questions whether piece work employers who have already given the required notice to the state will have to fulfill their “safe harbor” back payments by the December 15, 2016 deadline set in the statute (as reported in Piece Work and Safe Harbor).

The judge in the League case will hold a hearing on Monday, July 18, 2016 to determine whether these section 226.2 safe harbor notice and back pay deadlines will be extended to new definite dates or suspended indefinitely until the League’s full case can be tried.

 Stay tuned. Our lawyers Tim Bowles, Cindy Bamforth, or Helena Kobrin are available for more information as the above lawsuit develops.

Timothy Bowles, July 8, 2016