What's New in Employment Law?

Most employers understand their obligation to address harassment by supervisors and coworkers. Fewer appreciate the risk posed by people who do not work for the organization at all, including customers, vendors, contractors, patients, clients, and members of the public.

Claims involving third-party harassment are receiving increased attention, particularly as federal courts continue to grapple with when employers should be liable for misconduct committed by non-employees. California employers should proceed carefully. Federal uncertainty does not reduce risk under California law.

Under California’s Fair Employment and Housing Act (FEHA), employers may be liable for harassment by non-employees if the employer, or its agents or supervisors, knew or should have known of the conduct and failed to take immediate and appropriate corrective action.

The alleged harasser’s employment status is often less important than the employer’s response.

What is Third-Party Harassment?

Third-party harassment occurs when someone outside the employer’s workforce engages in unlawful conduct directed at an employee. Common examples include:

• Customers making sexual comments to employees
• Vendors engaging in racist or discriminatory behavior
• Patients harassing healthcare workers
• Clients making repeated inappropriate advances
• Contractors targeting employees based on protected characteristics

In these situations, employers may argue they lacked direct control over the individual, but that argument has limits.

California law does not require employers to control every third party. However, it does require reasonable action when problems arise.

The Employer’s Response Often Determines Risk

Courts evaluating harassment claims frequently examine what the employer did after learning of the conduct.

Questions may include:

• Was the complaint taken seriously?
• Was there a prompt investigation?
• Were steps taken to stop or reduce exposure to the behavior?
• Was the employee protected from continued mistreatment?
• Did managers minimize concerns because the individual was an important customer, client, or business partner?

Employers rarely face criticism for investigating complaints. Risk grows when concerns are ignored, delayed, or treated informally.

Although Control is Limited, Responsibility is Not.

Third-party harassment presents practical challenges. Employers cannot terminate customers, discipline members of the public, or always remove difficult clients or patients. That fact does not eliminate responsibility, though.

Reasonable corrective action may include:

• Reassigning work or limiting contact
• Issuing warnings to vendors or customers
• Changing reporting structures or schedules
• Ending business relationships where appropriate
• Documenting complaints and responses
• Training managers to identify and escalate concerns

The appropriate response depends on the circumstances. Doing nothing is often the greater risk.

Frontline Leaders Remain a Common Failure Point

Employees do not always report concerns to HR. Complaints often begin with supervisors, leads, or managers perceived as having authority.

When those concerns are dismissed, minimized, or never escalated, employers lose valuable opportunities to intervene before a workplace issue becomes a legal claim.

Training leaders to recognize potential harassment complaints and respond appropriately remains one of the most effective prevention tools available.

The Bottom Line

Workplaces increasingly involve interactions with non-employees: vendors, staffing agencies, customers, contractors, patients, and the public. As those interactions expand, so does an employer’s potential exposure.

For California employers, the better question is often not whether a legal duty exists in a particular situation. Instead, it is whether the organization responded as a reasonable employer would under the circumstances.

At Shaw Law Group, we help employers investigate complaints, train leaders, and respond to workplace issues before they become litigation. We Solve Workplace Problems.®

The post Third-Party Harassment Claims first appeared on Shaw Law Group.

      

Most public sector employment law problems do not begin with dramatic misconduct or obvious legal violations. They begin with ordinary workplace decisions made under pressure.

A supervisor informally adjusts a schedule without considering overtime implications. An accommodation request gets treated like a performance issue. A complaint is handled “off the books” to avoid disruption. An investigation begins before anyone defines scope, preserves documents, or evaluates retaliation risk.

Individually, these moments may seem manageable. Collectively, they create significant exposure for California public employers.

The Growing Gap Between Policy and Practice

Public agencies now operate at the intersection of employment law, labor relations, operational demands, public accountability, and rapidly evolving employee expectations. HR leaders are expected to move quickly while navigating FEHA, the ADA, CFRA, FMLA, labor agreements, civil service systems, constitutional protections, and agency-specific policies that do not always align neatly.

And unlike many private employers, public agencies often make these decisions under public scrutiny.

Years ago, many organizations focused on whether policies existed. Today, the greater issue is whether those policies are being applied consistently, thoughtfully, and defensibly in practice.

That distinction matters. Most liability does not come from the absence of a policy. It comes from the disconnect between policy language and operational reality.

A leave policy may technically comply with the law, but supervisors may not understand how protected leave intersects with performance management. An anti-retaliation policy may exist, but managers may still react defensively after employee complaints. An agency may have investigation protocols in place, yet inconsistent interviews, delayed responses, or poor documentation can still undermine the process.

Why Experience Alone Is Not Enough

One of the most common mistakes public employers make is assuming that experience alone protects against risk.

In reality, even sophisticated organizations can develop problematic practices over time because operational shortcuts become normalized before anyone evaluates them legally.

Supervisors begin discussing sensitive employee matters through texts or side conversations. Managers try to “help” struggling employees without involving HR early enough. Agencies delay investigations because of morale concerns or operational demands.

Practical decisions in the moment often become legal problems later.

At the same time, workplace issues rarely fit neatly into a single category anymore. A performance issue may also involve protected leave. A misconduct investigation may implicate accommodation obligations. A remote work dispute may raise labor relations concerns, retaliation allegations, and disability issues simultaneously.

That overlap requires agencies to think more strategically and more consistently than ever before.

What Effective Agencies Are Doing Differently

The agencies managing these challenges most effectively are usually not the ones with the harshest disciplinary cultures or the thickest policy manuals. They are the organizations investing in practical decision-making, consistent training, early issue recognition, and defensible processes.

In other words, they focus not just on compliance, but on execution.

That shift from policy to practice is becoming one of the defining challenges in California public sector employment law. It is also why investigations, accommodations, retaliation prevention, documentation practices, and supervisor training continue to dominate conversations among public employers. These are no longer isolated HR issues. They are operational leadership issues that directly affect culture, employee trust, and legal exposure.

Upcoming All-Day Workshop

Shaw Law Group will be discussing many of these trends and practical risk areas during our upcoming September 22, 2026, program, From Policy to Practice: Public Sector Employment Law in Action, a six-hour workshop focused on how public employers can better navigate the growing gap between written policy and real-world workplace management. Space is limited. Register here.

The post Where Public Sector Risk Really Starts first appeared on Shaw Law Group.

      

You have seen it play out. A strong employee needs flexibility. A manager wants to help. A decision gets made in the moment, practical, human, and well-intended. No one thinks twice about it. Months later, that same decision shows up in a demand letter.

This pattern is common in California workplaces. Employers don’t get into trouble because they don’t care. They get into trouble because real-world decisions are made faster than the processes designed to support them.

Flexibility Without Structure
Picture a manager adjusting a schedule so a high performer can handle family obligations. Maybe the employee works from home a few days a week or shifts their hours. No one documents the arrangement. No one evaluates whether the change affects overtime, expense reimbursement, or internal equity.

At the time, the decision feels right. Later, if the arrangement ends or other employees raise concerns, the employer has no clear record of what was agreed to or why. The story becomes inconsistent treatment or unpaid time, not thoughtful flexibility. California law focuses on what can be proven, not what was intended.

Accommodation by Instinct
Now think about how often supervisors try to solve medical or pregnancy-related issues on their own. An employee mentions a limitation. The supervisor adjusts duties or allows time off, trying to be supportive without escalating the issue.

That instinct is understandable, but it can derail the legal process. Under the California Fair Employment and Housing Act, the obligation is to engage in a structured, good faith interactive process based on medical information. When decisions happen informally, the employer loses control over that process. If the situation later breaks down, the lack of a documented analysis becomes the problem.

“We Trust Our Employees” and Wage Exposure
Most employers trust their teams. That trust shows up in how time is tracked and how work gets done. Employees are expected to take compliant meal breaks, record all hours worked, and manage their own workloads.

Then reality steps in. A high performer works through lunch to stay ahead. A manager sees it happen and says nothing because the work is getting done. Later, the employer argues that the employee chose to skip breaks.

That argument rarely works. California law asks whether the employer provided a real opportunity for a duty-free break and relieved the employee of all work. Knowledge, especially quiet, unspoken knowledge, undermines the defense. The same pattern shows up with off-the-clock work, after-hours emails, and quick tasks that never make it onto a time record.

Titles That Outpace Duties
Promotions often follow the same path. An employer wants to recognize someone who is doing excellent work. A new title and a salary increase follow, along with the assumption that the role is now exempt.

In practice, the job does not change much. The employee continues doing the same work, just with a new title. However, California law doesn’t look at titles; it looks at duties. If those duties remain primarily non-exempt, the classification risk is immediate.

This issue surfaces with interns and trainees as well. Programs are designed with good intentions, but if they do not meet legal standards, the individuals involved may be treated as employees entitled to wages and protections.

The Conversation That Becomes an Investigation
Workplace concerns rarely arrive in a neat package. A comment in a meeting. A complaint raised casually. An email that hints at something more. A manager looks into the issue informally, talks to a few people, and moves on.

That approach feels efficient but often creates exposure. If the issue later becomes a legal claim, the employer may struggle to show what it knew and what it did. In California, the absence of a clear record can matter as much as the underlying conduct.

Consistency Is Tested
Across these situations, the common thread is not bad intent. It is inconsistency. Decisions are made case-by-case, in the moment, without a framework that ties them together.

California law tests consistency. It asks whether similar situations were handled in similar ways, whether decisions were grounded in policy, and whether the employer can explain the reasoning behind its actions. When the answers depend on memory instead of documentation, the risk increases.

A More Defensible Way to Operate
Flexibility does not have to disappear. It just needs structure behind it. When supervisors and managers know when to pause, when to involve HR, and how to document decisions, the employer can support its team without creating unnecessary exposure.

That structure starts with policies that reflect how the business actually operates. It continues with training that helps leaders recognize when a situation has legal implications. It shows up in documentation that captures not just what was decided, but why.

Regular check-ins also matter. Practices drift. Managers develop habits. What worked last year may not align with current expectations. Reviewing how decisions are made in real time helps close the gap between intention and execution.

The Bottom Line
You are going to keep making judgment calls. That reality is not changing. In California, the question is whether those calls are supported by a process that holds up later. Good intentions may start the decision, but structure and consistency protect it.

The post When Good Intentions Create Liability first appeared on Shaw Law Group.

      

California employers routinely underestimate cell phone reimbursement. Labor Code section 2802 requires reimbursement for necessary business expenses, including personal cell phone use. The mistake is assuming the obligation only applies when use is substantial. It does not. Any work-related use can trigger reimbursement. A quick call, a text to a supervisor, or logging into a system from a personal device is enough. This is where liability starts to build.

Unlimited Plans Do Not Eliminate the Obligation
One of the most common missteps is relying on the idea that employees are not incurring additional costs. California law rejects that argument. The issue is not whether the employee pays more out of pocket. The issue is whether the employer has shifted a business expense to the employee. Even with an unlimited plan, employers must reimburse a reasonable percentage of the cost when personal phones are used for work.

Policies Are Where Employers Get Into Trouble
Many employers either lack a clear policy or rely on one that does not hold up. Requirements that employees submit detailed bills, prove increased costs, or show substantial use create risk. The law does not require that level of proof. The obligation sits with the employer. Policies that discourage reimbursement or make it difficult to obtain often become evidence in wage claims and PAGA actions.

Stipends Can Work If They Are Defensible
A flat monthly stipend is often the most practical approach. It creates consistency and reduces administrative burden. But the number has to be reasonable. A stipend chosen for convenience, without any connection to actual usage, is unlikely to satisfy the law. Employers should be able to explain how the amount was determined and revisit it as roles and usage change. One size does not always fit all.

Remote Work Increased the Exposure
Remote and hybrid work made this issue more visible. Employees now rely more heavily on personal devices for communication and access. What once felt occasional is now routine. That shift increases risk, especially in California where expense reimbursement claims are frequently included in class actions and PAGA cases. These claims are easy to assert and expensive to defend.

The Compliance Trap
Employers often treat this as a minor issue. It is not. Failure to reimburse can lead to wage claims, waiting time penalties, PAGA exposure, and attorneys’ fees. The risk is not the reimbursement itself. The risk is the cumulative liability that follows when the obligation is ignored or handled inconsistently.

What Employers Should Do Now
Start with a simple question. Are employees using personal cell phones for any work-related purpose. If the answer is “yes,” reimbursement is required. Review policies and remove unnecessary barriers. Evaluate any stipend for reasonableness and document the rationale. Train managers to support compliance, not undermine it.

Bottom Line
If personal cell phones are used for work, reimbursement is not optional. The cost of getting it right is predictable. The cost of getting it wrong is not.

The post Cell Phone Reimbursement Done Right first appeared on Shaw Law Group.

      

A company hires workers and calls them independent contractors. They sign agreements. They get 1099s. Everyone is aligned with what they are.

Until they’re not.

That’s exactly what happened in Dynamex Operations West, Inc. v. Superior Court—a case that reshaped how California looks at independent contractors and made one thing very clear: You don’t get to decide classification. The law does.

Here’s the problem. In California, classification is not about what you call someone. It is not about what’s written in the agreement. It is not about what the worker prefers. And it is definitely not about what “makes sense” for your business. Classification is about how the relationship actually functions. And California applies that analysis aggressively.

Employers rarely get tripped up because of their bad intent. It’s speed. It’s trying to solve real business problems in real time. “We just need someone flexible—a contractor.” “They’re paid a salary—exempt.” “They’re learning—intern.” Those decisions feel practical. But California law is not built around what feels practical—it’s built around specific legal tests that don’t flex just because your situation is messy.

After Dynamex, California adopted the ABC test for independent contractors, and it is unforgiving. To classify someone as a contractor, you must prove: (A) they are free from your control and direction; (B) they perform work outside your usual course of business; and (C) they are independently established in that trade. Miss one of these, and they’re an employee. Not close. Not mostly. An employee.

And it’s not just contractors. The same problem shows up everywhere. Exempt versus non-exempt? Salary alone is not enough. Interns? The training must primarily benefit the intern, not the employer. Volunteers? Generally, that’s not a thing in for-profit businesses. Different labels, same issue: employers rely on assumptions instead of applying the actual legal standard.

What happens when this unravels is predictable, and expensive. Misclassification turns into overtime and minimum wage claims, missed meal and rest break liability, unreimbursed expenses, waiting time penalties, PAGA exposure, and often class or representative actions. And it rarely stops with one person. It spreads across the role.

The employers who stay out of trouble do one thing differently. They slow this down. They ask what the role actually looks like day-to-day, how much control they’re really exercising, and whether the classification meets the legal test and not just the business need. They make the decision at the front end, and they document it. Because fixing this later is always harder, and always more expensive.

The bottom line: Classification is not a label. It’s a legal conclusion. And when you get it wrong, it adds up fast.

The post Employee Misclassification: It Adds Up Fast first appeared on Shaw Law Group.