An Administrator's Guide to California Private School Law

L iebert C assidy W hitmore LCW

An Administrator's Guide to California Private School Law

www.lcwlegal.com/expertise/private-education

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A BOUT THE A UTHORS

With offices in Los Angeles, San Francisco, Fresno, San Diego and Sacramento, Liebert Cassidy Whitmore services the needs of private schools and institutions of higher education. Our expertise includes the defense of educational institutions in actions brought by employees for claims such as harassment and discrimination, wage and hour violations, breach of contract, infringement of family and medical care leave rights, and wrongful termination. We are also experts in the defense of actions brought by students and their families alleging violations such as harassment, discrimination, and breach of contract. The Firm frequently works with Heads of Schools and their Boards to develop effective bylaws, contracts, policies, and handbooks. Liebert Cassidy Whitmore places a unique emphasis on preventive measures to ensure compliance with the law and to avoid costly litigation. For more than thirty-five years, the Firm has successfully developed and presented training on all aspects of education law to numerous private schools and associations. The Firm provides individual training to educational institutions, regular training to its consortium members, and frequently presents for state and national organizations such as the California Association of Independent Schools (CAIS), California Association of Private School Organizations (CAPSO), the National Association of Independent Schools (NAIS), and National Business Officers Association (NBOA).

LCW – The California Law Firm for California Schools.

This workbook contains generalized legal information as it existed at the time the workbook was prepared. Changes in the law occur on an on-going basis. For these reasons, the legal information cited in this workbook should not be acted upon in any particular situation without professional advice.

Copyright © 2019 Liebert Cassidy Whitmore. All rights reserved. No part of this publication may be reproduced, stored, transmitted, or disseminated in any form or by any means without prior written permission from Liebert Cassidy Whitmore.

T ABLE OF C ONTENTS

2019

C HAPTER 1 - I NTRODUCTION .....................................................................................................................................25 C HAPTER 2 - G OVERNANCE ......................................................................................................................................25 Section 1 Forming A Private School......................................................................................................................25 A. Introduction............................................................................................................................................25 B. Corporate Form ......................................................................................................................................25 1. Public Benefit Nonprofit Corporations........................................................................................26 2. Religious Nonprofit Corporations ...............................................................................................26 C. Tax-Exempt Status .................................................................................................................................27 1. Applying For 501(c)(3) Tax-Exempt Status................................................................................27 2. Tax Exemption Under California Law ........................................................................................27 D. Articles Of Incorporation .......................................................................................................................28 1. Mandatory Provisions..................................................................................................................28 2. Optional Provisions .....................................................................................................................29 3. Amendments To The Articles Of Incorporation..........................................................................30 E. Bylaws....................................................................................................................................................32 1. General Requirements .................................................................................................................33 2. Bylaws Relating To Directors And Management........................................................................33 3. Committees Of The Board...........................................................................................................37 4. Self-Dealing Transactions ...........................................................................................................40 5. Non-Discrimination Statement ....................................................................................................40 6. Prohibition On Partisan Activities ...............................................................................................41 7. Limitations of Liability For Directors And Officers ...................................................................41 8. Recommended Bylaw Provisions................................................................................................44 9. Amendments Of Bylaws..............................................................................................................44 F. Private School Affidavit.........................................................................................................................45 G. Statement of Information .......................................................................................................................46 C HAPTER 3 – H IRING ......................................................................................................................... 46 Section 1 Introduction............................................................................................................................................46 Section 2 Recruiting And Advertising ...................................................................................................................47 A. Applicable Discrimination Laws In Hiring ............................................................................................47 B. Recruiting And Advertising Practices Must Be Nondiscriminatory ......................................................47 C. Update Job Descriptions And Validate Job Requirements.....................................................................48 1. Accurate Job Descriptions Are Critically Important ...................................................................48 2. Hiring Criteria Must Correlate To Actual Job Duties..................................................................48 Section 3 Applications ...........................................................................................................................................49 A. Establish A Uniform Screening Process To Review Applicants............................................................49 B. Prior to Extending a Conditional Offer of Employment, Schools May Only Seek Criminal Conviction History of Applicants Applying for Positions Requiring Contact with Minors...................50 C. Applications May Not Inquire About Certain Matters, Including Arrests Not Resulting In Conviction Or Marijuana Convictions Over Two Years Old.................................................................51 D. Applications May Not Inquire Into Applicant’s Salary History.............................................................52 E. Waivers From Applicants To Obtain Background Information .............................................................53 F. Interviewers Should Review Applications Prior To The Interview .......................................................53 Section 4 Background Checks ...............................................................................................................................54 A. The Purpose Of A Background Check ...................................................................................................54 B. Legal Issues Regarding Background Investigations...............................................................................54 1. Privacy Issues ..............................................................................................................................54 2. Inquiries About An Applicant’s Physical And Mental Conditions..............................................55 3. Inquiries About An Applicant’s Criminal History ......................................................................55

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4. Potential Liability For Failure To Conduct Background Check ..................................................55 C. Initiating A Background Check..............................................................................................................55 1. Ensure That The Application Is Complete ..................................................................................55 2. Decide Who Will Conduct The Background Check....................................................................57 3. Obtain A Signed Waiver And Authorization...............................................................................57 4. Determine Which Candidates Will Be Investigated ....................................................................57 D. Conducting A Background Check..........................................................................................................58 1. Verify Information About Applicants .........................................................................................58 2. Information Available From Public Sources ...............................................................................58 3. Contact Individuals Who Actually Supervised Applicant ...........................................................59 4. Conducting The Reference Check...............................................................................................60 5. Use A Questionnaire....................................................................................................................60 6. Verify Education, Licenses, And Certifications ..........................................................................61 E. Credit Checks/Consumer Reports ..........................................................................................................61 1. The Federal Fair Credit Reporting Act........................................................................................62 2. The California Investigative Consumer Reporting Agencies Act ...............................................64 3. Restrictions On Use Of Consumer Credit Reports For Employment Purposes...........................67 F. Fingerprints ............................................................................................................................................68 1. How To Set Up A CORI Account With The Department Of Justice ..........................................68 2. Schools Must Fingerprint All Applicants Who Are Being Considered For A Position Which Requires Contact With Minor Students.......................................................................................70 3. Schools Are Entitled To Records Of Convictions And Arrests Pending Adjudication For Applicants For Positions With Supervisory Or Disciplinary Power Over Minors ......................70 4. Notification Of Subsequent Arrests.............................................................................................70 5. Requirements For Employing Contract Employees ....................................................................71 6. Requirements For Employing Construction Contractors.............................................................71 G. Convictions And Criminal Offender Record Information......................................................................71 1. Use Of Criminal Background Information Generally .................................................................71 2. Criminal History Information Schools May Not Seek Or Consider............................................72 3. Criminal Convictions Preventing Employment...........................................................................72 4. Consideration Of Applicants With Other Criminal Convictions .................................................73 5. The Limits On Using Megan’s Law Website In Making Employment Decisions ......................75 H. Responding To A Request For Background Information.......................................................................76 1. Potential Liabilities To The Employee ........................................................................................76 2. Potential Liability To Subsequent Employers .............................................................................77 3. Background Response Policy ......................................................................................................78 Section 5 Record-Keeping And Retention .............................................................................................................79 A. Statutory And Regulatory Requirements ...............................................................................................80 1. Federal Authorities ......................................................................................................................80 2. California Authorities..................................................................................................................80 B. Right To Inspect And Receive A Copy Of Personnel File.....................................................................81 C. Avoiding Discriminatory Failure To Hire Lawsuits...............................................................................81 Section 6 Maintenance of Personnel Files .............................................................................................................82 A. Why Maintain Personnel Files ...............................................................................................................82 B. Who Should Maintain The Personnel File?............................................................................................83 C. Where Should Schools Maintain The Personnel File? ...........................................................................83 D. Supervisor’s Files...................................................................................................................................83 E. What Information Should Schools Place In Personnel Files ..................................................................83 F. What Information Should Not Be Placed in Personnel Files .................................................................84 G. Information Required By The Immigration Reform And Control Act...................................................84 H. Employee’s Right To Dispute The Contents Of Personnel Files ...........................................................85 1. Overview .....................................................................................................................................85 2. Employee’s Right To Notice And Opportunity To Comment About Entry ................................85 I. Right To Inspect And Receive A Copy Of The Personnel File..............................................................85 J. Internal Disclosure .................................................................................................................................86

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Section 7 Employee Interviews..............................................................................................................................87 A. During the Interview ..............................................................................................................................87 1. Avoid Questions Or Comments About Any Protected Status .....................................................87 2. Take Notes And Promptly Summarize Information ....................................................................88 3. Be A Good Listener And Watch For Non-Verbal Cues ..............................................................88 B. Interview Questions Concerning Suitability To Work with Minors ......................................................88 C. Answer Questions And Address Any Concerns.....................................................................................89 D. After The Interview................................................................................................................................89 E. Exceptions For Religious Schools..........................................................................................................90 Section 8 Conditional Job Offers ...........................................................................................................................90 A. Pre-Conditional Offer Inquiries And Examinations...............................................................................91 1. Acceptable Inquires Before A Conditional Offer Is Issued .........................................................91 2. Impermissible Inquiries Prior To A Conditional Offer................................................................91 3. What Is A “Medical Examination”? ............................................................................................92 B. After A Conditional Offer Has Been Made............................................................................................92 Section 9 Pre-Employment Medical Exams...........................................................................................................93 A. Overview................................................................................................................................................93 B. Tuberculosis Risk Assessment ...............................................................................................................94 1. Required Of Applicants...............................................................................................................94 2. Required Of Employees ..............................................................................................................94 3. Required Of Volunteers...............................................................................................................95 4. Required Of Employees Who Transport Students.......................................................................95 Section 10 Reasonable Accommodations ................................................................................................................95 A. Accommodating Disabled Applicants In The Hiring Process................................................................96 1. The Obligation To Provide Accommodations Exists At The Hiring Stage .................................96 2. Employers May Request Reasonable Documentation Of The Need For Accommodation .........97 B. Reasonable Accommodations For An Applicant’s Religious Creed......................................................97 Section 11 Documentation At Time Of Hire............................................................................................................98 A. Employment Eligibility Verification And The Form I-9........................................................................98 B. Re-Verification Of Documents ............................................................................................................100 C. E-Verify System...................................................................................................................................100 D. Discrimination Based On Immigrant Status.........................................................................................101 Section 12 Minors ..................................................................................................................................................102 A. Obtaining A “Permit To Employ And Work”......................................................................................102 B. Other Applicable Laws ........................................................................................................................102 C. Recordkeeping .....................................................................................................................................103 Section 13 Unpaid Interns......................................................................................................................................103 Section 14 Mandated Reporters .............................................................................................................................103 C HAPTER 4 - E MPLOYMENT C ONTRACTS A ND S EPARATION O F E MPLOYEES ............................................ 104 Section 1 Introduction..........................................................................................................................................104 Section 2 At-Will Employment............................................................................................................................104 A. At-Will Contract Defined.....................................................................................................................104 B. Rights of At-Will Employees...............................................................................................................105 1. Termination For An Illegal Reason ...........................................................................................106 2. Wrongful Discharge In Violation Of Public Policy...................................................................106 3. Statutory Rights.........................................................................................................................107 Section 3 Employment Contract For A Specified Term ......................................................................................108 A. Contract For A Specified Term Defined ..............................................................................................108 B. 10-Months Versus 12-Month Contracts ...............................................................................................110 Section 4 “For Cause” Employment ....................................................................................................................111 A. Good Cause May Be Defined Within A Contract ................................................................................112 B. Good Cause Defined By Case Law......................................................................................................112 Section 5 Other Key Contract Provisions ............................................................................................................113 A. Place Of Employment ..........................................................................................................................113

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B. Hours of Work .....................................................................................................................................113 C. Satisfaction of Legal Requirements .....................................................................................................114 D. Employee’s Duties And Authority .......................................................................................................114 E. Compensation.......................................................................................................................................115 F. Benefits ................................................................................................................................................115 G. Outside Activities.................................................................................................................................116 H. Confidential And Proprietary Information ...........................................................................................116 I. School Closure or “Force Majeure” .....................................................................................................116 J. Severance .............................................................................................................................................116 K. Renewal Of Contracts And No Guarantee Of Future Employment .....................................................117 L. Integration Clause ................................................................................................................................118 M. Return Of School Property...................................................................................................................118 N. Use Of Image Or Likeness ...................................................................................................................119 O. Dispute Resolution ...............................................................................................................................119 P. Signatures.............................................................................................................................................123 Section 6 Investigating Employee Misconduct ....................................................................................................123 Section 7 Layoffs .................................................................................................................................................124 A. General Rule ........................................................................................................................................124 1. Criteria For Layoffs...................................................................................................................125 B. COBRA................................................................................................................................................127 1. Notification Requirements.........................................................................................................127 C. Unemployment Insurance ....................................................................................................................128 1. Employee Eligibility..................................................................................................................128 2. Process.......................................................................................................................................129 C HAPTER 5 – E MPLOYEE E VALUATIONS .............................................................................................. 130 Section 1 Introduction..........................................................................................................................................130 Section 2 Why We Avoid Giving Accurate Performance Evaluations ................................................................131 Section 3 The Impact Of Not Giving Accurate Performance Evaluations...........................................................132 Section 4 The Ten Basic Steps In Evaluating Performance .................................................................................133 Section 5 Different Evaluation Methods..............................................................................................................137 A. 360 Evaluations....................................................................................................................................137 B. Peer Reviews........................................................................................................................................138 C. Self-Assessments..................................................................................................................................138 Section 6 The Basic Rules For Writing Evaluations ............................................................................................138 A. Supervisor’s Log Or Notes...................................................................................................................139 B. Written Classroom Observations .........................................................................................................141 Section 7 The Evaluation Meeting .......................................................................................................................144 Section 8 Follow-Up: If Improvement Is Needed ................................................................................................145 C HAPTER 6 – W AGE A ND H OUR L AWS ............................................................................................... 146 Section 1 Introduction..........................................................................................................................................146 Section 2 Who Is Covered By Wage And Hour Laws? .......................................................................................146 A. Introduction To Coverage Issues..........................................................................................................146 B. Independent Contractors ......................................................................................................................147 1. Burden Of Proof ........................................................................................................................147 2. The ABC Test............................................................................................................................147 3. Other Considerations .................................................................................................................149 4. Penalties For Willful Misclassification Of Independent Contractors ........................................149 5. Trainees And Interns .................................................................................................................150 C. Volunteers ............................................................................................................................................152 1. Criteria For Determining Volunteer Status................................................................................152 2. Volunteers Who Are Also Current Employees..........................................................................152 D. Ministerial Exception And Parsonage..................................................................................................153

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Section 3 Overtime Exemptions...........................................................................................................................153 A. Generally..............................................................................................................................................153 B. Salary Test............................................................................................................................................154 1. Exempt Employees Must Be Paid On A Salary Basis...............................................................155 2. Deductions For Full Day And Partial Day Absences ................................................................155 3. Added Payments For Extra Work..............................................................................................155 4. Jury Duty, Attendance As Witness, Military Leave ..................................................................156 C. Duties Test ...........................................................................................................................................156 1. Executive Exemption.................................................................................................................156 2. Administrative Exemption.........................................................................................................158 3. Professional Exemption.............................................................................................................160 D. Organized Camp Exemption ................................................................................................................163 Section 4 Minimum Wage ...................................................................................................................................164 A. Federal Minimum Wage Requirements ...............................................................................................164 B. California Minimum Wage Requirements ...........................................................................................164 1. Learners.....................................................................................................................................165 2. Minors .......................................................................................................................................165 3. Split Shift Requirement .............................................................................................................165 C. Local Minimum Wage Requirements ..................................................................................................165 Section 5 Hours Worked ......................................................................................................................................166 A. Introduction To The Hours Worked Concept.......................................................................................166 B. Distinction Between Work Time And Paid Time ................................................................................167 C. Dual Employment And Different Rates of Pay ....................................................................................167 D. Rounding And De Minimis Rules ........................................................................................................167 E. Meal Periods ........................................................................................................................................168 1. Basic Requirements ...................................................................................................................168 2. Waiver Of Meal Breaks.............................................................................................................168 3. Requirements Imposed During Meal Periods............................................................................168 4. Premium Pay For Failure To Provide A Meal Period ...............................................................169 F. Rest Periods..........................................................................................................................................170 1. Basic Requirements ...................................................................................................................170 2. Requirements Imposed During Rest Periods.............................................................................170 3. Premium Pay For Failure To Provide A Rest Period.................................................................170 G. Standby Or On-Call Time ....................................................................................................................170 1. Controlled vs. Uncontrolled ......................................................................................................171 2. Employees Living On School Premises ....................................................................................171 H. Travel Time..........................................................................................................................................173 1. Travel To And From Work........................................................................................................173 2. Travel During The Workday .....................................................................................................173 3. Out Of Town Travel ..................................................................................................................173 4. Field Trips .................................................................................................................................173 I. Reporting Time Pay .............................................................................................................................174 J. Unscheduled Or Unreported Overtime.................................................................................................175 Section 6 Basic Overtime Requirements..............................................................................................................175 A. Daily, Double And Weekly Overtime..................................................................................................175 1. Daily Overtime ..........................................................................................................................175 2. Double Time..............................................................................................................................176 3. Weekly Overtime ......................................................................................................................176 4. Seven Consecutive Days of Work .............................................................................................176 B. Alternative Workweek Elections .........................................................................................................177 1. Types Of Alternative Workweek Schedules..............................................................................177 2. Example Of Overtime For Work In Excess Of Daily Or Weekly Alternative Workweek ........178 3. Disclosure And Secret Balloting Required................................................................................178 4. Schools Must Make Reasonable Accommodations...................................................................180 5. Substitution Of One Shift For Another At Request Of Employee.............................................180 C. Makeup Work Time .............................................................................................................................180

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Section 7 Payment Of Wages...............................................................................................................................181 A. Wages Payable On Termination...........................................................................................................181 1. Discharge Or Layoff..................................................................................................................181 2. Employee Quits .........................................................................................................................181 3. Delivery Of Payment.................................................................................................................181 4. Penalty For Failure To Pay Wages On Termination..................................................................182 6. “Action” Defined.......................................................................................................................182 7. Payment Of Wages Not Calculable Until After Termination ....................................................182 B. Regularly Scheduled Wages.................................................................................................................183 1. Non-Exempt Or Hourly Employees ..........................................................................................183 2. Exempt Or Salaried Employees.................................................................................................183 3. Wage Payment Where Holiday Occurs .....................................................................................183 C. Wage Payment – Other Requirements And Considerations.................................................................184 1. Fixed Salary For Non-Exempt Employees Cannot Include Overtime.......................................184 2. Disputed Wages Must Be Paid Without Condition ...................................................................184 3. Release Of Wage Claim Prohibited...........................................................................................184 4. Payday Notice Required ............................................................................................................185 5. Private Agreement May Not Contravene Pay Provisions..........................................................185 6. Payment Of Wages Due Deceased Employees..........................................................................185 D. Compensatory Time Off ......................................................................................................................185 E. Method Of Payment of Wages .............................................................................................................185 1. Wages Must Be Paid In Cash Or Instrument Negotiable In Cash .............................................185 F. Civil Penalty For Payment With Non-Sufficient Funds Instrument.....................................................186 G. Payment Of Wages Over A 10 Or 12 Month Period............................................................................186 1. Non-Exempt Employees............................................................................................................187 2. Exempt Employees....................................................................................................................187 H. Computation Of Regular Rate Of Pay And Overtime..........................................................................187 1. Payments That Must Be Included In The Regular Rate ............................................................188 2. Payments Excluded From The Regular Rate.............................................................................188 3. Methods Used In Calculating The Regular Rate Of Pay ...........................................................189 Section 8 Deductions From Wages ......................................................................................................................192 A. Legal Deductions .................................................................................................................................192 B. Recovery Of Wages Paid Is Illegal ......................................................................................................193 1. Self Help By School ..................................................................................................................193 2. Losses As Result Of Negligence Or Cost Of Doing Business...................................................193 3. Losses As Result Of Dishonest Or Willful Act Of Employee...................................................193 C. Deductions For Loans Made To Employees ........................................................................................193 D. Uniforms And Equipment ....................................................................................................................194 E. Deductions For Tardiness.....................................................................................................................194 F. Medical Or Physical Examination Costs..............................................................................................194 Section 9 Assignment Of Wages..........................................................................................................................195 Section 10 Vacation Time......................................................................................................................................196 A. “Use It Or Lose It” Vacation Policy Is Prohibited ...............................................................................196 B. Vacation Probation Periods..................................................................................................................196 C. Earnings Must Be Proportional ............................................................................................................196 D. Personal Time Off And Other Forms Of Vacation...............................................................................196 Section 11 Child Labor ..........................................................................................................................................197 A. School Attendance Requirements ........................................................................................................197 B. Work Permits .......................................................................................................................................197 C. Restrictions on Occupations.................................................................................................................198 D. Hours Worked ......................................................................................................................................198 E. Exemptions...........................................................................................................................................199 1. Training Programs .....................................................................................................................199 2. Nonprofit Entertainment............................................................................................................200 3. Work Necessary For Family Support ........................................................................................200

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Section 12 Recordkeeping .....................................................................................................................................200 A. Notification Requirements At The Time Of Hiring .............................................................................200 B. Pay Stub Requirements ........................................................................................................................201 1. Right To Inspect ........................................................................................................................201 2. Remedies For Violations ...........................................................................................................202 C. Other Recordkeeping Requirements ....................................................................................................202 D. Retention ..............................................................................................................................................203 E. Right To Inspect Personnel File ...........................................................................................................203 Section 13 Wage Discrimination (Equal Pay Act).................................................................................................204 Section 14 Remedies And Enforcement.................................................................................................................204 A. Statute Of Limitations ..........................................................................................................................204 B. Enforcement Of Wage Laws ................................................................................................................205 1. Administrative Enforcement By The Division Of Labor Standards Enforcement ....................205 2. Private Action By The Employee Or Labor Commissioner ......................................................205 3. Prohibition Against Retaliation .................................................................................................205 C. Remedies..............................................................................................................................................206 D. Criminal Penalties ................................................................................................................................206 C HAPTER 7 - R ECOGNIZING A ND P REVENTING H ARASSMENT , D ISCRIMINATION A ND R ETALIATION ......... 206 Section 1 Introduction..........................................................................................................................................206 Section 2 Laws Prohibiting Harassment, Discrimination, And Retaliation .........................................................207 Section 3 Religious Organization Exemptions From Title VII And The FEHA..................................................207 A. Exemptions Under Title VII.................................................................................................................207 B. Exceptions Under The FEHA ..............................................................................................................208 Section 4 The Ministerial Exception To Title VII And The FEHA .....................................................................208 Section 5 Protected Statuses/Classifications ........................................................................................................210 A. Race And National Origin....................................................................................................................211 B. Religious Creed....................................................................................................................................211 C. Physical Disability ...............................................................................................................................212 D. Mental Disability..................................................................................................................................213 E. Medical Condition................................................................................................................................213 F. Sex/Gender...........................................................................................................................................213 G. Age.......................................................................................................................................................214 H. Sexual Orientation................................................................................................................................214 I. Genetic Information .............................................................................................................................215 J. Opposition To Unlawful Conduct ........................................................................................................216 K. Association/Perception.........................................................................................................................217 Section 6 Discrimination......................................................................................................................................217 A. Disparate Treatment .............................................................................................................................218 1. Adverse Employment Action – Defined....................................................................................218 2. “Mixed Motive” ........................................................................................................................219 B. Disparate Impact ..................................................................................................................................219 1. Business Necessity Defense ......................................................................................................219 2. Bona Fide Occupational Qualification Defense ........................................................................220 Section 7 Harassment...........................................................................................................................................220 A. Hostile Work/School Environment Harassment ..................................................................................220 B. Quid Pro Quo .......................................................................................................................................223 C. Bullying And Abusive Conduct ...........................................................................................................224 1. Introduction ...............................................................................................................................224 2. What Is Workplace Bullying/Abusive Conduct And Who Is Affected? ...................................225 3. Bullying/Abusive Conduct Is Not Illegal Harassment ..............................................................225 4. Example Of Bullying/Abusive Conduct....................................................................................226 5. How Bullying/Abusive Conduct Impacts The Workplace ........................................................226 6. What Should Your School Do To Prevent Or Address Workplace Bullying ............................227 7. What Can Supervisors Do About Bullying/Abusive Conduct? .................................................227

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