Question: We want to hire some students to help out around the office this summer. Are there any limitations we should keep in mind? Answer: Yes. Although there are some exceptions for certain specific fields, generally speaking, the California Labor Code prohibits employers from employing a minor, age 15 years or younger, from working more than eight hours in any 24-hour day, or more than 40 hours in any work week, or before 7:00 a.m. or after 7:00 p.m.. The exception is during the summer months (defined as June 1 through Labor Day) when minors are permitted to work until 9:00 p.m. Minors ages 16-17 may not be employed more than eight hours in any 24-hour day, or more than 48 hours in any work, or before 5:00 a.m., or after 10:00 p.m. on any day preceding a school day though they can work until 12:30 a.m. on any day preceding a non-school day. If you consider retaining one or more minor employees beyond Labor Day, you should know that while school is in session, a minor, 14 or 15 years of age, cannot work more than three hours in any school day, nor more than 18 hours in any work week, nor during school hours. The only exception is for minors enrolled in, and employed pursuant to, a school-supervised and school-administered work program, in which case other rules apply. Subject to limited exceptions, no employer may employ a minor age 16-17 more than four hours in any school day. Q: We employ dozens of outside sales representatives, each of whom drive their own cars to and from sales appointments daily. If one were to cause an accident, what liability, if any, would my company have? A: If your employee is found to be the legal cause of an accident, he or she is primarily liable for any damage caused by his or her negligence. However, assuming the negligence arose during the course and scope of his/her employment, your company may also bear responsibility, especially if the employee does not have the means to satisfy the victims (e.g., either no liability insurance or inadequate liability insurance coverage). You can take several proactive steps to guard against this undesirable outcome. First, review your Company’s Commercial Automobile policy to ensure that coverage extends to damage caused by an insured operating a car that is neither owned, leased or borrowed by your Company. Some policies do, and others do not. If your current policy doesn’t cover this situation, contact your broker and inquire about a Non-Owned & Hired Automobile Liability Insurance Policy (this is your first and best line of defense). Second, ensure that your outside sales people (or any employees who need to drive from time-to-time during the course and scope of their employment, excluding commuting to and from work) have adequate liability insurance and, preferably, an umbrella policy as well. Document their coverage and follow-up to ensure that new evidence of coverage is produced for succeeding policy periods. Third, contact the Department of Motor Vehicles at www.dmv.ca.gov and enroll in the Employer Pull Notice Program (“Pull” for short). Open an account and enroll your employees who drive on business. Once enrolled, you’ll be notified if certain activities occur, such as accidents, convictions and license suspensions. This allows you to accurately monitor your employees’ driving records and to identify potential problems at an early stage. There is a fee for participation in the program, but it is well worth the added piece of mind. Q: My partners and I may not all be on the same page with respect to whether we should elect for our corporation to be a “Sub-chapter S” corporation or a traditional “C” corporation. What percentage do we need in order to make an S election? A: Electing “S status” requires the written consent of all shareholders, which shall include spouses who have a community property interest in the corporation’s shares. However, once an election is made, a vote/consent of more than 50 percent of a corporation’s stock, which includes non-voting stock, is required to revoke it. This column contains general information and under no circumstances constitutes legal advice. This information is not provided in the context of an attorney-client relationship and nothing herein creates an attorney-client relationship. Readers should not act upon this general information without first seeking professional advice. Ira Rosenblatt is a business and corporate lawyer and a co-founder and Director of Stone, Rosenblatt & Cha, a business law firm in Warner Center. Rosenblatt has earned Martindale-Hubbell’s highest rating (“AV”) for legal ability and ethics and is listed in the Martindale-Hubbell’s National Bar Register of Preeminent Lawyers. He can be reached at [email protected] .
