2013 Legislative Updates

Man signs document stamped handleBy Dana Peterson and Christopher Im

California’s Paid Sick Leave Law, AB 304, or the Healthy Workplaces, Healthy Families Act of 2014 as it is officially known, is a hot topic that we have blogged about a number of times. Eligible employees began accruing paid sick time under the new law on July 1st. However, proposed amendments to the Paid Sick Leave Law were still meandering through the Legislature until finally passed by the Senate on July 13th and signed into law by Governor Brown today.

Assembly Bill 304 was first introduced in February 2015, and underwent seven dizzying amendments. In our last blog, we discussed the June 2, 2015 version, which included for the first time an urgency clause. The urgency clause makes the amendments effective today, the day that Governor Brown signed the bill. To see the full text of the newly passed amendments, click here.

So what do the latest amendments do? The key changes relate to how employers are to calculate the payment of sick time accrued under the new law.

When the law was originally passed, the rate of pay was to be calculated based upon an employee’s hourly rate. For employees who earn different hourly rates of pay, are paid by commission or piece rate, or are nonexempt salaried employees, the rate of pay was calculated based upon the wages paid, not including overtime premium pay, and the hours worked in the full pay periods that the employee worked during the prior 90-days.

A different method of calculation was proposed in the original text of AB 304. However, to keep things interesting, subsequent amendments proposed different methods of calculation, including the final June 22nd amendment. While this left many employers scratching their heads over how to update their policies (“Should we incorporate the original method of calculation for  now?”  “Should we incorporate this version or wait and see if it’s going to be amended again?”  “What?  Another amendment?  It’s been only 3-days since the last one!  I give up!”) the good news is that the amended version signed by the Governor today contains a greatly simplified method of calculation.

Now,

a) For nonexempt employees, employers may choose one of two options: (1) calculate paid sick leave in the same manner as the regular rate of pay for the workweek in which the employee uses the paid sick time; or, (2) calculate paid sick leave by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked during the full pay periods that the employee worked during the prior 90 days.

b) For exempt employees, paid sick leave is calculated in the same manner as the employer calculates wages for other forms of paid leave time.

If you have any questions about the newly adopted amendments, you can always reach out to our California Counseling and Workplace Solutions team.

Edited by Jeffrey Berman and Colleen Regan

Funny doctorBy Dana L. Peterson and Christopher Im

Just weeks before California’s Paid Sick Leave Law fully takes effect on July 1, 2015, the California Legislature has formulated amendments to what is officially known as the Healthy Workplaces, Healthy Families Act of 2014 (a frequent subject of our blogs).

The proposed amendments, appearing in Assembly Bill 304, would treat some of the Paid Sick Leave Law’s worst maladies. To read the full text of the proposed amendments, click here.

The amendments should be chicken soup for the soul of employers who have found cold comfort in the FAQs issued by the Labor Commissioner. (See CA Paid Sick Leave Update). And AB 304, first introduced in February 2015, now has an “urgency clause” (added on June 2), which would make the amendments effective as soon as Governor Brown signs the bill. Without the urgency clause, the amendments would not be effective until January 2016.

The key proposed amendments include: Continue Reading What the Doctor Ordered? AB 304’s Cure For Sick Pay Law

(Illustration) Sick PayBy Kristina M Launey

The Labor Commissioner has issued a new and updated set of FAQs interpreting California’s new Paid Sick Leave Law (AB 1522 of 2014).

If you’ve been following along, you know that after passage of the new law last year, the Labor Commissioner issued a template Poster and Wage Theft Prevention Notice for employers to use and post, as well as a first set of FAQs.

The new FAQs obligate employers to inform existing employees of the new sick pay law and changes in policy via the Wage Theft Notice, provide guidance regarding when such notice must be given to existing employees, and provide guidance regarding sick leave eligibility for seasonal or break-in-service employees, as well as part-time and alternative work schedule employees.

Wage Theft Prevention Notices: Employees hired before January 1, 2015 must receive a new Notice that contains the new information regarding paid sick time under amended Labor Code section 2810.5, even if there is no change in employer policy.

Employers must give all employees (not just those hired after January 1, 2015) a new Wage Theft Prevention Notice, announcing any change to paid sick leave, within seven days of the actual change. Although the FAQs are silent on this point, note that Labor Code section 2810.5,  which requires Wage Theft Prevention Notices, applies only to non-exempt employees.

The “date of actual change” would depend on when the employer either establishes a paid sick program under the paid sick leave law or changes an existing paid leave program to comply with this law, but would be no later than July 1, 2015. Thus, the last date to provide notice of changes would be no later than July 8, 2015 (seven days after the July 1 sick leave entitlement effective date).

Employers who do not want to issue new Wage Theft Prevention Notices to all current employees may instead inform those employees of the change to paid sick leave by using an alternative method authorized by Labor Code section 2810.5(b)(1) or (b)(2) (e.g., giving notice of change in a pay stub or itemized wage statement). Employers who choose this route should take care to follow the requirements of these alternatives and keep records of having provided those employees with the notice.

Even employers whose existing policy satisfies the minimum requirements of the law must still provide notice—via the new Wage Theft Prevention Notice or an alternative method—regarding the new paid sick leave law. The notice must contain information about the new paid sick leave law and how the employer intends to meet its requirements for the particular employee. For example, a timely writing provided to each employee that refers to or summarizes the existing policy and contains the points of information specified in the revised Wage Theft Prevention Notice would comply with the individual notice requirement. Continue Reading CA Paid Sick Leave Update: Labor Commissioner Issues More FAQs

By Kristina Launey, Dana Howells, and Christina Jackson

The California Legislature adjourned in the wee hours of the morning on August 30, in advance of the official August 31 close of the 2013-14 Legislative Session.  It sent a number of employment-related bills to Governor Brown for consideration by his September 30, 2014 deadline to sign or veto the bills.

View a full summary of each of the approved, vetoed, and failed bills here

In the coming weeks, we’ll blog about how more of the new laws, including the following, may affect employers doing business in California, and our thoughts for Workplace Solutions.

The most notable bills include:

  • New paid sick days law;
  • Harassment prohibition for unpaid interns;
  • Nondiscrimination law regarding drivers licenses;
  • Changes to mandatory sexual harassment training and education for supervisory employees;
  • New Child Labor Protection Act;
  • Changes to notice regarding health care coverage waiting periods;
  • Changes to wage and hour laws including:
    • Mandatory rest or recovery period counted as hours worked;
    • Clarification of statute of limitations affecting recovery of liquidated damages for failure to pay minimum wage; and
    • Changes to Labor Commissioner’s authority regarding citations for failure to pay minimum wage.

Stay Tuned.

Edited by Julie Yap

By: Kristina Launey and Daniel Kim

As noted previously in this space, California already permits employees to take many kinds of protected time off not generally available in other parts of the country.  In 2013, California’s Legislature presented workers with even more kinds of legally-protected absences.  It is hard to begrudge leaves of absence for crime victims and emergency volunteers without sounding like the Grinch, but these new laws do add another layer of entitlements for employees and additional administrative tasks and training and potential liabilities for employers.

Expanded Excused Absences for Crime Victims

This legislative season, the California Legislature gave additional statutory employment protection to victims of crimes who take related time off work.  Effective January 1, 2014, Labor Code §§ 230 and 230.1 are amended by SB 400 to extend the existing prohibition against averse action toward victims of domestic violence and sexual assault who take related time off to include victims of stalking.  Similarly, new Labor Code § 230.5 (SB 288) will protect from adverse employment action employees who miss work to go to court because they or their loved ones were victims of serious, violent crimes (murder, sexual assault, child abuse, etc.).

Both new laws allow employers to require a certification (police report, court order, or doctor’s note) within a reasonable amount of time after such an absence.  SB 400 will also require employers to engage in the interactive process to provide reasonable accommodations (such as transfers, modified schedules, installations of locks, etc.) to victims of stalking, sexual assault and domestic violence.

It would appear that the California Legislature thinks all employers behave like Scrooge.  But was this legislation really necessary?  Supporters would say “Yes.” Proponents of SB 288 said it was because while Proposition 9 in 2008 (also known as Marsy’s Law), gave crime victims the Constitutional right to be heard, upon request, at any proceeding, that right was not employment-protected.  And proponents of SB 400 cited a study by the Legal Aid Society – Employment Law Center (also a bill sponsor), which found that nearly 40% of survivors in California reported either being fired or fearing termination due to domestic violence.

Protected Leaves for Volunteer Emergency Personnel

Also effective January 1, 2014, amended Labor Code § 230.4 will require employers to give up to 14 days per year off to employees to take training as volunteer firefighters, reserve peace officers, and emergency rescue personnel.  Formerly, such time off was permitted only for volunteer firefighters.  Community protection used to be the kind of thing we paid taxes for.  However, in California, employers will be required to bear the burden of helping to supplement the public safety forces.  Call us Ebenezer, but even though the time off for training is not paid, employers will suffer the predictable indirect costs that often occur when employees are absent from work, such as inefficiencies, decline in productivity and overburdening of other employees.

Workplace Solutions:  Don’t wait for the Ghosts of Christmas Past, Present and Future to visit and scare you into a change in policies.  Be aware that when your employees are crime victims or are volunteer emergency personnel, as of 2014, you may need to respond differently to their requests for time off.  So, revise policies and procedures now, as necessary, and train all supervisory employees on these new requirements so you are prepared to respond promptly and legally if an employee comes to you with a request for time off due to his or her victim or volunteer status.

For more information about these and other new laws enacted this past year, see our prior blog post here, and attend our free Webinar on December 11, 2013, “New California Employment Legislative Updates — Are You Ready for 2014?”  Sign up here to attend.

By Maya Harel and Colleen M. Regan

As previously reported here one of the pieces of 2013 California legislation that made a big splash is Assembly Bill 10 (AB 10).  AB 10 amends Labor Code § 1182.12 and raises California’s minimum wage in two steps over 18 months, from $8.00 to $9.00 per hour (on July 1, 2014) and then to $10.00 per hour (on January 1, 2016). 

The increase in minimum wage will obviously increase the amount that employers will need to pay for hourly wages, including the regular rate for overtime.  But, we ask, what other ripple effects will this new legislation create for California employers?  Here are some . . .

  • Minimum salary under the  “white collar” exemptions

The minimum salary for employees who qualify for one of the “white collar” overtime exemptions (administrative, executive, or professional) must be equivalent to no less than two times the state minimum wage for full-time employment.  Thus, an increase in the minimum hourly wage will, in turn, increase minimum salary requirements for these exemptions.  Beginning on July 1, 2014, the minimum annual qualifying salary will be $37,440, and on January 1, 2016 it will rise to $41,600.  

  • Minimum wage for the inside salesperson exemption

The inside salesperson exemption (generally available only to retail and service establishments) requires that employees under the exemption earn more than 1.5 times the current minimum wage and that commissions make up more than half of the employee’s earnings, measured on a workweek basis.  Thus, to be exempt from overtime, as of July 1, 2014, California inside salespersons will need to be paid at least $13.51 per hour, and at least $15.01 starting on January 1, 2016.  And, inside salespeople will need to increase their earnings from commissions to continue to qualify under the overtime exemption.

  • Compensation for non-productive work by commissioned or piece-rate employees

The increase in minimum wage also affects employers who compensate their employees on a commission only or piece-rate basis.  Recent judicial decisions mandate that such employees be compensated at no less than the minimum wage for non-productive work performed by such employees.  Click here to see our prior post on this issue. 

  • Adjusting compensation for employees receiving meal and lodging credits

Wage orders in virtually every industry or occupation allow the value of meals and lodging furnished by the employer to be credited toward the employer’s minimum wage obligation up to specific amounts.  Employers who use this form of compensation as part of their wage obligations will need to adjust accordingly to ensure that they are meeting the increased minimum wage obligations.

  • Changes must be reflected in itemized wage statements

The Labor Code requires employers to provide every employee with a written itemized statement either semimonthly or at the time wages are paid.  (Labor Code § 226).  Among other things, the itemized statement must show all applicable hourly rates in effect during the particular pay period and the corresponding number of hours worked at each hourly rate.  Employers should take steps to make sure that their itemized statements (as well as all other internal payroll-related documents) accurately reflect the increased minimum wage when the changes take effect.

  • Notifying employees of changes in accordance with the Wage Theft Prevention Act

The “Wage Theft Prevention Act of 2011” (see Labor Code § 2810.5) took effect on January 1, 2012.  Among other things, it requires employers to notify non-exempt employees in writing of any changes to their rate of pay.  Notice of any changes must be provided within seven calendar days from the time the change was made.  Accordingly, employees affected by the change in minimum wage must receive notice from their employer by July 7, 2014, for the increase to $9.00, and by January 7, 2016, for the increase to $10.00.

If you are interested in learning more, we will be talking about all of the new employment-related legislative developments at our upcoming free Webinar on December 11, 2013, “New California Employment Legislative Updates — Are You Ready for 2014?”  Sign up here to attend.  

By Dana Peterson and Coby Turner

Depending on your view of the world, California legislators have either implemented much-needed protections for California’s immigrant workforce, or they have given the legislative equivalent of a “gift” to dishonest employees this holiday season.  Starting January 1, 2014, workers will have immunity from disciplinary action for providing updated “personal information” to their employer, including, for example, a new social security number.  Assembly Bill 263 and Senate Bill 666 are purportedly aimed at eliminating unfair immigration-related practices in employment. However, while they may be well-intentioned, these legislative enactments will effectively hamstring employers’ rights to discipline, terminate or (in some cases) report employees who provided false information in order to secure the job in the first place.

AB 263 adds a new provision to California’s Labor Code (section 1024.6) prohibiting an employer from discharging, retaliating, or taking any adverse action against an employee because an employee “updates or attempts to update his or her personal information, unless the changes are directly related to the skill set, qualifications, or knowledge required for the job.” Similarly, SB 666 creates new Labor Code section 244, which makes it an “adverse action” for an employer to report or threaten to report to a government agency the suspected citizenship or immigration status of an employee, former employee, or prospective employee because the person has exercised a right under the Labor Code or other laws. 

So what does this mean?  It means that employees who are undocumented at the time of hire, but later receive work permits and social security cards, can provide “corrected” information to their employers, who are prohibited from taking any adverse action against the employee for seemingly providing false documentation before.  As thousands of young Californians apply for and receive work authorization through the Obama administration’s Deferred Action for Childhood Arrivals program, employers should expect to receive more and more such updates, or “corrections.”  It is therefore vital that your HR, payroll and management personnel be apprised of these new protections and prohibitions.  Also, when an employee has recently engaged in protected activity, such as complaining about unpaid wages or reporting a suspected safety violation, employers should be cautious about reporting that employee’s immigration or citizenship status to any government agency for any reason in order to avoid even the inference of retaliation under Labor Code section 244. 

Employers should be aware this legislation is coming so they can respond to employee inquiries, know effective dates of the legislation, and prepare to modify current systems and policies to ensure necessary changes are made.  If you are interested in learning more, please contact us and ask about our “California Peculiarities” full-length publication and if you would like to discuss strategies for effectively complying with the new laws, please contact a Seyfarth Shaw attorney.

We will be talking about these new legislative enactments and more at our upcoming free Webinar on December 11, 2013, “New California Employment Legislative Updates — Are You Ready for 2014?”  Sign up here.

Also, keep an eye on http://www.nationofimmigrators.com/, the immigration-policy blog of Seyfarth Shaw’s Angelo Paparelli, for more information regarding how state laws of this type and related  federal immigration developments may affect you and your business.  Early next week, he’ll be addressing federal preemption of new state immigration provisions, the duty of employers to investigate discrepant employee information, union-related issues, and other immigration topics of interest.  Stay tuned!

By Kristina Launey

October 13, 2013, marked the last day for California Governor Jerry Brown to sign or veto bills the Legislature sent to him for approval in the first half of the 2013-14 Regular Session.  Of the bills we tracked as most relevant to our clients that made it to the Governor’s desk, the vast majority—18 of 23—will become law. 

View a full summary each of the approved, vetoed, and “two-year” (i.e., bills that did not make it to the Governor’s desk and that may resurface in 2014) bills here.

We’ve already blogged about the new bills that the Governor approved prior to the October 13 deadline.  In the coming weeks, we’ll blog about how more of the new laws, including the following, may affect employers doing business in California, and our thoughts for Workplace Solutions:

•   Changes to protected statuses, pre-employment inquiries, and leaves of absence/time off work;

•   New retaliation prohibitions for immigration-related practices;

•   New wage and hour laws including:

o   Liquidated damages for failure to pay minimum wage;

o   Amendment to Labor Code section 226.7 to include “recovery periods”;

o   Penalty for failure to remit withheld wages to the appropriate agency;

o   Specify no administrative exhaustion requirement for certain Labor Code provisions;

o   Impose up to $10,000 penalty upon employers for violation of Labor Code section 98.6;

o   Not to mention the minimum wage increase, which we reported here.

•   Farm labor contractor successor liability

•   Governor’s VETO of the law that would have modified the mixed-motive instruction (prompted by the ruling in Harris v. Santa-Monica).

Stay tuned.

By Kristina Launey 

Since the 2013 portion of this California Legislative session concluded in mid-September, a number of employment-related bills have gone to Governor Brown for consideration.  As of today, the Governor has signed 8 of those bills into law, covering:

 

✓   Minimum wage increase, from $8 to $10/hour, over two years

✓   Criminal background checks for youth sports leaders

✓   Employment contracts for minor actors

✓   New penalty for violation of posting requirements for garment manufacturers

✓   Change in definition of sexual harassment

✓   Recovery of defense attorney’s fees in wage claims only if bad faith

✓   Expansion of coverage of Paid Family Leave

✓   Mandatory overtime for domestic workers who work over 9 hours/day or 45 hours/week. 

For a complete roundup of the (1) signed bills, (2) passed bills awaiting Governor’s action, and (3) failed bills, click here.  We will be updating this information as the pending bills are either signed or rejected by the Governor, who has until October 13 to act. 

Last night — on the eve of the last day for the California Legislature to pass bills before interim recess in this 2013-2014 regular session — the Legislature sent to the Governor for signature AB 10, which, over time, will raise the minimum wage in California from $8.00 per hour to $10.00 per hour. 

The Governor has already publicly announced that he will sign the bill, stating that “the minimum wage has not kept pace with rising costs” and will help families “struggling in this harsh economy.”  Assembly Speaker John Pérez and Senate President Pro Tempore Darryl Steinberg also supported the bill, claiming the money will be put back into the economy through spending and help ensure economic recovery and job growth.  California first set a minimum wage in 1916.  The California Chamber of Commerce opposed the measure because the increase exceeds a 3.5% rate of inflation and only adds to the costs — such as the Affordable Care Act, Proposition 30 taxes, and CA Department of Industrial Relations employment assessments — that California employers are already facing.

The bill will raise the minimum wage in two one-dollar increments, from the current $8 per hour rate to $9 per hour effective July 1, 2014.  Then to $10 per hour effective January 1, 2016.

Workplace Solution:  Employers should be aware this legislation is coming so they can respond to employee inquiries, know actual effective dates of each increase, and prepare to modify payroll systems and wage notices and forms to ensure necessary changes are made. This development also makes still more significant the recent judicial interpretations [see here and here] that require separate payment of minimum wage for the non-productive work performed by workers compensated on a piece-rate or commission basis.