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Seyfarth Synopsis: Effective January 1, 2019, California’s minimum hourly wage goes up to $12.00 for large employers, and many local minimum wages will go higher still. Don’t forget that the statewide change will affect salary thresholds for white collar exemptions, as well.

Effective January 1, as New Year’s bells toll, California’s minimum hourly wage will increase to $12.00 for employers of 26 or more, and $11.00 for employers of 25 or fewer.

This latest statewide adjustment is part of a series of adjustments mandated by a 2016 statute that, by 2020, will raise the statewide minimum wage to $15.00. The latest adjustment obviously increases what employers must pay for regular and overtime wages for employees currently earning the minimum. And the new, higher minimum wage also will automatically increase the threshold salary employers must pay to maintain salary-exempt status for administrative, executive, and professional employees: the threshold salary is twice the state minimum wage for a 40-hour week. The new annual salary minimum for large employers as of 2019 will thus rise to $49,920 (2 times $12/hour times 40 hours/week times 52 weeks/year).

In addition, to maintain overtime-exempt status for commissioned salespeople (in retail and service establishments, with the earnings threshold calculated as exceeding 1.5 times the current minimum wage), employers must now pay a higher earnings threshold—$18.01 per hour—and over one-half of the earnings must consist of commissions, so commissions might have to be increased accordingly.

And, of course, employers, under the Wage Theft Prevention Act, must notify non-exempt employees in writing of any changes to their new rate of pay within seven calendar days from the time of the change.

On top of the statewide change, the following California cities will be sending their own New Year’s greetings for minimum-wage earners:

Belmont: Employers who are subject to the Belmont Business License Tax or who maintain a facility in Belmont must pay—to each employee who performs at least two hours of work per week in Belmont—a minimum wage of $13.50. This requirement applies to both adult and minor employees.

Cupertino: Employers who are subject to the Cupertino Business License Tax or who maintain a facility in Cupertino must pay—to each employee who performs at least two hours of work per week in Cupertino—a minimum wage of $15.00. Covered employees are entitled to these rights regardless of immigration status.

El Cerrito: An employee who performs at least two hours of work in a particular workweek within the geographic limits of the City of El Cerrito must be paid a minimum wage of $15.00. This minimum wage applies regardless of the size of the employer, and applies to both part-time and full-time employees.

Los Altos: Employers who are subject to the Los Altos Business License Tax or who maintain a facility in Los Altos must pay—to each employee who performs at least two hours of work per week in Los Altos—a minimum wage of $15.00. This requirement applies to both adult and minor employees.

Mountain View: Employers who are subject to the Mountain View Business License Tax or who maintain a facility in Mountain View must pay—to each employee who performs at least two hours of work per week in Mountain View—a minimum wage of $15.65. This requirement applies to both adult and minor employees.

Oakland: Employers in the City of Oakland must pay a minimum wage of $13.80 to employees who perform at least two hours of work in a workweek within the geographic limits of the city. This requirement applies to both part-time and full-time employees.

Palo Alto: Employers in Palo Alto must pay a  minimum wage of $15.00 to any employee who works two hours per week within Palo Alto.

Redwood City: Redwood City’s local minimum wage of $13.50 will apply to all business operating within the geographic boundaries of Redwood City and any employee working at least two hours per week.

Richmond: All employers in the City of Richmond must pay a minimum wage of $15.00 to employees who work at least two hours per week within the geographic boundaries of the city. This requirement applies to both minor and adult employees.

San Diego: Employers must pay all employees who perform at least two hours of work in one workweek within the geographic boundaries of the City of San Diego a minimum wage of $12.00. This requirement applies to both minor and adult employees.

San Jose: Employers who are subject to the San Jose Business License Tax or who maintain a facility in San Jose must pay—to each employee who performs at least two hours of work per week in San Jose—wages of not less than $15.00 per hour. This requirement applies to both minor and adult employees.

San Mateo: Employers who are subject to the City of San Mateo Business License Tax or who maintain a facility in the city must pay a minimum wage of $15.00. Tax-exempt nonprofit organizations must pay a minimum wage of $13.50. This requirement applies to adult and minor employees.

Santa Clara: Employers who are subject to the Santa Clara Business License Tax or who maintain a facility in Santa Clara must pay—to each employee who performs at least two hours of work per week in Santa Clara—a minimum wage of $15.00 per hour. This requirement applies to both minor and adult employees.

Sunnyvale: Employers who are subject to the Sunnyvale Business License Tax or who maintain a facility in Sunnyvale must pay—to each employee who performs at least two hours of work per week in Sunnyvale—a minimum wage of $15.65. This requirement applies to both adult and minor employees.

Below is a handy “at a glance” chart detailing these municipal increases.

City Minimum Hourly Wage Effective January 1, 2019
Belmont $13.50
Cupertino $15.00
El Cerrito $15.00
Los Altos $15.00
Mountain View $15.65
Oakland $13.80
Palo Alto $15.00
Redwood City $13.50
Richmond $15.00
San Diego $12.00
San Jose $15.00
San Mateo $15.00
Santa Clara $15.00
Sunnyvale $15.65

Finally, still more cities (including Los Angeles and San Francisco) will impose higher minimum-wage requirements next July 1. Be sure to check this space in mid-2019 for those updates.

Seyfarth Synopsis: Since the days of Buddy the Elf’s short stint as a retail employee, New York City and many other municipalities have adopted predictive scheduling laws. Though California does not yet have a such a law, San Francisco, Emeryville, and San Jose have adopted predictive scheduling ordinances. With the bustling holiday season upon us, covered employers should make sure that they are complying with these ordinances. We highlight here the requirements of these predictive scheduling ordinances while pointing out some of the best ways to ensure compliance with them.

San Francisco’s Formula Retail Employee Rights Ordinances. Francisco! That’s Fun to Say! Francisco… Frannncisco… Franciscooo…

Which employers are covered? San Francisco’s Formula Retail Employee Rights Ordinances apply to retail establishments with at least 40 locations worldwide and 20 or more employees in San Francisco. The term “retail establishment” is defined loosely to cover many businesses. An employer is considered a retail establishment if it maintains at least two of the following features: a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, uniform apparel, standardized signage, a trademark, or a servicemark. Thus, a food establishment may be considered a retail establishment under the Ordinances. (We know what you are thinking, and no: covered food establishments are not limited to those serving the four main elf food groups—you know, candy, candy canes, candy corns, and syrup.)

In addition to applying to retail establishments, the provisions apply to property services contractors (e.g., janitorial and security services) for work performed in San Francisco at a retail establishment covered by the Ordinances.

What is required under the law? Employers that are covered by San Francisco’s Ordinances are required to do the following:

  • Provide notice:
    • Provide new employees with an initial estimate of their work schedules upon hire. This estimate must include the minimum number of working and on-call shifts the employee can expect to work and the days and hours of those shifts.
    • Provide employees with notice of their work schedules at least two weeks (14 days) in advance.
  • Provide compensation for changes to schedules:
    • If a change is made to an employee’s schedule after the work schedule has been posted, the employer may be required to compensate the employee for the changes. If between 24 hours and seven days remain until the shift, employees are entitled to one hour of pay at regular rate; if employees receive less than 24 hours’ notice, they are entitled to two hours of pay at regular rate for each shift of four hours or less, and four hours of pay at regular rate for each shift of more than four hours.
    • If an employee is scheduled for an on-call shift but is ultimately not required to come into work, then the employee is entitled to two hours of pay at the employee’s regular hourly rate for each shift of four hours or less, and four hours of pay at the employee’s regular hourly rate for each shift of more than four hours.
  • Exceptions: Notice and compensation are not required if a change was needed to address unexpected employee absences due to illness, vacation, or employer-provided time off of which the employer had less than seven days’ notice. Similarly, notice and compensation are not required if a change was needed to address unexpected employee absences due to failure to report to work, termination, or disciplinary action. Similarly, employees are not entitled to notice or compensation when they have to work overtime. To review all of the applicable exceptions, click here.
  • Offer additional work: Before hiring new employees the employer must first offer the additional work to existing qualified part-time employees.
  • Equal treatment: Employers must treat part-time and full-time employees equally with respect to wages, access to time off, and promotion eligibility.

Key Points to Remember About Emeryville’s Fair Workweek Ordinance if You Want to Avoid the Naughty List

Which employers are covered? Emeryville’s Fair Workweek Ordinance applies to retail firms with 56 or more employees globally, and fast food firms with 56 or more employees globally and 20 or more employees within Emeryville. The term “retail firm” is defined narrowly and includes department stores and specialty retailers. A fast food firm is one that does not serve alcohol and that requires patrons to pay before they eat. So if you are serving up the “World’s Best Cup of Coffee” in Emeryville, you just might be covered by the City’s Ordinance.

What is required under the law? Employers that are covered by the Emeryville Ordinance must do the following:

  • Provide notice:
    • Provide new employees with an initial estimate of their work schedules upon hire. This estimate must include a good faith estimate of the employee’s work schedule.
    • Provide employees with notice of their work schedules at least two weeks (14 days) in advance.
  • Provide compensation for changes to schedules:
    • If a change is made to an employee’s schedule after the work schedule has been posted, the employer may be required to compensate the employee for the changes. If between 24 hours and 14 days remain until the shift, the employee is entitled to one hour of pay at their regular rate. If less than 24 hours’ notice is provided and the employee’s hours are canceled or reduced, the employee is entitled to four hours or the number of hours in the scheduled shift, whichever is less. Employees are entitled to one hour of pay at their regular rate for all other changes.
  • Exceptions: As with San Francisco’s Ordinances, Emeryville’s Ordinance contains exceptions. Emeryville has far fewer exceptions, however, than San Francisco does. For instance, requiring an employee to work overtime constitutes a change under the Emeryville Ordinance and entitles the employee to additional pay.
  • Offer of additional work: Before hiring new employees, the employer must first offer the additional work to existing qualified part-time employees.
  • Entitlement to rest periods: Employers must not schedule or require an employee to work during rest periods, without the employee’s consent. The rest period includes the first 11 hours after the end of the previous calendar day’s shift and the first 11 hours following the end of a shift that spanned two calendar days. Employees who agree to work during the rest period are entitled to compensation at one-and-a-half times their regular rate of pay.

San Jose’s Elf-Sized Predictive Scheduling Ordinance

Though San Jose’s Opportunity to Work Ordinance is not, strictly speaking, a predictive scheduling law, the ordinance does require employers to offer additional work to existing qualified part-time employees before hiring new employees. To learn more about San Jose’s Ordinance, click here.

I Like to Comply, Complying’s My Favorite

Though navigating the San Francisco, Emeryville, and San Jose predictive scheduling ordinances is not as difficult as navigating one’s way through the seven levels of the Candy Cane forest, through the sea of swirly twirly gum drops, and out the Lincoln Tunnel, we want to help employers make sure that they are compliant. Here are some tips to help covered employers navigate these predictive scheduling laws:

  • Employers should be sure to keep their employees informed by providing employees with predictive scheduling policies.
  • To the extent possible, employers should try not to change employee schedules after they have been posted. That would be the simplest way to avoid liability under the Emeryville and San Francisco ordinances.
  • At least with respect to covered employees working in San Francisco, employers should minimize or eliminate the use of on-call shifts, except where necessary. Remember, absent limited exceptions, on-call employee who call in and learn their services are not required will be entitled to predictability pay.
  • Though the ordinances do not require communications regarding schedule changes to be in writing, employers would be wise not to solely rely on oral exchanges. It is best to have a signed, written record of schedule receipt and schedule changes.
  • Though the holiday season is an especially busy time for many employers, they should avoid hiring seasonal employees until they have offered the additional hours that they need covered to existing part-time employees.
  • At least in Emeryville, employers should try not to ask employees to work overtime. A covered Emeryville employee who works overtime is not only entitled to compensation at one-and-a-half times their regular rate of pay, but also entitled to one hour of predictability pay.

Workplace Solutions

With the holiday season upon us, employers have a lot to do. One important thing to do is to take the time to comply with any predictive scheduling law. Keep in mind that while California is peculiar, it is not the only place where one can find predictive scheduling laws. Don’t hesitate to reach out to Seyfarth to help you determine whether you are a covered employer under any state or municipal predictive scheduling laws.

Edited by Coby Turner.

Seyfarth Synopsis: On March 13, 2017, San Jose’s new “Opportunity to Work Ordinance” takes effect, requiring covered employers to offer additional hours to part-time employees before hiring new or temporary employees. As the law’s effective date looms, the City has issued guidance clarifying portions of the ordinance and has released the notice form that employers must post.

An earlier post detailed the obligations that San Jose’s new voter-approved ordinance creates for San Jose private employers. The ordinance requires certain employers to:

  • offer additional work hours to existing, qualified part-time employees before hiring new employees, through a “transparent and non-discriminatory process,”
  • post a notice of the rights created by the ordinance, and
  • retain, for four years, relevant records such as work schedules, payroll records, and offers to current and former part-time employees.

With the ordinance’s March 13th effective date now knocking, the City has issued guidance on how to comply. We provide some highlights below.

For starters, employers can stop banging on the City’s door for the ordinance’s required notice. The City has issued the notice for employers to post with their other employment notices (click here for the notice in English, Spanish, Chinese, and Vietnamese).

The City has also published Frequently Asked Questions to shed some light on how the City interprets the ordinance. Perhaps most importantly, the FAQs define a “full-time” employee as an employee who works at least 35 hours a week, which means that “part-time” employees (who must be offered extra hours) are those who work fewer than 35 hours a week.

The FAQs also remind us that a “covered employer” is an employer that has at least 36 employees and that is subject to San Jose’s business tax (i.e., the ordinance doesn’t apply to government employers). The FAQs also explain that the employer’s total number of employees includes employees who work in locations outside of San Jose.

The FAQs go on to explain that only non-exempt employees count towards the 36-person threshold required to become a covered employer (this number includes part-time and full-time employees). Administrative and professional employees will not affect an employer’s coverage under the law; in fact, the FAQs explain that they are exempt from the law.

Further, the FAQs details how employers can comply. First, employers need to offer additional hours to part-time employees only at a particular location. Employers do not need to reach out to employees at other locations.

Second, employers can decide how to offer additional hours to part-time employees, provided that the employers adopt a process that is transparent and non-discriminatory. For example, an employer can give employees a limited window to accept additional hours of work before bringing on new labor. And employers need not rearrange their shift schedules to give more hours to part-time workers; the part-time worker must be able to work during the employer’s regularly scheduled shift.

Finally, for those covered employers who feel like the ordinance might knock them out, the City has provided a hardship application. On a case-by-case basis, the City will grant renewable twelve-month exemptions where a covered employer’s “work or need is unpredictable or requires a specialized skill and there is a need to essentially have Employees ‘on call.’ ”

This recent guidance, while not removing all uncertainty, certainly gives employers a better understanding of what lurks behind the Opportunity to Work Ordinance door, which will open on March 13.

Workplace Solutions. Compliance with new city ordinances can be tricky, especially since they are often relatively obscure. Knowledge is the first step. Compliance efforts are the next. If you would like assistance with ensuring compliance with this new ordinance, then please contact the authors or another attorney from Seyfarth’s Labor and Employment Group.

Edited by Michael Cross.

Seyfarth Synopsis: On November 8, 2016, San Jose voters approved the most recent local effort to dictate employment scheduling practices. Beginning in March 2017, San Jose employers must offer existing part-time employees additional work hours before hiring any temporary, part-time, or new worker. Violations of the ordinance can trigger city fines and private law suits.

Temporary, part-time, and contract employees are important segments of the economy, particularly around the holidays. Retailers and logistics companies often rely on these workers to meet customers’ holiday wishes. And outside of the holidays, temporary and part-time employees provide important scheduling flexibility in an increasingly on-demand economy. The new year, however, will bring new restrictions on the ability of San Jose employers to use these important staffing tools.

Ok, so what do I need to know?  On November 8, 2016, San Jose voters approved Ballot Measure E, called the “Opportunity to Work Ordinance,” which requires an employer to offer part-time employees additional hours before the employer hires any new or temporary employees. Sponsored by a coalition of labor unions, the new ordinance limits employers’ ability to bring on new workers by forcing them to first offer existing “employees” the opportunity to work the additional hours. The ordinance also saddles employers with new record retention and notice requirements.

The restrictions will take effect on March 8, 2017 and, as covered here, continue a trend seen in other California cities, such as San Francisco, of local regulation of employers’ scheduling and hiring practices.

What if I employ only two people in San Jose? You still may be covered. The ordinance covers employers if they employ more than 35 employees and are subject to San Jose’s business tax. But employers can be covered even if they employ 35 or fewer employees in San Jose. For chain businesses, the ordinance counts every employee of the business, whether or not located in San Jose. For franchisees, the ordinance counts all employees of the franchisee, again, without regard for where the employees work.

The ordinance also broadly defines “employee.” Companies “employ” an individual if they exercise direct or indirect control over the individual’s wages, hours, or working conditions. For an employee to fall under the ordinance, the employee must have worked two hours within the last calendar week or be entitled to California’s minimum wage.

How can I comply? The short answer is that it is not entirely clear. We know that the ordinance:

  • requires employers to offer qualifying employees the extra hours before looking to temporary labor solutions (obviously),
  • requires employers to post notice to their employees about their rights under the new ordinance,
  • requires employers to “use a transparent and non-discriminatory processes” to distribute hours among existing employees,
  • only requires employers to offer additional hours to employees who “in the employer’s good faith and reasonable judgment, have the skills and experience to perform the work,” and
  • stops short of requiring employers to pay existing employees overtime.

Employers need not offer additional hours to employees if those hours would entitle the employee to a premium rate of pay.

Aside from these guidelines, however, the ordinance provides no additional detail on how employers must distribute hours among existing employees or when an employer can send work to a contractor or temporary staffing company. For more guidance, we must wait on the City or the courts. The ordinance grants the City authority to issue guidelines and rules, as well as to make non-substantive changes to the ordinance itself.

Is there anything else I need to do? Yes, and you may need another file cabinet. In addition to its scheduling component, the ordinance burdens employers with record retention and notice requirements. Employers must retain records for new hires that show the employer’s efforts to first offer the additional work to existing part-time employees. Employers must also preserve employee work schedules and “any other records the City requires for employers to demonstrate compliance with the ordinance.” All of these records must be maintained for four years. Failure to comply will create a presumption that the employee’s account as to scheduling practices is accurate.

Further, the ordinance requires employers to display a poster outlining the rights created by the ordinance.  The City’s Office of Equality Assurance will publish a bulletin outlining the required notice, but has not done so yet.

What are the consequences if I stick to my old scheduling practices? Ignoring the ordinance could result in significant liability. Although the ordinance exempts employers for their first violation, the ordinance authorizes the City to issue administrative fines up to $50 per violation and to seek civil penalties in court for noncompliance.

More alarming yet, the ordinance authorizes private actions. Any person not offered work under the ordinance can bring a private suit in court. If successful, the individual would be entitled to lost wages, penalties, and attorneys’ fees.

The ordinance also adopts the San Jose minimum wage law’s employee-friendly retaliation language.  Employees who claim they suffered an adverse employment action within 90 days of complaining about a violation of the ordinance will enjoy a rebuttable presumption that retaliation has occurred.

What if I have a collective bargaining agreement or just can’t comply? Perhaps as a nod to its sponsors, the ordinance provides a carve-out for CBA scheduling provisions. But to invoke the carve-out, the CBA must explicitly waive the ordinance in clear and unambiguous terms.

The City has the authority to exempt businesses from complying with the ordinance where the business works in good faith to comply but compliance is impracticable, impossible, or futile. The City has yet, however, to outline the procedures for requesting this exemption.

Stay tuned. The ordinance takes effect on March 8, 2017. Be sure to check this site in the coming weeks for updates on the City’s plans for rolling out the ordinance and any guidelines it might issue to help clarify the burden San Jose employers must bear in the new year.

Workplace Solutions. Compliance with new city ordinances can be tricky, especially since they are often unknown to employers. Knowledge is the first step. Compliance efforts are the next. If you would like assistance with ensuring compliance with this new ordinance, please contact the authors or another attorney from Seyfarth’s Labor and Employment Group.