2018 New Employment Laws. Numerous laws impacting employee rights in California go into effect this year. Be sure you are aware of the changes.

Salary  History

In a move to bring greater equality in compensation between the sexes, a new law prohibits employers from considering an applicant’s salary history when determining employee wages.

Minimum Wage

Each state has its own laws regarding minimum wage. The state of California’s minimum wage increased by $0.50 beginning on the first day of the year. Employers with more than 25 employees will need to pay workers at least $11.00 per hour this year. Employers with 25 or fewer employees are only required to pay $10.50 per hour in 2018. Other minimum wage increases are scheduled for each year between 2019-2022. California cities may have different minimum wage rates, over and above the State minimum. For example, the minimum wage in Los Angeles is $12.00, and will increase to $13.25 this summer.

Parental Leave Law

If you work for an employer that employs between 20-49 people, a new parental leave law may give you the right to take up to 12 weeks of unpaid leave. The law applies equally to natural parents and parents who are adopting or welcoming a foster child into their home. Several factors must be met in order to qualify for the leave:

The employee must have worked for the employer for a minimum of one year prior to taking the leave of absence.

The employee must have worked a minimum of 1250 hours for the employer within the last year.

The employee must work at a job site where there at least 20 other employees working for the same employer within 75 miles.

Parents can take this leave within one year of the child’s birth, adoption, or foster care placement. As long as the leave is taken within the one-year timeframe, it is protected leave under the new law.

Ban the Box

This law prohibits employers of five or more employees from including questions about an applicant’s criminal record on a job application. It also prevents employers from asking an applicant about their criminal history throughout the interview process. The topic cannot be discussed until after an offer has been made. If, after an offer is made, an applicant is determined to have a criminal history that is incompatible with the position offered, an employer can withdraw the job offer. If an employer decides to revoke an offer of employment, it must notify the applicant of their decision as soon as possible, explain its decision, include a copy of the conviction report, and outline how the applicant can respond to the revocation. The applicant then has the right to respond within five days—the employer’s decision is not final until this five-day period has passed. This gives applicants the chance to explain why their convictions should not be used to preclude them from the employment sought.

New Laws Impact Your Rights at Work, Including the Equal Pay Act

All of the new laws were effective on Jan. 1, 2016, unless otherwise noted.

Wage & Hour

California Fair Pay Act – SB 358

 Governor Brown has referred to this new law as “the strongest equal pay law in the nation,” and we think he’s right on the money. Amending California’s existing equal pay law, the new Fair Pay Act lowers the burden of proof for plaintiffs claiming gender-discriminatory pay practices, by prohibiting an employer from paying lower wage rates for “substantially similar” work, rather than “equal” work as used in existing law. The Fair Pay Act also increases the burden of proof for employers in defending such claims, requiring employers to directly demonstrate that a wage differential is based on a bona fide factor other than the employee’s gender. Notably, the new law provides broader coverage than its federal counterpart, the Equal Pay Act (29 USC § 206(d)). Unlike the Equal Pay Act, California’s Fair Pay Act even provides employees an ability to challenge their pay based on wages paid to employees at other work locations of the same employer. 

PAGA Amendments  – AB 1506

 Amendments to the Private Attorneys General Act of 2004 (PAGA), which are effective immediately, provide some welcome relief to employers relating to claims under Labor Code § 2699. Based on the amendment, employers now have  a limited right to cure a violation of failing to provide its employees with a wage statement containing the inclusive dates of the pay period and the name and address of the legal entity that is the employer.

Expanded Labor Commissioner Enforcement Powers  – SB 588 and AB 970

 In SB 588, the California legislature authorized the Labor Commissioner to file a lien on real estate, or a levy on an employer’s property, or impose a stop order on an employer’s business to assist an employee in collecting unpaid wages where there is a judgment against the employer. Additionally, employers, or individuals acting on behalf of employers, who violate any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or who violate other related provisions of law, may be held liable as the employer for such violation. A bond of up to $150,000 may be required of an employer who does not promptly pay a judgment for unpaid wages.

In AB 970, the California legislature authorized the Labor Commissioner to issue citations to enforce local minimum wage and overtime laws.

IWC Wage Orders 4-2001 and 5-2001 and Health Care Employees – SB 327

 In an effort to negate the California Court of Appeal opinion in Gerard v. Orange Coast Memorial Medical Center, 234 Cal. App. 4th 285 (2015), the California legislature enacted SB 327, making meal period waivers for health care employees valid and enforceable (reaffirming the validity of Section 11(D) of Industrial Welfare Commission Wage Orders 4-2001 and 5-2001).

Piece-Rate Compensation – AB 1513

 The California legislature clarified the statutory requirements for piece-rate compensation and provided an affirmative defense and safe harbor for employers who, by Dec. 15, 2016, fully compensate their specified employees for all under-compensated or uncompensated rest periods, recovery periods, or unproductive time between July 1, 2012 and Dec. 31, 2015.

Kin Care:  More Kin & More Care – SB 579

 This Act was amended to better coordinate with California’s paid sick leave law. Effective Jan. 1, employees may take kin care leave to care for grandparents, grandchildren, and siblings. Also, the amendment clarifies and expands the reasons an employee may take for leave. While the prior version covered “leave to attend to an illness,” the new version covers:

◾ the diagnosis, care, or treatment for an existing health condition, or for preventive care (prior law specified “illness” only)

◾ certain absences resulting from domestic violence, sexual assault, or stalking

This is meaningful when employers offer more generous sick leave (or PTO) than the sick leave law requires.  Now, employees can use up to one-half a year’s sick leave/PTO accrual for, basically, the same purposes as the sick leave law with the same protections against negative repercussions as the sick leave law creates.

Leave & Benefits

Paid Sick Leave Amendments – AB 304

 Last year, the California legislature created California’s paid sick leave (PSL) obligations, which applies to most California employers. The provisions took effect on July 1, 2015. Quickly thereafter, however, the California legislature made some fixes to the original law. These fixes took effect July 13, 2015 and clarified the following points:

◾ An employee must work for the same employer for 30 or more days within a year of the commencement of employment to be eligible to use PSL.

◾ Allow for alternative accrual methods for all leave banks.

◾ “Grandfather” in leave banks existing as of Jan. 1, 2015.

◾ Allow employers with unlimited or undefined leave banks to indicate “unlimited” on the employee’s itemized wage statement.

◾ Allow employers to calculate the rate of pay for employees using any of three methods.

◾ Make other clarifications and exclusions from the PSL law, and delay its effective date for some employers.

Family School Partnership Act – SB 579

 The school-related leave law is expanded to broaden the reasons employees may take job-protected leave from work without the fear of reprisal by allowing workers to take time off work to: (1) find, enroll, or re-enroll children in a school or with a licensed child care provider, and (2) to address a child care provider or school emergency.

Grocery Store Workers Protection – AB 359 and 897

 Certain large grocery store establishments now have obligations to retain certain grocery store workers for a limited period of time following the sale of the grocery store to another entity.

Discrimination and Retaliation Laws

New California laws extend employee protection in both the retaliation and discrimination context.

California law protects employees from retaliation and discrimination based on the employee having engaged in protected conduct. AB 1509 amends Labor Code section 98.6, 1102.5, 2810.3, and 6310, and extends that protection with regard to retaliation by extending it to a family member of a person who engaged in, or was perceived to engage in, the protected conduct. The bill also gives an exemption to household goods carriers from the client, employer and labor contractor liability provisions in this law.

Meanwhile, AB 987 extends retaliation and discrimination protections under the Fair Employment and Housing Act (FEHA) to include employees requesting accommodation based on disability or religious beliefs, regardless of whether the request was ultimately granted. The purpose of the law is to clarify part of the holding in the published decision Rope v. Auto-Clor Sys. Of Washington, Inc., 220 Cal. App. 4th 635 (2013).

Government Contractors and Prevailing Wages

New laws also expanded the definition of “public works” in the prevailing wage context.  AB 219 expanded the “public works” definition to include hauling and delivery of ready-mixed concrete. The law also provides that the entity engaged in the hauling and delivery of ready-mixed concrete is considered a subcontractor for the purpose of Labor Code section 1720.9. The law goes into effect on July 1, 2016.

AB 852 expanded the “public works” definition to include work (i.e. construction, alteration, demolition, installation, or repair work) done under a private contract on a most general acute care hospitals under certain conditions. The law contains a limited exception for rural general acute care hospitals, where the project is funded at least in part with proceeds of conduit revenue bonds issued by a public agency.

SB 350 expanded the “public works” definition to include work (i.e. construction, alteration, demolition, installation, or repair work) on projects involving California’s electric transmission system pursuant to the Clean Energy and Pollution Reduction Act of 2015. Such projects will now be subject to the prevailing wage laws.

AB 327 extended to Jan. 1, 2024 the sunset date for the statutory exemption of paying volunteers a prevailing wage on public works projects.

 

 

A number of changes to California Employment Law have taken effect or were recently amended. The laws are summarized below. If you are experiencing difficulties at work regarding these situations, or would like to speak with an attorney regarding your employment rights, please give us a call.

Changes to the new law regarding Paid Sick Leave include requirements that:

-An employee must work for the same employer for 30 or more days within a year of the commencement of employment to be eligible to use PSL.

-Allow for alternative accrual methods for all leave banks.

-“Grandfather” in leave banks existing as of January 1, 2015.

-Allow employers with unlimited or undefined leave banks to indicate “unlimited” on the employee’s itemized wage statement.

-Allow employers to calculate the rate of pay for employees using any of three methods.

-Make other clarifications and exclusions from the PSL law, and delay its effective date for some employers.

California’s equal pay statute, first enacted in 1949, was significantly modified to lower the burden of proof for plaintiff’s claims, to greatly increase the burden of proof for an employer’s defenses, and to allow employees to ask other employees about the amount of their wages for the purpose of ascertaining whether there may be a factual basis for an equal pay claim.  Governor Brown has referred to the new law as “the strongest equal pay law in the nation.”

Employment retaliation protections are extended to an employee who is a family member of a person who engaged in, or is perceived to have engaged in, legally protected conduct. This bill also exempts household goods carriers from the client employer and labor contractor liability provisions in this law.

Employers are prohibited from retaliating or otherwise discriminating against an employee for requesting accommodation of his or her disability or religious beliefs, regardless of whether the accommodation request was ultimately granted.  The new law is intended to clarify a portion of the holding in the published decision of Rope v. Auto-Clor System of Washington, Inc. 220 Cal. App. 4th 635 (2013).

The Labor Commissioner is authorized to file a lien on real estate, or a levy on an employer’s property, or impose a stop order on an employer’s business in order to assist an employee in collecting unpaid wages where there is a judgment against the employer. Any employer, or individual acting on behalf of an employer, who violates any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or who violates other related provisions of law may be held liable as the employer for such violation. A bond of up to $150,000 may be required of an employer who does not promptly pay a judgment for unpaid wages.

The Labor Commissioner will have the authority to issue a citation to enforce local minimum wage and overtime laws, including against an employer or person acting on behalf of an employer for violations of existing law related to reimbursements for expenses.

The duration of the “disability benefit period” is extended from 14 days to 60 days.

Two statutory provisions containing the term “alien,” used to describe any person who is not born in or a fully naturalized citizen of the United States, will be deleted from the Labor Code.

The Family School Partnership Act is expanded to broaden the authorized reasons for which an employee can take job-protected time off of work without the fear of discrimination or discharge by allowing workers to take time off work to: (1) find, enroll, or re-enroll his or her child in a school or with a licensed child care provider, and (2) to address a child care provider or school emergency, as defined.  (SB 579; amends Labor Code sections 230.8 and 233).

Certain grocery stores that are sold to another entity will have specified obligations to retain grocery workers for a limited period of time.

The definition of an “unlawful employment practice” is expanded to prohibit an employer or any other person or entity from using the E-Verify system at a time or in a manner not required by federal law, or not authorized by a federal agency memorandum of understanding, to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment. There is a civil penalty of up to $10,000 for each violation of the provisions of the bill.

Pedicab businesses might have the option of allowing alcohol to be served and consumed on board, if their employees are properly trained.

What is the general rule on paying overtime in California?

In California, the general overtime provisions are that 8 hours of labor constitutes a day’s work, and employment beyond 8 hours in any workday or more than 40 per week or more than six days in any workweek is permissible if the employee is compensated for the overtime at not less than:

a.            1.5 times the employee’s regular rate of pay for all hours worked over 8 in one day up to and including 12 hours in any workday, and for the first 8 hours worked on the seventh consecutive day of work in a workweek; and

b.            Double the employee’s regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of 8 on the seventh consecutive day of work in a workweek.

How do you generally calculate the regular rate of pay?

1.            If you are paid by the hour, the hourly rate is your regular rate of pay.

2.            If you are paid a salary, the regular rate is determined as follows:

a.  Multiply monthly earnings by 12 (months) to get the annual salary; b. Divide the annual salary by 52 (weeks) to get the weekly salary; and then  c. Divide the weekly salary by 40 (hours) to get your regular hourly rate.

3.            If you are paid by the piece or commission, either of the following methods may be used to determine the regular rate of pay for purposes of computing overtime:

a.            The piece or commission rate is used as the regular rate and you are paid 1 & 1/2 times this rate for production during the first 4 overtime hours in a workday, and double time for all hours worked beyond 12 in a workday; or

b.            Divide your total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours.

How is overtime calculated if you earn different rates of pay in the same workweek?

If you are paid two or more rates by the same employer during the workweek, the regular rate is the “weighted average” which is determined by dividing your total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours.

For example, if you work 32 hours at $10.00 an hour and 10 hours during the same workweek at $8.00 an hour, the weighted average (and thus the regular rate for that workweek) is $9.52 This is calculated by adding your $400 straight time pay for the workweek (32 hours x $10.00/hour) + (10 hours x $8.00/hour) = $400) and dividing that number by the 42 hours you worked.

Are salaried employees entitled to overtime?

It all depends and usually requires an attorney to analyze. Generally, a “salaried” employee must be paid overtime unless they meet the test for “exempt status” as defined by federal or state law. This area of law can be complex. If you are being paid on a “salary” basis and are not being compensated for overtime hours, give us a call and we will be glad to discuss whether you have a potential claim.

President Obama intends to direct the Department of Labor to significantly change the Fair Labor Standards Act (FLSA) regulations that relate to overtime exemptions so that a larger number of employees will qualify for overtime pay.  While the details of the intended revisions have not yet been announced, it is reported that Obama will be urging at least two major changes: (1) an increase in the amount of minimum compensation that must be paid to an employee in order for the employee to qualify for exempt status (the minimum currently is $455 per week under the FLSA [please note: in California it is $640 already, so it may not represent a big change for California employees], and Obama is expected to direct that the minimum be substantially increased, with some urging that it be doubled); and (2) replacing the FLSA “primary duty” test with a more quantitative test that requires an employee to spend a certain percentage of his or her time (likely at least 50%) on exempt duties in order to qualify for exempt status. These changes would substantially increase the number of employees who qualify for overtime pay under the FLSA.

 

The IRS announced the 2014 optional standard mileage reimbursement rates.  Beginning January 1, 2014, they decrease one-half cent from the current rates in effect, and are as follows:

  • 56 cents per mile for business miles driven;
  • 23.5 cents per mile driven for medical or moving purposes; and
  • 14 cents per mile driven in service of charitable organizations (same as current rate in effect).

 

California has fee-shifting provision in place for claimants seeking unpaid minimum wages and unpaid overtime pay, by which the prevailing employee is entitled to attorney’s fees. Many employer defendants have sought to scare away a former employee plaintiff by “reminding” them that if the employee loses, the employer will go after them for their fees and costs. Many employees have considered the risk and opted not to pursue legitimate claims based on that fear.

Good news….

Effective January 1, 2014, Labor Code § 218.5 will provide that a prevailing employer can recover its defense costs only if it proves to the court that the employee brought the action “in bad faith.” “In bad faith” is not defined in the statute, but it will probably require that the employer prove that the employee knowingly filed a false claim purely withy the intent to harm their former employer.
The history behind the change reveals California’s long-established “pro-employee” position. Governor Brown signed the legislation, SB 462, making this change on August 26, 2013. The bill’s author, Sen. Bill Monning, D-Carmel, stated that this amendment corrects “an historic injustice” and “brings California into conformity with the overwhelming majority of states in the country.
The amendment was prompted by a 2012 California Supreme Court ruling holding that a prevailing employer in a meal-rest penalties case could not recover attorneys’ fees because such penalties are not “wages” and the Labor Code statutes permit fee recovery only in actions involving wages. Kirby v. Immoos Fire Protection, 53 Cal. 4th 1244 (2012).

Although there was no applicable fee-shifting statute in Kirby, the case implied that if the claims had involved wages instead of penalties, an award of attorneys’ fees to the prevailing employer could have been appropriate. The reaction from SB 462′s sponsor — the California Employment Lawyers Association — was to try to protect plaintiff employees from that eventuality by requiring successful employers to prove bad faith. A true win for employee plaintiffs!

Wet Seal, a California based retailer, has settled a national class action suit that was filed in federal district court. The employment discrimination case was based on the company’s alleged Title VII of the Civil Rights Act of 1964 violation. The act prohibits employers from discriminating against employees based on sex, race, national origin, color or religion.

The settlement is reportedly for $7.5 million and Wet Seal promises to make changes that will reduce discrimination based on race. The suit was filed after an investigation by the Equal Employment Opportunity Commission that lasted nearly three years. The EEOC determined that the retailer was indeed guilty of denying certain employees promotions and equal pay based on race.

The court has indicated that it will decide in November whether to give the settlement final approval after a review of the process for claims. Before the ink is dry on this settlement, the EEOC has filed two additional complaints against two different companies alleging that they discriminated against applicants by using background checks to disqualify them. Some say that the case against Wet Seal and these two additional complaints illustrate the fact that African Americans in California and around the country continue to face prejudices when it comes to employment.

Many people would like to believe that the days of employment discrimination based on things such as race are far from over. Unfortunately, that isn’t always the case. There are still many people who are subjected to discrimination on a daily basis simply because of the color of their skin. Any employee that feels they have been discriminated against for any reason has the right to file a complaint. If the employer fails to satisfactorily handle that complaint, the employee may seek additional advice and assistance with reaching a satisfactory conclusion.

Source: ThinkProgress.org, “Wet Seal To Pay $7.5 Million Class Action Race Settlement,” Joseph Diebold, June 18, 2013

Piece-rate employees must be paid separately for work that does not fall within the scope of the work that is the subject of the piece rate.

So, if you’re a brake mechanic and are paid by the brake job (or other repair), but also clean the shop, make appointments, open/close the shop or any other duties that are not related to the brake jobs themselves, you must be compensated for the extra work. The hours spent working on non-piece rate tasks must be paid at least at minimum wage.

For example, in one case, an auto dealership compensated its auto mechanics based on a “piece rate” system. For repairs, the company would pay the employees based on a standard period of time allowed for a repair (flag hours).  The pay rate was significantly higher than minimum wage.  So, if the job took longer than standard hours, there was enough wages to ensure the mechanic earned more than minimum wage.

But the mechanics spent significant time at work NOT performing repairs, such as in training, cleaning, etc.  The dealership would calculate the total hours worked vs. the compensation it would pay for flag hours.  If the pay rate fell below minimum wage, the dealership would make up the difference.  The dealership did not pay a separate hourly rate for non-repair time that would not have been covered under the piece rate.

The court held that policy was illegal. The main issue is whether the applicable wage order (here Wage Order (Wage Order 4-2001)), requires payment of at least minimum wage for each hour worked, or an average of minimum wage for all hours worked in the work week.  The trial court and Court of Appeal, relying on an earlier case, Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314 agreed with the plaintiffs that the former interpretation was correct.
If you earn a piece rate for tasks completed, but also perform unrelated duties and wonder if you are being paid correctly under California labor law, give us a call. If you would like to read the entire case summarized above, you can find it here.

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