Brownness, employment law, Legal

5 Things Small Businesses Should Be Aware of:Legal Reasons #65

California’s state minimum wage increased for California’s employers on January 1, 2018.  California’s minimum wage law provides for two different rates based on the size of the employer, and the minimum wage increases are reflected in this chart:

Date Minimum Wage for Employers with 25 Employees or Less Minimum Wage for Employers with 26 Employees or More
January 1, 2017 $10.00/hour $10.50/hour
January 1, 2018 $10.50/hour $11.00/hour
January 1, 2019 $11.00/hour $12.00/hour
January 1, 2020 $12.00/hour $13.00/hour
January 1, 2021 $13.00/hour $14.00/hour
January 1, 2022 $14.00/hour $15.00/hour
January 1, 2023 $15.00/hour

 

Once the rate reaches $15 per hour, it will be adjusted annually based on inflation.  Here are five potential pitfalls California employers need to be careful to avoid with the increase in the state minimum wage.

 #1: Who is considered an employee?

California’s Department of Industrial Relations website provides the following explanation:

Labor Code section 1182.12 defines “employer” as: “any person who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person [and] includes the state, political subdivisions of the state, and municipalities.”

Any individual performing any kind of compensable work for the employer who is not a bona fide independent contractor would be considered and counted as an employee, including salaried executives, part-time workers, minors, and new hires.

 #2: The salary level to qualify as an exempt employee increases based on the state minimum wage.

Employers need to review the base salary for all exempt employees to ensure the employees meet the salary required to be exempt.  To be exempt from the requirement of having to pay overtime to the employee, the employee must perform specified duties in a particular manner and be paid “a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.” (Lab. Code, § 515, subd. (a).)

With the increase in the state minimum wage in 2018, the equivalent of two times the minimum wage of $10.50 per hour for small employers equals $43,680 per year, and two times the minimum of $11.00 per hour for large employers equals $45,760 per year to qualify for the white collar exemptions.

It is important to note that the salary basis test is set according to the California state minimum wage, not the applicable minimum wage that may apply in the various local city and counties in California.

#3: Which minimum wage rate applies if the number of employees raises and falls below 26 employees throughout the year? 

The California Department of Industrial Relations provides that: “An employer with 26 or more employees at any time during a pay period should apply the large-employer minimum wage to all employees for that pay period.”  Changing the rate of pay for each pay period raises another pitfall about the notice employers are required to provide employees before changing their rate of pay ( #4 below).

 #4:  Employers are required to update the notice to employees setting forth the employee’s rate of pay. 

California employers are required to provide non-exempt employees with certain information upon hire as required by the Wage Theft Protection Act.  The law became effective in 2012 and is codified at Labor Code section 2810.5.  Many employers use the Labor Commissioner’s template to meet this notice requirement.

However, employers who pre-populate the form will need to revise the forms to ensure that the wage rates comply with the increased minim wage rate in 2018.  Likewise, it is a good practice to review the notices mid-way through the year to ensure compliance with  the various local cities and counties (such as Los Angeles and Santa Monica) that typically increase their minimum wage rates in July each year.

 #5: Employers still need to comply with local city or county minimum wage requirements if those laws provide a higher minimum wage rate. 

Employers need to review any applicable local city or county laws that may provide for a higher minimum wage than the state minimum wage requirement.  Employers must comply with the highest minimum wage rate applicable to their workforce.  It is also important to review the local minimum wage ordinances as many ordinances differ in how to determine if the employer is small or large, and usually contain their own notice requirements.

employment law, Legal

New California Employment Laws: Legal Reasons #64

  • Stop asking about salary history – AB 168 bars employers from asking job applicants about their previous salary. The legislation’s goal is to narrow the gender gap by preventing employers from basing offers on prior salary and thus, presumably, perpetuating historical discrimination. This will also remove the perceived gap in negotiating power between an employers and employees who must disclose their prior salary. Employers should ensure that their job applications don’t seek prohibited information and that those interviewing applicants know not to ask these questions.
  • More employers must offer parenting leave – SB 63, officially titled the Parental Leave Act, requires employers with between 20 and 49 employees to offer parenting leave that mirrors the Family Medical Leave Act. The new Act allows employees who work for a covered employer to take 12-weeks of unpaid, job-protected leave if they have worked a minimum of 1,250 hours in the 12-months prior to taking leave.  Employees can take leave only for the purpose of bonding with a newborn child, adopted child or foster child within a year of the birth or placement. Covered employers will also need to maintain health coverage under the same terms as an active employee. The Act also prohibits discrimination and retaliation against an employee for taking parental leave.The Parental Leave Act does not require employers to pay any portion of the leave but requires that employees be able to use accrued sick and vacation time. Employees can apply to have a portion of the parental leave paid for through the state’s Paid Family Leave program.  As we’ve previously explained, San Francisco requires some employers to pay a remaining portion of parental leave.
  • Expanded harassment training – California requires at least biannual harassment training for supervisors in companies with 50 or more employees. Having given a dozen sessions of the  training in the last month, I can assure you that there’s no shortage of material to talk about. But as of January 1, 2018, SB 396 requires that the training include information on gender identity, gender expression, and sexual orientation. If your handbook doesn’t specifically prohibit discrimination and harassment on those bases, you’re overdue for a revision.
  • Ban the box – Following the leads of San Francisco and Los AngelesAB 1008prohibits employers with five or more employees from:
    • Asking on employment applications about criminal convictions;
    • Asking applicants about criminal convictions before making a conditional offer of employment;
    • When conducting background checks on applicants, considering, distributing, or disseminating information about prior arrests not leading to conviction, participation in diversion programs, or convictions that have been sealed, dismissed, expunged, or otherwise nullified.

Employers who wish to rely on criminal conviction information to withdraw a conditional job offer must notify the applicant of their preliminary decision, give them a copy of the report (if any), explain the applicants right to respond, give them at least five business days to do so, and then wait five more business days to decide when an applicant contests the decision. There are exceptions for employers who operate health facilities hiring employees who will have regular access to patients or drugs.

  • Minimum wage increases – On January 1, 2018, the California state minimum wage goes up to $11.00 per hour for businesses with 26 or more employees and $10.50 per hour for smaller companies. The inimitable Sahara Pynes discusses which cities are raising their minimum wages here.
Brownness, employment law, Legal

The New Parent Leave Act: Legal Reasons #63

Biracial mom on bed with her multiethnic black infant son (baby is 3 months old)

Under the New Parent Leave Act (Parental Leave), employers with 20 or more employees must provide eligible employees with 12 weeks of unpaid, job-protected leave to bond with a new child.

Compliance with this new law is essential. You will be liable if you fail to provide an eligible employee with Parental Leave, fail to guarantee the employee the right to return to the same or comparabl?e position at the end of Parental Leave, or take any adverse action against an employee for taking Parental Leave or for exercising his/her rights under the law.

Who’s Eligible for Parental Leave?

The New Parent Leave Act applies to:

  • Any person who directly employs 20 or more persons to perform services for a wage or salary; and
  • The state and any political or civil subdivision of the state and cities, regardless of the number of employees.

To be eligible for Parental Leave, an employee must:

  • Have worked for a covered employer for at least 12 months;
  • Have worked at least 1,250 hours in the 12 months before taking leave; and
  • Work at a worksite that has at least 20 employees within a 75-mile radius.

Duration and Timing of Leave

Eligible employees can take up to 12 weeks of Parental Leave to bond with their new child. The leave must be taken within one year of the child’s birth, adoption or foster care placement.

The 12 weeks of Parental Leave is in addition to the up to four months of Pregnancy Disability Leave (PDL) available to a pregnant parent. An employee eligible for PDL and Parental Leave can take up to four months of protected leave when disabled by pregnancy and then an additional three months of Parental Leave.

If both parents work for you and both are eligible for Parental Leave, you must allow both to take Parental Leave. However, you are not required to provide more than 12 weeks total for both employees. You may allow the employees to take the leave simultaneously, but are not required to do so.

 

Employer Notice Requirement

The New Parent Leave Act requires that employers provide employees with a guarantee of reinstatement before an employee begins his/her Parental Leave. If you fail to provide this guarantee of reinstatement before the employee’s leave begins, you will be treated as if you refused to allow the employee to take Parental Leave and can be held liable for a violation of the law.

Employers should ensure that all employees taking Parental Leave are provided a guarantee that the employee will be reinstated to the same or comparable position at the conclusion of the employee’s Parental Leave. The guarantee should be in put in the handbook or an additional policy that all employees are aware of.

Returning to Work After Leave

When an employee returns from Parental Leave, you must reinstate the employee to the same or comparable position. If you need to terminate an employee on Parental Leave or have concerns about reinstatement, seek legal counsel.

employment law, Legal

New California Labor Laws for 2018

Here are some of the more significant labor laws that take effect on January 1, 2018:

Conviction History of Applicants (AB 1008)

A number of other states have already enacted what is popularly known as “ban-the-box” laws, which limit an employers’ ability to review and consider a job applicant’s prior criminal conviction history.  The California Fair Employment and Housing Act (FEHA) has now been amended to prohibit employers with five or more workers from:

  • Including on any application for employment questions that seek the disclosure of an applicant’s conviction history before making a conditional offer of employment to the applicant.
  • To inquire into, or consider the conviction history of the applicant, including any inquiry about conviction history on any employment application, until after the employer has made a conditional offer of employment to the applicant.
  • To consider, distribute, or disseminate certain information while conducting a conviction history background check in connection with any application for employment

 

Salary Inquiry Limits – Applicant’s Prior Salary History (AB 168) 

AB 168 enacts Labor Code section 432.3, which prohibits California employers from asking job applicants about their salary history, including any benefits and other compensation information from previous employment.

While California employers cannot currently use an applicant’s prior salary to justify any disparity in compensation, the inclusion of section 432.3 now keeps employers asking about salary history when interviewing, or making a job offer to applicants. If an applicant voluntarily provides their salary history, then an employer can use that information for salary consideration.  Section 432.3 also requires employers to provide the pay scale of a position to an applicant, which makes California the first state to do so.

New Parent Leave Act (SB 63)

The “New Parent Leave Act,” extends CFRA rights to employees working at locations with at least 20 employees within a 75 mile radius. The California Family Rights Act (“CFRA”) had already provided child bonding parental leave to employees at companies with 50 or more employees. This has now been expanded to small businesses with the recent California Senate Bill 63.

Essentially the same as the California Family Rights Act, the bill establishes that an employee must have at least 12 months of service with a covered employer. The employee must have at least 1,250 hours of service during the 12-month period in order to take up to 12 weeks of paid family leave. The purpose of the leave is to allow an employee time to bond with a new child within one year of the child’s birth, adoption or foster care placement. 

Immigration Worker Protection Act (AB 450)

Assembly Bill 450, “the Immigration Worker Protection Act”, prohibits employers from allowing federal immigration enforcement officials to access non-public areas of a work place without a judicial warrant. Governor Brown recently signed legislation limiting the coordination between local and state law enforcement and federal immigration officials. AB 450 was drafted to mirror this effort.

The Act also prohibits an employer from voluntarily allowing an immigration enforcement agent to access, review or obtain employee records without a court order or subpoena. The Act provides the following exceptions to this prohibition:

  • Employment Eligibility Verification forms and other documents for which a Notice of Inspection has been provided to the employer.
  • Instances where federal law requires employers to provide access to records.

If employees are to be subject to an agency’s inspection the Act requires employers to provide sufficient notice that must also meet specific content requirements in order to be compliant.

Harassment Training on Gender Identity, Expression & Sexual Orientation (SB 396)

The California Fair Employment and Housing Act (FEHA) prohibits the harassment of an employee directly by the employer or indirectly by agents of the employer with the employer’s knowledge.  Senate Bill 396 amends Sections 12950 and 12950.1 of the Government Code, and Sections 14005 and 14012 of the Unemployment Insurance Code, relating to employment.

SB 396 requires California employers with 50 or more employees to expand their mandatory sexual harassment prevention training to include the topics of “gender identity, gender expression and sexual orientation.” This training, which is conducted biennially for supervisory and managerial employees, must include practical examples to address such harassment. Employers must also post a DFEH-approved poster for all employees to review regarding transgender rights.

employment law, Legal

Fired While On Disability Leave? Legal Reasons #50

If you were fired while you on leave, you may have a claim for wrongful termination.

The laws covering whether you can be fired while you’re off work recovering from a physical or mental illness or injury are complicated. First, it depends whether you are taking leave under the FMLA or similar state leave law, taking other unpaid leave, or collecting workers’ compensation temporary disability benefits. Whether or not you are collecting short-term or long-term disability (LTD) insurance benefits doesn’t matter – LTD policies offer no protection for your job.

Third, there are some situations in which you can legally be fired even though you’re on disability leave, as long as your employer follows the rules under the Americans with Disabilities Act (ADA).

Job Protection Under the Family and Medical Leave Act (FMLA)

If you are covered by the Family and Medical Leave Act (FMLA), you can take up to 12 weeks of unpaid leave to deal with a physical or mental medical problem (or to take care of a family member’s medical issues). Unfortunately, the FMLA does not apply to most employees who work for small businesses—it applies only to employees who work at companies with at least 50 workers (who must work within 75 miles of each other). Also, employees can take FMLA leave only if they worked at least a year for an employer and worked at least 1,250 hours for that employer last year.

Assuming you are eligible for FMLA leave and you correctly requested it, you cannot be fired while on FMLA leave. And when you return from FMLA leave, your employer must give you back your position, or one that is nearly the same—assuming you can still do the job.

Job Protection under the Americans with Disabilities Act (ADA)

Even after you have exhausted your 12 weeks of FMLA leave per year, the Americans with Disabilities Act (ADA) can make it difficult for your employer to fire you when you are out on disability leave. Fortunately, the ADA covers more small businesses than the FMLA—those with just 15 or more workers.

Before firing you while you’re on disability leave—or not reinstating you to your position after your disability leave ends—your employer has to try to “accommodate” you; that is, make the job suitable for you, given your impairments. Examples of ways an employer could accommodate your disability include granting you more unpaid leave after you’ve exhausted your FMLA leave, allowing you to work a flexible schedule, or making your workspace more ergonomic.

Your employer must work interactively with you to try to come up with accommodations that would allow you to do your job. (To protect yourself, it’s best to request accomodations from your employer in writing.) During discussions with your employer, you may need to compromise on the accommodations you asked for, however, since your employer only has to make accommodations that are reasonable and that won’t cause the company “undue hardship.” What constitutes undue hardship is based on the cost of the accommodations to your employer and the size of the company.

 

Brownness, employment law, Legal

48 hour Sick Leave Law In Effect in City Of Los Angeles: Legal Reasons #56

The City of Los Angeles has a mandatory paid sick leave (PSL) law which is part of its minimum wage ordinance and which has been in effect since July 1, 2016, for employers with 26 or more employees.  The Los Angeles PSL ordinance will begin to apply to employers with 25 or fewer employees on July 1, 2017.

From an employer perspective, one of the toughest challenges of these local PSL ordinances is that the rules can change at any time. That is precisely what happened with Los Angeles’s ordinance when the city recently revised the rules and regulations relating to this ordinance. The city also revised its answers to frequently asked questions (FAQ).

Some of these changes or clarifications are important, providing information on topics such as:

  • How to determine business size;
  • How to pay employees for sick time;
  • When an existing paid leave or paid time off policy can satisfy the requirements of the ordinance;
  • How to use the frontloading method during the first year that the law applies to an employer and in subsequent years; and
  • Whether a maximum cap on accrued hours is allowed.

The Los Angeles PSL ordinance contains different provisions than the state PSL law. Employers with businesses in a city with a local PSL ordinance need to comply with both the state and the local law. For each provision, protection or benefit, employers will need to provide whichever is more generous to the employee.

More information can be found on the Office of Wage Standard’s website.

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

The City of Los Angeles requires employers to post a minimum wage and paid sick leave poster. CalChamber’s Los Angeles Labor Law Posters contains the official notices employers must post in Los Angeles City and Los Angeles County.