Last updated: January 2018

Every year, California passes a number of new employment-related laws that while aimed at protecting employees, often complicate the lives of employers. While there were perhaps less bills passed in 2017 than in other years, the new laws California employers are faced with for 2018 are significant and far- reaching. To name a few, we now have a bifurcated increase in Minimum Wage, a New Parent Leave Act, prohibitions against asking applicants for Criminal Background Information, and employers now are prohibited from asking applicants about Salary History.

New California Employment Laws – The following is a description of most of the more impactful (but not all) new employment laws that unless otherwise stated, went into effect on 1/1/18:

Minimum Wage and Exemptions – Although SB 3 passed in 2016, effective 1/1/18, we had our next scheduled minimum wage increase. For employers with 25 or fewer employees, the new minimum wage is $10.50 per hour. For employers with 26 or more employees, the new minimum wage is $11.00 per hour. As a reminder, in California, minimum wage has an impact on more than just the employees who earn at that level. In order to be exempt from overtime, an employee must have job responsibilities that meet certain legal requirements and must generally be paid a salary that is at least twice minimum wage for the equivalent of full time work. This now means that the minimum salary requirement for exempt employees depends upon employer size and is either $43,680 or $45,750 per year.

Additionally, minimum wage has an impact on determining if insides sales employees are exempt and in determining when certain trade employees can be required to provide their own hand tools. Also keep in mind that close to 20 different cities and other municipalities in California have their own minimum wage ordinances.

Note that in 2017 a California appellate court decision (Vaquero v. Stoneledge Furniture) held that commissioned sales employees must be paid separately (at no less than minimum wage) for all mandatory rest breaks. The court further held that the employer cannot comply with this requirement by paying employees a recoverable draw, even if the draw is large enough to cover minimum wage for all hours worked.

For more information on exemptions, see Vantaggio’s Info Bulletins Exempt vs. Non-Exempt and Special Exemptions.

New Parent Leave Act – SB 63 requires employers with between 20 and 49 employees to provide up to 12 weeks of unpaid parental leave, in a 12-month period, to bond with a new child within one year of the child’s birth, adoption, or foster care placement. Prior to the enactment of this law, only employees who worked at a location with 50 or more employees in a-75 mile radius were required to provide baby bonding leave under both the Federal Family Medical Leave Act (FMLA) and California Family Rights Act (CFRA). This law provides new benefits to employees at companies already subject to FMLA and CFRA who work at location with less than 50 employees in a 75-mile radius as well as to employees at smaller companies who are not subject to FMLA and CFRA. (For more details, see Vantaggio’s article California’s New Parent Leave Act.) Note that the California Fair Employment and Housing Council has published some proposed NPLA regulations – so we will be learning more in the coming months once those are finalized.

Sexual Harassment Training – SB 396 expands the required content that must be included as part of currently mandated sexual harassment prevention training that employers with 50 or more employees must provide to their supervisors and managers every 2 years. The curriculum must now include instruction on harassment based on gender identity, gender expression, and sexual orientation including practical examples. The law also requires that trainers have specific knowledge and expertise in these newly added areas. In addition, employers with 5 or more employees must immediately display a new Transgender Rights in the Workplace poster and begin distributing updated Sexual Harassment Info Sheets (updated December 2017) to all employees. (For more details, see Vantaggio’s article Sexual Harassment Training Expanded in CA.)

Note that all farm labor contractors, regardless of company size, as a condition for receiving or renewing a farm labor contractor’s license, are currently required to provide 2 hours of sexual harassment prevention training to all employees (supervisory and non-supervisory) annually. SB 295 adds the requirement that the training be in the language understood by each agricultural employee.

Criminal Background Information – AB 1008 makes it an unlawful employment practices for employers with 5 or more employees to include questions on a job application that require disclosure of an applicant’s conviction history and to perform a background check into an applicant’s criminal history until such time as the applicant has received a conditional offer of employment. Employers are further prohibited from making adverse employment decisions based on the results of a background check unless they can demonstrate that the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job. Employers are required to consider – the nature and gravity of the offence, the time that has passed since the offense or the completion of the sentence, and the nature of the job. If an employer is considering rescinding the job offer, the employer must notify the applicant of their preliminary decision to disqualify the applicant and provide the applicant with 5 business days to respond to the notice and submit evidence. If within those 5 days the applicant notifies the employer that he/she disputes the accuracy of the information, the applicant will be afforded 5 additional business days to respond. After considering the information supplied by the applicant, if the employer makes the final decision to rescind the offer, the employer must notify the applicant of this decision in writing and must include a number of detailed pieces of information including how to challenge the decision and/or file a complaint. There are several exemptions from these new requirements for certain types of jobs where background checks are required by law. All of this is a dramatic change for most California employers, making it all the more important to enlist the services of a qualified and experienced third-party background check company who can help ensure compliance. Please contact us at Vantaggio for a recommendation.

Salary History Information – AB 168 prohibits employers from relying on an applicant’s salary history as a factor in determining whether or not to offer employment and in determining the salary to be offered. Additionally, employers may not, either personally or through an agent (such as a recruiter) seek history salary information, including benefits and compensation, from an applicant either orally or in writing. Applicants would not be prohibited from voluntarily disclosing, without prompting, salary information, and if they do so, employers may use this information in determining salary for that applicant. Upon reasonable request, an employer must provide the pay scale for a position to the applicant.

Paid Family Leave (aka Family Temporary Disability Insurance) – AB 908 increases the amount of weekly benefits payable to employees who apply for wage replacement while taking time off to care for family members. The bill also removes the 7-day waiting period before benefits are payable.

Contractors Liable for Subcontractors’ Wages – AB 1701 imposes liability onto the general contractor on private construction contracts for unpaid wages and fringe benefit contributions or payments that a subcontractor (at any tier) owes a laborer who performs work on contracts entered into after January 1, 2018. Subcontractors are required, upon request from the direct contractor, to provide payroll records and other information to confirm that all wages, benefits, and other contributions have been made. The law does not prohibit contractors from establishing or enforcing lawful remedies against any of its subcontractors. Note that in 2017, for the very first time, the CA Labor Commissioner fined a general contractor $249,879 for unpaid overtime, minimum wage, final pay, and rest break violations for one of its drywall and framing subcontractors!

With the current trend, we strongly recommend that general contractors use well drafted written contracts that include indemnity and hold harmless provisions to protect against unpaid wage or benefits claims by subcontractors’ employees. Additional language should be added requiring strict compliance with all applicable wage and hour regulations. General contractors should consult immediately with counsel experienced in this area of the law to take the necessary precautions. Please call us if you would like a referral.

Wage Discrimination – Prior to the implementation of California’s Fair Pay Act (AB 358, 2015), California law required employers to pay employees at the same rate of pay as employees of the opposite sex or another ethnicity who perform equal work at the same establishment. This law made a number of significant legal changes, notably removing the requirement that the employees in question have to be at the same establishment, and instead of “equal work,” the pay must be the same for “substantially similar” work. Despite how it was generally perceived, the Fair Pay Act was not the piece of legislation that made unequal pay illegal, it made it easier for employees to bring unfair pay claims against private employers. This year, AB 46 extends the Fair Pay Act to also cover public employers. However, public employers are not subject to the provision that makes a willful violation of the law a misdemeanor.

Worksite Immigration Enforcement –   AB 450 includes a number of provisions to protect employees from immigration enforcement activities while at work and imposes fines between $2,000 and $10,000 per violation on employers who fail to comply. Employers are prohibited from allowing federal immigration officials to access non-public areas of the worksite without a warrant and from providing agents access to employee records without a subpoena or warrant. However, the latter provision does not apply to I-9 forms or other documents for which a Notice of Inspection was provided to the employer.

Regarding I-9 audits, employers must post a notice to inform employees of the impending inspection within 72 hours of receiving a Notice of Inspection. The notice must include specific information about the inspection and must be provided in the language that is normally used to communicate about employment issues. While employers must begin meeting this notice requirement on January 1, 2018, the Labor Commissioner has until July 1, 2018 to develop a model notice.

Employers must provide a copy of the Notice of Inspection to an affected employee (those who are identified to be lacking work authorization or whose documents have deficiencies) upon reasonable request. Affected employees and their collective bargaining representatives must be given a copy of the inspection results and the employer’s ensuing obligations within 72 hours of receiving this information.

Federal law already prohibits employers from reverifying the employment eligibility of current employees in a manner not required by law. AB 450 now makes doing so also a violation of state law that can subject an employer to civil penalties of up to $10,000.

Labor Commissioner’s Increased Authority –  SB 306 expands the California Labor Commissioner’s authority by allowing an employer to now be investigated even without  an employee complaint in situations where the Labor Commissioner suspects retaliation or discrimination against an employee during a wage claim or other investigation. The Labor Commissioner could then “with reasonable cause” obtain a court order for injunctive relieve to prohibit the employer from terminating or taking adverse action against the employee even before the investigation is complete. The employer would still be permitted to discipline or terminate the employee for reasons unrelated to the retaliation claim. Fines of $100 per day (up to a maximum of $20,000) can be assessed against the employer for willful refusal to comply with an order to reinstate an employee or former employee and/or for refusal to post a notice regarding the alleged conduct.

Gender Identification – SB 179 allows CA residents to choose any one of 3 options on state ID cards including birth certificates and drivers’ licenses – female, male, and “nonbinary,” The bill further simplifies the process for individuals to change their gender on legal documents. AB 1556 revises the Fair Employment and Housing Act (FEHA) by replacing gender specific pronouns in California’s anti-discrimination, anti-harassment, Pregnancy Disability Leave, and Family Medical leave laws – utilizing terms such as “the person” or “the employee” instead of “he” or “she.” And earlier in 2017, new FEHA guidelines were issued requiring employers to honor an employee’s request to be referred to by a preferred gender, name, or pronoun including gender neutral pronouns.

Human Trafficking Poster – Current law requires certain service organizations (businesses with liquor licenses, adult or sexually-oriented businesses, ER and urgent care, airports, passenger, light rail and bus stations, truck stops, etc.) to post a notice regarding slavery and human trafficking. AB 260 expands this posting requirement to hotels, motels, and bed and breakfast inns effective January 1, 2018. In addition to requiring the posters to now include a text number along with phone numbers where individuals can reach out for help, AB 260 makes other changes to the model notice which will be updated by the CA Dept. of Justice on or begore January 1, 2019.

Cleaning Products in the Workplace – Existing law requires that employers make available to employees Material Data Safety Sheets (MDSS) on hazardous chemicals in the workplace. SB 258 impacts employers that have certain designated products in the workplace that are used primarily for janitorial, industrial, or domestic cleaning purposes and include general cleaning products, air care products, automotive care products, and polish or floor maintenance products. Employers must now make MDSS available on these products. For more information on MDSS compliance, see Cal OSHA’s Publication, “Guide to the California Hazard Communication Regulation.”

Workers Compensation – Like most years, 2018 included a number of new laws regarding California Workers’ Compensation Insurance:

• AB 44 – Requires employers to provide a nurse case manager to employees who suffer workplace injuries in an act of domestic terrorism during a declared state of emergency. The Division of Workers’ Compensation is charged with developing regulations to implement this law.
• SB 189 – This law goes into effect on July 1, 2018 and provides clarity about when business owners, officers, board members, and LLC members may be excluded from workers’ compensation coverage.
• AB 1422 – Clarifies provisions of AB 2883 from 2016 regarding automatic stays on liens filed by medical providers charged with criminal fraud.
• SB 489 – Extends the billing deadline for providers of emergency workers’ compensation medical services from 30 to 180 days and was aimed to avoid a situation where a severely injured worker is unable to communicate about the injury in question until after the billing period had passed.

Other New CA Laws:

• AB 1221 – Mandatory Training for Alcohol Servers
• AB 219 – LGBT Rights for Long-Term Care Facility Residents
• AB 1102 – Whistleblower Protections for Employees in Health Facilities
• SB 490 – Wages and Licenses in the Barbering and Cosmetology Industry
• AB 1170 – Expands Anti-Discrimination Protection for Veterans

Other California Developments:

Waiting Periods on Vacation Plans –A recent California case (Minnick v. Automotive Creations, Inc.) ruled that an employee who worked for less than one full year was not entitled to vacation pay at the time of termination since the employer had a clear and unambiguous policy stating that employees do not earn or accrue vacation until after the first year of employment. While not inconsistent with the California Labor Commissioner’s previous positions on vacation waiting periods, this case does open up some additional, albeit a bit murky, possibilities for the design of a compliant vacation policy.

One Day of Rest in Seven – The California labor code stipulates that employees are entitled to at least one day off in a seven-day workweek and that the employer cannot cause an employee to lose a day of rest. An employee is allowed to accumulate rest days when the nature of the work requires the person to work more than 7 consecutive days, provided that the worker received the equivalent of one day of rest in seven during each calendar month. Additionally, the requirement does not apply to emergency situation or to work performed to protect life of the loss or destruction of property. That being said, these requirements have long been the subject of conflicting interpretation. In 2017, the California Supreme Court (Mendoza v. Nordstorm, Inc.) answered several questions. The court ruled that the day of rest is only guaranteed for each workweek, not any 7-day rolling period. As such, employees can work 6 consecutive days that cross two workweeks without a violation. The court also expounded upon what it means for an employer to “cause” an employee to lose a day of rest and opined that the employer is not forbidden from allowing or permitting an employee to independently decide not to take a day of rest. Additionally, the court ruled that the day of rest rules do not apply for employees who work less than 30 hours in any workweek or 6 hours in any one day.

Rest Breaks – As a reminder, in 2016, the California Supreme Court (Augustus v. ABM Security Services Inc.) ruled that employers cannot require employees to remain “on call” during rest periods even if they perform no work. As such, employers are discouraged from rest break policies that require employees to remain on-site during their rest breaks.

Computer Professionals Exemption – In order to be exempt from overtime, computer professionals in CA must have duties that meet the strict requirements under the law AND must be paid no less than rates established by the DIR each year. For 2018, computer professionals must be paid no less than $43.58 per hour or a monthly salary of $7,352.62, or an annual salary of $90,790.07.

Private School Employees – As a reminder, effective July 1, 2017 (AB 2230 from 2016) requires that in order to be exempt from overtime, private school teachers must be paid a salary that is comparable to those offered in public schools in the same district or county.

Posters – If you need to order new 2018 combined federal and state poster sets, please contact us at Info@VantaggioHR.com or call 1-877-VHR-relx (1-877-847-7359).    

And on the Federal Level:

IRS Mileage – The IRS updated the standard mileage rate for 2018 for use of an employee’s automobile – it’s now 54.5 cents per mile.

I-9 Forms – As a reminder a New I-9 Form was published and the Handbook For Employers was updated in mid 2017.

What should employers do?

• Review and update your employee handbooks to include a policy on New Parent Leave.
• Review and revise your Sexual Harassment Prevention training curriculum to ensure it covers all of the newly required elements. Ensure your trainer is well versed in these areas.
• Schedule your bi-annual Sexual Harassment Prevention training for all supervisors and managers and training for any new supervisors/managers.
• Consider Sexual Harassment Prevention training for your entire staff.
• Obtain and post your new employment posters.
• Update employee handbooks immediately due to the New Parent Leave Act and also to consider changing employee references throughout the document to be gender neutral.
• Update job applications to remove all language regarding criminal history and salary information.
• Amend hiring and background check practices to ensure appropriate timing and notifications regarding criminal background information.
• Review your scheduling practices to ensure meeting the 1 Day of Rest in 7 requirements.
• Ensure all employees are being paid the current minimum wage and that all exempt employees are paid the new minimum salary requirements. It would also be a good time to do an exempt/non-exempt audit of your employees to ensure proper classification.
• Ensure that your Commission Plans are in writing and that your pay practices for commissioned employees comply with the requirements to pay separately for rest breaks.
• Inspect your workplace for hazardous and MDSS covered chemicals and cleaning products.

Vantaggio can assist with answering additional questions; updating your handbook; ensuring that you have the proper forms, notices, and posters in place; conducting training; or implementing solutions to any of the above referenced compliance needs. We can even provide a complete HR audit for your company. For more information, contact us at Info@VantaggioHR.com or call 1-877-VHR-relx (1-877-847-7359)    

And remember, relax™ , We Take the Stress out of HR™  !

Effective Date – January 1, 2018

Weinstein Company, NBC, Fox News, don’t be next!

Not a day has gone by in recent months without hearing about a new sexual harassment claim or lawsuit in the media. With the heightened awareness surrounding this new climate of sexual harassment, take the time to protect your company and employees now by staying current on the mandatory training required in California. Make sure the training you’re currently doing isn’t obsolete!

On October 15, 2017, Governor Brown signed into law Senate Bill 396 that went into effect on January 1, 2018. This bill has 2 important components. First, it expands the required content that must be included as part of currently mandated sexual harassment prevention training that employers with 50 or more employees must provide to their supervisors and managers every 2 years. The curriculum must now include instruction on harassment based on gender identity, gender expression, and sexual orientation including practical examples. The law also requires that trainers have specific knowledge and expertise in these newly added areas.

In addition, employers with 5 or more employees must immediately display a new Transgender Rights in the Workplace poster and begin distributing updated Sexual Harassment Info Sheets (updated December 2017) to all employees.

To review the text of the Sexual Harassment Legislation in California, click here: SB 396

As a reminder, AB 1825 went into effect in 2006 and applies to employers with 50 or more employees, both inside and outside of California. It requires regular, bi-annual training to all supervisory staff on the prevention of sexual harassment, discrimination, and retaliation. In 2015, AB 2053 added the topic of “abusive conduct” aka “bullying” to the required content.

The question we’re all asking is that in today’s new world, can employers really limit their training to the minimum legal requirements? Do we now have a greater incentive to open up a dialogue on this topic with all employees – not just our managers and supervisors? At Vantaggio, we feel that employers can no longer afford to contain these important discussions to a 2-hour session every 2 years and with only a small portion of your staff. We’re encouraging all our clients, even those with less than 50 employees, to train all employees and to initiate conversations of this very pertinent topic across all segments of your organization.

Vantaggio offers a unique 2-hour AB 1825 compliant training that is designed for all employees to attend during the 1st hour, with supervisors and managers remaining for a 2nd hour of content.

Call us today to schedule your 2018 Sexual Harassment Training!

On July 17, 2017, The U.S. Citizenship and Immigration Services (USCIS) issued a new Employment Eligibility Form commonly know as the I-9 form.  The primary changes to the new form are revisions to the Instructions and List of Acceptable Documents.   These changes will also be included in a revised Handbook for Employers: Guidance for Completing Form I9.

While employers may continue to use the I-9 form with a revision date of 11//14/16N, as of September 18, 2017 all employers must use the new 7/17/17 revised form.  As such we strongly encourage switching to this new form as soon as practicable.   Below is a link to the USCIS website to obtain the forms in English and Spanish (please note that the Spanish version may ONLY be used by employers in Puerto Rico).

https://www.uscis.gov/i-9

Understanding how to complete an I-9 form accurately, what documents you can and cannot ask for, when to recertify an employee and other related I-9  issues can be challenging.  When is the last time you audited your I-9’s to make sure your company is in compliance?

If you have any questions about how to complete the new I-9 form, or would like our assistance in conducting an I-9 audit for your company – CONTACT VANTAGGIO HR!

In addition to the more typical “white collar” exemptions under both federal and state law (“Executive, Administrative, and Professional” exemptions), there are a number of special exemptions. This document provides guidelines about some of the more commonly used special exemptions.

SALES: In general, the exemptions available for salespersons fall into one of the two following categories. Please keep in mind, however, that these sales exemptions are often misunderstood and misused by employers. In addition, there is significant deviation between federal and state regulations involving these exemptions. The following summarizes how to exempt salespersons from both federal and state law.

An exempt OUTSIDE SALESPERSON must:

• be employed for the purpose of, and who is customarily and regularly engagedawayfromtheemployer’splaceor places of business in: making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; AND

• not spend more than 40% of his/her weekly work hours performing tasks other than those described above. Work performed incidental to and in conjunction with the employee’s own outside sales or solicitations (i.e. booking appointments, drafting reports) is considered exempt if it does not exceed the stated 40% limit; AND

• not spend more than 5% of his/her weekly hours on work unrelated to outside sales or solicitations.

An exempt INSIDE SALESPERSON must:

• be guaranteed compensation totaling $2,000 or more per month; whether paid weekly, biweekly or monthly; AND

• earn in excess of one and one-half times the federal minimum wage; AND

• be employed by a retail or service establishment;

• have more than 50% of his/her compensation for a representative period (not less than one month) be in the form of commissions of sales of goods or services.

An exempt COMPUTER PROFESSIONAL must:

• be guaranteed compensation totaling $2,000 or more a month, whether paid weekly, biweekly, or monthly.

• be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;

• have as his/her primary duty:
  • The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; OR
  • The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; OR
  • The design, documentation, testing, creation or modification of computer programs related to machine operating systems; OR
  • A combination of the aforementioned duties, the performance of which requires the same level of skills.

No higher learning degree is required, although an individual who meets this exemption may have one. There is also no licensing or certification requirement, and any such license or certification alone will not guarantee this exemption.

The computer employee exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment. Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs (e.g., engineers, drafters and others skilled in computer-aided design software), but who are not primarily engaged in computer systems analysis and programming or other similarly skilled computer-related occupations identified in the primary duties test described above, are also not exempt under the computer employee exemption.

An exempt LEARNED OR CREATIVE PROFFESIONAL must:

• be compensated at a rate of not less than $455 per week (which includes a fixed salary or fixed fee of not less than $210 per week); AND

• have as his/her primary duty the performance of work that either:

• requires advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction or study, as distinguished from a general academic education and from an apprenticeship and from training in the performance of routine mental, manual or physical processes. (“Learned Professional”); OR

• is original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination or talent of the individual (“Creative Professional”); AND

• perform work that is predominately intellectual and varied in character (as opposed to routine mental, manual, mechanical or physical work) and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time; AND

• consistently exercise discretion and independent judgment in the performance of the above duties.

For more information, please contact us!

Federal and state wage and hour laws require employers to pay minimum wages as well as overtime pay to some employees. Employees subject to these laws are called “non-exempt,” whereas employees to whom these provisions do not apply are called “exempt.” Distinguishing between these two classifications of employees is often not a simple job for an employer.

Important to remember:

• Titles are irrelevant. Simply calling someone a “manager,” does not make him or her an exempt employee.

• Paying someone a salary does not automatically make the employee exempt – nor does the amount of money you pay matter. Don’t assume that “hourly” means non-exempt and that “salaried” means exempt.

• An employee must meet both the federal and state exemptions in order to be truly exempt. Be careful since both sets of requirements are sometimes similar and sometimes quite different. This document summarizes how to classify someone as exempt in a manner that will meet both sets of requirements.

Who is exempt?

Under Hawaii law and federal Law, employees may be exempt from overtime pay provisions if they are employed in the following capacities and if their job descriptions meet the definition of the following job categories:

• executive
• administrative
• professional

The employee must:

1. be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week.

AND

2. be “primarily engaged” in duties that meet the definition of exempt work. Details are provided on the next page.

NOTE: In addition to the more typical “white collar” exemptions under federal and state law, there are a number of special case exemptions (including computer professionals and salespersons).

ANYONE NOT MEETING THE ABOVE REQUIREMENTS IS NON-EXEMPT!

Exempt vs. Non-Exempt Specific Rules for Classification – Hawaii

In Hawaii, employees may be exempt from overtime pay provisions if they can accurately be classified in one of the three following categories as defined by federal/state law:

An exempt EXECUTIVE employee must:

• be compensated on a salary basis at a rate not less than $455 per week; AND

• have as his/her primary duty the management of the business or of one of its recognized departments or subdivisions;

• AND customarily and regularly direct the work of at least two or more full-time employees or their equivalent; AND

• have the authority to hire or fire other employees or have particular weight given to his/her suggestions and recommendations regarding the hiring, firing, advancement, promotion, or change of status of other employees; AND

• customarily and regularly exercise discretionary power.

An exempt ADMINISTRATIVE employee must:

• be compensated at a rate not less than $455 per week (which includes a fixed salary of not less than $210 per week)

• have as his/her primary duty the performance of office or non-manual work directly related to management policies or the general business operations of the employer or the employer’s customers; AND

• customarily and regularly exercise discretion and independent judgment with respect to matters of significance; AND

• regularly and directly assist a proprietor or an exempt executive or administrator OR perform, under only general supervision, work along specialized or technical lines requiring special training, experience or knowledge, OR execute special assignments and tasks under only general supervision.

An exempt PROFESSIONAL employee must:

• be compensated at a rate not less than $455 per week (which includes a fixed salary or fixed fee of not less than $210 per week)*; AND

• hold a valid license or certificate permitting the practice of law or medicine or any of their branches and who is actually engaged in the practice thereof or who is the holder of the requisite academic degree for the general practice of medicine and engaged in an internship or residency program for the profession; OR have as his/her primary duty the performance of work requiring advanced knowledge in a field of science or learning OR requiring invention, imagination, or talent in a recognized field of artistic endeavor; AND

• consistently exercise discretion and independent judgment in the performance of the above duties; AND

• perform work that is predominately intellectual and varied in character.

*The compensation/salary requirement does not apply to bona fide practitioners of law or medicine.

For more information, please contact us!

Federal and state wage and hour laws require employers to pay minimum wages as well as overtime pay to some employees. Employees subject to these laws are called “non-exempt,” whereas employees to whom these provisions do not apply are called “exempt.” Distinguishing between these two classifications of employees is often not a simple job for an employer.

Important to remember:

• Titles are irrelevant. Simply calling someone a “manager” does not make him/her an exempt employee.

• Paying someone a salary does not automatically make the employee exempt – nor does the amount of money you pay matter. Don’t assume that “hourly” means non-exempt and that “salaried” means exempt.

• An employee must meet both the federal and state exemptions in order to be truly exempt. Be careful since both sets of requirements are in some places similar and in others quite different. This document summarizes how to classify someone as exempt in a manner that will meet both sets of requirements.


Who is exempt?

Under California and federal law , employees may be exempt from overtime pay provisions if they are employed in the following capacities and if their job descriptions meet the state’s very narrow definition of the following job categories:

• executive
• administrative
• professional

The employee must:

1. Earn a monthly salary equivalent to no less than two times the state minimum wage for full time (40hours per week) employment. Keep in mind that both the state minimum salary requirements increase annually so employers will need to monitor these numbers on an annual basis.

AND

2. Be “primarily engaged” (more than half of the employee’s work time) in duties that meet the definition of exempt work.

NOTE: In addition to the more typical “white collar” exemptions under federal and state law, there are a number of special case exemptions (including computer professionals and salespersons).

ANYONE NOT MEETING THE ABOVE REQUIREMENTS IS NON-EXEMPT!

Exempt vs. Non-Exempt Rules for Classification – California

In California, employees may be exempt from overtime pay provisions if:

• They are paid a monthly salary equivalent to no less than two times the state minimum wage for full time (40 hours per week) employment; AND

• they can accurately be classified in one of the following categories as defined by federal/state law:

An exempt EXECUTIVE employee must:

• have as his/her primary duty the management of the business or of one of its recognized departments or subdivisions; AND

• customarily and regularly direct the work of at least 2 full-time employees or their equivalent; AND

• have the authority to hire or fire other employees or have particular weight given to his/her suggestions and recommendations regarding the hiring, firing, advancement, promotion, or change of status of other employees; AND

• customarily and regularly exercise discretionary power; AND

• devote more than 50 percent of his/her work time to the activities described above.

An exempt ADMINISTRATIVE employee must:

• have as his/her primary duty the performance of office or non-manual work directly related to management policies or the general business operations of the employer or the employer’s customers; AND

• customarily and regularly exercise discretion/independent judgment with respect to matters of significance; AND

• regularly and directly assist a proprietor or an exempt administrator OR perform, under only general supervision, work along specialized or technical lines requiring special training, experience or knowledge OR execute special assignments and tasks under only general supervision; AND

• devote more than 50 percent of his/her work time to the activities described above.

An exempt PROFESSIONAL employee must:

• be licensed or certified by the State of California and primarily engaged in the practice of law (lawyers, not legal assistants), medicine (physicians, not nurses), dentistry, optometry, architecture, engineering, teaching, accounting (CPAs only) OR primarily engaged in an occupation commonly recognized as a learned or artistic profession; AND

• customarily and regularly exercise discretion/independent judgment in performance of the above duties; AND

• perform work that is predominately intellectual and varied in character.

*Note: Licensed physicians or surgeons are exempt from overtime if their hourly pay is equal to or greater than $76.24 during 2016 (adjusted annually). **Pharmacists and registered nurses are not considered exempt professionals; they may only be treated as exempt if they fit the definition of an exempt executive or administrative employee.

For more information, please contact us!

Vantaggio HR offers supervisor training, all employee training and off-site training sessions in Hawaii dedicated to sexual harassment prevention in the workplace. The sessions have a purpose of educating employers and employees about this topic. Check out details and the various pricing options.

Supervisor Training – $1,875*: This 2-hour session is designed exclusively for managerial and supervisory staff.

All Employee Training – $1,975*: This 21⁄2 hour session is designed for all levels of employees. Non-supervisory staff will attend along with managers and supervisors for the first 1-hour session. After a brief break, managers and supervisors will remain for the 2nd hour.

• Conducted at your location.
• Cost includes all prep time, presentation, and written materials for up to 25 participants.
• Extra participants are $15 each.
• Discounts available for multiple sessions on same day.

Off-Site Training – $85 per person: Send 1 or more of your managers to our location for this 2-hour session.

*Supplemental rate applies when Ms. Lauraine Bifulco is the trainer.

Contact us to receive more information specific to the sexual harassment prevention training or to custom design a seminar for your needs!

Not only is regular harassment training a highly advisable way to keep harassment out of the workplace and limit employer liability, it’s also mandated by California law (AB 1825). Learn how to educate employers and employees about keeping ALL forms of harassment out of the workplace. Check out the requirements and pricing for this type of training.

Requirements

• Requires employers with 50 or more employees (includes all full time, part time, temporary, and independent contractors – even those who are outside of CA) to train California supervisors on sexual harassment every 2 years.
• Requires employers to train new supervisors within six months of their assuming a supervisory position.
• Training must be conducted by trainers with “knowledge and expertise in the prevention of harassment, discrimination, and retaliation.”
• Training must include “classroom” or other effective “interactive” means.

Pricing

Supervisor Training – $1,375*: This 2-hour session is designed exclusively for managerial and supervisory staff.

All Employee Training – $1,475*: This 21⁄2 hour session is designed for all levels of employees. Non-supervisory staff will attend along with managers and supervisors for the first 1-hour session. After a brief break, managers and supervisors will remain for the 2nd hour.

• Conducted at your location.
• Cost includes all prep time, presentation, and written materials for up to 25 participants.
• Extra participants are $15 each.
• Discounts available for multiple sessions on same day.

Off-Site Training – $85 per person: Send 1 or more of your managers to our location for this 2-hour session.

*Supplemental rate applies when Ms. Lauraine Bifulco is the trainer.

Contact us to receive more information specific to the sexual harassment prevention training or to custom design a seminar for your needs!

“Smart” Recruiting is not only important for the obvious reason of wanting to attract the best-qualified employees. In today’s complex legal climate, employers can be found liable for negligent hiring if they fail to show appropriate due diligence in the hiring process which results in unreasonable harm to others.

Contact us for more recruiting advice.

Example of negligent hiring might include:

• Not contacting former employers
• Not verifying licenses or certificates
• Not checking references
• Not checking for criminal records
• Not checking for history of drug or alcohol abuse

The following are some guidelines to follow when recruiting employees. Please keep in mind that it is important to scrutinize candidates appropriately, but also important to not violate the applicants’ rights to privacy or any other discrimination or labor laws.

KEYS TO SMART RECRUITING:

• Assess the Need – Evaluate carefully the exact nature of the position to be filled.
• Draft a Job Description – List the major and collateral job responsibilities, reporting structure, skills.
• Decide on Recruiting Media – Consider local and major newspapers, professional organization publications, job banks, Internet-based recruiting, trade and other schools, etc.
• Draft Job Ad – A well-crafted ad that includes just the right information can make all the difference in how many qualified candidates you obtain.
• Use Standard Employment Application – Even for candidates who submit resumes, a well-written job application serves a number of important legal and information-gathering purposes.
• Check References – Always check references, even if the candidate has been personally referred to you.Avoid friends and relatives and insist on speaking with at least one former boss.
• Conduct Background Checks and Drug/Alcohol Screening – The cost of these tests has become increasingly affordable. Use a reputable consumer reporting agency who will help ensure compliance with federal and state credit reporting laws.
• Conduct Phone Interviews – A brief phone interview can weed out unacceptable candidates.
• Conduct In Person Interviews –Make sure the interview is not superficial but be careful not to ask questions that violate federal or state laws. (See our handout on interviewing.)
• Use Written Job Offers – Formalize the job offer with a written letter detailing the terms and conditions of employment, start date, reporting structure, at-will nature of employment, etc.

Our seasoned HR consultants have years of recruiting experience in a variety of industries and would be delighted to help out with any aspect of this process. Please contact us for a customized quote.

Each year, California enacts a number of new employment-related laws that never seem to fail in making employers’ lives more difficult. 2016 is no different. In addition to an increase in Minimum Wage, California has new laws which impact Paid Sick Days, Piece Rate Pay, School Activities Leave, Kin Care, Retaliation, Reasonable Accommodation, E-Verify, and others. Additionally, the new CA Fair Pay Act, which mirrors proposed federal legislation, has both legal and practical implications for employers. The CA Fair Day’s Pay Act expands the labor commissioner’s authority and creates increased personal liability for an employer’s owners, directors, officers, and managing agents. And on both the federal and state level, classifying workers as Independent Contractors continues to get increasingly difficult. Now, more than ever, employers need to educate themselves on the changing legal landscape and ensure that their operations are compliant.

New California Employment Laws – The following is a brief description of a number (but not all) of new employment laws that unless otherwise stated, went into effect on 1/1/16:

Minimum Wage – AB 10, passed in 2013, provided for an increase in California’s minimum wage to $10.00 per hour effective January 1, 2016. As a reminder, in addition to having job responsibilities that are considered exempt duties under the law, exempt employees need to be paid at least twice minimum wage for the equivalent of full time work, or at least $41,600 annually in order to remain exempt from overtime. Note that sometime early in 2016, we expect the federal Department of Labor to also increase the minimum salary requirement for exempt employees which may well end up being higher than the current threshold in California.

Paid Sick Days – Only 13 days after California’s Healthy Workplaces, Healthy Families Act of 2014 went into effect, Governor Brown signed AB 304 into law on 7/13/15. This urgency piece of legislation was enacted to clear up confusion over the initial Paid Sick Days legislation. For more information, please see Vantaggio’s detailed article California’s Paid Sick Days Law Effective 7/1/15 Amended on 7/13/15!

Piece Rate – Historically, employers who paid employees a flat fee per item produced or service performed (common in the manufacturing and automotive industries) could use the total amount paid to the employee each week divided by the total hours worked in order to ensure that the employee was paid at least minimum wage and for calculating overtime. In 2013, two California court cases ruled that employers could not use this averaging method to ensure that employees were adequately compensated for paid breaks, recovery periods, and other non-productive time. Instead, employees need to be paid at least minimum wage for those periods on top of the piece-rate pay received. AB 1513 imposes significant record-keeping requirements for employers who utilize this method of compensation. Notably, employees’ pay stubs must show the total hours worked for paid rest and recovery periods and other non-productive time, the corresponding rates of pay, and the gross wages earned for these periods. Additionally, employers are required to pay employees for these periods at the greater of current minimum wage or the average hourly rate based on total hours worked exclusive of these periods.

School Activities/ Child Care Leave – Current law provides that employers with 25 or more employees must allow an employee who is a parent, guardian, or grandparent of a child in licensed child day care, kindergarten, or grades K to 12 to take up to 8 hours per month to a maximum of 40 hours per year for the purpose of participating in school activities and cannot discharge or discriminate against an employee for engaging in such activities. Employers are allowed to require documentation and can make the employee use available paid time off before taking additional unpaid time off. SB 579 expanded these rights to stepparents, foster parents, or persons who stand in loco parentis to a child. And instead of referencing a child day care facility, the law now refers to a child care provider. Further, activities allowed for such leave now also include addressing a child care provider or school emergency, and finding, enrolling, or re-enrolling a child in school or with a child care provider.

Kin Care – California’s existing Kin Care law requires employers who provide paid sick time off to their employees to allow at least ½ of any such accrued time off to be used to care for a family member who is sick. After passage of California’s new Paid Sick Days law in 2015, Kin Care and Paid Sick Leave laws differed in their definitions of who is a family member and the allowable reasons for using paid sick time. SB 579 amended the Kin Care law so that it now mirrors Paid Sick Days in these two areas. For more information, please see Vantaggio’s detailed article on Paid Sick Days.

Retaliation against Family Members – Existing law prohibits an employer from discharging or discriminating, retaliating, or taking any adverse action against an employee or applicant who has engaged in protected conduct or who has made a protected complaint (such as whistleblowing). AB 1509 expands this protection to an employee who is a family member of a person who has engaged in or who is perceived to have engaged in these protected activities.

Retaliation based on Reasonable Accommodation – Existing law protects employees from retaliation and discrimination based on their being in a protected category, and requires employers to provide reasonable accommodation of, among other things, a person’s disability and religious beliefs. It also prohibits discrimination against a person who has opposed such prohibited practices or because the person has filed a complaint. AB 987 makes the mere act of requesting accommodation based on religion or disability a protected activity and protects the person from retaliation – regardless of whether the requested accommodation was granted or not. This law further expands the definition of “employer” to include “client employers” and “controlling employers” (i.e. staffing agencies, PEOs, etc.) even if the retaliation is not coming from the direct employer.

California’s Fair Pay Act – Currently, employers must pay employees at the same rate of pay as employees of the opposite sex who perform equal work at the same establishment. AB 358 makes a number of significant legal changes to existing law, notably removing the requirement that the employees in question have to be at the same establishment, and now instead of “equal work,” the pay must be the same for “substantially similar” work. “Substantially similar work” means a composite of skill, effort, and responsibility that is performed under similar working conditions and does not have to be the exact same job title or function. Additionally, existing law provided for an automatic exemption when a gender wage differential was related to a seniority system, a merit system, quantity or quality of production, or any bona fide factor other than sex. AB 358 provides that an employer must now affirmatively demonstrate that one of these factors applies, that the factor has been applied reasonably, and that the factor accounts for the entire wage differential. In summary, AB 358 makes it easier for employees to bring unfair pay claims against employers.

AB 358 also makes it illegal for an employer to prohibit an employee from disclosing his/her own wages, discussing the wages of others, inquiring about another employee’s wages. Employers are; however, not required to disclose wages.

Personal Liability for Wage Claims – SB 588, oddly named “The Fair Day’s Pay Act,” expands the Labor Commissioner’s authority to enforce judgments for a number of wage and hour violations including unpaid wages, other compensation, penalties, and interest. The Labor Commissioner can place a lien on an employer’s property, levy a business’s bank accounts and/or accounts receivable, and impose a “stop order” on the company. Further it can prohibit an employer from closing down and re-opening its operations under a new business name in an attempt to avoid liability. Of particular note is that this law provides for individual liability for many wage and hour violations for business owners, directors, officers, and managing agents of a company!

E-Verify – AB 622 prohibits an employer for using the federal E-Verify system at any time or in any manner not required by federal law. Employers may not use E-Verify to check the employment authorization status of an existing employee or an applicant who has not yet received an offer of employment – unless otherwise required by federal law.

Private Attorneys General Act (PAGA) Claims – Under PAGA, an employee acting on his/her own behalf or on behalf of other current and former employees, can bring a civil action to enforce provision of the California Labor Code if the government has not done so. AB 1506 amends PAGA to allow employers a limited opportunity to cure two different types of violations relating to wage statements. Employees will be required to give notice to the employer, providing the opportunity to fix wage statements that failed to include the correct dates of the pay period and /or do not show the correct name or address of the employer. The corrected wage statement will be deemed to have fully cured the violation. However, an employer can only utilize this cure provision once in any 12-month period.

Other California Developments:

Posters – In addition to needing to post the new state minimum wage, California has two new/updated postings: Note to Employees – Injuries Caused by Work and California Whistleblower’s Protection. If you need to order new 2016 combined federal and state poster sets, please contact us at Info@VantaggioHR.com or call 1-877-VHR-relx (1-877-847-7359.  

Computer Professionals Exemption – In order to be exempt from overtime, computer professionals in CA must have duties that meet the strict requirements under the law AND must be paid no less than rates established by the DIR each year. For 2016, computer professionals must be paid no less than $41.85 per hour or a monthly salary of $7265.43, or an annual salary of $87,185.14.

California Family Rights Act – On July 1, 2015, the California’s Fair Employment and Housing Council’s updates to the California Family Rights Act (CFRA) went into effect. The intent was to clarify the existing regulations and bring them more in line with the federal Family Medical Leave Act (FMLA). While both sets of laws generally provide up to 12 weeks of unpaid leave to eligible employees and have many similar provisions, historically, the two laws also have had significant divergences. The new CFRA regulations incorporated many elements of the 2013 FMLA regulations, but intentionally elected to retain important differences and even created new ones. California employers with 50 or more employees must comply with both sets of rules. For more information, please see our detailed article, California’s Family Rights Act Amended on July 1, 2015.

And on the Federal Level:

Independent Contractors – The federal DOL continues to take a hard line approach to employers who want to classify workers as independent contractors. On July 15, 2015 they issued this Administrator’s Interpretation expressing their belief that “most workers [classified as independent contractors] are employees under the FLSA’s broad definitions.” As far back as 2012, California took dramatic measures to try to decrease the number of workers that were misclassified as independent contractors. For more information, see Vantaggio’s detailed article Independent Contractor Misclassification Penalties Now Severe.

ACA Reporting – With finally some good news for employers, the IRS extended its deadlines for employers to provide employees with Forms 1095-B and 1095-C to March 31, 2016 (initially February 1, 2016). The deadline for employers to file Forms 1094-B, 1095-B, 1094-C, and 1095-D has been extended to March 31, 2016 (initially February 29, 2016) if not filing electronically and June 30, 2016 (initially March 31, 2016) if filing electronically. More information can be found on the IRS’s website: Affordable Care Act Tax Provisions for Large Employers

IRS Mileage – The IRS updated the standard mileage rate for 2016 for use of an employee’s automobile – 54 cents per mile.

What should employers do?

• Review current sick leave, vacation, or PTO policies to ensure compliance with new mandated Sick Leave laws.
• Review CFRA/FMLA policy, procedure, administration process for compliance with updated regs.
• Review and update policy on school activities leave.
• Review policies on conflict of interest and family members working together.
• Update employee handbooks immediately due to new protected categories and expanded protections against retaliation.
• Audit for equal pay practices.
• Audit Independent Contractors.
• Audit Joint Employment relationships – PEOs and staffing agencies – due to increased legislation extending employment-related liability to all involved employers.
• Update all employment posters as of 1/1/16.
• Ensure all employees are being paid the current minimum wage and that all exempt employees are paid the new minimum salary requirements. It would also be a good time to do an exempt/non-exempt audit of your employees to ensure proper classification.
• Review all payroll rates and practices to avoid potential wage/hour claims and penalties that now carry PERSONAL LIABILITY.
• Plan your bi-annual Sexual Harassment Prevention training for supervisors and ensure that the training contains the new information about abusive conduct in the workplace.

As always, but is changing and employers’ liability is increasing. Vantaggio can assist with answering additional questions; updating your handbook; ensuring that you have the proper forms, notices, and posters in place; conducting training; or implementing solutions to any of the above referenced compliance needs. We can even provide a complete HR audit for your company. For more information, contact us at Info@VantaggioHR.com or call 1-877-VHR-relx (1-877-847-7359)  

 And remember, relax™ , We Take the Stress out of HR™ !

The information presented in this article is intended to be accurate and authoritative information on the subject matter at the time submitted for publication. It is distributed with the understanding that Vantaggio HR is not rendering legal advice and assumes no liability whatsoever in connection with its use.

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