May 2021

Our team is looking for a dynamic HR Consultant with the desire to provide outstanding services to businesses across industries and states. The HR Consultant position manages multiple accounts with complex and sophisticated tactical and strategic human resource needs. The right candidates will be responsible for managing the relationship, service delivery, and overall client experience. This is an exciting opportunity for someone looking to be a part of a thriving multi-state HR firm!

• Development of Policies/Procedures
• Recruiting/Succession Planning
• Employee New Hire
• Employee Relations
• Investigations
• Terminations
• Benefits Administration
• Payroll Administration
• Payroll & HRIS Implementation
• Staff Development/Training
• Review and Development of Compensation Program

• 7-10 years of Human Resource Generalist/Management experience
• Experience with Payroll and HRIS system administration and implementation preferred
• Bachelor’s Degree in Human Resources Management or equivalent
• PHR or SPHR preferred
• Excellent written and verbal communication skills
• Excellent presentation skills
• Ability to be flexible and adaptable with a “can-do” attitude
• Bilingual Spanish is preferred

If you want to work with our team:

• This position is remote, based in Oahu, Hawaii
• This position is part time 25-30 hours per week
• Travel is required for on-site clients on the Island
• We offer a competitive salary based on experience: salary, variable comp, bonus

We are an equal opportunity employer and value diversity in our company. We do not discriminate on the basis of race, religion, color, national origin, gender, sexual orientation, age, marital status, veteran status, or disability status.

To apply please email erin@vantaggiohr.com

May 2021

Our team is looking for a dynamic HR Consultant with the desire to provide outstanding services to businesses across industries and states. The HR Consultant position manages multiple accounts with complex and sophisticated tactical and strategic human resource needs. The right candidates will be responsible for managing the relationship, service delivery, and overall client experience. This is an exciting opportunity for someone looking to be a part of a thriving multi-state HR firm!

• Development of Policies/Procedures
• Recruiting/Succession Planning
• Employee New Hire
• Employee Relations
• Investigations
• Terminations
• Benefits Administration
• Payroll Administration
• Payroll & HRIS Implementation
• Staff Development/Training
• Review and Development of Compensation Program

• 10+ years of Human Resource Generalist/Management experience
• Experience with Payroll and HRIS system administration and implementation preferred
• Bachelor’s Degree in Human Resources Management or equivalent
• PHR or SPHR preferred
• Excellent written and verbal communication skills
• Excellent presentation skills
• Ability to be flexible and adaptable with a “can-do” attitude
• Bilingual Spanish is preferred

If you want to work with our team:

• This position is based in SoCal
• Travel is required for on-site client visits in SoCal
• We offer a competitive salary based on experience: salary, variable comp, bonus
• Benefits include medical, dental, vision and retirement with a 3% match, 7 paid holidays, Paid Sick Leave and PTO

We are an equal opportunity employer and value diversity in our company. We do not discriminate on the basis of race, religion, color, national origin, gender, sexual orientation, age, marital status, veteran status, or disability status.

To apply please email erin@vantaggiohr.com

Families First Coronavirus Response Act (FFCRA)

Recent Updates by DOL

Last Updated:  September 15, 2020

FFCRA became law on March 24, 2020, and in the weeks that ensued, the federal Department of Labor (DOL) published numerous Q&As and issued final regulations. After what seemed like months of constant updates and new learning, employers were finally feeling like they knew their way around these two new benefits – Emergency Paid Sick Leave (EPSL) and Expanded Family and Medical Leave (EFMLA). Until now…

On August 3, 2020, the U.S. District Court for the Southern District of New York struck down four of the DOL’s rules regarding FFCRA. On September 11, 2020, the DOL issued revised regulations to address the elements challenged by the court.

Availability of Work

• DOL’s Original Rule: Employees are only eligible for EPSL or EFMLA if a qualifying reason prevents the employee from performing work that is available at the time the leave is needed.
• The Court: Whether or not work is available at the time the employee needs leave is not relevant. If the employee is still technically employed – even if not actively working – FFCRA must be granted. This means, for example, that furloughed employees must be provided paid FFCRA if they otherwise qualify.
• DOL’s Updated Rule: The DOL held to its original position that a leave means that the employee is absent from work. If there is no work to be performed, the concept of leave does not exist. They reminded employers that employees who have no work to perform are eligible for unemployment benefits.

Documentation

• DOL’s Original Rule: Employees can be required to provide documentation to their employer prior to taking FFCRA leave.
• The Court: Employers may require documentation but cannot prevent an employee from starting leave pending receipt of this information.
• DOL’s Updated Rule: The DOL clarified that employee leave cannot be denied pending documentation and that employees are required to provide any required documentation to the employer as soon as practicable.

 Intermittent Leave

• DOL’s Original Rule: Employees must get approval from their employer before being able to use intermittent leave for childcare purposes when their children’s school or place of care is closed due to COVID-19.
• The Court: The employer must allow use of intermittent leave if the employee needs time off to care for children due to school or childcare closure as a result of COVID-19.
• DOL’s Updated Rule: The DOL held to its original position that leave related to childcare reasons may only be taken intermittently with permission from the employer. They did however clarify what would be considered intermittent leave. For example, if an employee’s child’s school is closed on Tuesdays and Thursdays, and that employee then takes Tuesdays and Thursdays off, this would not be considered intermittent leave but instead 2 separate instances of needing FFCRA leave. In contrast, if an employee’s child’s school is closed from Monday to Friday and the employee only wants to take Tuesdays and Thursdays off, this would be considered intermittent leave and as such would require employer approval. They said the same would apply for smaller increments of time.

Exempt Healthcare Workers

• DOL’s Original Rule: A health care provider is anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. It also includes anyone employed by an entity that contracts with any of these institutions to provide services or to maintain that entity’s operations.
• The Court: The court struck the DOL’s definition saying that it was too broad in relying on the hiring entity’s identity instead of looking at the skills, role, duties, and capabilities of a class of employees. While the court failed to provide a new definition, it appears that only employees who actually provide direct healthcare services would be considered exempt.
• DOL’s Updated Rule: The DOL revised its definition of healthcare providers that can be exempt from FFCRA putting the focus on the employee’s role vs. the role of the employer entity. They clarified that healthcare providers include physicians and other individuals who provide diagnostic, preventive, treatment, and other patient services that are integrated with and necessary to the provision of patient care. The DOL further encourages employers to be judicious when deciding to exempt these individuals and consider possibly exempting only for reasons that involve caring for another but still allowing for FFCRA if needed due to the person’s own health status.

Employers should take measures immediately to abide by this new ruling, in particular with regards to providing notice of eligibility for any employees that were previously believed to be exempt but who would now qualify for FFCRA.

Finally, Answers to Some of our Questions!

Last Updated:  August 10, 2020

On August 4, 2020, the SBA issued new FAQs specifically about the forgiveness process for PPP loans. The following is a brief summary of some of the topics our clients have been asking about.

• Which Form to Use?
  • Sole Proprietors, Independent Contractors, and Self-Employed Individuals who had no employees at the time of the PPP loan application are permitted to use the EZ Form when applying for loan forgiveness.

Payroll Questions:

• Payroll costs that were incurred during the Covered Period or the Alternative Payroll Covered Period but paid after the end of the applicable period may be counted toward forgiveness if they are paid on or before the next regularly scheduled pay date.
• Payroll costs that were incurred before the Covered Period but paid during the Covered Period may be counted toward forgiveness.
• Partial Pay Periods – If an employer pays biweekly or more frequently, to avoid having to calculate partial pay periods, the employer can elect to use the Alternative Payroll Covered Period (APCP). The APCP in essence ensures that the employer will be able to capture an entire pay period at the tail end of their covered period for loan forgiveness purposes. However, as the APCP is not an option for employers who pay semi-monthly or less frequently, they will need to calculate partial payroll costs for partial pay periods.
• All forms of compensation to an employee – salary, hourly wages, tips, commissions, bonuses, hazard pay, can be included in loan forgiveness up to the $100,000 annualized cap per employee.

Benefits:

• Employer expenses for employee group health care benefits that are either paid or incurred during the Covered Period or the APCP can be counted toward forgiveness. If an employer has an insured group health plan, insurance premiums will qualify as payroll costs as long as the premiums are paid during the applicable period or by the next premium due date after the end of the period. Forgiveness is not provided for health benefits costs that are “accelerated” from periods outside the Covered Period or the APCP.
• Employer contributions towards retirement benefits that are either paid or incurred during the Covered Period or the APCP can be counted toward forgiveness. Forgiveness is not provided for employer contributions for retirement benefits that are “accelerated” from periods outside the Covered Period or the APCP.

Owner Compensation:

• Owner-employees’ and self-employed individuals’ payroll compensation is capped at $20,833 per individual across all business in which the individual has an ownership stake for those using a 24-week Covered Period and $15,385 for those using an 8-week period. If their total compensation across businesses that received a PPP exceeds the cap, owners can choose how to allocate the capped amount across different businesses.
• In addition, the following restrictions depend upon the business type:
  • C-Corp – For an owner who is also an employee, no more than 2.5/12 of his or her 2019 employee cash compensation can be used towards forgiveness. Cash compensation is defined as it is for all other employees. Payments for employer state and local taxes on this compensation, amounts paid for employer contributions towards health insurance, and up to 2.5/12 of the 2019 employer retirement plan contributions should be included on lines 6-8 of the PPP Schedule A of the forgiveness application and do not count toward the $20,833 cap.
  • S-Corp – For an owner who is also an employee, no more than 2.5/12 of his or her 2019 employee cash compensation can be used towards forgiveness. Cash compensation is defined as it is for all other employees. Payments for employer state and local taxes on this compensation and up to 2.5/12 of the 2019 employer retirement plan contributions should be included on lines 7-8 of the PPP Schedule A of the forgiveness application and do not count toward the $20,833 cap. Employer contributions towards health insurance are not eligible for S-corporation employees with at least a 2% stake in the business including for employees who are family members of an at least 2% owner.
  • Self-Employed Schedule C (or Schedule F) Filers – For self employed individuals, including sole proprietors and independent contractors, no more than 2.5/12 of 2019 net profit as reported to the IRS can be used towards forgiveness. Payments for health insurance, retirement or state or local taxes are not eligible as they are paid out of net self-employment income. If the IRS 2019 Schedule C (or F) was not provided at the time of the loan application, it must be provided with the forgiveness application.
  • General Partners – No more than 2.5/12 of 2019 net earnings from self-employment that is subject to self-employment tax as reported to the IRS can be used towards forgiveness. Payments for health insurance, retirement, or state or local taxes are not eligible. If the IRS 2019 Form 1065-K-1 was not provided at the time of the loan application, it must be provided with the forgiveness application.
  • LLC Owners – As LLCs can choose how they are organized for tax purposes, LLC owners must follow the instructions that apply to how their business elected to be treated for tax year 2019.
  • Non Payroll Costs:
    • Mortgage interest costs, eligible business rent or lease costs, and eligible business utility costs incurred prior to the Covered Period and paid during the CP are eligible for loan forgiveness.
    • Mortgage interest costs, eligible business rent or lease costs, and eligible business utility costs incurred during the Covered Period but paid after the CP are eligible for loan forgiveness if they are paid on or before the next regular billing date.
    • The Alternative Payroll Covered Period does not apply to nonpayroll costs.
    • Interest on unsecured credit incurred before February 15, 2020, while a permissible use of PPP loan proceeds, is not eligible for forgiveness.
    • Lease renewals and mortgage loans that are refinanced after February 15, 2020 are eligible for forgiveness as long as the original lease or mortgage existed prior to February 15, 2020.

Loan Forgiveness Reductions:

• Full Time Equivalent (FTE) Employee Count – Employees making over $100,000 in 2019 should be included in the employer’s calculations of FTE.
• Wage Reduction
  • When determining if an employee’s salary or hourly wages have been reduced by more than 25%, only salary amounts or hourly wages need to be considered – not all forms of compensation.
  • If an employee’s salary or hourly rate of pay has not been reduced but the employee works less hours during the Covered Period, the employer does not need to count this decrease in total pay as a wage reduction for purposes of determining if wages have been decreased by no more than 25%. The reduction of hours will be taken into account when calculating FTE but will not also impact the wage reduction calculation.

  The actual Paycheck Protection Program FAQs on Loan Forgiveness goes into more detail including examples and other questions. We hope they will be updated to address even more questions that are being asked both by employers and lenders.

  Vantaggio will be actively monitoring this subject for updates.

  Call us and schedule an appointment now if you need help projecting your PPP forgiveness and its impact on your staffing decisions. We’re here to help!

  Call: 877-VHR-RELX

  Email: info@vantaggioHR.com

   

PPP Loan Forgiveness Application Update

And it’s Good News for Employers!

Last Updated:  June 18th, 2020

The PPP Flexibility Act was signed into law on June 5, 2020 and provided significant relief to employers who had either already received or who planned to apply for the Paycheck Protection Program Loan. However, even after that initial round of good news, many questions remained unanswered. On 6/16/20 the Treasury Department published an updated PPP Loan Forgiveness Application as well as an EZ Loan Forgiveness Application that answer many of those questions and bring even more good news. Below is a brief summary of the new rules surrounding having your PPP loan forgiven.

• EZ Form – This form tremendously simplifies the forgiveness process by eliminating cumbersome calculations related to Wage Reductions and Full Time Equivalent (FTE) Reductions. If a borrower can establish one of the following 3, the EZ Loan Forgiveness Application form can be used.
  • Borrower is Self-employed, an Independent Contractor, or a Sole Proprietor who had no employees at the time of the PPP loan application submission and did not include employee salaries in the computation of the loan amount.
  • Borrower did not reduce the annual salary or hourly wages of any employee who did not make more than an annualized rate of $100,000 during any pay period in 2019 by more than 25% during Covered Period compared to the period of 1/1/20 to 3/31/20 AND the Borrower did not reduce the number of employees or the average paid hours of employees between 1/1/20 and the end of the Covered Period.
  • Borrower did not reduce the annual salary or hourly wages of any employee who did not make more than an annualized rate of $100,000 during any pay period in 2019 by more than 25% during Covered Period compared to 1/1/20 and 3/31/20 AND the Borrower was unable to operate the business during the Covered Period at the same level as before 2/15/20 due to COVID-19 compliance.
• Covered Period
  • OLD RULE: Initially, PPP loans were subject to an 8-week covered period that commenced on the date the loan was funded. Employers had only these 8 weeks during which they needed to establish that the loan monies were spent on payroll and other qualified expenses that would count towards the total amount of the loan that could be forgiven.
  • NEW RULE: Now, employers may choose to still use the initial 8-week period but have the option of utilizing a 24-week period to qualify for loan forgiveness.
• Payroll Expenses
  • OLD RULE: Initially, at least 75% of the total loan amount needed to be spent on payroll costs for the loan to be fully forgivable. Spending less than 75% would cause the total loan forgiveness to be adjusted down on a pro-rated basis.
  • NEW RULE: Now, employers are only required to spend 60% of the total loan amount on payroll. After the initial passage of the PPP Flexibility Act, it appeared that this new 60% threshold was an “all or nothing” cliff. The newly released forgiveness application makes it clear that this is not the case. Spending less than 60% will not cause the entire loan amount to not be forgiven. It will simply cause the forgivable amount to be adjusted down.
• Payroll for Owner-Employee, Self Employed, General Partner
  • OLD RULE: Initially, forgivable payroll for these individuals could not exceed 8 weeks worth of 2019 compensation, capped at $15,385.
  • NEW RULE: Now, employers who use the 8-week covered period can still use 8 weeks of 2019 payroll described above. However, employers who elect the 24-week period must limit owner compensation to 2.5 months of 2019 compensation, capped at $20,833. However, we now know that retirement plan costs for S corporation owners are allowed to be included in forgivable payroll costs.
• Salary/Wage Reductions
  • OLD RULE: Initially, the total loan forgiveness was reduced dollar for dollar for any reductions in annual salaries or hourly wages for employees making less than the equivalent of $100,000 per year. A Safe Harbor existed for employers to bring those wages back up by 6/30/20 to avoid any loan forgiveness reduction related to wages.
  • NEW RULE: The prior Safe Harbor still exists but now allows employers to restore wages by the earlier of the date of the loan forgiveness application is submitted or 12/31/20.
• Full-Time Equivalent (FTE) Reduction
  • OLD RULE: Initially, the total loan forgiveness was reduced proportionately if the employer cut their headcount during the Covered Period compared to one of 2 reference periods. A Safe Harbor existed for employers to bring their headcount back up by 6/30/20 to avoid any loan forgiveness reduction.
  • NEW RULE: The prior Safe Harbor still exists and is now referred to as Safe Harbor #2 and gives employers to the earlier of the date on which the loan forgiveness application is submitted or 12/31/20. Additionally, there is a new Safe Harbor #1 which allows an employer to simply check a box stating that due to COVID-19 compliance restrictions, the business has not been able to return to the same level of operations as before 2/15/20. If you can attest to that statement, you are given no loan forgiveness reduction related to FTE count.

There are still more open questions that we hope will get answered in regs and possibly Q&As from the SBA and/or the Treasury Department. This is evolving quickly, so keep informed.

Join us for a FREE WEBINAR on Wednesday, June 24, 2020 at 2 pm PDT to dig into some of these details and engage in a lively Q&A session. Please register in advance:

https://us02web.zoom.us/meeting/register/tZMtce-urzIjGtVDHTWR5dQUNCUnlLjtgt3T

Call us and schedule an appointment now if you need help projecting your PPP forgiveness and its impact on your staffing decisions. We’re here to help!

Call: 877-VHR-RELX

Email: info@vantaggioHR.com

The COVID-19 Crisis

Options for Employers

Last Updated:  March 31, 2020

In the wake of a devastating pandemic that has impacted us all, the US government has rallied to create resources to help companies survive this crisis.

As HR experts and not tax specialists, we’ve prepared this list of resources for our valued clients but urge you to also seek help from your CPA, bank, and/or payroll company. We are finding that companies really need to look at all of the options available before deciding upon a go-forward plan. Whether you’re partially or fully open as an Essential Business, having your staff work remotely, or have had to shut down some or all of your operations, the following may be of assistance.

Please call us if you want to brainstorm about the best way to keep your business and your employees in the best shape possible during these tough times.

Family First Coronavirus Response Act (FFCRA)

• Effective 4/1/20.
• Applies to employers with 500 or fewer employees.
• Provides employees with 2 weeks of Emergency Paid Sick Leave for taking time off due to the employee being quarantined, having been advised to self -quarantine, experiencing COVID-19 symptoms, caring for another who is in one of these situations, or has a child whose school or childcare is closed.
• Provides employees with 12 weeks (initial 2 are unpaid, subsequent 10 are paid) of Expanded Family and Medical Leave (FMLA) for employees who need to take time off due to unavailability of children’s school or childcare due to COVID-19.
• Employers are reimbursed for the cost of the paid time by reducing their required deposit of payroll taxes including all federal income taxes withheld, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees (not just those who got paid leave).
• Can be reported as soon as 2nd quarter 2020 payroll tax returns (Form 941). If deposits are insufficient to cover the credit, employers can request an advanced payment from the IRS.
• Details from DOL: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
• Details from the IRS: https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus
• Summary from Vantaggio: https://vantaggiohr.com/industry-news/dol-labor-update/

Payroll Tax Deferral

• Effective immediately.
• Applies to all businesses and non-profits.
• Employers are able to defer payroll taxes unless they receive a loan under the SBA Paycheck Protection Program.
• The employer’s portion of Social Security taxes (not Medicare and not the employee’s share of SS or Medicare) through the end of 2020 can be deferred. 1st 50% of deferral must be paid before 12/31/21. 2nd 50% of deferral must be paid before 12/31/22.
• Info: https://www.schatz.senate.gov/coronavirus/payroll-tax-deferral

Employee Retention Credit:

• Available to all employers regardless of size who do not take out an SBA small business loan.
• To qualify, the employer has to show one of the following:
  Operations were fully or partially suspended due to a COVID-19 government-mandated shut-down order, OR
  Gross receipts declined by greater than 50% compared to same quarter in prior year. Once the employer’s gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.
• Credit is 50% of qualifying wages up to $10,000 per employee paid after 3/12/20 and before 1/1/21. Amounts are limited to cash wages but can include a portion of employer provided healthcare. Does not include paid leave benefits under FFCRA for which the employer is separately eligible for tax credits.
• For employers with less than 100 employees (average in 2019), the credit is based on wages paid to all employees, regardless if they worked or not.
• For employers with more than 100 employees (average in 2019), the credit is allowed only for wages paid to employees who did not work during the calendar quarter.
• Employers are reimbursed for the cost of the credit by reducing their required deposit of payroll taxes including all federal income taxes withheld, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees (not just those who got paid leave).
• Can be reported as soon as 2nd quarter 2020 payroll tax returns (Form 941). If deposits are insufficient to cover the credit, employers can request and advanced payment from the IRS.
• Details from IRS: https://www.irs.gov/newsroom/irs-employee-retention-credit-available-for-many-businesses-financially-impacted-by-covid-19 and https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

Paycheck Protection Program (PPP) Small Business Loans

• Available for businesses with 500 or fewer employees (for hospitality including restaurants, not more than 500 per physical location) that were operational on 2/15/20, had employees on payroll, and paid wages and payroll taxes.
• Businesses can apply beginning 4/3/20. Independent contractors and self-employed individuals can apply beginning 4/10/20.
• Loans can be obtained through 6/30/20.
• Loan amounts are the lesser of average monthly payroll costs during the prior year times 2.5 or $10 million. Payroll costs are capped at $100,000 per year for each employee.
• Loan funds can be used for payroll, employee benefits, mortgage payments, rent, and utilities. Cannot be used for paid leave benefits under FFCRA for which the employer is separately eligible for tax credits. Any amounts used for these purposes in the 8 weeks following getting the loan will be forgiven. Not more than 25% of the forgiven amount can be for non payroll items.
• Loan will not be forgiven if compensation is decreased for staff making less than $100,000 per year by more than 25% or if headcount is reduced. Employees may be rehired by 6/30/20 to preserve loan forgiveness.
• Interest rate is 0.5% fixed. No fees to apply. Loan due in 2 years. No personal guarantee. Payments deferred for 6 months.
• Info from Treasury Department: https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%20Sheet.pdf
• Info from the SBA: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp

Pandemic Unemployment Insurance Assistance

• Available to individuals who are unemployed, partially unemployed, or unable to work between 1/27/20 and 12/31/20 for the following reasons directly related to COVID-19: diagnosed with, experiencing symptoms of, having a family member with, or caring for a family member with the disease; caring for a child whose school or childcare is closed; unable to reach the place of employment due to a quarantine; ordered to self quarantine; unable to commence a job or reach the job; became the breadwinner due to the head of household dying; has to quit a job; or has a place of employment that has closed.
• Employees still apply to their state unemployment office and if eligible for benefits will receive an additional $600 on top of the amount allowable under state law up until 7/31/20.
• Total length of unemployment is increased from 26 weeks (max in most states) to 39 weeks.
• Also provides benefits to those normally not eligible for unemployment such as independent contractors, gig workers, and self-employed individuals.
• States are encouraged to waive waiting periods for benefits and relax the requirements that an individual be actively seeking work to be eligible for benefits.
• As this program will be administered by state unemployment offices, employers should encourage employees to apply if they feel they might be eligible. As states may retain some discretion in how this Federal assistance is applied in their location, we expect to learn more as time goes by.
• More details: https://www.nelp.org/publication/unemployment-insurance-provisions-coronavirus-aid-relief-economic-security-cares-act/

Other Help from the SBA:

SBA Working Capital Disaster Loan

• Funds from US Treasury.
• Apply direction with SBA.
• No cost to apply, no obligation to take if approved.
• Up to $25,000 unsecured.
• Automatic 12-month deferral.

SBA Economic Injury Disaster Loan

• Up to $2 million.
• Small business 3.75%, Non-Profits 2.75%.
• Up to 30 years.
• Provides an emergency grant of up to $10,000 to be made within 3 days of application. These grants do not have to be repaid as long as funds are used for:
  • providing paid sick leave to EEs unable to work due to the direct effect of the COVID–19;
  • maintaining payroll to retain EEs during business disruptions or substantial slowdowns;
  • meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;
  • making rent or mortgage payments; and
  • repaying obligations that cannot be met due to revenue losses.

More Questions – We know everyone’s heads are spinning and are here if you need to talk. Vantaggio remains fully open for business and is committed to helping you and your employees during this unprecedented time.

Call: 877-VHR-RELX

Email: info@vantaggioHR.com

Families First Coronavirus Response Act 

DOL DOES AN ABOUT-FACE ON SMALL BUSINESS EXEMPTIONS UNDER THE FFCRA

Last Updated:  March 30, 2020

The Federal DOL has been publishing updates on the FFCRA in the form of Q&As on their website, pending formal regulations that we are told will be published in April. Please refer back to our previous articles:  Urgent HR Law COVID-19 Update 3/19/20 and Mandatory Notice for Employees as of 3/25/20  for the basic information.

As a reminder, the FFCRA provides for a number of relief actions that directly impact employers and employees:

• Expanded Family and Medical Leave – which provides for a new type of paid FMLA leave.
• Emergency Paid Sick Leave – which provides for a new type of paid sick days benefit.

This update will focus on the areas clarified by the DOL that have been the most confusing for employers.

Effective Dates – The law goes into effect on April 1, 2020 and does not apply retroactively. Employees who experienced a job loss or loss of wages and hours prior to this date (layoff or furlough) would not be eligible for FFCRA as the law requires being currently employed on the date it becomes effective.

 Exemptions

• Employers with Fewer than 50 Employees who can establish that compliance would jeopardize the viability of the business can be exempt from the FFCRA but ONLY for Paid Sick Leave or Extended Family Medical Leave for employees requesting time off due to the unavailability of children’s schools or childcare. This is a huge and surprising clarification from the DOL and means that no employers are exempt from providing Paid Sick Leave for employees with a COVID-19 related illness or quarantine for themselves or family members.

To claim this exemption, an authorized officer of the company would need to establish that:

• Providing the FFCRA paid time off would cause the business’s expenses and financial obligations to exceed available revenues and cause the company to cease operating at minimal capacity; OR
• The absence of the employee(s) asking for FFCRA paid time off would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; OR
• There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee(s) requesting FFCRA paid time off, and these labor or services are needed for the business to operate at a minimal capacity.

• Emergency Responders and Health Care Providers do not have to be provided FFCRA paid time off. For details about which types of employees would meet these definitions, see the DOL’s Q&As.

Business Closures – For any businesses that close prior to 4/1/20 due to “lack of work” or because the business “was required to close pursuant to a Federal, State, or local directive,” impacted employees would not be eligible for FFCRA paid time. For businesses that close after that date, employees would need to be paid for any FFCRA paid time to which they were entitled prior to the closure but not after. While still not 100% clear, this language appears to suggest that employees who are sent home and unable to telework due to a “Stay at Home” order or other similar directive would not qualify for FFCRA paid time off.

Furloughs – If employees are furloughed, they are not eligible for FFCRA paid time during their hiatus from work. Should they return to work, they would again be eligible.

Reduced Work Hours – If employees’ work hours are reduced due to lack of work, they are not eligible for FFCRA paid time because they are not prevented from working due to a COVID-19 qualifying reason, even if the reduction in hours is related to COVID-19. However, if employees need to work a reduced schedule due to one of the qualifying reasons, the amount of paid time off to which they would be entitled would be calculated based on their work schedule prior to the hours being reduced.

Recordkeeping and Notices

• Employers who will be seeking reimbursement for these paid benefits through refundable tax credits should keep track of exactly what is paid to employees and will be provided additional instructions from the IRS. Our recommendation is to create distinct earning codes in your payroll system so that any FFCRA paid time does not get commingled with other paid leave offered by the employer such as PTO or other paid sick days.
• Employees who take Expanded Family and Medical Leave to care for children can be required to provide documentation attesting to the fact that school or childcare is unavailable to due COVID-19. Such documentation could include notices, emails, texts, or even newspaper or online publishing from the school or day care.
• For all other leaves under FMLA, the existing notice and certification requirements remain unchanged.

Teleworking – If employees are permitted to telework during the pandemic and are paid their normal wages, they are not eligible for FFCRA paid time. If during teleworking they become unable to work, paid time off would be available as long the inability to work meets one of the qualifying reasons under the law.

Intermittent Work while Teleworking – Employees can use FFCRA paid time intermittently if they are not able to work their full schedule due to a qualifying reason as long as the employer agrees. Employers are allowed to determine the increments in which the FFCRA paid time may be taken and are being encouraged to be as flexible as possible.

Intermittent Work while Working at the Regular Job Site – Paid Sick Leave for those working at their regular job sites must be taken in full-day increments if the leave is needed due to the employee being quarantined, having been advised to self -quarantine, is experiencing COVID-19 symptoms, or is caring for another who is in one of these situations. The employee would need to take Paid Sick Leave either until the full amount of leave has been used or the qualifying reason to take leave no longer exists. If the full amount of leave is not taken, it can be used again for another qualifying reason prior to 12/31/20. For example, if an employee needs to take 5 days off due to a personal quarantine order and is then medically released to return to work, he/she would use up 5 full days of FFCRA and still have 5 days remaining for use at a later time. If the employee needs to take Paid Sick Leave or Paid Expanded Family and Medical Leave to care for children, it may be taken intermittently as long as the employer agrees to the schedule – even if in increments of less than a full day.

Partial Unemployment – While most states have their own unique programs for employees who experience some form of partial loss of wages (vs. full unemployment), the DOL has recently provided additional flexibility to the state programs for extending partial benefits. As employers really cannot predict or promise how unemployment benefits will be determined by their state agencies, they should encourage any employee who might qualify to apply for benefits.

Health Benefits – Employers must continue group health insurance benefits to employees taking Paid Sick Leave or Extended Family Medical Leave under the same terms and conditions. Employees may be required to continue to make their contributions towards these coverages. If employees are unable to return to work, depending upon the terms and conditions of your medical insurance plan, employees might have to be terminated from the plan and made eligible for COBRA or state “mini-COBRA” benefits. However, during these challenging times, most insurance carriers are allowing more flexibility for keeping employees covered in circumstances when they might ordinarily have lost coverage. We highly recommend checking with your own broker or insurance company. Any time taken off under FFCRA will be considered the same as hours worked for purposes of meeting eligibility requirements under group health insurance plans.

Supplementing Paid FFCRA – While employees are not entitled and cannot be forced to use any other type of paid leave provided by the employer to supplement FFCRA paid time, employers are free to allow this option. For example, employees who are only receiving 2/3 of their regular wages or who have maxed out on the daily or cumulative caps might want to use existing PTO benefits to make up the missing wages. Likewise, an employer is permitted to simply pay the employees to make up any difference. Either form of supplemental wages would not be subject to the reimbursement provisions via tax credits that apply for FFCRA paid time.

Existing Time Off Policies – Employers who already provide any type of paid time off benefits such as vacation, sick, or PTO are not permitted to use these benefits to offset their obligation to provide paid FFCRA time.

Coordination with “Regular” FMLA Leave:

• Paid Sick Leave – Employees who have a qualifying reason to take Paid Sick Leave are eligible for the full paid time off regardless of any prior FMLA taken before 4/1/20 as Paid Sick Leave is not considered a type of FMLA leave.
• Emergency Family Medical Leave – If the employer was covered by FMLA prior to 4/1/20, any time taken off by an employee for a different FMLA leave will impact the amount of time available for Emergency Family Medical Leave. Using the regular method that the employer has adopted for tracking their FMLA 12-month period, prior time taken in the current year will be deducted from the total 12-week allowance. For example, an employee who previously used 6 weeks of FMLA due to his/her own serious medical condition or to care for a family member, would only have 6 weeks remaining in this year for Emergency Family Medical Leave. Likewise, an employee who takes less than a full 12 weeks of Emergency Family Medical Leave between now and 12/31/20, could potentially use the remaining 6 weeks of total leave allowed under FMLA for another qualifying (non COVID-19) reason during the remainder of the employer’s established 12-month period.

Mandatory Notice

• GET YOUR COPY HERE: Employee Rights under the Families First Coronavirus Response Act
• This notice must be posted at your place of business in a conspicuous place. Employers are permitted to mail or email the notice directly to employees or post on their company website.
• NOTE that even small businesses who intend to take the limited exemption for providing FFCRA paid time off in childcare situations must still distribute this notice as Paid Sick leave for other purposes will still apply.

More Questions – We all still have so many more questions on this new law but are hopeful that the promised regulations will answer them. In the meantime, please reach out to us at Vantaggio for help understanding this new, complex law and or any assistance with what this means for your specific circumstances and staff.

Call: 877-VHR-RELX

Email: info@vantaggioHR.com

URGENT HR LAW COVID-19 UPDATE 03/19/2020

Vantaggio HR will be providing a series of regular HR updates to our valued clients and colleagues during these very uncertain times. We know that many of you have questions about the many changes in government policy and how they can affect the current state and future of your business and what that means for your employees. We’re here to help.

Today’s update will focus on the new federal Families First Coronavirus Response Act, signed into law by the President last night. Please note that the final version of the law differs in important areas from the version passed a few days ago by the House. There are a lot of articles on the web that may cause confusion.

While the bill provides for a number of relief actions, this update will focus on the 2 directly related to employers and employees:

• Emergency Family and Medical Leave Act – which provides for a new type of paid FMLA leave.
• Emergency Paid Sick Leave Act – which provides for a new type of paid sick days benefit.

Effective Dates – Both acts take effect on April 2, 2020 and remain in effect through December 31, 2020.

Employer Coverage – Both acts apply to all private businesses in the United States with fewer than 500 employees.

Exemptions – Both acts allow:

• Employers of employees who are healthcare providers or emergency responders to exclude such employees from coverage.
• The Secretary of Labor to issue regulations that would:
  • Exclude certain healthcare providers or emergency responders from the definition of employees under the act
  • Exempt small businesses with fewer than 50 employees if compliance would jeopardize the viability of the business.

Note that we have no further information at the current time about how such exemptions would be requested or approved.

Tax Credits – The cost for providing the benefits under these acts will be reimbursed to employers by the federal government through credits that the employer will receive against their Social Security and Medicare tax liabilities. Additionally, these reimbursements can be “grossed up” to include a share of the employees’ health insurance costs associated with the paid time off provided.

Note there is also a formula available for similar credits for certain self-employed individuals.

Notices – Both acts require the posting of notices that will be developed by the Department of Labor. With regards to other notices and certifications required under FMLA and other legally mandated paid sick leave, we have no further information at the current time.

Employee Protections – Both acts prohibit employers from disciplining, discharging, or discriminating against employees who exercise their rights to these benefits.

Emergency Family and Medical Leave Act

• Employee Eligibility – Applies to any employee working for a covered employer for at least 30 days (unlike “regular” FMLA leave which is available only to employees with 1250 hours and 12 months of prior service at a work location with 50 or more employees in a 75-mile radius).
• Reason to Take Leave – Employees who are unable to work or “telework” due to the need to care for a son or daughter under 18 years of age whose school is closed or whose childcare is unavailable as a result of a public health emergency. This is the only reason to take FMLA leave and does not cover individuals who are ill or are caring for others who ill due to COVID-19.
• Duration of Leave – up to 12 weeks.
• Pay During Leave:
  • First 10 Days – are allowed to be unpaid. Employees may choose, but the employer may not require, use of existing paid time off such as vacation, sick, or PTO.
  • Remainder of Leave – The employee must be paid by the employer:
    • 2/3 of the employee’s regular wages
    • Up to a maximum of $200 per day and an aggregate maximum of $10,000
    • Part time employees – must be paid at FLSA regular rate of pay times the number of hours the employee would normally have been scheduled to work. Special rules apply for employees with varying schedules.

• Job Restoration – Similar to “regular” FMLA leaves, employees are entitled to be returned to the same or a “substantially similar” position. However, the bill does provide for relief from guaranteed job restoration for certain employers with fewer than 25 employees if specific conditions are met.
• Notice – Employees can be required to provide advance notice to the employer when practicable.

Emergency Paid Sick Leave Act

• Reason to Take Leave – Employees who are unable to work or “telework” due to one of the following reasons:
  • 1- The employee is subject to quarantine due to COVID-19;
  • 2- The employee has been advised by a healthcare provider to self quarantine due to COVID-19;
  • 3- The employee is experiencing symptoms and is seeking medical care;
  • 4- The employee is caring for an individual (that does not have to be a family member) who is experiencing either #1 or #2 above;
  • 5- The employee is caring for a son or daughter whose school is closed or whose childcare is unavailable due to COVID-19;
  • 6- The employee is experiencing other substantially similar conditions as specified by the Secretary of Health and Human Services
• Employee Eligibility– Applies to any employee working for a covered employer with no length of service requirement.
• Amount of Paid Time Off:
  • Full Time Employees – 80 hours
  • Part Time Employees – the average number of hours the employee works in a 2-week period. Special rules apply for employees with varying schedules.
  • Benefits do not rollover or carry over and cease after the need for the leave goes away.
  • Employees cannot be required to find coverage for their shifts if they are absent.
  • Employers may not require the use of other paid time off such as sick, vacation, or PTO prior to using Emergency Paid Sick Days.
  • While the prior version of the bill made it clear that the entitlement to these new Paid Sick Days was in addition to any other paid time off currently required by law or offered by the employer, the final bill remained silent on this issue. At Vantaggio, out of an abundance of caution, we are presuming that other paid time off could not be used to meet these new requirements.
• How Pay is Determined:
  • If an employee takes time off for his/her own health situation under #1, #2, or #3 above, the employee is to be paid
  • 100% of his/her regular wages
  • Not to exceed $511 per day and an aggregate maximum of $5,110
• If an employee takes time off under #4, #5, or #6 above, the employee is to be paid
  • 2/3 of his/her regular wages
  • Not to exceed $200 per day and an aggregate maximum of $2,000
  • No less than minimum wage at the employee’s location

These new laws will require a lot of internal administration and interpretation as we’re awaiting further guidance.

Please reach out to any of us at Vantaggio if you need help with getting quickly in compliance. We’re here to support you.

Call: 877-VHR-RELX

Email: info@vantaggioHR.com

Human Resources is an essential component of any company that often gets overlooked. Every company needs a dedicated team with the right expertise when it comes to navigating the waters of Human Resources.

A dedicated and skilled HR department needs to handle more than employee relations counseling, payroll, and training. For a Human Resources department to be genuinely effective, it needs to serve every facet of a company expertly.

As a highly skilled and tested full-service human resource consulting firm, Vantaggio HR is uniquely suited to help companies of all sizes with the myriad intricacies that come with providing an instrumental, productive, and comprehensive HR department.

The Importance of Human Resources

Human Resources is a vital component to the livelihood of any company, and most importantly, its employees. HR plays many vital roles that deal with several areas crucial to a company’s development and success. These areas include everything from employee morale to labor regulations to payroll.

With so many essential tasks under the purview of an HR department, you need a dedicated and skilled team working for you. As a full-service human resource consulting firm, Vantaggio HR possesses the skills and resources required to provide your company with any and all HR needs.

What Sets Vantaggio HR Apart

Vantaggio HR is a unique HR solution because we don’t offer one blanket service for everyone. Instead, we believe in a ground-up approach designed for scalability depending on your individual needs, both current and future.

Our HR consultants specialize in employment law compliance, handling and resolving complex employee issues, and instituting strong HR policies and procedures built to last. Above all that, what truly sets us apart is our relax™ HR consulting hotline. The relax™ consulting hotline stands for Real-Time Employment & Labor Advice Xactly when you need it!

We stand by our belief that you deserve accessible and comprehensive solutions. That’s why we give our clients peace of mind thanks to a dedicated HR professional who’s always available by phone or email, providing immediate response to any HR questions and assistance with related issues and concerns.

The Vantaggio HR relax™ hotline also provides:

• Telephone and email consulting hotline
• A dedicated HR consultant assigned to your account
• Introductory Employment Practices Review meeting and follow up recommendations report
• Access to Vantaggio HR’s library of customizable HR forms
• One complete set of federal and state required employment posters
• E-Newsletter and updates on interesting and timely HR issues
• Discounted pricing on our relax™ Employee Handbook – for companies that want the
  convenience of a short, streamlined handbook that contains the essentials of best HR practices.

Vantaggio HR is Your Full-Service Solution to Any HR Need.

As a full-service HR consulting firm, we handle all the facets of Human Resources for you. Our mission is in our name, “Vantaggio,” an Italian word meaning advantage, benefit, leverage, and Profit.

Vantaggio HR is uniquely suited to serve as your HR solution thanks to our extensive available resources and over 20 years of experience and success. We set ourselves apart from other HR solutions because we do more than merely offer a way to track everything. Instead, we provide assistance, materials, and resources that help you manage your company. We’re not content with being “good enough.” That’s why we provide expert advice and guidance helping you achieve higher levels of success.

Because we believe in putting the human in Human Resources, we offer a full range of custom-tailored services and consulting for all degrees of need, whether you need an entire HR department or case-specific expertise for your existing HR Department.

Notable Services Vantaggio HR Offers:

• HR Outsourcing
• Labor Law Compliance (multi-state)
• Employee Handbooks
• HR Hotline
• HR Compliance Audits
• Operational Assessment of HR Departments
• Sexual Harassment Prevention Training
• On-Site HR Services
• New Employer Set Up
• PEO Exit Services
• Discipline & Terminations
• Training & Development
• Recruiting
• COBRA Notice Kit
• Compensation Planning
• Employee Benefit & Retirement Plans
• Payroll Administration
• HRIS & Payroll Software Implementation
• Labor Commissioner Complaints
• Expert Witness Testimony
• Merger & Acquisition Consulting

When it comes to all your Human Resource needs, you and your employees deserve the best. At Vantaggio HR, we can help you with any, and all your HR needs no matter how big or small. If you would like to learn more about how we can help you achieve higher levels of success and profitability through comprehensive HR solutions, contact us today!

Last updated: May 2018

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 complaint vacation policy.

First a bit of background – nothing under California (or federal) law requires an employer to provide paid vacation to its employees. However, once a company decides to offer such benefits(whether called vacation, PTO or Personal Days – the name does not matter), the administration of these plans is highly regulated. California law views paid vacation as part of an employee’s wages as opposed to a gift or perk. Like any other compensation, once earned, vacation benefits legally cannot be forfeited. Existing law also provides that an employee’s right to vacation benefits is earned as the employee performs work, and as such, any unpaid portion of the employee’s vacation is due to the employee (pro-rated based on actual number of days worked) as part of wages payable upon termination. For example, if an employee is entitled to one week of vacation after 1 year of service, the right to that 1 week accrues as time goes by, so if the employee leaves after 6 months of service, half of the 1 week of vacation would be due and payable at the time of termination. That being the case, the Labor Commissioner has had a long-standing position that employers may impose waiting periods before new employees can begin accruing vacation – having approved waiting periods as long as 6 months or even a year. The waiting period, however, may not be a subterfuge. For example, a plan that provides no vacation in year 1, 4 weeks in year 2, and then 2 weeks in years 3 and onward would be viewed as an illegal plan since the Labor Commission feels that 2 of the 4 weeks earned in year 2 are actually earned in year 1. A plan that provides for no vacation in year 1, 2 weeks in year 2, and 3 weeks in years 3 would be considered legal. More typically, employers tend to impose 30, 60, or even 90-day initial waiting periods before vacation starts to accrue.

The Minnick case shed some additional light on an employer’s ability to enforce vacation accrual waiting periods. The court ruled that an employee who terminated employment prior to working less than one year was not entitled to any pro-rated vacation time because the company had a clear, unambiguous, and lawful policy that stated that employees do not start to earn or accrue vacation until after their first year of employment.

The Company’s policy read as follows:

All employees earn 1 week of vacation after completion of one year of service and a maximum of two weeks’ vacation after two years of service. This means that after you have completed your first anniversary with the company, you are entitled to take one week of paid vacation, and after the completion of two years of service, you will accrue two weeks paid vacation per year. This does not mean that you earn or accrue 1/12th of one week’s vacation accrual each month during your first year. You must complete one year of service with the company to be entitled to one week of vacation.

While we would agree that the policy is very clear about the employee not being entitled to accrue any vacation during the initial year, we find the remainder of it is still confusing. It falsely leads one to believe that the court approved vacation benefits that are granted in lump sums which is not the case. It appears that the employer intended (and the court agreed) that the one week the employee can take after his/her first anniversary is not a lump sum vesting but actually an advance on the 2 weeks that can be accrued during the second year of employment. The employee argued that the fact that “receiving” 1 week of vacation at the beginning of his second year meant that this was already a vested benefit. The court disagreed saying that employers are permitted to “front-load” vacation benefits, permitting the employee to take 1 week of vacation before it was actually earned. They noted that if an employee then left during his/her second year, he/she would only be entitled to a pro-rated share (“the vested portion”) of that year’s 2-week benefit.

While this case certainly brings more flexibility to employers in how they design their vacation policies, we would not recommend implementing something written like this employer’s policy. To achieve the results they were after, we’d suggest having worded the policy more like this:

All employees are eligible to begin accruing vacation benefits after completion of one year of service. Vacation benefits accrue at the rate of 3.08 hours per bi-weekly pay period worked which equates to a maximum of 2 weeks of vacation per year of service. Despite the fact that accruals do not begin until your 1st anniversary, upon completion of 1 year of service you will be allowed to take 1 week of vacation as an advance on the vacation to be earned during your second year with the company. Going forward you will be allowed to accrue no more than 2 weeks of vacation for each year worked.

Vacation accruals that grant a certain number of hours of vacation to employees per pay period or per hour worked are the easiest to understand and to track. These types of accruals can be set up in most payroll systems, which eliminates the ambiguity over how much vacation is owed at what point in time. Keep in mind that just because accrued vacation is on the books, an employer does not have to permit employees to take time off. Vacation scheduling is at the discretion of the employer. Despite the policy in this case having been declared legal by the court, having a policy that describes benefits in lump sum amounts, when by law the employee accrues the rights to the benefit as work is performed, is confusing for everyone and opens up the door to claims of impropriety.

The case further underscores for employers the need to have written vacation policies that are clear, unambiguous, and legally compliant; and to ensure that such policies are consistently followed in practice. With new light on options for employers, this is a good time to audit and re-examine your company’s vacation, PTO, and other paid time off policies.

With many years of experience designing, documenting, and administering vacation/paid time off plans, at Vantaggio we’re here to help. Please give us a call.

For more information, please contact us.

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

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)  

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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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