The following chart compares the factors used by various federal and state agencies and bodies of law to determine if a worker is an independent contractor or an employee.

It is important to keep in mind that simply calling someone an independent contractor and/or by providing the person with a 1099 does not ensure that the worker will meet the legal requirements.

The risks for employers who misclassify a worker as an independent contractor are significant and include back taxes, penalties, interest, unpaid personal incomes taxes of the misclassified worker, overtime, benefits, leave entitlement, and other rights and protections due to employees. This handout should serve as a generic summary of the very complex factors that various agencies use to make their determinations. There is, however, no substitute for case-specific advice regarding a particular worker. We strongly suggest that, in addition to our assistance, you seek legal counsel from an attorney experienced in this particular area of employment law, and/or a formal, written determination from the Hawaii Department of Industrial Relations and/or the IRS.

For more information, please contact us.

The following chart compares the factors used by six government agencies to determine if a worker is an independent contractor or an employee.

It is important to keep in mind that simply calling someone an independent contractor and/or by providing the person with a 1099 does not ensure that the worker will meet the legal requirements.

The risks for employers who misclassify a worker as an independent contractor are significant and include back taxes, penalties, interest, unpaid personal incomes taxes of the misclassified worker, overtime, benefits, leave entitlement, and other rights and protections due to employees. Effective January 1, 2011, California law renders the actual act of misclassification unlawful and subjects the employer to civil penalties of $5,000 to $25,000 per occurrence plus other significant disciplinary action. This handout should serve as a generic summary of the very complex factors that various agencies use to make their determinations. There is, however, no substitute for case-specific advice regarding a particular worker. We strongly suggest that, in addition to our assistance, you seek legal counsel from an attorney experienced in this particular area of employment law, and/or a formal, written determination from the EDD and/or the IRS.

For more information, please contact us.

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. For a more detailed discussion of the business implications of sales exemptions, please refer to our article, “Inside and Outside Sales Employees – Who is Exempt?”

An exempt OUTSIDE SALESPERSON must:

• Be at least 18 years of age AND

• Devote more than 50% of his/her work time away from the employer’s place or places of business selling tangible or intangible items, or obtaining orders or contracts for products, services, or the use of facilities. Please note that work which is incidental to and/or in conjunction with outside sales does NOT count towards the 50% requirement. Examples of this type of work would include clerical activities such as drafting sales reports or booking appointments, as well as delivery, repair, or maintenance activities.

An exempt INSIDE SALESPERSON must:

• Be employed by a company covered by the California Industrial Welfare Commission’s Wage Order 4 (Professional Services) or Wage Order 7 (Mercantile, i.e. retail and wholesale businesses) AND

• Earn in excess of one and one-half times minimum wage AND

• 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 compensated at a minimum hourly rate ($41.85 per hour for 2016) OR on a minimum salaried basis ($7.265.43 per month or $87,185.14 per year for 2016) which are established by the California Department of Industrial Relations AND

• Be engaged in work that is intellectual or creative AND requires the exercise of discretion and independent judgment AND

• Be highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, OR2 software engineering AND

• 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.

This exemption described above will not apply to an employee if ANY of the following are true:

• The employee is a trainee or in an entry-level position, who is learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering

• The employee is in a computer-related occupation but has not attained the level of skill and expertise necessary to work independently and without close supervision

• The employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment

• The employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs, and who is skilled in computer-aided design software, including CAD/CAM, but who is not in a computer systems analysis or programming
  occupation

• The employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for onscreen media, or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media such as the World Wide Web or CD-ROMs or

• The employee is engaged in any of the exempt activities described on the previous page if those activities are for the purpose of creating imagery for effects used in the motion picture, television, or theatrical industry.

An exempt LEARNED OR ARTISTIC PROFFESIONAL must:

• Be compensated on a salary basis at a rate not less two times minimum wage 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 (“Artistic 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!

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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