Monthly Archives: September 2014

Are you on board with the Bay Area Commuter Benefits Program? Today’s the Day!

Just a reminder that today is the day that Bay Area employers must get on board with the Commuter Benefits Program.

You probably already know that getting commuters out of single occupancy vehicles can significantly reduce carbon emissions. That’s the best reason for this blog entry.

September 30, 2014 is the day covered Bay Area employers are to register with the Bay Area Air Quality Management District. In essence, the rule is that employers with 50 or more full-time employees within the nine Bay Area counties (Alameda, Contra Costa, Napa, Solano, Sonoma, Marin, Santa Clara, San Mateo, and San Francisco) must offer certain commuter benefits to eligible employees.

A “covered employer” is: “Any public, private, or non-profit entity (person, corporation, partnership, business firm, government agency, special purpose agency, educational institution, health care facility, etc.) for which an average of 50 or more full-time employees per week perform work for monetary compensation within the geographic boundaries of the District. . . The term excludes seasonal/temporary employees.”

A “covered employee” is an employee “who performed an average of at least 20 hours of work per week within the previous calendar month within the geographic boundaries of the District, excluding a seasonal/temporary employee.”

A covered employer must:

1. Offer Commuter Benefit Options. The employer must offer one or more of the following commuter benefit options to eligible employees by September 30, 2014:

a. Pre-Tax Option. Under this option, an employer allows employees to elect to exclude commuting costs incurred for transit passes or vanpool charges from their taxable wages (this must also be consistent with IRC 132(f)). These are basically “commuter checks.” Vendors can provide these to you and help you manage the program – email me if you need suggestions!

b. Employer-Paid benefit. For this option, an employer offers employees a subsidy equal to the monthly cost of commuting via public transit or vanpool, or $75, whichever is lower. Employers may also choose to provide a subsidy for bicycle commuting costs.

c. Employer-Provided transit. You can have your own Google bus! For this option, the employer must give employees at no or low cost (as determined by the Air Pollution Control Officer) a vanpool, bus or similar multi-passenger vehicle operated by or for the employer.

d. Alternative commuter benefit. Finally, an employer can be creative and provide a pre-approved alternative employer-provided commute benefit that is as effective as getting employees out of single occupancy vehicles as the other options (AKA the wild card!).

2. Notify eligible employees of the options available and how to take advantage of them

3. Designate a Commuter Benefits Coordinator and register. The Coordinator (you, lucky reader?) must register with the Bay Area Air Quality Management District through the commuter benefits program website (I fixed the link!).

So. . .a reminder of your obligation to give your employees options to encourage commute alternatives, thus improving air quality, is my primary reason for this post.

The second best reason? It lets me link to an old Onion article: “Report: 98 Percent Of U.S. Commuters Favor Public Transportation For Others.” Makes me laugh every time.

“But we couldn’t make it without our volunteers!” — A very expensive trap for the unwary business owner (even if you don’t think of it as a “business”)

As you may gather from the very title of this blog, I focus on California employment law (!). This past week, a colleague whose practice has a focus on helping wineries and breweries with legal issues gave me a heads up on a confluence of our practice areas: the use of volunteers at wineries. While you, dear reader, may not operate a winery, you may use volunteers – read on!

For most people, getting to work for a small winery is that rare chance to do something you love. Some even perform the work for free because it is fun, or because volunteering is a great opportunity to get a foot in the door, or because it is a chance to help a friend. Many wineries rely upon volunteers to work in the tasting room, pour at festivals, and help with the bottling line. And while months, or years may go by where this creates a seemingly symbiotic system, with rewards for both the volunteer and the winery, the employment concerns are a ticking time bomb of penalties and unpaid wages.

In general, both California and federal laws that govern how people are to be paid prohibit most private sector, for-profit employers from using volunteers. For the most part, only public sector and non-profit organizations can use volunteers and only when the volunteer is performing civic, charitable, or humanitarian work.

An important thing to remember about California’s employment laws is that, for the most part, they apply to every employer — from every “new economy” tech company with the latest killer app to every small business started 40 years ago. Needless to say, there is no exception for small, medium or large wineries.

In California, an individual is an employee if he or she works in the service of another person (the employer) and that employer has the right to control the details of the employee’s work performance. There are a few, very limited exceptions to the rule that California expects workers to be paid as employees. These exceptions include bona fide independent contractors (bona fide being a key phrase!), educational internship programs and immediate family members of the employer (spouse, parent, child). There are also limited exceptions for certain types of jobs. Except for those limited exemptions to the general rule, California requires that an employee be paid at least minimum wage for all hours worked, be paid overtime for all hours worked over eight in a day (and 40 in a workweek), and to be provided the opportunity to take meal and rest periods of a minimum length. This means that, at a minimum, a winery or any other employer must make the appropriate arrangements to properly hire, pay and employ workers.

Before someone can begin working, the employer must require the individual to show that he or she is legally authorized to work in the United States. The employee must complete a Form W4 to determine withholdings for income tax purposes. The employer must track the hours worked by the employee on a daily basis to ensure overtime is paid. The employer must issue paychecks at least every two weeks, and the paystubs must include specific information such as the hours worked, the overtime earned, and the rate of pay, among many other pieces of information. A written offer letter and/or a letter setting forth certain terms and conditions of employment can be invaluable – and sometimes required. This is just a short summary of the requirements for being an employer, but it is a good starting point.

After my colleague told me about this issue for local wineries, I did the heavy research of looking up the matter on the internet. I found some commentators suggesting that wineries simply pay the (former) volunteers as “1099 workers” or as contractors. This decision could get the winery into different, and expensive trouble with the workers and government agencies. It is the rare winery worker who is properly classified as an independent contractor because a critical factor in assessing that status is the degree of control over the worker. For example, the individuals who work in the tasting room pouring your wine the way you want it poured, talking about your wines, and selling them, is an employee. The workers who come every two weeks to maintain the landscaping are contractors.

In the end, many wineries—and other types of companies! – have used volunteers to supplement their paid work force. They have done this without any evil intent. The law, however, is set up to protect workers from, well, “other” companies – the ones that force workers to volunteer for a period before they may consider being hired, the ones that don’t pay at least minimum wage, etc. In any event, no matter how generous you are with your volunteers in ways other than wages, it could be a very detrimental decision to continue using them in this manner. Volunteers can seek back wages for four years’ time, along with substantial penalties, interest and attorneys fees. It is not uncommon for the penalties and fees to exceed the underlying wages owed. And these situations are ripe for the dreaded, financially crippling class action.

If you think you may need to take a close look at how you pay (or don’t pay) people who work at your company, give any of the attorneys at McPharlin Sprinkles & Thomas LLP a call!

(And for a link to my colleague who can help with your winery, brewery and distillery legal issues, click here.)
Whew. I need a drink!

Healthy Workplaces, Healthy Families! Paid Sick Leave Will be the Law in California Next Summer

Starting July 2015, California Employers in California must give part and full-time workers at least three days of paid sick leave each year. Here’s a very quick summary of the new rules – we’ll delve deeper in the ten months before it takes effect.

The new law, signed by Gov. Jerry Brown on September 10, 2014, gives workers paid sick leave at a rate of one hour for every 30 hours worked and lets them begin using the accrued time after 90 days of employment. The hours could also be used for time off to care for a sick family members, including a child, parent, spouse, registered domestic partner, grandparent, grandchild or sibling.
An employee could also use the paid sick leave in conjunction with protected time off for an employee who is a victim of domestic violence or stalking.

Accrued but unused paid sick days will carry over to the next year, but in certain circumstances the employer may limit the workers’ use of the paid time to 24 hours (3 days) per year.

As with the San Francisco Paid Sick Leave Ordinance enacted in 2006, if an employer already offers a paid sick leave program (either paid sick leave or “PTO”), the terms of that program should be reviewed to ensure the accrual, carryover, and protections in the existing program are at least as generous (if not more so) than the new law.

Employers will be required to display posters telling employees of their right to paid sick days and informing them that retaliation for requesting or using paid sick days is illegal. Employers could face fines of up to $4,000 per day for withholding paid sick leave or violating the bill’s requirements. Offer letters, handbooks, and other policy statements should be reviewed and revised appropriately.

The requirement applies to both full-time and part-time employees, but exempts workers subject to certain collective bargaining agreements and airline flight crews and attendants who are under federal labor laws. As reported by the L.A. Times, a late amendment was added to the bill to exempt state-funded in-home healthcare providers because including them would have cost the state $106 million annually.

For your reading pleasure, you can find the full text of the new law here: