California’s farmworkers will soon get to enjoy the payment of overtime after an 8 hour day (like almost everyone else).

California farmworkers are currently exempt from the rule that requires overtime be paid for work over 8 hours in a day or 40 in a week.  Instead, farmworkers are currently paid overtime if they work more than 10 hours in a day or 60 hours in a week.

This morning, Governor Jerry Brown signed into law Assembly Bill 1066.  The law will slowly remove the provisions that make farmworkers exempt from the rules regarding hours, meal breaks, and other working conditions, including specified wage requirements.  It also provides for the overtime changes to be phased in over four years: starting in 2019, OT kicks in at 9 ½ hours; in 2020, it is at 9 hours; 2021 at 8 ½ hours and in 2020, 8 hours.   Double-time will begin at the 12th hour.   Employers who employ 25 or fewer employees will have an additional 3 years to comply with the phasing-in of the overtime requirements.

For more information, please click here.

Employment Law Update Webinar!

You’re invited (yes – YOU!)

I’ll be doing a LIVE webinar on Thursday, February 25, 2016 through HR Options (a wonderful group of people who provide Human Resources consulting from recruiting to analysis of workforce plans and strategies.

I’ll be discussing compensation and discrimination issues “new for 2016” such as:

– The minimum wage increase & how it effects exempt employees
– Amendments to the Equal Pay Act law
– Restrictions on piece-rate compensation that affects ALL employers
– Corrections to incorrect paystubs
– Clarification of meal period waivers and employee classification
– Expansion of the Labor Commissioner’s Powers
– Expanded protections for employees who complain about discrimination

Time: 10:00 AM – 11:00 AM Pacific Time

The program is free!!

To register, click here.

This program is pending approval for 1 General HR recertification credit hours toward California, GPHR, HRBP, HRMP, PHR and SPHR recertification through the HR Certification Institute. For more information about certification or recertification, please visit the HR Certification Institute website at http://www.hrci.org

 

EEOC Wants to Collect More Pay Information from Large Employers to Promote Equal Pay.

I read “The Week” – a magazine that collects in tiny bits all of the news of the past week so I can read it quickly and then get back to my sports and entertainment news. There is a section called “Boring but Important” – and the EEOC’s announcement this morning falls squarely into that topic:

This morning, the Equal Employment Opportunity Commission (EEOC) announced a proposed revision to the Employer Information Report (EEO-1) to include collecting pay data from employers, including federal contractors, with more than 100 employees. The goal of the data collection is to help the EEOC identify possible pay discrimination and to assist employers in promoting equal pay in their workplaces. The timing of the EEOC’s proposal is part of the commemoration of the seventh anniversary of the Lilly Ledbetter Fair Pay Act.

EEO-1 data provides the federal government with workforce profiles from private sector employers by race, ethnicity, sex, and job category. The proposed change would require aggregate data on pay ranges and hours worked starting with the September 2017 report. Members of the public have until April 1, 2016, to submit comments about the proposed change.

The purpose of the change is to give the EEOC and the DOL (and its Office of Federal Contract Compliance Programs – OFFCP) more information about potential pay disparity. The EEOC intends to compile and publish aggregated data that will help employers in conducting their own analysis of their pay practices to facilitate voluntary compliance. And the agencies will be able to use the pay data to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities.

So, kinda “boring,” and, while a pain on the collection side, having more information in the aggregate seems like it will help with identifying and reducing the pay gap.

2016: A new year and new laws!

I posted the webinar I presented on new California employment laws 2016.  From the energy level of my voice, I think I need to modify my New Years’ resolution to drink more caffeine, not less. In the event you want just a quick summary, and not view the webinar, here you go.

As of January 1, 2016, California’s minimum wage is $10.00 per hour. The overtime rate for an employee paid minimum wage is therefore $15.00 per hour – except, please note, if the employee receives other “variable compensation” – piece rate, commissions, nondiscretionary bonuses. If that is the case, the overtime rate must be calculated based on the regular rate inclusive of these additional payments.

Since the minimum wage for nonexempt employees has been raised to $10.00 per hour, the minimum annual salary requirement for properly classified exempt employees under the administrative and executive exemption is $41,600 per year.

For properly classified employees under the computer software professional exemption, the annual cost of living increase means that such employees must make at least $41.85 per hour or $87,185.13 per year. As before, this is only an exemption from the overtime rules. These employees must still be provided the opportunity to take meal and rest breaks.

Employers that pay employees on a “piece rate” basis must pay such employees separately for (a) rest and recovery periods and (b) “nonproductive time.”
(New Labor Code section 226.2). Employers must pay for rest and recovery periods at an hourly rate no less than the greater of either the applicable minimum wage or the employee’s average hourly wage for all time worked (exclusive of break time) during the workweek. Under this new law, “nonproductive time” is “time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.” Nonproductive time must be paid as an hourly rate of at least minimum wage – paid by actual records or the employer’s “reasonable estimate.”

In addition to paying these periods separately – that may previously have been “included” in the piece rate – the paystubs need to be updated to include:
• Total hours of compensable rest and recovery periods
• Rate of compensation for rest and recovery periods
• Total hours of “other nonproductive time”
• Rate of compensation for “other nonproductive time”
• Gross wages paid for both rest/recovery periods and nonproductive time

One way to potentially satisfy the sticky “other nonproductive time” requirement is by paying minimum wage for all hours worked in addition to piece rate.

Finally, the new law provides a “safe harbor” for employers who, by December 15, 2016, fully compensate their affected employees for all under-compensated or uncompensated rest periods, recovery periods, or unproductive time between July 1, 2012 and December 31, 2015.

There is another “safe harbor” rule this year. Employers have a “right to cure” paystub violations that fail to show the inclusive dates of the pay period, and/or the name and address of the legal employer. Employers may correct these very technical violations of the Labor Code by providing each affected employee a “fully compliant, itemized wage statement . . . for each pay period for the three-year period prior the date of the written notice” required for a PAGA claim. An employer may cure such violations once in a 12-month period if the employer takes action within 33 days of notice of a violation. Of note, this “safe harbor” only affects “Private Attorney General Act” (“PAGA”) penalties; it does not provide any protections from an employee’s ability to seek statutory penalties. But any steps an employer can take to reduce potential liability is helpful. I previously wrote a blog post on this, in case you want more information.

The ability of workers who work an “Alternative Workweek Schedule” to waive the second meal period had been in doubt due to a rogue court ruling early last year. The legislature clarified that everyone’s interpretations – including the Labor Commissioner’s – was correct. As before, an employee may voluntarily elect to waive the second meal period if the waiver is in writing and states that the employee understands she may revoke the waiver at any time.

The Labor Commissioner’s powers have expanded (again). The Labor Commissioner can now enforce local minimum wage laws – like those that govern employees in San Jose, San Francisco and Oakland. Before, the employee had to file at claim directly with the municipality. The Labor Commissioner also has specific authority to issue citations against employers who fail to indemnify employees for employment-related expenses. The Labor Commissioner’s enforcement powers have also increased – the DLSE can act as a judgment creditor and file liens on real estate, levy an employer’s property, or impose a stop order on an employer’ business to assist in the collection of unpaid wage judgments. And the hearing officer of a wage claim will hear and rule on whether an employer, or individuals acting on behalf of employers, who violate any provision regulating minimum wages or hours and days of work may be held liable as the employer for such violation.

The Legislature clarified that cheerleaders performing for California-based professional sports teams are employees and not independent contractors. This may not seem as if it is relevant to many employers, but it is a good reminder to review who your company is paying as a contractor and if that classification is correct.

In an earlier blogpost, I talked about the new gender equity pay law. Here’s a quick summary: California employers are subject to a new equal pay law that will create a much stricter standard for gender pay equity.

The new law prohibits an employer from paying employees of one sex lower than employees of the opposite sex for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”

Before the amendment, an employee had to demonstrate that he or she was not being paid at the same rate as someone of the opposite sex at the same establishment for “equal work.” The “same establishment” has been deleted, and the employee need only show he or she is not being paid at the same rate for “substantially similar work.” In other words, the employees need not be in the same exact job or the same geographic location.

If a wage differential exists between employees of the opposite sex, the law will allow employers to demonstrate the purpose of any difference that is based on:
• a seniority system;
• a merit system;
• a system that measures earnings by quality or quantity of production; or
• some other bona fide factor other than sex such as education, training, or experience.

If an employer tries to justify a pay differential under this law as a “bona fide factor other than sex”, it must show that the factor is not based on or derived from a sex-based differential in compensation, is job-related with respect to the position in question, and is consistent with a business necessity.

“Business necessity” is defined as an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This exception will not apply if the employee can show that an alternative practice exists that would serve the same business purpose without producing the wage differential.

An employee may seek to enforce an unequal pay claim with California’s Labor Commissioner or through a civil lawsuit. An employee who is successful can recover the pay differential plus an additional equal amount as liquidated damages. Employees who file lawsuits can also recover interest, litigation costs, and attorneys’ fees.

The new law also bars employers from prohibiting employees from disclosing their own wages to others, discussing their wages, or inquiring about the wages of another employee.

Discrimination protections were expanded. First, employers cannot retaliate against employees who request a religious or disability accommodation, regardless of whether the accommodation is granted. And, second, employers cannot retaliate against an employee who is a family member of a person who has, or is perceived to have, engaged in protected activities, such as complaints about working conditions, pay, harassment, or whistleblowing.

Lastly (for today’s post, at least), employers may not use E-Verify to check the employment authorization status of an employee or an applicant who has not received an offer of employment, except as required by federal law or as a condition of receiving federal funds.

Employment Law Update Webinar

Wendel Rosen’s Construction Practice Group Receives First Tier Ranking by U.S. News and World Reports

Source: Wendel Rosen’s Construction Practice Group Receives First Tier Ranking by U.S. News and World Reports

California’s Stepped-Up Equal Pay Law Effective January 1, 2016

California employers will soon be subject to a new equal pay law that will create a much stricter standard for gender pay equity. Signed into law on October 6, 2015, the new law is considered the most aggressive equal pay law in the nation. Employers will want to begin preparing immediately for its impact – as well as high potential for future laws regarding pay equality based on race, disability, and other protected classes.

What Does the New Law Do?
The new law (SB 358) is actually an amendment to an existing gender pay equity law. There are already state and federal laws that require gender pay equity. The amendment is designed to make it easier to enforce the equal pay rules. The new law prohibits an employer from paying employees of one sex lower than employees of the opposite sex for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”

Before the amendment, an employee had to demonstrate that he or she was not being paid at the same rate as someone of the opposite sex at the same establishment for “equal work.” The “same establishment” has been deleted, and the employee need only show he or she is not being paid at the same rate for “substantially similar work.” In other words, the employees need not be in the same exact job or the same geographic location.

Exceptions Available To Employers
If a wage differential exists between employees of the opposite sex, the law will allow employers to demonstrate the purpose of any difference that is based on:
• a seniority system;
• a merit system;
• a system that measures earnings by quality or quantity of production; or
• some other bona fide factor other than sex such as education, training, or experience.

If an employer tries to justify a pay differential under this law as a “bona fide factor other than sex”, it must show that the factor is not based on or derived from a sex-based differential in compensation, is job-related with respect to the position in question, and is consistent with a business necessity.

“Business necessity” is defined as an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This exception will not apply if the employee can show that an alternative practice exists that would serve the same business purpose without producing the wage differential.

Remedies and Enforcement
An employee may seek to enforce an unequal pay claim with California’s Labor Commissioner or through a civil lawsuit. An employee who is successful can recover the pay differential plus an additional equal amount as liquidated damages. Employees who file lawsuits can also recover interest, litigation costs, and attorneys’ fees.

An agreement by the employee to work at a lower rate of pay will not bar such a claim or lawsuit.

“Wage Transparency” Required
The new law also bars employers from prohibiting employees from disclosing their own wages to others, discussing their wages, or inquiring about the wages of another employee.

Many employers were already mindful about not limiting employees’ ability to discuss the “terms and conditions of employment,” but this is a good reminder.

The new law does not require that the employer disclose another employee’s wages or that an employee disclose his or her own wages in response to a co-worker’s inquiry.

Action Items
The first step is a salary/pay rate review. Employers should determine if any differences exist for pay rates for the same or similar jobs that are tied to gender. If disparities exist, check to see whether they can be justified within the new law. Whenever an employer is reviewing pay practices (read: potential exposure to wage and hour claims), we recommend that the analysis be conducted with the advice and assistance of an attorney (read:  attorney-client privilege).

Employers should also reassess hiring and compensation practices to ensure sufficient documentation. The reasons why an employee is hired at a different salary than another must be explained. For example, a new-hire’s wage could be dictated by the current job market, the financial status of the company, the outcome of salary negotiations, or competitive offers from other companies. The company’s personnel documents should confirm the reason, and document any / every factor that led to raises down the line.

Final Comment

This may be the issue that finally pushes me to bust out a separate blog for commentary! The aggressive comments I have seen about this law –ignoring the fact it doesn’t even go far enough when it comes to differentials in pay based on race and disability, to name a few—are shocking.For now, we can have coffee and discuss in more detail.