Spring 2013-2: New Forms

July 13, 2013 by · Leave a Comment 

CALIFORNIA: New Changes – New Forms

For employers to properly implement recent statutory and regulatory changes, new forms should be used.

I-9

The Department of Homeland Security has issued a new I-9 form.  Effective May 7, 2013 employers may no longer use any other version of the I-9 for new hires or for reverification. [Employers are not required Read more

Spring 2013-1: New Disability Regulations

July 13, 2013 by · Leave a Comment 

New California Disability Regulations

The Fair Employment and Housing Commission (before being dissolved and replaced with the Fair Employment and Housing Council) issued new regulations with regard to disability discrimination.  [Employers with 5 or more employees are subject to California disability discrimination law.]  Generally these regulations incorporate existing statutory and case law changes.  The new regulations reflect the expansion of disability discrimination law to cover almost all medical conditions and to require the employer to actively engage in the interactive process.

Generally, only very mild conditions (such as colds, common flu or non-migraine headaches) are excluded from the definition of disability.  “Essential job functions” are very limited.  A job function may be essential because the reason the position exists is to perform that function; there are a limited number of employees available among whom the performance of that job function can be distributed; or the function may be highly specialized, so that the incumbent in the position is hired for his or her expertise or ability to perform the particular function.  It is important for the employer to have specific evidence of the essential job functions which can include: accurate, current, written job descriptions; documentation on the amount of time spent on the function; legitimate business consequences if the employee is not required to perform a function; and reference to the importance of a job function in prior performance reviews.  [Many employers include “lifting” as an essential job function when it is not in many cases.]

An employer has an affirmative duty to make a reasonable accommodation, unless the employer can show, after engaging in the interactive process, that the accommodation would impose an undue hardship.  A “reasonable accommodation” must be effective in enabling the employee to perform the essential functions of the job.  A leave of absence may be a reasonable accommodation.

An employer must assess on an individual case-by-case basis whether an employee can perform the essential functions of the job with or without a reasonable accommodation.  Therefore an employer cannot impose an arbitrary “100 percent healed” policy before an employee can return to work.  An employer should not have a policy that limits all leaves to a particular period of time, e.g., one year, as this is counter to an individualized assessment.

Engaging in the interactive process is a separate obligation of the employer, even if there may be no reasonable accommodation.  The interactive process requires communication and good-faith exploration of possible accommodations between employers and employees.

Recommendations

Whenever an employee is unable to work or is looking to return to work as a result of any medical condition (whether work-related or not) an employer should engage in the interactive process with the employee to determine whether a reasonable accommodation is necessary and can be made.  Employer policies on leaves of absence and return to work issues should be reviewed to ensure compliance with disability discrimination laws.

For more information or assistance on implementing any of the above please contact Jeanne Flaherty.

Fall 2012-2: New CA Laws (2)

July 13, 2013 by · Leave a Comment 

CALIFORNIA: New Employment Laws for 2013 – Part 2

The following are additional new employment-related laws in California dealing with wage and hour issues.  All of the new laws are effective January 1, 2013 unless otherwise noted.

Wage Statements

An employee will be deemed to have suffered an “injury” (and thus entitled to damages) if the wage statement is not complete and accurate and the employee cannot “promptly and easily determine” amounts and other information required.

A temporary services agency must include the rate of pay and hours worked for each of an employee’s assignments during the payroll period.

Review wage statements which accompany payroll checks to ensure they are accurate and easily readable.

Commission Agreements

In addition to the requirement that these must be in writing and acknowledged by the employee by January 1, 2013, the legislature has clarified that short-term productivity bonuses or bonus/profit-sharing plans are not commissions for purposes of this statutory requirement.

Ensure written commission agreements are developed and implemented, if appropriate.

Salaried Non-Exempt Employees

The hourly rate of pay for a non-exempt employee is determined by dividing the salary by all regular non-overtime hours during the pay period covered by the salary.  An employee and employer cannot agree to include any overtime hours in the salary.

Ensure non-exempt employees’ regular rate of pay is properly calculated to determine appropriate overtime payments.

Wage Garnishment

The amount of wages exempt from garnishment is increased.

Poster – Human Trafficking

Entities in certain industries (e.g., public premises that sell alcohol; bus and certain passenger rail stations; truck stops; hospital emergency rooms; farm labor contractors; private job recruitment centers; and certain massage/bodywork businesses) will be required to post a notice with information on slavery and human trafficking.  A model notice will be provided by the Department of Justice.  English and Spanish versions of the notice must be posted along with one other language most widely spoken in the county.

New Federal Requirement – Fair Credit Reporting Act (FCRA)

An updated version of the FCRA Summary of Rights notice must be used (when obtaining certain consumer reports on an employee or applicant) beginning January 1, 2013.  The primary change in the language of the notice is to reflect that the FCRA is now being enforced by the Consumer Financial Protection Bureau, rather than the Federal Trade Commission.

Make sure you have all appropriate posters or notices required for your business.

For more information or assistance on implementing any of the above please contact Jeanne Flaherty.

Fall 2012-1: New CA Laws

July 13, 2013 by · Leave a Comment 

CALIFORNIA: New Employment Laws for 2013 – Part 1

The California Legislature has once again passed, and Governor Brown has signed, a number of new requirements for employers in California.  All of the following new laws are effective January 1, 2013 unless otherwise noted.

Personnel Files

Personnel records must be made available for inspection by an employee, a former employee, or his or her representative not later than 30 days after a written request (can be extended by five days by agreement).  Additionally, a copy of the records must be provided (on written request) within the same timeframe.  The employer may charge the actual cost of copying the records.  Certain documents (e.g., letters of reference) are excluded and the name(s) of any nonsupervisory employee in the records may be redacted.  An employee is limited to one request to inspect/copy per year and a representative is limited to 50 requests on behalf of individual employees per month.  The employer may provide a form for this purpose and can designate the representative to whom requests should be made.

Employers can expect numerous requests from employees and their representatives to review and receive a copy of their personnel files.  It will be helpful to designate a representative and use an employer form.

Social Media

An employer may not require an employee or applicant to 1) disclose a username or password for the purpose of accessing personal social media (except for those kept on employer-owned devices); 2) access personal social media in the presence of the employer (“shoulder surfing”); or 3) divulge any personal social media (unless the social media is reasonably believed to be relevant to an investigation or allegations of employee misconduct or a violation of law.

Do not ask employees or applicants for personal usernames or passwords or ask employees or applicants about personal social media postings.  However, you should retain all usernames or passwords used on Company computers or other electronic devices.

Fair Employment and Housing Act (FEHA) Changes

Religious discrimination

The definition of “religious creed” in FEHA has been expanded to include “religious dress and grooming practices”.  “Dress” will be construed broadly and will include clothing, head or face covering, jewelry and artifacts.  “Grooming” includes all forms of head, facial and body hair.  As with all discrimination based on religion, the employer must reasonably accommodate the employee unless doing so creates an undue hardship.  The statute specifically states that segregating from other employees or the public is not a reasonable accommodation of a religious dress or grooming practice.

Definition of “sex”

The definition of “sex” includes breastfeeding or medical conditions related to breastfeeding.

Fair Employment and Housing Commission (FEHC)

This separate agency has been eliminated and has been replaced with an Employment and Housing Council within the Department of Fair Employment and Housing (DFEH).  Additionally the DFEH will now bring direct civil actions (rather than bringing them before the FEHC) after mandatory dispute resolution.

Particularly with regard to possible religious discrimination you need to be prepared for requests to wear certain jewelry or artifacts and maintain certain facial or body hair.

For more information or assistance on implementing any of the above please contact Jeanne Flaherty.

Spring 2012: The Brinker Decision: Rest and Meal Breaks

June 11, 2012 by · Leave a Comment 

On April 12, 2012 the California Supreme Court issued its long-awaited decision in Brinker Restaurant v. Superior Court. Although the case was primarily brought to determine whether class certification was appropriate for the various causes of action, the court specifically answered threshold questions raised in the case on meal and rest breaks in California.

The Court first considered how to determine the appropriate number of rest breaks. The IWC Order at issue in the case states the following:

Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. However, a rest period need not be authorized for employees whose total daily work time is less than three and one-half (3 1/2) hours.

The court adopted the literal definition of “major fraction thereof” finding that an employee must be given a ten-minute rest period for every four hour segment of the day plus any additional period of more than two (2) hours. The only exception is, as stated in the Order, when an employee’s entire workday is three and a half (3 ½) hours or less. Thus, employees must be given one break for daily work hours of three and a half (3 ½ to six (6); an additional break if the employee works between six (6) and ten (10) hours; a third break for a work day of ten (10) to fourteen (14) hours, etc. The Labor Commissioner has followed this interpretation for some time. However, the only requirement with regard to timing of rest breaks is that the rest period must be “insofar as practicable” in the middle of each work period. Assuming this condition is met, no particular sequence of rest and meal breaks is required by the Orders. Thus, a rest break may, in some cases, be taken before or after a meal break.

With regard to meal periods the Supreme Court concluded that an employer “must relieve the employee of all duty for the designated period, but need not ensure that the employee does no work.” Thus the employer’s obligation is to provide a meal period which is “off duty” such that the employee need not perform any work for at least thirty (30) uninterrupted minutes during which time the employee is free to leave the work premises. The court did not find any affirmative obligation on the part of the employer to ensure that no work is done during this time. Rather, the focus is on the employer relinquishing control over the employee during this period of time. However, even when the employer has properly provided the meal period (and, therefore, is not liable for the one-hour penalty), if the employee continues to work and the employer knows, or has reason to know the employee is continuing to work, the employee must be paid regular compensation for the time worked.

Furthermore, there is no requirement that the employer provide a second meal period if the employee works more than five (5) hours after the end of the first meal period, as long as the employee does not work more than ten (10) hours total in the day. Thus, there is no “rolling” five (5) hour period requirement after the first five (5) hour period of the work day.

For most employers this decision is very welcome news. Supervisors or managers no longer have to “police” when meal periods are taken, as long as the employees are aware that they can take a meal period after no more than five (5) hours worked without repercussions. If employees should decide to continue working (during which time they will be paid) the employer will not be required to pay an additional one-hour penalty. Thus, the employee is now being given greater flexibility with regard to the timing of his/her meal period (assuming the employer wishes to grant this flexibility). Keep in mind that the decision to keep working must be the employee’s, not influenced or pressured by the employer. To do so would make the employer liable for the penalty for a meal break that was not provided. It is important to note that the decision did not hold that the employer can provide the meal period at any time during the day as long as there is a meal period for every five (5) hours worked – it must be provided no later than after the first five (5) hours worked.

Notably, even though the employer need not ensure that employees take meal breaks the employer can still require employees to take a meal period (and take it at a particular time) as a matter of its own internal policy, to avoid additional paid time to an employee and/or to make sure that employees are working during times determined by the employer.

Employers have been given additional flexibility in the scheduling of rest breaks (before or after a meal period) if it is not practicable to allow rest breaks in the middle of the work period.

For more information or assistance on implementing appropriate rest and meal breaks contact Jeanne Flaherty.

January 2012: Clarification on Written Notices to Employees

June 11, 2012 by · Leave a Comment 

As noted in the Employer’s Legal Advisory (Winter 2012 and Fall 2011-3), as of January 1, 2012 all employers are required to provide newly-hired employees with a written notice that includes certain payroll information and other information about the employer (both the worksite employer and any entity that directly employs the employees) and the employer’s workers’ compensation carrier. [Additionally, if the employer is a farm labor contractor, this notice must also include the name and address of the entity that secured the services of the farm labor contractor and this information must be included in the itemized wage statement (paycheck stub).]

The employer is also required to notify employees in writing of any changes in the information included in the notice, unless the change is included in a timely wage statement (paycheck stub) or in another legally-required written notice within seven (7) days of the change. All employees (not just those hired after January 1, 2012) must be given notices of changes, not just newly-hired employees. [Since all employees must be notified of changes employers may want to consider giving the initial notice to all employees. However, the law does state that the initial notice only needs to be given to employees “at the time of hiring.”]

Additionally, the notice need not be given to exempt employees or employees covered by a collective bargaining agreement if the agreement includes specified provisions.

The Labor Commissioner has now provided the template in English and other languages (including Spanish) at: http://www.dir.ca.gov/dlse/Governor_signs_Wage_Theft_Protection_Act_of_2011.html.

For additional assistance please contact Jeanne Flaherty at 805-499-2918 or jflaherty@eladvisor.com.

Winter 2012: New Year Reminders; NLRB Actions; and Reporting Time Pay

June 11, 2012 by · 1 Comment 

New Year Requirements (Reminder)
Employers are reminded that several new laws become effective on January 1, 2012. These include: payment of health insurance premiums for employees on a pregnancy disability leave; restrictions on the use of credit reports by employers; and a written notice to all new hires stating rates of pay, payday, and other employer and workers’ compensation carrier information. The Labor Commissioner’s office has issued a template for this written notice. It can be found at
http://www.dir.ca.gov/dlse/LC_2810.5_Notice.pdf (PDF version) or
http://www.dir.ca.gov/dlse/LC_2810.5_Notice.doc (Word version).

See Fall 2011-2 and 2011-3 Employer’s Legal Advisories for additional information on these new requirements.

NLRA Poster/Election Procedures
IMPORTANT: The NLRB has again extended the beginning date for posting the NLRA poster. The new compliance date is April 30, 2012.

This new date is also the effective date for the NLRB’s final rule which amends its election procedures. These amendments will generally result in elections taking place much more quickly. Legal action and potential legislative action may affect these proposed amendments. Nonetheless, it is a reminder to all employers to be aware of areas of vulnerability that could lead to a union-organizing effort.

Reporting Time Pay Clarified
In California an employee must be paid “reporting time pay” of at least two (2) and not more than four (4) hours when the employee is furnished less than half of the usual or scheduled day’s work. However, the California Court of Appeal recently ruled that when a meeting is scheduled for a specific period of time, and the employee is paid for more than half the scheduled time, the employee is not entitled to reporting time pay.

If an employee is asked to report for a meeting of unspecified duration on a day in which he did not expect to work a scheduled or usual shift, the employer is only required to pay the employee the two-hour minimum.

Additionally, the court ruled that an employee is only entitled to an additional one hour of pay at minimum wage (the “split shift” premium” when an employee’s work schedule is interrupted by non-paid, non-working periods other than bona fide meal or rest periods) when his/her wages for the day is less than the number of hours worked plus one times the minimum wage.

If employees are required to report to work for a short period of time – such as for a meeting – the time and duration of the meeting (or other reporting) should be scheduled at least far enough in advance to avoid a claim that it was “unscheduled” and the meeting should take at least one-half of the scheduled time for no reporting time payment to be due. If there is no expectation of a scheduled or regular work period (such as when an employee is asked on short notice to report for an individual short meeting of unspecified duration and then is terminated or not otherwise put to work), the employee must be paid the two-hour minimum.

All employers are also reminded to ensure that employees receive at least the minimum wage for all hours worked, and at least a total payment that includes an additional hour at minimum wage when the employee must report to work for a second time.

For additional assistance, please contact Jeanne Flaherty at Employer’s Legal Advisor, Inc.

Fall 2011-4: Independent Contractors Misclassification

June 11, 2012 by · Leave a Comment 

IRS Voluntary Compliance Settlement Program
The Internal Revenue Service (IRS) has implemented a new program to allow taxpayers who have misclassified workers as independent contractors to voluntarily reclassify the workers as employees with minimal tax liability. This is a voluntary program. To be eligible, a taxpayer must have consistently treated the workers as non-employees; have filed all required Forms 1099 for the past three years; cannot currently be subject to an audit by the IRS, the Department of Labor (DOL) or a state government agency; and, if previously audited by the IRS or DOL on this issue has complied with the results of that audit.

To participate in the Voluntarily Compliance Settlement Program (VCSP), the taxpayer must complete an application which will be reviewed by the IRS for verification of eligibility. The taxpayer must agree to prospectively treat the workers as employees for future tax periods and agree to a three-year extension of the statute of limitations on an assessment of employment taxes during the first three years (resulting in a six-year statute of limitations). The taxpayer will be required to pay 10% of the employment tax liability (calculated at reduced rates) for the most recent tax year only and will not be required to pay interest or penalties. The taxpayer will not be subject to audit with respect to worker misclassification for prior years. The taxpayer must enter into a closing agreement with the IRS to finalize the terms of the VCSP and pay any amount due.

Keep in mind that this program does not affect other potential liabilities of an entity that has misclassified workers as independent contractors rather than employees. The California Employment Development Department (EDD) may still impose tax liability under California law for misclassification. Additionally, there may be overtime that was not paid or other violations of federal or state employment laws. There may also be liability or other consequences if it is determined that these workers should have been included in pension or health and welfare benefit plans.

IRS/DOL Memorandum of Understanding
At the same time, the IRS and DOL have entered into a Memorandum of Understanding (MOU) by which the DOL Wage and Hour Division will share information and other data with the IRS that relates to misclassification issues. This could lead to increased IRS audits of entities with independent contractors – which could result in assessments of employment taxes payable (without the discount provided by the VCSP), penalties and interests. The MOU also provides for information-sharing agreements between the IRS and state and local taxing agencies. [California has not currently entered into such an agreement.] The IRS and DOL will also coordinate education of taxpayers/employers and other outreach efforts on the misclassification issue. One of the stated goals is to provide a “level playing field” for law-abiding taxpayers and employers.

The VCSP and IRS/DOL Memorandum of Understanding are essentially “carrot and stick” efforts by the federal government to promote taxpayer compliance with regard to misclassification of employees as independent contractors which would result in increased federal employment tax revenues. There may be significant federal tax savings for employers who currently have employees misclassified as independent contractors. Any employer in this situation should consider applying for the VCSP. However, since there may be other liabilities as a result of reclassification, employers should consult with counsel before proceeding with this process.

New California Law on Misclassification
This new law makes willful misclassification, defined as avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor, unlawful. It is also unlawful to charge such an individual for equipment, materials, etc. for which it would be a violation of law (because the employer would be required to provide the items) if the individual were not misclassified. Civil penalties for such violations range from $5000 – $15,000 and then $10000 – $25,000 if there is a pattern and practice of such violations. Anyone who is found to have violated these provisions will be required to display a notice that enumerates the violations and notifies anyone who believes he/she is misclassified with information for contacting the Labor and Workforce Development Agency. The notice must be signed by an officer and be posted for one year.

For more information or assistance with the implementation of these new requirements contact Jeanne Flaherty at Employer’s Legal Advisor, Inc.

October 2011-2: Information for Employees of Farm Labor Contractors

January 16, 2012 by · Leave a Comment 

As noted in the Employer’s Legal Advisory (Fall 2011-3), as of January 1, 2012 all employers will be required to provide newly-hired employees with a written notice that includes certain payroll information and other information about the employer and the employer’s workers’ compensation carrier. Additionally, if the employer is a farm labor contractor, this notice must also include the name and address of the entity that secured the services of the farm labor contractor.
Read more

October 2011-1: New Pregnancy Leave Legislation

January 16, 2012 by · Leave a Comment 

The new legislation, effective January 1, 2012, prohibits any employer from refusing to maintain health coverage for an employee on a statutorily protected pregnancy leave of up to four (4) months. The employer will be required to pay the premiums normally paid by the employer under the same conditions as if the employee was working. Unlike a similar provision under the Family and Medical Leave Act (FMLA) and California Family Rights Act (CFRA) which apply only to employers with 50 or more employees, these changes to the California Pregnancy Disability Leave Law apply to all employers with five (5) or more employees. Read more

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