New Labor Laws For California In 2016 Will Challenge Employers
Over the last couple of years the compliance scene has really gotten difficult for employers. Both Cal-OSHA and the Division of Labor Standards of Enforcement are making employers who choose to stay out of compliance pay. In addition to that the new labor laws for California in 2016 are just going to add fuel to the fire that was started a couple of years ago. It is amazing to me just how quickly things have changed in California concerning compliance matters. It was not that long ago that I would not even feel the need to help employers who employed less than ten employees. At the end of 2013 things really began to change and then in 2015 we developed a network of attorneys for the first time since we started our company in 1997. All of that bring us up to where we are today.
New Labor Laws for California in 2016 have really put the icing on the cake but these new laws are not the only ones giving employers problems. So in this article we will not only be covering the new laws but we will be discoing some areas where employers have failed to comply in a big way and now they are going to be more likely to have to pay for the failure to comply. At Ces Today we have seen this coming since 2013. We saw this begin with Cal-OSHA, but never really thought that this move to make employers comply with the passage of new laws would go over to the labor law side of compliance. As you read this article if you should have any questions we would love to hear them. We love questions.
Both Cal-OSHA and the Department of Labor Standards Enforcement are going to be enforcing not only the new labor laws for California in 2016 but older ones as well. To begin with let’s start with some labor laws that have been on the books for a while.
Rest and Meal Periods:
Rest and Meal Periods: Since the Brinker decision employers must provide employees with both rest and meal periods. In a normal 8 (eight) hour shift employers must provide 2 (two) breaks periods of at least 10 (ten) minutes in length. This time is to be duty free. It is a time that the employee can make phone calls check their emails or whatever else they want to do. The meal period is to be a 30 (thirty) minute break again this time must be duty free. The good news for employers is that according to California Labor Code lunches can be taken starting the 2nd hour of the work day but must be taken before the 6th hour of the work day.
Overtime In California:
Overtime is to be paid when an employee works over 8 (eight) hours a day or 40 (forty) hours in a week. This means that it is possible to owe an employee for overtime even if they have not worked a 5 (five) day or a 40 (forty) hour work week.
Paid Sick Leave:
Many employers today are taking their vacation policy and changing it to a PTO policy for the purpose of complying with the new California Paid Sick Leave Policy. The mistake that employers make is that their PTO policy as written does not comply with the Paid Sick Leave policy. Allow me to give you an example for the purpose of clarity. If you PTO can only be taken in increments of 8 (eight) hour periods and you use that policy for the paid sick leave you are not compliant. The reason you are not compliant is because the paid sick leave policy is given in hourly increments. In order to comply your PTO policy must be able to be taken in hourly increments as well.
Many employers today are still making the mistake of classifying employees that are nonexempt as exempt employees, and this is a very big issue when it comes to the California Labor Code. If you are doing this you are in violation of the codes of Ca Labor laws and it could come back and bite you big time. An Exempt employee must make double minimum wage, they must have the ability to hire and fire along with the ability to make executive decisions.
Failing to pay employees properly. I am only going to hit one aspect of this. Let’s say that you own an automotive repair shop or a restaurant. Your employees shift starts at 8: A.M., but you make him come in early and use that time to get into his uniform. You do not pay him for that time because he is not on the clock, but he is in the building you are not paying your employee according to the standards of employment law. The correct way to do this is once the employee is on the job site the employee is on the clock. If you want him to be dressed when he reports to work have him take his uniform home the night before and put it on at his house and then report for work. These days it is better to be safe than sorry when it comes to the California Labor Codes.
With the passing of these new labor laws for California in 2016 there will be even more things for employers to have to consider. If you have not updated your employee handbook in a couple of years now would be a very good time to do so.
For many years a lot of employers had looked the other way when it came to compliance with the California Labor Laws and Cal-Osha Regulations. Believe it or not many employers do not have a formally written Safety Program and quite a few don’t even have and employee handbook and many more employers fail to update their employee handbook annually.
Failing to not have a current employee handbook and or failing to have a current Safety Program was never a wise thing to do but now with all of the new compliance enforcement procedures and the new labor laws for California in 2016 it is like playing Russian Roulette.
In addition to that attorneys are now going to great lengths to make sure that your employees are aware of their many rights and that one of those rights is the right to sue you their employers for any wage and hour violation. There are over 180,000 websites that is educating employees on how to do just that.
Take a look at this video from YouTube, there are many, many more that are much stronger. It is short and I promise you this will help you to understand why employers are being sued more and more today.
It is now time for employers to not only understand the new labor laws for California in 2016 that we have discussed so far and will continue to discuss below. It is also time to protect your rights as an employer and the only way that you can effectively do that is to get and stay in compliance.
One of the problems is that these new laws are not simplistic in nature. Many of them are far reaching and confusing, and if you don’t take the time to study them you may one day really wish that you had.
Paid Sick Leave: Took Effect: In July Of 2015
Let’s just take a minute and talk about the New Paid sick leave was a law that was passed and became law effective July 1, 2015. Now this law requires that employers now give 3 days of paid sick leave to all employees who qualify. The accrual rate is one hour of sick leave for every 30 hours worked. On the surface this does not sound like such a big deal. However, it is a big deal because it is far more reaching than that. In the next few bullet points we will highlight some of the nuances of this new paid sick leave law.
- You must track the hours that have been accrued on the employee’s pay stub.
- If you go the banking method then you must track the number of hours the employee has left to use.
- You must not in any circumstance retaliate by having a policy that says if you fail to work the day before a paid holiday or the day after you will not be eligible to receive your holiday pay.
- Every employer with one or more employees must know have an employee handbook that will accurately explain how you are going to make provision for this new labor law.
- PTO (Paid Time Off) can be used for and qualifies for the paid sick leave. But your PTO must be written in a way that address all of the issues in this new paid sick leave law.
- Using PTO can actually save you from having to deal with the additional three days since it does qualify.
- What do you have to do to make PTO work for you with regards to paid sick leave and your payroll company.
If you have a payroll company using PTO Could be considered a small nightmare. The reason why is because the software of all of these payroll companies is not able to handle PTO. So what these payroll services are making employers do is take some of the PTO time and set that aside for sick time only. This becomes a problem on many fronts.
First of all many employers in California are switching out their vacation time and calling it PTO retroactive to July 1, 2015. So let’s take a second and see how this might work. As an employer you have been providing your employees with 5 days of vacation time per year. As you look at your budget you see that you really cannot afford to give another 3 days for sick leave and so you decide to change your vacation time to PTO.
Now the reason that PTO qualifies for paid sick leave is because PTO can be used for any type of leave from vacation, sick leave, personal time, or family time. So up to now everything is good your employees are not losing anything and you are not having to provide additional days that you cannot afford. And then your payroll company says that since you must keep track of sick leave hours on the employee’s pay-stub you must now take three of these five days and designate them as sick days and this is where the issues start.
The problem is they have no way on their software for you to add PTO which would solve the entire problem because under the PTO heading which qualifies for Paid sick leave you could just put down your PTO. You can force them to do this but they will tell you a 1000 times that you can’t and yet when you stand your ground and stay firm they can and do figure out a way to get it done. Should you ever get to a place that you need some help with that we can and will help you just give us a call.
The Following are new labor laws for California in 2016
The new Minimum Wage:
The new minimum wage will be going up to $10.00 per hour effective January 1st, 2016.
New labor laws for California in 2016 establish the minimum rate of pay for employers and that minimum wage is currently $9.00 per hour. This rate will rise to $10.00 per hour in July of 2016. This law is really going to be a burden for some industries such as, the fast food industry and the construction industry as well as the automotive repair industry.
For the construction industry and the automotive repair industry this law is a nightmare. The reason why is because in these industries many times employees are required to bring their own tools in order to be able to work for the company.
When you add this into the mix the price per hour is now $20.00 per employee per hour. In both of these industries this is getting close to top dollar and yet the employee that you hire on may not be worth that kind of money but you have to hire someone and if you require them to have tools then you are stuck.
However if you are in one of these industries and you can provide tools and not have the employee bring his own there is a work around. You can have an employee bring and use his own tools as long as it is not required by the company for the employee to bring his own tools. What that means is you the employer must have tools on site for the employee to use. There is actually a contract that you can sign with the employee which allows him to stop bringing his tools at any time and in this case you must have everything he needs to work.
The main crux of this law is that if it is required that the employee bring his or her tools. So you the employer once again for clarity must have tools available for the employee to use.
Once again the employee can bow out of this agreement at any time and then if he was bringing some of his own tools by choice now you must provide all tools for him and you cannot retaliate or you could be facing a large lawsuit.
AB-1513 AKA Rest and Recovery Bill has become law.
On October 10 Governor Brown, signed a new bill into law. This new law has undone and re-written the rules that were previously in place concerning piece-rate compensation. The new law that I am making reference to is AB 1513. AB 1513 gives birth to the California Labor Code section 226.2. AB 1513 establishes new requirements for the payment of a separate hourly wage for time worked by piece-rate or production based pay. What does this really mean to employers? It means that if you are in the transportation industry or the construction industry or if you have employees that work in agriculture this new labor code could affect you. This is one of the new labor laws for California in 2016 that is a night mare for employers. Even labor law attorneys are having a difficult time with this.
Non-Production Time is any time that the employee is not working on something that is enabling him to earn production pay below are a couple of examples. Rest Breaks and time spent waiting for parts or moving cars in and out of stalls. In short any time spent on the job that is not directly allowing the employee to earn his piece-rate or production pay.
After the Downtown Motors versus the Gonzalez case many employers in the automotive repair industry have chosen to compensate their employees by paying them double minimum wage if the employee is required to provide their own tools in order to work on the job. In addition to that there would be a production rate increase that would be based upon the employee establishing a minimum of x number of flag hours, and depending upon the employer there could be 1-3 levels of production based upon the total number of flag hours reached per pay period. The problem now with this method of pay is that the productions bonus is based upon flag hours which is considered a form of piece rate pay. Now the new law does not come out and say that this method would fall into the piece rate category, but the labor law attorneys that I am talking with are very concerned that this thin vale will be pierced very soon and that it is not worth the risk of litigation.
Kin Care Law
SB 579 amends Labor Code Section 233, commonly referred to as the “Kin Care” law. The law requires that employer providing paid sick leave must permit employees to use half of their accrued and available sick leave to attend to an illness of their child, parent, spouse, or domestic partner.
SB 579 requires such leave to be used for the same reasons allowed under California’s new Sick Leave Law:
The diagnosis, care, or treatment of an existing health condition of or preventive care for an employee or the employee’s family member; and
Certain absences resulting from domestic violence sexual assault, or stalking.
The term “family member” is defined by California’s new paid sick leave law and includes not only child, parent, spouse, or registered domestic partner but also a parent-in-law, grandparent, grandchild, or sibling.
The rights and obligations under Section 233 should no longer be referred to as “Kin Care” leave since the amended Section 233 include not only kin care leave but also leave for an employee’s own illness in addition to leave for an employee who is a victim of domestic violence, sexual assault, or stalking. Employers must comply with Section 233 and Paid Sick Leave.
‘School Activities’ Leave:
Currently, Labor Code Section 230.8 requires employers with 25 or more employees to provide unpaid leave to employees who are a parent, guardian, or grandparent with custody of one or more children who are kindergarten or grades 1 through 12 or are attending a licensed daycare facility. Employers must provide such employees with up to 40 hours of unpaid leave each year, not to exceed eight hours in any calendar month, to participate in school or daycare activities.
SB 579 expands the reasons for which employees can take leave to include the following: (1) to find or enroll or reenroll their child in a school or with a licensed childcare provider and (2) to address a childcare provider or school emergency. “Child Care provider or school emergency” is broadly defined to mean that an employee’s child can’t remain in school or with a childcare provider because of one of the following:
- The school or childcare provider has requested that the child be picked up or has an attendance policy, excluding planned holidays; that prohibits the child from attending or requires the child to be picked up:
- Behavioral or discipline problems;
- The closure or unexpected unavailability of the school or childcare provider, excluding planned holidays; or
- A natural disaster such as a fire, earthquake, or flood.
Part One of AB 1513 New Labor Code Section 226.2
Requires Separate Hourly Pay for Rest and Recovery Periods and Nonproductive Time Worked by Piece-Rate Employees
AB 1513 creates new section 226.2 of the California Labor Code, which applies to all employees compensated on a piece-rate basis.1 The new section, which will become effective January 1, 2016, codifies three, basic statutory requirements for the payment of employees on a piece-rate basis: Rest and recovery periods and other nonproductive time. Employers must pay a piece-rate employee for rest and recovery periods as well as all other nonproductive time at an average hourly rate that is determined by dividing the employee’s total rate of pay for the pay period (not including compensation for rest and recovery periods and overtime premiums) by the total hours worked during the workweek (not including rest and recovery and other nonproductive periods).
Part Two of AB 1513 is an explanation of the safe harbor provision in AB 1513 AB 1513 provides limited relief for employers facing recently filed litigation on these claims, or who fear they could face liability if such a claim is filed now that the statute has codified these concepts. For more information on this I would encourage you to follow the second link in the reference link section of this article.
Part Two of AB 1513:
AB 1513 means that employers must now also specify several additional categories of information on a piece-rate itemized wage statement:
The total hours of compensable rest and recovery periods, the rate of compensation paid for those periods, and the gross wages paid for those periods during the pay period. If employers do not pay a separate hourly rate for all hours worked (in addition to piece-rate wages), then the employer must also list the total hours of other non-productive time, the rate of compensation for that time, and the gross wages paid for that time during the pay period.
Below is a list of cases that the new law AB 1513 was built upon:
Gonzalez v. Downtown Motors, Bluford v. Safeway, Inc. Cardenas v. McLane Foodservices, Inc.
Each of these cases took away a piece of the employer’s ability to average out the hours worked by the wages paid. In times past if at the end of the day the employer had paid at least minimum wage then they were good.
Rest and Meal Periods:
The Brinker Case really gave employers a break when it comes to meal periods. Before the Brinker Case, the employer was responsible to make sure the employee took their lunch. This was true even when the employer did not have control over his/her or her or her employee ie construction workers who work on the jobsite and not in the office.
After the Brinker case, employers must still make sure they provide meal periods but the employer is no longer responsible to make sure the employee takes the meal period, of course the best way to prove that you have a meal period established is to have an employee handbook that spells out your rest breaks and meal periods.
Deductions From Employees Pay Brief:
California Labor Laws do not allow employers to deduct anything from the employee’s last check or any other check other than normal deductions. In other words, if an employee damaged a company vehicle or something that belongs to one of the company’s customers, California labor laws are very clear you cannot deduct any of that from the employee’s check final or otherwise. In California, all of that is simply the cost of doing business.
With all of the new labor laws for California in 2016 concerning Discrimination and other issues employers must be careful when terminating an employee. If you are using your AT-Will Employment status to hire and fire you need to make sure that you use it correctly or it could be a very costly experience. Make sure that you have not made any implied contracts that would violate the at-will status. For example sayings things like we expect all of our employees to be here forever. To us all of our employees are just like family.
Make sure you are terminating someone who has a history of getting raises and or good reviews based upon job performance. If you are terminating someone like this you need to make sure that you have good documentation.
Stay away from firing anyone who may be a protected category such as a pregnant women, and older employee, especially if they have been with the company for a long while.
This has quietly become a huge deal, and it is catching employers off guard. It is estimated that 50% of the workforce is facing some kind of bullying in the workplace.
The legal term is called a hostile work environment which can also include sexual harassment and discrimination. It is the employer’s responsibility to make sure that the work environment is free from all of these kinds of behaviors.
Separation From The Company:
If you terminate the employee, you must have their final pay check by the end of business day. If the employee terminates their relationship with you, then accord to labor Laws California; gives you have seventy-two hours to issue the final paycheck.
Let me say this one more time, as you can see with all of the new labor laws for California in 2016, in conjunction with what is already on the books, it is imperative that employers get in, and stay in compliance.
Should you have any questions we are there to help you.