The IRS issues annually its optional standard mileage reimbursement rates for an employee’s business use of his or her vehicle. The IRS has decreased the rate from 56.5 in 2013 to 56 cents per mile in 2014.

The government calculates the mileage rate by an annual study of the fixed and variable costs of operating an automobile.

Under California Labor Code Section 2802, employers must fully reimburse employees for all work-related expenses actually and necessarily incurred. Many employers choose to use the IRS mileage reimbursement rate to satisfy their reimbursement obligation.

If the employee can show the IRS reimbursement rate does not cover all of his/her actual and reasonable business-related vehicle expenses, however, the employer must pay the difference.

For more details on required reimbursements to employees for business purposes, visit www.IRS.gov.

January 2, 2014

California’s $8.00/hour minimum wage will continue its pace as one of the highest in the nation; rising to $9.00/hour on July 1, 2014, and to $10.00/hour on January 1, 2016. In approving the recent legislation, Governor Brown stated, “This legislation is overdue and will help families that are struggling in this harsh economy.”

Washington State currently has the highest minimum nationally, at $9.19/hour, adjusted annually based on the consumer price index (due to increase to $9.32 January 1,2014). California currently ranks 5^th highest in the country. State minimum wage rates range down to Georgia and Wyoming at the bottom, matching the federal minimum level of $7.25/hour. That federal minimum did not increase for 20 years, from 1997 to 2007. Congress not expected to raise it again in the foreseeable future.

On its face, any rise in minimum wage would not appear to pose any significant burden. A 2012 Federal Department of Labor Survey found only 1.6 million workers paid at that level, some 2.1% at the national labor force.

Nevertheless, California employers should note additional costs indirectly created by a rise in the “wage floor.” Increased minimum wage levels will tend to push up other hourly wage rates for companies that want to keep pace at some proportion above the minimum. Higher wage rates lead to higher payments on employment taxes as well as workers’ compensation premiums.

The scale of such impacts depends of course on the size of a business’s payroll. Particularly for large employers, an increase in wage levels is all the more reason to ensure all wage and timekeeping practices are in full compliance with applicable federal and state laws.

For example improperly calculated overtime, faulty procedure on meal and rest periods, or substandard clock-in and clock-out systems and rules can create expensive challenges, in the worst case from a claimed class of numerous workers allegedly affected across-the-boards.

For information concerning wage levels and related workplace practices, as well as model employee policies and forms, contact one of our attorneys Tim Bowles or Cindy Bamforth.

Law Offices of Timothy Bowles
January 1, 2014

Our articles “Caring for Caregivers” and “Private Household Workers in California” caution that misunderstandings about California’s rules for household employees can be expensive. California’s Domestic Worker Bill of Rights (DWBR), effective January 1, 2014, drives home the need to properly pay the wages and to comply with the hours and working conditions requirements for certain household occupations.

The DWBR entitles nannies and other caregivers to overtime pay.

Assemblymember Tom Ammiano, the author of the new law, states, “Domestic workers are among the most isolated and vulnerable workers in the state. Historically, domestic workers who cared for property were given full wage and hour protections but those who cared for human beings were not. Personal attendants in California were excluded entirely from overtime coverage under [existing law].”

California’s Industrial Welfare Commission (IWC) regulates the wages and hours of workers through a series of “Wage Orders.” Wage Order 15 covers employees engaged in so-called “household occupations,” services related to the care of people or premises in a private household.

Under Wage Order 15, “personal attendants” include nannies, babysitters and certain caregivers who work in a private household to supervise, feed, or dress a child or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision. (Wage Order 15 vaguely directed that “personal attendant” status only applies when “no significant amount of work” outside of such caregiving duties was required. The DWBR now specifies that “no significant amount of work” means that work other than “supervising, feeding or dressing” does not exceed 20 percent of the total weekly hours worked.)

Wage Order 15 excluded such personal attendants, including live-in workers, from receiving overtime. Beginning January 1, 2014, the DWBR overrides that wage order, providing that personal attendants “shall not be employed more than nine hours in any workday or more than 45 hours in any workweek unless the employee receives one and one-half times the employee’s regular rate of pay for all hours worked over nine hours in any workday and for all hours worked more than 45 hours in the workweek.”

This new law will be temporary, ending in 2017 if the Legislature fails to extend them.

The DWBR does not cover, among others, the employer’s close family members; babysitters who are under 18 or casual babysitters (i.e. someone who babysits a minor child on an irregular or intermittent basis and whose vocation is not babysitting).

Improperly calculated overtime and substandard clock-in and clock-out systems and rules can create expensive challenges. Thus, personal attendant employers should take action including:

• Define in a written agreement the terms of the caregiver’s employment, including duties and compensation. The agreement should specify the “at will” nature of the relationship, meaning the caregiver can resign or be released from employment at any time, with or without cause or advance notice. It is also a good idea to specify that a live-in caregiver will vacate the premises promptly when employment ends;
• Pay the caregiver an hourly rate and agree in advance on the workweek schedule;
• Pay the caregiver at least minimum wage and pay all overtime for all “hours worked,” defined by law as any time an employee is “suffered or permitted to work.” In other words, all time the caregiver is on duty; and
• Have the caregiver maintain a written log of all daily hours worked with the caregiver confirming in writing its accuracy each day.

For more information concerning an employer’s obligations under California or federal wage and hour laws, contact one of our attorneys Tim Bowles or Cindy Bamforth.

Law Offices of Timothy Bowles
January 1, 2014

Our articles “Caring for Caregivers” and “Private Household Workers in California” caution that misunderstandings about California’s rules for household employees can be expensive. California’s Domestic Worker Bill of Rights (DWBR), effective January 1, 2014, drives home the need to properly pay the wages and to comply with the hours and working conditions requirements for certain household occupations.

The DWBR entitles nannies and other caregivers to overtime pay.

Assemblymember Tom Ammiano, the author of the new law, states, “Domestic workers are among the most isolated and vulnerable workers in the state. Historically, domestic workers who cared for property were given full wage and hour protections but those who cared for human beings were not. Personal attendants in California were excluded entirely from overtime coverage under [existing law].”

California’s Industrial Welfare Commission (IWC) regulates the wages and hours of workers through a series of “Wage Orders.” Wage Order 15 covers employees engaged in so-called “household occupations,” services related to the care of people or premises in a private household.

Under Wage Order 15, “personal attendants” include nannies, babysitters and certain caregivers who work in a private household to supervise, feed, or dress a child or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision. (Wage Order 15 vaguely directed that “personal attendant” status only applies when “no significant amount of work” outside of such caregiving duties was required. The DWBR now specifies that “no significant amount of work” means that work other than “supervising, feeding or dressing” does not exceed 20 percent of the total weekly hours worked.)

Wage Order 15 excluded such personal attendants, including live-in workers, from receiving overtime. Beginning January 1, 2014, the DWBR overrides that wage order, providing that personal attendants “shall not be employed more than nine hours in any workday or more than 45 hours in any workweek unless the employee receives one and one-half times the employee’s regular rate of pay for all hours worked over nine hours in any workday and for all hours worked more than 45 hours in the workweek.”

This new law will be temporary, ending in 2017 if the Legislature fails to extend them.

The DWBR does not cover, among others, the employer’s close family members; babysitters who are under 18 or casual babysitters (i.e. someone who babysits a minor child on an irregular or intermittent basis and whose vocation is not babysitting).

Improperly calculated overtime and substandard clock-in and clock-out systems and rules can create expensive challenges. Thus, personal attendant employers should take action including:

• Define in a written agreement the terms of the caregiver’s employment, including duties and compensation. The agreement should specify the “at will” nature of the relationship, meaning the caregiver can resign or be released from employment at any time, with or without cause or advance notice. It is also a good idea to specify that a live-in caregiver will vacate the premises promptly when employment ends;
• Pay the caregiver an hourly rate and agree in advance on the workweek schedule;
• Pay the caregiver at least minimum wage and pay all overtime for all “hours worked,” defined by law as any time an employee is “suffered or permitted to work.” In other words, all time the caregiver is on duty; and
• Have the caregiver maintain a written log of all daily hours worked with the caregiver confirming in writing its accuracy each day.

For more information concerning an employer’s obligations under California or federal wage and hour laws, contact one of our attorneys Tim Bowles or Cindy Bamforth.

Law Offices of Timothy Bowles
January 1, 2014

California’s $8.00/hour minimum wage will continue its pace as one of the highest in the nation; rising to $9.00/hour on July 1, 2014, and to $10.00/hour on January 1, 2016. In approving the recent legislation, Governor Brown stated, “This legislation is overdue and will help families that are struggling in this harsh economy.”

Washington State currently has the highest minimum nationally, at $9.19/hour, adjusted annually based on the consumer price index (due to increase to $9.32 January 1, 2014). California currently ranks 5^th highest in the country. State minimum wage rates range down to Georgia and Wyoming at the bottom, matching the federal minimum level of $7.25/hour. That federal minimum did not increase for 20 years, from 1997 to 2007. Congress not expected to raise it again in the foreseeable future.

On its face, any rise in minimum wage would not appear to pose any significant burden. A 2012 Federal Department of Labor Survey found only 1.6 million workers paid at that level, some 2.1% at the national labor force.

Nevertheless, California employers should note additional costs indirectly created by a rise in the “wage floor.” Increased minimum wage levels will tend to push up other hourly wage rates for companies that want to keep pace at some proportion above the minimum. Higher wage rates lead to higher payments on employment taxes as well as workers’ compensation premiums.

The scale of such impacts depends of course on the size of a business’s payroll. Particularly for large employers, an increase in wage levels is all the more reason to ensure all wage and timekeeping practices are in full compliance with applicable federal and state laws.

For example improperly calculated overtime, faulty procedure on meal and rest periods, or substandard clock-in and clock-out systems and rules can create expensive challenges, in the worst case from a claimed class of numerous workers allegedly affected across-the-boards.

For information concerning wage levels and related workplace practices, as well as model employee policies and forms, contact one of our attorneys Tim Bowles or Cindy Bamforth.

Law Offices of Timothy Bowles
January 1, 2014

Beginning on January 1, 2014, California’s Fair Employment and Housing Act (FEHA) will protect an individual’s “military and veteran status” against employment discrimination and harassment.

This new FEHA provision defines military and veteran status as “a member or veteran of the United States Armed Forces, United States Armed Forces Reserve, the United States National Guard, and the California National Guard.”

Administered by the California Department of Fair Employment and Housing (DFEH), FEHA also protects race, religious creed, color, national origin, ancestry, physical disability, mental disability, sex, sexual orientation, age (40 or over), and several other individual characteristics or life conditions from such workplace mistreatment. Employment discrimination laws are intended to ensure employers make personnel decisions on the basis of ability and performance and not on factors recognized as irrelevant to the conduct of business or management of personnel.

California’s regard for military and veteran status is distinct from the other protected classifications as FEHA specifically reserves the right of employers to ask applicants for any military service and to give preference to those who served or who have served in the military.

FEHA’s anti-discrimination provisions extend to any business regularly employing five or more persons FEHA’s anti-harassment provisions cover any business regularly employing one or more persons or receiving the services of one or more independent contractors.

For more information concerning an employer’s obligations under federal or California discrimination laws, contact one of our attorneys Tim Bowles or Cindy Bamforth.

Law Offices of Timothy Bowles
January 1, 2014

San Francisco Adopts a “Right to Request” Workplace Flexibility Ordinance (for employers with 20 or more on payroll)

On January 1, 2014, San Francisco enacted a “right to request” ordinance which gives certain employees working in the City the right to seek flexible work arrangements to address family needs. The City has since amended the law to apply to employers with 20 or more employees anywhere.

The ordinance permits workers employed within the city limits for at least six months and eight hours per week to request scheduling accommodation to assist with caregiving responsibilities for: (i) children under the age of 18; (ii) family members with a serious health condition; or (iii) parents age 65 or older.

The employer must meet with the requesting employee within 21 days and respond within 21 days of that meeting. If the employer denies the request, it must explain to the worker in writing the business reasons for the decision as well as specify that employee’s rights to request reconsideration. Legitimate reasons for a denial include the cost of the proposed change, the detrimental effect on customer/client demands, inability to organize work among other employees, or lack of available work during the proposed work time.

The ordinance also makes it unlawful for an employer to “discharge, threaten to discharge, demote, suspend, or otherwise take adverse employment action against any person on the basis of caregiver status, in retaliation for exercising rights protected under the Ordinance, or for cooperating with the City in enforcement.”

Employers with work sites in San Francisco need to post the ordinance’s official notice and should consider modifying their applicable employment policies.

Law Offices of Timothy Bowles
January 1, 2014

Our 2010 blog "Office Holiday Survival Guide" provides a roadmap for handling alcohol at holiday office parties. By its off-the-clock and put-work-aside nature, the annual company-wide gathering may also be a prime setting for unwelcome sexual advances by employees, worse yet by managers. Such harassment is not an experience anyone would want to go through. It can also lead to serious legal liability no business wants to experience.

Examples of inappropriate, unwelcome party behavior are:

• Bringing risqué joke gifts;
• Wearing suggestive “party” attire;
• Complimenting a co-worker’s body after one too many drinks;
• Frat house antics, e.g., “competition” for predatory sexual liaisons; or
• Dancing romantically or suggestively with a subordinate or co-worker.

The employer must be proactive to prevent and, where it occurs, to deal fairly and effectively with incidents of unwelcome advances at the holiday retailer party. For example:

• Re-publish, re-distribute the company’s sexual harassment policy before event takes place;
• Remind employees in advance that while holiday festivities are to be enjoyed, they do not offer an excuse for violating policy;
• Issue a business attire or other appropriate “dress code” in advance;
• Limit the availability of free alcoholic drinks and take other measures suggested in our “Office Holiday Survival Guide I, A Risky Cocktail: Alcohol and an Employee Party;"
• Hold the party during the day, with work to continue afterwards;
• Reduce the opportunities for unwelcome situations by avoiding inappropriately suggestive music or party games like “Twister” or “Truth or Dare” (strip poker is also out); and
• Avoid decorating with mistletoe.

It goes without saying – but we will say it anyway – that if your business does not have a written sexual harassment policy, the time to establish one is yesterday, if not sooner. Please let us know if we can advise you on such matters.

Law Offices of Timothy Bowles
November 20, 2013

The October 1, 2013 Notice Deadline: The federal Patient Protection and Affordable Care Act (ACA or “Obamacare”) requires the state-by-state creation of the so-called “Health Insurance Marketplace” (“Marketplace” for short, also called the “Exchange”), a virtual one-stop shopping mall for access to private coverage. California’s exchange is “Covered California”: http://www.coveredca.com/. Each state exchange started offering such insurance options on October 1, 2013.

Also by October 1, all employers subject to another federal law – the Fair Labor Standards Act (FLSA) – were to give each of its workers a written notice of the existence of the Health Insurance Marketplace. The FLSA generally kicks in for companies grossing $500,000 or more annually and which are engaged in interstate commerce. “Interstate commerce” is a very broad term. A local farmer selling at the local Saturday market may not be considered engaging in interstate commerce. A local market selling goods originating from other states definitely is. The U.S. Department of Labor offers an online self-assessment for companies to determine if they are subject to the FLSA: http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp.

No Penalty Currently for Employers Who Missed that October 1 Date: While no business is comfortable missing a deadline, the U.S. Department of Labor has confirmed there are no penalties or fines for having missed this October 1, 2013 ACA notice date. See, http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html. Thus, while the notification is a legal requirement, it is in effect optional. However, since this optional status could be temporary, employers covered by the FLSA who have yet to comply should arrange to issue these notices as soon as possible.

Content of the ACA Notice: This required, yet optional, written notice must include three points: 1) inform the employee of the existence of the Marketplace/Exchange, including a description of its services and how the employee may contact the Marketplace for assistance; 2) describe how the employee may be eligible for a premium tax credit if he/she purchases a qualified health plan through the Marketplace; and 3) inform the employee that if he/she purchases a qualified health plan through the Marketplace, he/she may lose the employer contribution (if any) to any health benefits plan the employer offers as well as lose certain federal tax advantages.
The U.S. Department of Labor has published two templates for such notice, one for FLSA-covered employers who do not have a current health plan for their workers (see, http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf), the other for such employers who do offer such a plan for some or all of their workers (see, http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf).

For more information concerning employer’s obligations in this area, contact one of our attorneys Tim Bowles or Cindy Bamforth.

Law Offices of Timothy Bowles
October 22, 2013