On July 13, the Internal Revenue Service increased the optional standard business mileage rate from 72.5 cents to 76 cents per mile, retroactive to July 1, 2026.

The new rate applies to business use of personal vehicles, including gasoline, diesel, hybrid, and fully electric models.

‍California Labor Code section 2802 requires employers to reimburse employees for necessary business expenses, including required business use of a personal vehicle. While the IRS rate is not mandatory, it remains a simple and reasonable reimbursement method.

Take-Away:

Employers using the IRS standard mileage rate should reimburse at 76 cents per mile for business travel on or after July 1, 2026. They should also review July reimbursements paid at 72.5 cents per mile and issue a 3.5-cent-per-mile adjustment where applicable.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• California Employers Face July Minimum Wage Changes (June 11, 2026)
• Employee Handbooks & Employment Forms

Cindy Bamforth

July 29, 2026

The U.S. Department of Labor’s Wage and Hour Divisionrecovered $30,442 in back wages from the University of Tennessee for violating a staff member’s leave rights and for failing to provide its workforce with leave policy.  The employee was on intermittent (i.e., non-continuous) leave under the Family and Medical Leave Act when the university demanded resignation or be terminated.

Companies with 50 or more employees within a 75-mile radius, as well as public agencies and local educational institutions, are required to provide FMLA leave.  For those who have worked 1250 hours in the preceding 12 months, this is protected leave of up to 12 weeks per year for:

• serious health conditions interfering with job performance;
• care of a child, spouse, or parent, with a serious health condition;
• birth and care for a newborn;
• placement and care of an adopted or foster child; and
• qualifying exigencies of military children, spouses, or parents on or called to active duty.

California employers need only have five or more on payroll to be covered by the comparable California Family Rights Act.  Employees also must have worked 1250 hours in the preceding 12 months to be eligible for up to 12 weeks leave for their own serious health conditions, care of an expanded list of family members or designated person with a blood or family-like relationship with a serious health condition, adoption and foster child or birth-related care.

Other FMLA and CFRA requirements management must learn to manage leaves correctly include:

• Give employees notice of required leave rights and responsibilities;
• Upon learning a request may qualify, inform the employee of eligibility within five days;
• Classify any qualifying leave as such;
• Calculate and keep track of the amount of qualified leave used; and
• Upon return from leave, reinstate workers to the same or equivalent positions.

Take-Aways:

Management must know their employees’ leave rights, provide posters and any other notifications of those rights, and allow workers to take all protected leave.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Get-Away Time -- Personal Leaves of Absence  (September 20, 2024)
• Disability Leave Policy (August 25, 2023)
• Family and Medical Leaves Policy (July 20, 2023)

Helena Kobrin

July 24, 2026

The U.S. Department of Labor’s Wage and Hour Division recovered $1,730,598 in back wages for 1,666 workers after finding that The State Group Industrial (USA) Ltd. Inc., a Tennessee-based multi-trade contractor, miscalculated overtime by excluding incentive bonuses from the employees’ regular rates of pay.

Under federal law, overtime generally must be paid at 1.5 times the employee’s “regular rate,” not merely 1.5 times the base hourly rate.  The regular rate generally includes all compensation for the workweek, subject to statutory exclusions. The calculation is:

Total includable compensation for the workweek (excluding overtime and statutory exclusions) ÷ Total hours worked that week = Regular Rate

DOL Fact Sheet 56A explains what to include or exclude from the federal regular rate.  Discretionary bonuses may be excluded, but State Group failed to include non-discretionary incentive bonuses in its regular rate calculation.

Wage and Hour Division Administrator Andrew Rogers stated:

"The State Group violated federal law when it excluded bonuses from its overtime calculations, averaging more than $1,000 in back wages owed to each employee. Our investigators remain committed to obtaining appropriate remedies for workers who are not paid as the law requires and driving long term compliance to prevent violations in the future."

California law also requires overtime based on the employee’s regular rate of pay.  Under Labor Code section 510, overtime is generally due at 1.5 times the regular rate, with double time required in specific circumstances.  See Calculating Overtime with Employee Bonuses in California.

Flat-sum bonuses -- guaranteed dollar amounts for specific actions like weekend work -- have special overtime rules. Under federal law, divide the flat sum bonus by total hours worked that week to calculate overtime. In California, divide the flat sum bonus by the non-overtime hours actually worked (capped at 8/day or 40/week), not total hours worked. This can produce a higher overtime rate.  California employers are required to pay whichever is the higher amount.

Take-Aways:

Employers must calculate and pay overtime based on the correct regular rate. Using the base hourly rate alone can create substantial liability.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Simple Addition: Rehab Company Hit for Multiple Location Overtime (July 2026)
• Tipping Point: Restaurant Cited for Depriving Service Staff (January 2025)
• The Basics of Overtime: Five Rules for California (April 2018)

Helena Kobrin

July 17, 2026

California law generally requires employers to provide non-exempt employees with a timely, uninterrupted 30-minute meal period when they work more than five hours in a day. Employers need not force employees to take meal breaks, but they must be ready to explain meal break exceptions, i.e., missed, short, or late meal records. Two California Supreme Court decisions, Brinker and Donohue, explain why.

Brinker: Provide the Break

Brinker requires employers to relieve non-exempt employees of all work duties and provide a genuine opportunity for a timely, uninterrupted meal period -- not police breaks or force employees to eat.

Donohue: Document Exceptions

Donohue addresses meal break exceptions: the law presumes a violation unless the employer proves it provided a proper meal break opportunity or the employee voluntarily skipped or shortened it.

The Court also barred rounding meal break times because rounding can hide late or short breaks.

Employers should document the reason for each exception before payroll closes. If the employer caused the problem or cannot document a voluntary employee choice, it should pay the meal period premium: one additional hour at the employee’s regular rate of pay.

The Practical Difference

Brinker gives employers flexibility; Donohue requires proof when records show a problem. Meal break records often drive PAGA and class action claims because plaintiffs look for patterns: late lunches, missing meal records, short breaks, automatic 30-minute lunch deductions, or unpaid premiums.

Take-Aways

Employers should:

• record actual meal start and end times, without rounding;
• document meal break exceptions through attestations or electronic prompts;
• pay meal premiums when warranted; and
• train supervisors not to delay, interrupt, or discourage breaks.

Employers that provide proper breaks and document exceptions reduce the risk that one meal break issue becomes a broader PAGA or class action claim.

For further information, please contact Tim Bowles, Cindy Bamforth, or Helena Kobrin.

See also:

• Channel the Waters - Workplace Policy Handbook & Forms for 2026 (May 27, 2026)
• Devils or Detail - Precision Timekeeping: Best Protection Against Business Damnation (January 2, 2026)
• Sweat the Details: Friendly Workplace Practices Audits Before PAGA Comes Calling (January 24, 2025)

Cindy Bamforth

July 16, 2026

Wage-and-hour compliance is not a bookkeeping problem, it is a litigation problem.  Labor Code standards are mandatory, a dense, technical, penalty-laden web covering timekeeping, minimum wage, pay stubs and much more. A disgruntled former employee is just a Google search away from the growing community of worker-side lawyers specializing in bringing class action torment down on even a modestly sized business.

For instance, Young’s Nail Spa, employing 36 persons in Temecula, settled for $1.2M on alleged independent contractor misclassification, underpayment of overtime and failing to provide appropriate meal and rest breaks.

Lin’s Fusion, a Fresno restaurant employing 32, agreed to pay $2M to resolve allegations of unpaid overtime, deprived meal periods and undocumented cash wage payments.

This is simple multiplication math, one or more seemingly small errors spread over all workers employed up to four years back.  Pick your industry: hospitality, retail, manufacturing, healthcare, construction, beauty services. The facts change. The pattern does not.

Take-Away:

Review workplace practices for compliance with experienced legal counsel and promptly fix what you find. For instance, the worst time to discover your timekeeping system is noncompliant is after a “knock on the door” from the law firm that feeds off such shortcomings.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

Heed the Plague Workplace Mass Litigation Is Out of Control (January 30, 2026)

‍Devils or Detail - Precision Timekeeping: Protection Against Business Damnation (Jan. 2, 2026)

‍Paystub Purgatory - The PAGA Perils of Not Paying Attention (March 14, 2025)

Tim Bowles

July 10, 2026

The federal Department of Labor has flunkedFirst Physical & Functional Rehab for failing to count the employees’ cumulative hours at three work locations, thus shorting them on overtime pay.

First Physical settled with the DOL for $171,897 back wages and $18,810 civil penalties for willful violations.

An employer may not separately treat a worker’s labors at different locations to avoid paying overtime even where, as here, each venue is separately incorporated.  First Physical’s website shows each of its three offices as a joint enterprise.  

Honolulu Wage and Hour Division Acting District Director Patrick Candoleta said: “Employers must abide by federal laws and ensure that workers are fully compensated for all hours worked.   We will continue to hold employers accountable to help ensure that compliance is a priority in every workplace. We will also offer compliance assistance to help employers who seek it avoid violations of overtime requirements and other wage and hour rules.”

Take-Aways:

Management must combine all of an employee’s daily and weekly hours worked at all locations and pay any resulting overtime.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Tipping Point: Restaurant Cited for Depriving Service Staff (January 2025)
• Salons Nailed: Parlors Pay Dearly for Workplace Violations (July 2024)
• The Basics of Overtime: Five Rules for California (April 2018)

Helena Kobrin

July 3, 2026

On March 16, 2026, U.S. Immigration and Customs Enforcement released an updated Form I-9 inspection fact sheet, classifying many I-9 errors as substantive violations. This distinction is important: technical or procedural failures usually allow at least 10 business days for correction, but substantive violations may result in a Notice of Intent to Fine without that opportunity.

What Changed:

The statutory framework remains the same, but the practical risk has changed. ICE now classifies more errors as substantive violations. Employer-side commentators call this a significant reclassification of errors previously seen as clerical or correctable.

Errors ICE Now Identifies as Substantive:

The fact sheet lists several substantive violations: failure to prepare or present Form I-9, late completion of Sections 1 or 2, use of the Spanish-language I-9 outside Puerto Rico, missing employee details in Section 1, incomplete List A, B, or C documentation, missing employer representative details in Section 2, missing preparer or translator information when required, and incomplete reverification or rehire information in Supplement B.

ICE also considers it a substantive violation to omit the alternative-procedure box when using an authorized method or to use the method without meeting E-Verify or DHS requirements.

Penalties and Retention:

Current penalties for I-9 paperwork violations range from $288 to $2,861 per violation, adjusted annually. ICE calculates penalties based on the number of substantive and uncorrected technical violations, then adjusts by up to 25% based on business size, good faith, seriousness, unauthorized worker involvement, and prior violations.

Employers must retain Form I-9 for each current employee and, for former employees, for at least three years after hire or one year after employment ends, whichever is later. As best practice, employers should keep I-9s and any retained supporting documents in a separate I-9 file or system, not in individual personnel files.

Take-Aways:

Do not assume HSI will treat minor I-9 mistakes as technical defects with an opportunity to fix them. When receiving a Notice of Inspection, employers have only three business days to provide requested I-9s, so HR should proactively audit I-9s, review remote onboarding, confirm electronic systems comply, and train staff. Employers unsure about compliance should consult employment or immigration counsel.

For further information, please contact Tim Bowles, Cindy Bamforth, or Helena Kobrin.

See also:

• Channel The Waters - Workplace Policy Handbook & Forms for 2026 (May 27, 2026)
• Verification Modification - Minor Changes to Form I-9 Language (April 25, 2025)
• Ice Capades - Immigration Enforcement in the California Workplace (March 28, 2025)

Cindy Bamforth

June 19, 2026

Into the What-Were-They-Thinking Department entered two Orange County lawyers, filing briefs the federal appeals court later found to contain “multiple nonexistent cases, misattributed quotations, and gross misrepresentations of real cases.” Claiming the errors were innocent typos, the attorneys denied the possibility that generative artificial intelligence might have produced the errors. The Court, finding otherwise,  sanctioned the lawyers, including a six-month suspension from the practice  of law. Anu v. Blanche (June 3, 2006).

Along the way, one of the lawyers eventually conceded it was “possible” AI had been used by the law student who drafted the briefs. While the attorney “reviewed” them before filing, “no licensed attorney read the cases cited...”

While not condemning generative AI as inherently unethical, the Court noted the tool prone to “hallucinations”—fabricated authorities and inaccurate legal statements. Even legal-specific tools from major research providers had reported hallucination rates of 17% and 33% on a representative set of legal queries in 2024.

A competent lawyer must do more than ask AI, confirm the cited case exists, and “call it a day.” The lawyer must “read and reason,” responsible for analysis of the referenced authorities.

However once called out, the lawyers went all-in, offering fictional justifications for their breaches of diligence and candor. The three-judge panel further found these as knowing or “recklessly false statements” to the Court.

The Court thus sanctioned each attorney $2,500, suspended them from practice before the Ninth Circuit for six months, and directed them to provide the disciplinary order to their clients, opposing counsel, presiding judges in all pending cases and every attorney in their firm.

For two years, the lawyers and all attorneys at their firm must include in filings a sworn statement disclosing whether generative AI was used, identifying the tool, and certifying that the signing attorney personally reviewed the filing and verified that all citations and quotations refer to existing authority.

Boom.

‍

Take-Aways:

While AI can assist lawyers, it cannot replace them. The signing attorney is responsible for every filed citation, quotation, and legal proposition. The lawyer also must immediately report AI hallucinations found in filings.  A cover-up may be punished more harshly than the botched brief.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

Techno Train Wreck - Lawyers v. Artificial Intelligence (May 8, 2026)

• Automatic Behavior Modification - Curbing AI's Potential for Workplace Discrimination (August 28, 2025)
• Workplace Artificial Intelligence - EEOC Goes Old School (May 23, 2023)

Tim Bowles

June 12, 2026

Effective July 1, 2026, several California cities and counties will increase their local minimum wage rates.

To keep track of interim updates, see the UC Berkeley Center for Labor Research and Education.

For employers with remote employees in multiple jurisdictions or employees who travel across different cities and counties, applicable minimum wage rates may vary based on each employee’s work location(s).  To simplify compliance, some employers choose to pay the highest applicable minimum wage across all locations.

Some industries, such as fast food, hotels, and healthcare, have separate minimum wage requirements.  Employers in those and other specialized industries should check on whether a special minimum wage applies to their industry.

Covered employers must conspicuously post the applicable wage notice or notices, which are available through the links above.

See also:

• Channel The Waters - Workplace Policy Handbook & Forms for 2026 (March 27, 2026)
• California Minimum Wage Rates as of January 2026 (December 19, 2025)
• California New Minimum Wage Rates Take Effect in July (June 19, 2025)

Helena Kobrin

Daniska Coronado

June 11, 2026