Click here for our more recent article about California Wage Orders (updated June 2, 2017).

The California Industrial Welfare Commission (IWC) Wage Orders regulate wages, hours and working conditions. Employers must comply with the IWC Wage Order and California labor laws applicable to their business or industry. For example, IWC Order 1 applies to the manufacturing industry; Wage Order 4, professional, technical, clerical, mechanical and similar occupations; Order 7, the mercantile industry; Order 12, the motion picture industry; Order 15, household occupations; and Order 16, occupations in the construction, drilling, logging and mining industries.

“WHICH IWC ORDER? Classifications” – a pamphlet from the California Division of Labor Standards Enforcement (DLSE), assists employers and employees in determining which IWC Order applies to a business or employee (available online at http://www.dir.ca.gov/dlse/WhichIWCOrderClassifications.PDF).

Each California Wage Order covers regulations on topics such as:

• Administrative, executive and professional exemptions;
• Overtime wages;
• Alternative workweeks;
• Minimum wages;
• Reporting time pay;
• Records retention;
• Cash shortage and breakage;
• Uniforms and equipment;
• Meals and lodging;
• Meal periods;
• Rest periods; and
• Required posting of the order.

The Industrial Welfare Commission (IWC) provides copies of the 17 California Wage Orders and California’s Minimum Wage Order online at http://www.dir.ca.gov/iwc/wageorderindustries.htm. Every California employer should know the applicable Wage Order for her/his/its business and employees and the regulations regarding wages, hours and working conditions contained therein.

If you have any questions, please contact me or any of our other employment law attorneys. Best, Bob Edwards

The California Industrial Welfare Commission’s (IWC) 18 published “wage orders” can be among the most underutilized items in an HR Manager’s toolkit. They are chock full of wage and hour regulations regarding overtime wages, meal and rest periods, record-keeping requirements and other working conditions.

California employers must comply with the IWC wage order (or, in some cases, more than one order) applicable to their industry or profession. For example, Wage Order 1 applies to the manufacturing industry; Wage Order 4 to professional, technical, clerical, mechanical and similar occupations; and Wage Order 16 to occupations in the construction, drilling, logging and mining industries.

Each of the 18 wage orders also contains or references regulations on applicable minimum wages.

Recently, the California Department of Industrial Relations (DIR) updated all but Wage Order 14 (agricultural workers) and Wage Order 17 (miscellaneous) to include the 2017 and 2018 state minimum wage rates increases. See, California’s Gradual Increases in Minimum Wage, to Reach $15.00 Per Hour by January 1, 2022 (April, 2016).

After determining which wage order(s) apply to a business and its employees, employers must post the most recent version(s) at the workplace or on the job site where employees can read it/them easily.

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

Cindy Bamforth
June 2, 2017

Under federal law, employers have the responsibility to verify the identity and employment authorization of their employees through the Form I-9 (Employment Eligibility Verification).

On November 14, 2016, the U.S. Citizen and Immigration Services (USCIS) published a revised Form I-9, allowing employers to download and save it as a PDF, fill in the blanks electronically, and then print the form for their records.

On April 6, 2017, the USCIS announced a glitch had occurred with this on-line form between November 14 and 17, 2016 causing social security numbers entered in Section 1 of the form to print incorrectly. For example, 123-45-6789 entered on that on-line form would appear on the printed form as 123-34-6789.

Any employer who downloaded the form during those three days may still be unknowingly printing incorrect social security numbers. Affected employers can and should fix this particular glitch as follows:

• Discontinue using the incorrect form immediately.
• Download and save the corrected Form I-9 at https://www.uscis.gov/i-9 and delete the incorrect version.
• Review all affected printed I-9 forms for errors in the employee’s social security number.
• Have the employee(s) draw a line through the altered social security number(s), enter the correct number(s), then initial and date the change.
• Retain a written explanation about why the employee made the correction in case of an audit.

It is important for employers to fix any errors as soon as possible, as penalties for failure to complete this form correctly range from $216 to $2,156 per infraction.

See also, Checking Worker Immigration Status (Oct, 2016) and New Changes on Employment Eligibility Verification Form I-9 (May, 2016).

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

Cindy Bamforth
May 31, 2017

California’s Home Care Services Bureau (HCSB) licenses and oversees Home Care Organizations (HCOs) that provide employee caregivers to private clients. See: You Snooze, You Lose (April, 2016) and Home Health Care Organizations Last Chance to Continue Operations After June 30, 2016 (June, 2016).

In its May, 2017 webinar, the HCSB confirmed that unannounced inspections of HCO administrative offices are in progress. HCSB analysts – the HCSB staffers assigned to specific HCOs – conduct these inspections. As a word for the wise, the three most common problems analysts reportedly encounter are: (1) no licensee or designee is present or office closed during stated business hours; (2) training is not documented; and (3) forms are not complete.

An HCO is required to specify on its licensing application the individual licensee as well as any other person(s) who can act as representative or “designee” in the absence of the licensee. See Application Instructions for a Home Care Organization License. To accommodate such unannounced inspections, the HCSB requires an owner/licensee or a designee to be on the HCO’s office premises and available during all office hours that the HCO stated in its application.

Thus, in advance of any such sudden visit from the state, an HCO should: (a) verify those listed on its application as licensee(s) and designee(s) along with office hours stated; and (b) ensure it has at least one of these people present and the office open during those hours. Changes in designated persons or office hours are possible but require notification to the HCSB.

Notably, if an HCO is not open to the public more than eight consecutive hours on any day during a month or is open by appointment only, an analyst will notify the HCO’s contact person at least two hours before arriving for an inspection. That HCO must then have its licensee or a designee at the office at the appointed time to meet with the analyst.

The HCSB’s recent webinar also reported that analysts are frequently finding Home Care Aide (HCA) training has been done but the training logs are out-of-date. The solution is of course obvious, with records updated and maintained as current before any analyst shows up to inspect.

As for incomplete forms, HCOs should be using the HCO inspection checklist to prepare for an inspection. The HCO needs to ensure that it has all specified forms ready to provide to the analyst. The time to check for that is before the analyst arrives. These should be final versions of each form, not drafts.

The HCSB also advised in that webinar that it has proposed application/registration fee increases to meet rising expenses. If approved, the HCA fee will go from $25.00 to $50.00 every two years while the biannual HCO fee will go from $5,165.00 to $5,803.00.

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

Helena Kobrin
May 24, 2017

California’s “reporting time pay” law sometimes directs employers to pay workers above the actual hours worked on short days. Personnel managers of course must know the circumstances that trigger this obligation and see to any resulting extra compensation.

Many of this state’s workplace compensation rules are found in the 18 “wage orders” of the Industrial Welfare Commission. There is an overall wage order on minimum wage. Each of the other 17 covers a particular industry or type of worker. Wage Order 1 applies to the manufacturing industry. Wage Order 4 applies to “professional, technical, mechanical and similar occupations.” The list goes on.

Wage Order 4, Section 5 (with comparable sections in the other 17 industry/occupation wage orders) addresses “reporting time pay.” It provides that when an employee is required to and does report to work, but works less than half of that employee’s normal day’s work or scheduled time, the employer must pay him/her for half of the usual or scheduled day’s hours, with a minimum of two hours and maximum of four. Emphasis supplied.

Two California appeals court decisions illustrate situations when and how the reporting time pay rule will apply.

In Aleman v. Airtouch Cellular (2012) 209 California Appellate Reporter 4^th series (Cal.App.4^th) 556, the Court of Appeal found the employer was not obligated to provide additional reporting time pay on a day when the worker attended (and was paid for) his actual one-hour participation in a scheduled 90-minute “store meeting” on a weekend. Although that one hour was less than the employee’s normal shifts, the 90 minutes was scheduled time and the worker received pay for the actual 60 minutes (more than half of 90), thus no extra pay.

In Price v. Starbucks (2011) 192 Cal.App.4^th 1136, a store manager called in an employee “to have a talk” outside of any scheduled shift. The manager fired that worker in a 45-second conversation, providing two checks, the first for all wages earned on that employee’s previous shift days, the second for two hours of reporting time pay on the day he was terminated.

The Court of Appeal found that Mr. Price was entitled to reporting time pay for that last day but that Starbucks had complied with the law by paying the two hours. This was because the worker’s appearance in that instance was not for any usual or otherwise scheduled working shift but for a meeting to last an “unspecified number of hours.” The Court observed: “If an employee is not scheduled to work or does not expect to work his usual shift, but must report to work for a meeting, the employee falls into the regulatory category of those employees called to work on their day off for a scheduled meeting. Price was entitled to the [two hour] minimum payment, which is what he received.”

A manager’s take-aways from this should include: a) avoid scheduling employees unless you know you will need their services at least half of the time scheduled; b) if on a particular day an employee is no longer needed and leaves before half of the scheduled hours are completed, the company must still pay half of those scheduled hours; c) for on-premises meetings with employees outside of normal shifts, specify the scheduled time and duration of the meeting and pay at least half of that time if the meeting happens to break up (or an employee leaves) before the halfway point; d) as in the Starbucks’ decision above, a minimum two hours reporting time pay will be due for “day off” meetings of an indeterminate duration that end up lasting less than two hours.

For assistance in implementing these rules, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin
May 9, 2017

Employees occasionally arrive late to work, it’s inevitable. Mostly traffic, oversleeping or bad weather are to blame, but sometimes an employee has a more unusual excuse. According to a recent CareerBuilder survey, some of the more creative explanations employers have heard include:

• “I thought Flag Day was a legal holiday.”
• “I overslept because the kids changed all the clocks in the house.”
• “I was cornered by a moose.”
• “My mother locked me in the closet.”
• “My mother-in-law wouldn’t stop talking.”
• “My dad offered to make me a grilled cheese sandwich, and I couldn’t say no.”

While employers may discipline for unexcused lateness or absences, they must be careful about legally-protected absences or tardiness. The Labor Commissioner’s Office recently updated the California Paid Sick Leave: Frequently Asked Questions to include clarifications on paid sick leave and employer attendance policies.

In this state, if an employee has an unscheduled absence or lateness and uses accrued paid sick leave for an allowed purpose under the paid sick leave law, it is not permissible for the employer to discipline the employee. Conversely, if the employee does not have any available paid sick leave or the absence is not for a reason covered under that law, the absence would not be protected from disciplinary action. For more, see California Paid Sick Leave Law (August, 2015) and California Paid Sick Leave Law, More About (November, 2015).

Employers must still be cautious as the absence may be protected under the Family and Medical Leave Act, the California Family Rights Act, California Pregnancy Disability Leave laws, the Americans with Disabilities Act, or the Fair Employment and Housing Act. It is important for personnel managers to do their homework and understand this patchwork of overlapping laws.

The updated FAQs also address company paid time off policies that were already in place before the new law went into effect (grandfathered plans).

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

Cindy Bamforth
May 5, 2017

A Los Angeles superior court judge has ruled McDonald’s in violation of California’s daily overtime laws in 119 restaurants. Maria Sanchez v. McDonald’s Restaurants of California, Inc., L.A. County Superior Court No. BC499888, April 20, 2017 order. The decision is a lesson in the close care required on employer overtime pay practices.

California requires that hourly employees receive overtime pay for time worked beyond forty hours in any one workweek or after eight hours in a workday. A “workday” is any consecutive 24-hour period commencing at the same time each calendar day. An employer has the prerogative to begin that 24-hour period at any time of day.

The court found McDonald’s payroll computer program was fudging on this 24-hour workday standard, and thus shorting workers on overtime pay, when: (a) an employee worked an “overnight shift” that started in the evening of Day One and ended after midnight on Day Two; and then (b) worked another shift later during that Day Two. Although the company regarded its 24-hour day to begin at midnight and end at 11:59 p.m., its payroll software was nevertheless counting all of the overnight shift hours above as work during Day One only. Only the later day-shift hours on Day Two were counted as work on that Day Two.

Thus, for example, if an employee worked an overnight shift that started at 10:00 p.m. on Day One and (with half-hour unpaid meal break) ended at 6:30 a.m. on Day Two and then came back to work another Day Two shift between 2:00 p.m. and 10:30 p.m. (with another such meal break), McDonald’s counted the whole overnight shift as Day One hours and only the later 2:00 p.m. – 10:30 p.m. day shift as Day Two hours. This would mean no overtime pay for this worker, since each shift in this example was only eight hours long.

The court found this practice in violation. Again, the company admitted that for the purpose of daily hours’ calculations, its 24-hour day began at midnight and ended at 11:59 p.m. Thus, McDonald’s was required to count all Day Two hours from midnight that day. In the example above, that would mean only two hours worked for Day One and 14 hours worked for Day Two, with 1.5x regular pay rate for the 9^th through 12^th hour and 2x regular rate for the 13^th and 14^th hours. See: Working Overtime in California.

Ironically, if McDonald’s had been careful to clearly define its 24-hour workday in policy and practice as beginning at 6:30 a.m. and ending at 6:29 a.m. the next day, it would have owed no California daily overtime on this night-shift, next day-shift scheduling. With that break point between workdays, the company could have properly counted each of the shifts in the example above as eight hours long.

If this ruling applied to only one or a few workers, its actual impact on the employer would of course be minimal. However, this Sanchez case is a certified class action lawsuit, meaning that thousands of workers employed in the 119 restaurants from January, 2009 to the present may be affected, with significant total back pay, penalties and interest assessed at the trial scheduled for later this year. Targeting larger employers as McDonald’s, such “class action” suits have become big business in the courts across the United States, including California.

Moral: careful and continuing management attention to the details of workforce timekeeping, wage calculations and the many other related procedures is essential.

For additional assistance understanding and implementing California’s overtime rules, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

The Devil Is in The Details: Employment Class Action Suits
Contractor Misclassification … Class Action?
Brinker Case Settles for $56 Million

Tim Bowles
April 28, 2017

Effective March 13, 2017, the City of San Jose’s Opportunity to Work Ordinance requires employers with 36 or more employees to offer additional work hours to existing, qualified part-time employees before hiring new employees, including subcontractors and use of temporary staffing services. The ordinance does not cover employees that are exempt from overtime, nor does it require employers to provide additional hours to employees that would put them into overtime.

Small businesses with 35 or fewer employees are exempt from this ordinance. The number of employees for chain businesses or franchises is determined by counting the total number of part-time and full-time employees for all locations, whether the branches are located in the City of San Jose or not. Employers do not need to offer additional hours that become available at one location to employees at other locations.

According to the City’s Frequently Asked Questions, employers are required to post a notice about this ordinance in English, Spanish, Vietnamese and Cantonese.

Available employee remedies include the right to sue for additional work hours; award of back wages; civil penalties of $50 per day; and reasonable attorneys’ fees and costs.
Additionally, employers must maintain certain records for no less than four years, including documentation of additional work hours offered to existing personnel, and employee work schedules. See the ordinance for more details.

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

Cindy Bamforth
April 26, 2017

The City of Los Angeles’ Department of Public Works, Bureau of Contract Administration recently published frequently asked questions (FAQs) to assist employers in applying its Fair Chance Initiative for Hiring Ordinance (FCIHO) that went into effect January 22, 2017. For more on this ordinance, see Ban the Box in The City of Los Angeles (January, 2017) and “Banning the Box” in Los Angeles (March, 2017).

The department’s FAQs include guidance on job applications and advertisements for employment.

For employers that wish to use the same job application within the city of Los Angeles as well as other municipalities, a general disclaimer may be included directly following employment questions regarding an applicant’s criminal history, such as: “Applicants for a position located within a Fair Chance jurisdiction are not to answer this question.” (For a list of such jurisdictions, California and nationwide, current to February, 2017, see Fair-Chance Employment, Ban the Box, National Employment Law Project (NELP) (2017).

Employers must include in advertisements for employment in the city a statement that they will consider for hiring qualified applicants with a criminal history, for example: “We will consider for employment all qualified applicants, including those with criminal histories, in a manner consistent with the requirements of applicable state and local laws, including the City of Los Angeles’ Fair Chance Initiative for Hiring Ordinance.”

Companies employing workers in L.A. should review the entire ordinance and the FAQs for all requirements under this new law.

For additional assistance understanding and implementing the City’s FCIHO, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth
April 20, 2017