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The U.S. Department of Labor (DOL) issued itsFinal Rulein May 2016, raising minimum salary amounts for exempt-from-overtime executive, administrative, professional, computer and outside sales employees under theFair Labor Standards Act (FLSA). See “New Stricter Federal Requirements on Exemptions from Overtime, Employers Must Comply No Later than December 1, 2016.”
The U.S. Department of Labor (DOL) issued its Final Rule in May 2016, raising minimum salary amounts for exempt-from-overtime executive, administrative, professional, computer and outside sales employees under the Fair Labor Standards Act (FLSA). See “New Stricter Federal Requirements on Exemptions from Overtime, Employers Must Comply No Later than December 1, 2016.”
The new regulations, currently set to take effect less than four months from now, pose a sudden, 100%-plus increase in minimum salary for otherwise qualified exempt employees: from $455/week, $1,972/month, or $23,660/year to $913 per week, $3,957 per month or $47,476 annually.
On July 15, 2016, Congressmember Kurt Schrader (D – OR) introduced H.R. 5813, the Overtime Reform and Enhancement Act (OREA), to slow the Final Rule’s implementation. The measure seeks a four-step phase-in of the higher minimum over three years:
The bill would also eliminate the Final Rule’s automatic three year minimum salary increases that are to start in 2019, instead requiring the DOL to comply with the standard evaluation and justification process federal rulemaking law requires.
H.R. 5813 currently does not address the Final Rule’s increase from $100,000 to $134,004 for a “highly compensated” executive to qualify for exemption. The measure is also silent on the Final Rule’s minimum increase for motion picture exempt salaries from $695/week to $1,397/week (or equivalent for a less than six-day week). The bill may of course be amended to address these points.
In an election year particularly, the bill’s prospects of becoming law before the Final Rule’s December 1 effective date is anyone’s guess. Employers who plan to meet the full increase by that date can allow themselves to be pleasantly surprised if indeed H.R. 5813 succeeds in time.
If you need assistance with working any of the issues raised by these new regulations, our attorneys, Tim Bowles, Cindy Bamforth or Helena Kobrin, can help.
Helena Kobrin
August 5, 2016
As we have reported, all businesses with employees working within thegeographic boundaries of the City of Los Angeles(City) are potentially subject to its new minimum wage and paid sick leave rules:Ordinance No. 184320andOrdinance No. 184319(Work Ordinances). See, e.g.,Latest Minimum Wage Increases for California Cities,City of Los Angeles New Paid Sick Leave Requirements Effective July 1, 2016,City of Los Angeles Minimum Wage Increasing Annually from 2016 to 2020.
As we have reported, all businesses with employees working within the geographic boundaries of the City of Los Angeles (City) are potentially subject to its new minimum wage and paid sick leave rules: Ordinance No. 184320 and Ordinance No. 184319 (Work Ordinances). See, e.g., Latest Minimum Wage Increases for California Cities, City of Los Angeles New Paid Sick Leave Requirements Effective July 1, 2016, City of Los Angeles Minimum Wage Increasing Annually from 2016 to 2020.
In an attempt to consolidate the Work Ordinances’ passages in a single, easy-to-read document, the City published on July 25, 2016 an anticipated set of frequently-asked questions (Ordinances FAQs).
Ordinances FAQs restate Work Ordinances’ general definitions; the City’s minimum wage rate increase schedule; eligibility for paid sick leave; how qualifying “Employees” accrue and take paid sick leave; for what purposes an “Employee” can take paid sick leave; how to pay and track earned and taken sick leave; and other information Employers must provide to their Employees.
For additional assistance understanding and implementing the City’s Work Ordinances, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.
Cindy Bamforth
July 28, 2016
A court order on the eve of a July 1 deadline threw into doubt whether California would be able to immediately enforce its new piece work compensation law,Labor Code 226.2. See,Storm Brewing Over Piece Work Safe Harbor(July, 2016). However, that judge has now further ordered the state may proceed to administer that law in full and without delay.Nisei Farmers League v. California Labor and Workforce Development Agency,July 25, 2016 order.
A court order on the eve of a July 1 deadline threw into doubt whether California would be able to immediately enforce its new piece work compensation law, Labor Code 226.2. See, Storm Brewing Over Piece Work Safe Harbor (July, 2016). However, that judge has now further ordered the state may proceed to administer that law in full and without delay. Nisei Farmers League v. California Labor and Workforce Development Agency, July 25, 2016 order.
Section 226.2 directed that a California piece work employer give a formal “safe harbor” notice to the state by July 1, 2016 if that business was going to opt to avoid potentially greater liability. A business then could do so by paying all affected workers by December 15, 2016 additional back pay to mid-2012 under one of two calculation methods. See, Safe Harbor in Sight, Piece Work Compensation in California (May, 2016) (Safe Harbor).
The state’s Department of Industrial Relations (DIR) currently lists at least 2,500 companies that have submitted formal safe harbor notices. The only change the above July 25 Order effected was to confirm extension on that July 1 notice filing deadline through July 28, 2016. The DIR will not accept any notices received after that date. Piece work employers may submit this notice online.
Timely filing of its safe harbor notice is only the beginning of a piece work employer’s required actions, all to be taken as soon as feasible. For such a business to meet its safe harbor requirements by paying up to 4% of gross earnings to each piece work employee between July 1, 2012 and December 31, 2015 (Safe Harbor Period) (see, Safe Harbor), these actions include:
A. Safe Harbor Period Back Pay and Documentation:
The new law allows employers to correct any good faith error on such calculations within 30 days of discovering the mistake.
There is much more at stake. Full “safe harbor” compliance will only protect a piece work employer from potential pre-2016 liability. Section 226.2 also requires such employer’s compliance with specific piece work pay standards from January 1, 2016 onward. For piece work companies that do not yet have such standards in place, further actions include:
B. Promptly Implement a Revised Piece Work Pay System:
As discussed in our Safe Harbor blog, section 226.2 now requires California employers to pay at least the applicable minimum wage to each piece work employee for every hour worked as well as a specially calculated premium for every rest or recovery period to which such employee is entitled for each day of labor. Thus, such a business can and should swiftly:
C. Further Back Pay Compliance, from January, 2016 to Date of New System Implementation:
With section 226.2’s standards effective January 1, 2016, an affected company should also swiftly take actions that will catch-up on such compliance for any 2016 pay periods preceding the above implementation, including:
Our lawyers Tim Bowles, Cindy Bamforth, and Helena Kobrin are assisting many such employers with these essential compliance steps, including help with the proper calculations and template and custom forms for the required documentation. Please contact our office should you need further information.
Tim Bowles
July 27, 2016
Continuing the trend of escalating minimum wage laws, numerous cities and one county in California increased their minimum wage effective July 1, 2016. See, for example, our blogs onSan Francisco,Santa Monica,Pasadena,Los Angeles City, andLos Angeles County. The laws vary in their application to smaller and larger employers, as described below.
Continuing the trend of escalating minimum wage laws, numerous cities and one county in California increased their minimum wage effective July 1, 2016. See, for example, our blogs on San Francisco, Santa Monica, Pasadena, Los Angeles City, and Los Angeles County. The laws vary in their application to smaller and larger employers, as described below.
The UC Berkeley Center for Labor Research and Education has published an on-line list of the local California jurisdictions with ordinances raising the minimum wage above the $10.00/hour statewide standard. All but one went into effect July 1, 2016. San Diego’s was effective July 11, 2016.
The ordinances specifically define the terms “Employer” and “Employee” for application of their standards. For example, the Los Angeles ordinance specifies an “Employee” to be a person who performs work for an employer for at least two hours in a week within city limits. That ordinance defines “Employer” as anyone who “employs or exercises control over the wages, hours or working conditions of any Employee,” whether directly or indirectly. Other municipalities have similar definitions with some variations.
Each ordinance requires that affected employers post an updated official notice where employees can read it easily. We supply links to access those notices below. Some of the ordinances require employers to post the notice in Spanish and/or other specific languages in addition to English. Others require that employers post the notice in other languages spoken by at least a certain percentage of their employees. See, for example, City of Los Angeles and El Cerrito.
Businesses must also provide a complete and accurate Wage Notice to each new employee.
If you have: (a) individual workers who perform work in more than one applicable municipality; or (b) facilities in different applicable municipalities where you have employees, you need to confirm any required implementation of the local minimum wage ordinance in each case. As compliance can be complex, we encourage you to obtain assistance from your attorneys, accountants, and payroll services. Each of the laws has its own nuances, including such things as future increases, provisions on counting tips in minimum wage or not, and exemptions. It is therefore important that you become familiar with the express provisions of any minimum wage laws that may apply to your company.
For further information, contact one of our attorneys Tim Bowles, Cindy Bamforth, or Helena Kobrin.
Helena Kobrin, July 21, 2016
No California employer is obligated to provide paid vacation time to its workers. However, such benefit is a common practice, promoting morale and productivity. Once a company grants paid vacation (say, one week annually), it is considered an accruing benefit, i.e., an employee earns it gradually throughout the working year. See,Vacation Pay in California, andRequiring Use of Paid Vacation for Unpaid Leaves.
No California employer is obligated to provide paid vacation time to its workers. However, such benefit is a common practice, promoting morale and productivity. Once a company grants paid vacation (say, one week annually), it is considered an accruing benefit, i.e., an employee earns it gradually throughout the working year. See, Vacation Pay in California, and Requiring Use of Paid Vacation for Unpaid Leaves.
While California employees are entitled to their vacations under such policies, business does not necessarily go on vacation during the prime months for such time off. In order to ensure continued production and service to their publics, employers have the right to manage their vacation pay responsibilities, including control over scheduling and the number of vacation days a given worker may take at any particular time.
Manager thought and care are required. For example, an employer may not deny vacation time to a worker simply because that person recently returned from a medical disability leave. Such grounds – unrelated to business production demands — could constitute unlawful retaliation. In the event management must deny a proposed vacation period or suggest alternative dates, written confirmation of the actual work-related reasons is a very good idea.
Thus companies need to specify the scheduling ground rules into any policy providing such benefits, including written requests well in advance of planned vacations and a clear statement that it is ultimately management’s prerogative when and how the company will schedule vacation time.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin for more information.
Cindy Bamforth, July 20, 2016
The City of Los Angeles (City) recentlyincreased minimum wageand doubled California’s paid sick leave requirements (Ordinance No. 184320) for “Employees,” i.e., workers performing labor within the City for a given employer for at least two hours in a particular week. (See below for City limits maps.)
The City of Los Angeles (City) recently increased minimum wage and doubled California’s paid sick leave requirements (Ordinance No. 184320) for “Employees,” i.e., workers performing labor within the City for a given employer for at least two hours in a particular week. (See below for City limits maps.)
As we previously noted, Ordinance No. 184320 did not clearly state whether small businesses with 25 or fewer “Employees” were allowed to wait until 2017 to comply with these City paid sick leave standards.
The City’s newly-issued official notice answers this question. Starting July 1, 2016, all Employers with 26 or more Employees must receive the City’s paid sick leave. Employers with 25 or fewer Employees do not have to provide these sick leave benefits until July 1, 2017.
The official notice also summarizes the City’s minimum wage increases and describes when and how sick pay is earned and used. The notice reiterates that Employees are protected from any discrimination or retaliation for exercising their rights to receive the City’s paid sick leave.
As stated in the City’s companion ordinance (Ordinance No. 184319), every Employer (presumably regardless of size) must post in a conspicuous place at any workplace or job site the City’s official notices in English, Spanish, Chinese (Cantonese and Mandarin), Hindi, Vietnamese, Tagalog, Korean, Japanese, Thai, Armenian, Russian and Farsi, and any other language spoken by at least five percent of the Employees at the workplace or job site. Employers may download the official notices at http://wagesla.lacity.org/.
Click here or here to find out if a particular address is located within City limits.
If you would like further, more detailed information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
California’s Court of Appeal and Legislature have in recent years created an unprecedented and potentially crushing interpretation of piece work compensation requirements. See,Piece Work Compensation is a Wreck Waiting to Happen, The Perils of New Labor Code Section 226.2(December, 2015) (Piece Work).Among that statute’s provisions, effective January 1, 2016, California piece work employers (the norm for whole industries, including trucking, agriculture, and vehicle repair) were required to sub
California’s Court of Appeal and Legislature have in recent years created an unprecedented and potentially crushing interpretation of piece work compensation requirements. See, Piece Work Compensation is a Wreck Waiting to Happen, The Perils of New Labor Code Section 226.2 (December, 2015) (Piece Work). Among that statute’s provisions, effective January 1, 2016, California piece work employers (the norm for whole industries, including trucking, agriculture, and vehicle repair) were required to submit a public “safe harbor” notice by July 1, 2016 that they were opting to pay all affected workers additional back pay to mid-2012 under one of two calculation methods. See, Safe Harbor in Sight, Piece Work Compensation in California (May, 2016) (Safe Harbor).
However, through a suit filed days before that July 1 deadline, Nisei Farmers League (League), a major agricultural trade association, has secured a statewide court order extending that filing deadline until at least July 28, 2016. See, June 30, 2016 order in Nisei Farmers League v. California Labor and Workforce Development Agency, Fresno County Superior Court No. 16CECG02107. The state’s Department of Industrial Relations (DIR) has since posted a statement on-line:
“Pursuant to an Order of the Fresno Superior Court, the State has been temporarily restrained from enforcing the July 1, 2016 deadline for employers to submit notice of their election to make payments to current and former employees pursuant to Labor Code Section 226.2(b). The Director of Industrial Relations will continue to accept and post these notices through at least July 28, 2016 or further order of the Court.”
This lawsuit throws far more than this “safe harbor” notice deadline into play. Pointing to key provisions in the statute that may be incapable of any specific definition, the suit seeks to declare Labor Code 226.2 unconstitutional.
Thus, the only thing now certain regarding section 226.2 is uncertainty. The suit also questions whether piece work employers who have already given the required notice to the state will have to fulfill their “safe harbor” back payments by the December 15, 2016 deadline set in the statute (as reported in Piece Work and Safe Harbor).
The judge in the League case will hold a hearing on Monday, July 18, 2016 to determine whether these section 226.2 safe harbor notice and back pay deadlines will be extended to new definite dates or suspended indefinitely until the League’s full case can be tried.
Stay tuned. Our lawyers Tim Bowles, Cindy Bamforth, or Helena Kobrin are available for more information as the above lawsuit develops.
Timothy Bowles, July 8, 2016
Effective July 1, 2016, all employers (wherever located) must pay wages of at least $13.00/hour to every employee who performs work in San Francisco (including temporary and part-time employees). San Francisco (City) was right behind Seattle inleading the charge to a $15.00 minimum wagewhen its voters passed theSan Francisco Minimum Wage Ordinanceon November 4, 2014. SeeSan Francisco Minimum Wage Escalates to $11.05 and BeyondandSan Francisco Minimum Wage Escalates to $12.25 on May 1, 2015. S
Effective July 1, 2016, all employers (wherever located) must pay wages of at least $13.00/hour to every employee who performs work in San Francisco (including temporary and part-time employees). San Francisco (City) was right behind Seattle in leading the charge to a $15.00 minimum wage when its voters passed the San Francisco Minimum Wage Ordinance on November 4, 2014. See San Francisco Minimum Wage Escalates to $11.05 and Beyond and San Francisco Minimum Wage Escalates to $12.25 on May 1, 2015. San Francisco’s minimum will be $3.00 ahead of California’s current $10.00 minimum standard. It will reach $15.00/hour in mid-2018, two years before the statewide minimum hits that level.
The San Francisco ordinance applies to adult and minor employees who work two or more hours per workweek, including non-city resident workers performing work in San Francisco. Compensation used to calculate the City’s minimum includes salary, hourly pay, piece rate, commissions and non-discretionary performance bonuses. See San Francisco Office of Labor Standards Enforcement’s Frequently Asked Questions for more information. An eligible employee cannot waive this minimum except through a valid collective bargaining agreement.
Employers may not retaliate against an employee who asserts his or her right to receive the City’s minimum wage. An employee may file a civil lawsuit against an employer for any violation of this ordinance. The City may investigate possible violations, access payroll records, and enforce minimum wage requirements by ordering reinstatement, payment of back wages, and penalties. See San Francisco Minimum Wage Notice
Affected employers must also post an updated Notice by July 1, 2016, where employees can read it easily.
For further information, contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
June 29, 2016
California employers must comply with all applicable state and supplemental local sick pay laws. In the latest trend sweeping the state, Southern California municipalities includingLos Angeles, Santa Monica and now San Diego have rushed to enact their own sick pay ordinances, leaving employers with a confusing, contradictory and ever expanding set of standards to follow.
California employers must comply with all applicable state and supplemental local sick pay laws. In the latest trend sweeping the state, Southern California municipalities including Los Angeles, Santa Monica and now San Diego have rushed to enact their own sick pay ordinances, leaving employers with a confusing, contradictory and ever expanding set of standards to follow.
Where the terms of one set of applicable laws contradict the other(s), employers must implement whichever provisions are most favorable to their employees. As more and more local ordinances continue to crop up, this headache-inducing task is easier said than done.
On August 18, 2014, the San Diego City Council originally approved its paid sick leave and minimum wage ordinance (Ordinance No. 20390). After the mayor vetoed the ordinance, it lay dormant until San Diego voters resurrected it on June 7, 2016.
Once the City officially certifies the election results, the ordinance will immediately go into effect. The Office of the City Treasurer estimates the certification process will take place either the week of July 11 or July 18.
Under Ordinance Section 39.0104(a), employers must provide paid sick time to any “Employee,” i.e., any person who in one or more calendar weeks of the year performs at least two hours of work within San Diego’s geographic boundaries for an Employer.
Section 39.0105(b) requires Employers to provide an Employee with one hour of earned sick leave for every 30 hours worked within the city’s boundaries.
Section 39.0105(g) allows employers to limit an employee’s use of earned sick leave to 40 hours in a given year, but employers must allow employees to continue to accrue and carryover earned sick leave to the following year without any cap or limit.
The ordinance does not specify whether employers may provide paid sick leave benefit using the alternative advance/front-loading method available under the statewide law and, if so, whether the employer must carryover any unused hours into the following year. See, Mandatory Paid Sick Leave for California Employers.
According to Section 39.0106(a)(6), in addition to using earned sick leave for the reasons specified under state paid sick leave law employees may also use earned sick leave when, by order of a public official due to a public health emergency, there is a closure of the employee’s place of business or the employee’s child’s school or child care provider.
This is an outline of the basic aspects of the currently-available ordinance. For further information, contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.
Cindy Bamforth
June 24, 2016