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Click here for our more recent article about Pay Stub Requirements (updated May 3, 2018).
Click here for our more recent article about Pay Stub Requirements (updated May 3, 2018).
California employers must of course comply with all laws applicable to payment of minimum wage and overtime. See, for example: Be Prepared for Statewide and Local Minimum Wage Increases and Working Overtime in California.
Businesses are also required to accurately specify wage-related information on each pay stub for each worker in each pay period. Up until July 1, 2015, California required nine possible items. Since that time, the requirements have expanded to up to 16 California pay stub requirements in some cases.
A. The First Nine California Pay Stub Requirements: As we reported in “Pay” By The Rules: California Pay Stub Requirements, the first nine items are:
(1) Gross wages earned;
(2) Total hours worked (except salaried exempt employees);
(3) Piece rate units and rate, if applicable;
(4) All deductions, including taxes, disability insurance, and health and welfare payments (deductions ordered by the employee may be aggregated and shown as one item);
(5) Net wages earned;
(6) The inclusive dates of the pay period;
(7) The name of the employee along with his or her social security number (last four digits only) or an employee identification number;
(8) The name and address of the legal employing entity; and
(9) All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.
B. Required Listing of Employee’s Paid Sick Days Benefit: As we reported in California Paid Sick Leave Law, most employers in this state have also been required since July, 2015 to include:
(10) Written notice of the amount of available paid sick leave on the employee’s pay stub or a separate writing provided with the employee’s payment of wages.
Under revised Labor Code 246(h), an employer who provides unlimited sick leave to its employees (no maximum cap) may now meet this notice requirement by indicating “unlimited” [sick leave] on the employee’s itemized wage statement or in a separate writing provided on each designated pay date.
Further Required Paystub Listing of Rest and Recovery Pay for Certain Employers: As we recently reported in Piece Work Compensation Is a Wreck Waiting to Happen, employers utilizing any form of so-called piece work (production-based) compensation system have been further obligated since January 1, 2016 to pay affected workers additionally for rest and recovery time. Under new Labor Code 226.2(a)(2)(A), such employers are now required specifically to list three additional items on each pay stub:
(11) Total hours of compensable rest and recovery periods in the applicable pay period;
(12) Rate of compensation for such periods; and
(13) Gross wages paid for such rest and recovery periods during that pay period.
Under Labor Code 226.2(a)(2)(B), and unless a piece work-paying employer includes an hourly minimum wage base rate in its compensation system, that employer will also have to list yet three more items on each pay stub for affected workers:
(14) Total hours of other compensable nonproductive time in the applicable pay period;
(15) Rate of compensation for such time; and
(16) Gross wages paid for that time during the pay period.
Company attention to such detail is important. Labor Code 226(e) provides that an employer’s knowing and intentional failure to comply may entitle each worker affected to recover at least $50 for the first violation and a minimum $100 for each subsequent occurrence up to a maximum of $4,000. In the event a company’s non-compliance applies long-term to a large number of employees, the total potential liability could be very significant.
This state’s Labor Commissioner has for many years listed a template pay stub illustrating the placement of the above nine items. See: http://www.dir.ca.gov/dlse/PayStub.pdf. However, the state has yet to offer what it considers acceptable examples of pay stubs containing additional items (10) through (16) above. This lack of government guidance makes it all the more important that affected employers consult with legal counsel to determine how best to bring their pay stub formats into compliance with the above-described new California pay stub requirements.
For further assistance, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Tim Bowles, March 17, 2016
To protect employees from workplace health and safety hazards,California’s Division of Occupational Safety and Health, commonly known as Cal/OSHA, requires certain employers to maintain and post work-related injury and illness records.
To protect employees from workplace health and safety hazards, California’s Division of Occupational Safety and Health, commonly known as Cal/OSHA, requires certain employers to maintain and post work-related injury and illness records.
Unless otherwise exempt, California companies who had at least 11 employees at any time throughout 2015 must visibly post the Cal/OSHA injury and illness summary record (Cal/OSHA Form 300A) from February 1, 2016 through April 30, 2016 so that all employees may view it.
Cal/OSHA Form 300A (Form 300A) contains a summary of significant work-related accidents and illnesses. If the company had no recordable occupational injuries or illnesses in 2015, it must insert zeros in the total lines.
In addition to completing and posting Form 300A, all eligible companies, including establishments classified in agriculture, mining, construction, manufacturing, transportation, communication, electric gas and sanitary services, wholesale trade, and those establishments in the retail, service, finance, insurance and real estate industries must also complete Cal/OSHA Form 300.
The Form 300 is used to record more detailed and private employee information about each injury and illness and thus shall not be posted.
Unless the government otherwise requests it, California establishments in low-hazard industries are exempt from these posting requirements if classified under certain Standard Industrial Classification (SIC) codes.
All California employers, regardless of size, including those exempt from the above recordkeeping requirements, must however immediately report to the nearest Cal/OSHA district office all serious occupational incidents that result in any fatality, hospitalization for more than 24 hours (other than for observation), or loss or serious disfigurement of any body part.
For more information on Cal/OSHA recordkeeping requirements, please visit http://www.dir.ca.gov/dosh/etools/recordkeeping/index.html.
For further assistance, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Cindy Bamforth, March 3, 2016
Our recent article “Caregiver Agencies Must Comply with Home Care Services Consumer Protection Act or Cease Operation” provided an overview of this new California law, effectiveJanuary 1, 2016.
Our recent article “Caregiver Agencies Must Comply with Home Care Services Consumer Protection Act or Cease Operation” provided an overview of this new California law, effective January 1, 2016.
The Act defines “home care organizations” (HCOs) as any individual, 18 years of age or older, or any business entity that arranges for home care services by an affiliated home care aide (HCA) to a client. Non-compliance with the Act requires an HCO to shut down.
The Act requires all HCOs to take two vital actions by March 1, 2016:
• HCO Application for Licensing: All HCOs must submit their applications for licensing along with the $5,165.00 fee with the new Home Care Services Bureau (Bureau) by March 1, 2016. The required forms include: (1) Application for a Home Care Organization License; (2) Licensee Applicant Information; (3) Designation of Home Care Organization Responsibility; (4) Company Organization Structure; (5) Employee Dishonesty Bond; (6) Criminal Record Statement; and (7) Board of Directors Statement. An HCO must also submit supplemental documents concerning its organization, job descriptions, policies, training plan, program description, and insurance.
• Applications for Home Care Aides Registration: The Bureau’s FAQ on the Act states that it requires HCOs to employ all affiliated home care aides (HCAs). (HCOs thus may not utilize independently contracted HCAs). The Act requires all such employed HCAs to be registered with the Bureau. For each HCA it currently employs, an HCO must submit the registration application along with the $25.00 fee by March 1, 2016. The required forms include: (1) Application for Home Care Aide Registration; (2) Criminal Record Statement; and (3) LiveScan fingerprints request. There is a separate LiveScan fee. See also: our article “Home Care Aides Must Register With New State Agency No Later Than March 1, 2016.”
An HCO must obtain its license and complete the registration process for all of its HCAs by July 1, 2016. The state may impose fines of $900/day and bring criminal misdemeanor charges for non-compliance.
Our office is educating and assisting home care organization owners on the requirements of this new law. We are also advising clients on the formation and structure of domestic referral agencies, an alternate business model currently exempt from the Act. Contact Tim Bowles, Cindy Bamforth, or Helena Kobrin for more information.
Helena Kobrin, February 19, 2016
As announced in its December 17, 2015press release, the Internal Revenue Service (IRS) has lowered itsoptional standard mileage reimbursementrates for an employee’s business use of his or her vehicle from 57.5 cents in 2015 to 54 cents per business mile driven in 2016.
As announced in its December 17, 2015 press release, the Internal Revenue Service (IRS) has lowered its optional standard mileage reimbursement rates for an employee’s business use of his or her vehicle from 57.5 cents in 2015 to 54 cents per business mile driven in 2016.
The government bases the mileage rate on an annual study of fixed and variable automotive operating costs, including insurance, repairs, maintenance, gas and oil.
Under California Labor Code section 2802, employers must reimburse employees for all actual work-related expenses necessarily incurred. Many employers use the IRS mileage reimbursement rate to satisfy their reimbursement obligation.
According to section 29.2.4 of California’s Division of Labor Standards Enforcement’s Enforcement Policies and Interpretations Manual (p.102), using the IRS mileage reimbursement rate will satisfy an employer’s reimbursement obligation absent evidence demonstrating otherwise. For example, if the employee can show the IRS reimbursement rate does not cover all of his/her actual and necessary business-related vehicle expenses, the employer must pay the difference.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin for more information.
Cindy Bamforth, February 10, 2016
New California law, effective January 1, 2016, requires all home care organizations (HCOs) to be licensed and to register all of their home care aides (HCAs) with the state. See our blog“Caregivers Agencies Must Comply With Home Care Services Consumer Protection Act or Cease Operation”describing the Home Care Services Consumer Protection Act (HCSCPA).
New California law, effective January 1, 2016, requires all home care organizations (HCOs) to be licensed and to register all of their home care aides (HCAs) with the state. See our blog “Caregivers Agencies Must Comply With Home Care Services Consumer Protection Act or Cease Operation” describing the Home Care Services Consumer Protection Act (HCSCPA).
The HCSCPA required all Home Care Organizations (HCO) to submit by December 31, 2015 to the new Home Care Services Bureau (Bureau) a “notice of intent” to apply for such licensing.
This new law also requires HCOs to submit the actual application for licensing by March 1, 2016. No HCO is authorized to operate without a Bureau-issued license after July 1, 2016.
The HCSCPA did not include a specific deadline date for HCAs listed in an HCO’s Notice of Intent to file registration forms. However, such aides are required to file within 60 days of the “Home Care Aide Registry” going live online. The Registry went live January 1, 2016. The HCA registration filing deadline, 60 days from that date, is thus March 1, 2016.
Home Care Aide registration requires completion and submission to the Bureau of three forms: HCS 100 – Application for Home Care Registration ; LIC 508 – Criminal Record Statement ; and HCS 9163 – Request for LiveScan Services (fingerprinting form).
This new law and the Bureau procedures to administer are detailed, covered in the Bureau’s 80 page booklet available online. This publication includes sections on civil penalties starting at page 31. Such penalties include a possible $900 per day fine for operation without a license. Operators of unlicensed facilities are also subject to criminal prosecution.
To date, we have found no guidance from the Bureau on the consequence of an HCO having missed that December 31, 2015 notice of intent deadline. However, good sense would indicate that: a) now filing that notice as soon as possible is better than not filing it at all; and b) not waiting until the last minute on March 1 to file the HCO licensing application and HCA registrations is preferred.
Our office is available to assist HCO owners and managers navigate these new legal requirements. Please contact Tim Bowles, Cindy Bamforth, or Helena Kobrin for more information.
Helena Kobrin, January 22, 2016
A strict set of new laws, effectiveJanuary 1, 2016, requires the registration and licensing of home health care providers through a newly created agency — the Home Care Services Bureau (Bureau) – and the qualification and registration of all of their in-home caregivers. The state is also directing providers that their caregivers (“home care aides”) must all be employees and not independent contractors.
A strict set of new laws, effective January 1, 2016, requires the registration and licensing of home health care providers through a newly created agency — the Home Care Services Bureau (Bureau) – and the qualification and registration of all of their in-home caregivers. The state is also directing providers that their caregivers (“home care aides”) must all be employees and not independent contractors.
While the required initiation of the licensing process on or before December 31, 2015 is fairly simple – and actual licensing will not be mandatory until July 1, 2016 — the applicable operating standards will require many home care providers to profoundly change the way they do business.
Licensing Now Required to Promote and Operate as a Home Care Business: The 2013 Home Care Services Consumer Protection Act (HCSCPA) , AB 1217, created sections 1796.10- 1796.63 of the Health and Safety Code. The HCSCPA requires all California home care organizations (HCOs) to be licensed and also to have all of their caregivers – referred to in the law as “home care aides” (HCAs) – undergo successful background checks and register with the state.
The California Department of Social Services (CDSS) has created a new agency, the Home Care Services Bureau (Bureau), which will work with the Caregiver Background Check Bureau (CBCB) to implement and enforce the law.
The HCSPA defines “home care services” to include the typical services provided by caregivers, referred to as “personal attendants” under California’s Wage Order 15, in assisting persons who require companionship and help with functions of every-day life because of advanced age or physical or mental disability.
Section 1796.35 provides that any person or organization that fails to register and gain licensing as an HCO may not represent himself, herself or itself to be a home care organization by name, advertising, soliciting, or any “other” presentation to the public or in connection with providing home care services and also may not use “home care organization,” “home care,” or “in-home care” or any combination of such terms in its name.
New Statewide Registry of Qualified Caregivers (“Home Care Aides”): The Bureau will establish a registry that lists all applicants who have met the requirements to be registered. Registration requires: background examination, including submission of fingerprints, a declaration regarding prior criminal convictions, evidence that the home care aide can comply with the requirements of the law and is of “reputable and responsible character,” disclosure of any prior revocation or disciplinary action against the home care aide applicant, and a signed statement that the applicant has read and understood both the HCSCPA and other rules and regulations enacted under that statute.
The California Department of Justice will use fingerprints supplied by the applicant to conduct a background check. A person is ineligible to be listed on the registry if the person “has been convicted of a crime, other than a minor traffic infraction” without an exemption issued by the Director of the state Department of Social Services. If a person is notified that he/she is ineligible, the person may submit an exemption request to the Bureau so long as none of the crimes are ineligible for exemption.
All home care aides employed by HCOs are required to register. Individuals who are hired directly by patients to provide such services independently and not through an HCO have the option of applying personally for listing on the registry. However, they are not required to do so and may be hired directly by one or more private persons without registering.
Specific Registration and Licensing Requirements for Home Care Organizations: To receive a license, an HCO must provide proof of general and professional liability insurance at a minimum of $1 million per occurrence and $3 million in the aggregate, a valid workers’ compensation policy, and a complete list of its home care aides, along with proof that they have registered with the Bureau. In addition, individual owners of HCOs, and any person who owns more than 10 percent of an entity such as a corporation or LLC that runs an HCO will have to submit the same information as home care aides and consent to a background check.
Registration of HCOs and HCAs will expire every two years, requiring a new application for registration be made. The cost to put in an application for HCA registration is $25.00. For an HCO, the application fee is $5,165.00.
The statute also establishes operating requirements for an HCO once it is licensed: (1) posting its license so that it is visible to clients and home care aides; (2) maintaining its workers’ compensation policy; (3) maintaining an employee dishonesty bond, including third-party coverage, with minimum limits of $10,000; and (4) reporting any suspected or known adult abuser. The HCO must also have on file valid TB tests showing an absence of active TB for all HCAs taken within the time period of 90 days before to seven days after employment and fingerprints. It must notify the Bureau if the person is no longer employed by that HCO. The HCAs are required to have at least five hours of entry-level training prior to being with clients and five hours of annual training thereafter.
The HCSCPA provides for a fine of $900/day for any HCO that is in violation of the statute from the date the violation is verified to the date it is corrected or the license is suspended or revoked. It also makes it a misdemeanor to falsely represent oneself as a registered home care aide or applicant for such status. Violating this statute or willfully or repeatedly violating any of the rules or regulations under the statute is also a misdemeanor, subject to 180 days in the county jail and a $1,000 fine.
The state has issued an FAQ with answers to many questions concerning the HCSCPA. One of the FAQs states that HCAs hired by HCOs may not be independent contractors as “the statute requires the Home Care Organization to direct the actions of an Affiliated Home Care Aide with requirements such as TB testing, training, background check and registration.” This indicates that the Bureau will require all such HCAs hired by HCOs to be employees. This of course will require an HCO’s compliance with all wage laws, including such things as minimum wage and overtime.
Registration Procedure is Relatively Simple: By now, the reader is probably asking whether there is any good news for HCOs. The answer is yes. The only action required by December 31, 2015 is submission with the Bureau of a form HCS 200A, “Intent to Apply for a Home Care Organization License.” An HCO will then have until March 1, 2016 to file its formal (and simple) application (form HCS 200) and pay the fee. See Home Care Services website. An HCO can then continue operating even before its license is issued until July 1, 2015. If an HCO does not submit its Intent to Apply for a license by December 31, 2015, it may not continue operations. This would trigger the possibility of the $900/day fine and misdemeanor charges.
Thus, a caregiver business must promptly determine its course of action. If it intends to apply and meet all standards to obtain the required license by July 1, 2016, it must file the above-required notice of intention by December 31, 2015.
Our office can help company owners and managers better understand these fast-approaching changes in the law and a business’s options to deal with them. Contact Tim Bowles, Cindy Bamforth, or Helena Kobrin for more information.
Helena Kobrin, January 19, 2016
As recently covered in ourCalifornia Minimum Wage Increasingblog, California’s minimum will rise to $9.00 an hour on July 1, 2014.
As recently covered in our California Minimum Wage Increasing blog, California’s minimum will rise to $9.00 an hour on July 1, 2014.
Also by July 1, California employers must prominently post the new Division of Labor Standards Enforcement Minimum Wage Order (MW-2014) specifying this $9.00 per hour minimum requirement as well as the $10.00 per hour minimum that begins January 1, 2016.
California employers must conspicuously display all such mandatory state and federal labor posters and notices where all employees may view them. Even companies with only one employee must display certain notices. Companies must post a separate set of these notices in each business location. Several of these employer postings must also be displayed where job applicants can read them.
An “all in one poster” containing current California and federal law notifications, along with other currently required pamphlets, may be purchased from the California Chamber of Commerce This comprehensive poster set includes:
California Notices:
Federal Notices:
For more information concerning required workplace notices, contact one of our attorneys, Timothy Bowles, Cindy Bamforth or Helena Kobrin.
As recently covered in ourCalifornia Minimum Wage Increasingblog, California’s minimum will rise to $9.00 an hour on July 1, 2014.
As recently covered in our California Minimum Wage Increasing blog, California’s minimum will rise to $9.00 an hour on July 1, 2014.
Also by July 1, California employers must prominently post the new Division of Labor Standards Enforcement Minimum Wage Order (MW-2014) specifying this $9.00 per hour minimum requirement as well as the $10.00 per hour minimum that begins January 1, 2016.
California employers must conspicuously display all such mandatory state and federal labor posters and notices where all employees may view them. Even companies with only one employee must display certain notices. Companies must post a separate set of these notices in each business location. Several of these employer postings must also be displayed where job applicants can read them.
An “all in one poster” containing current California and federal law notifications, along with other currently required pamphlets, may be purchased from the California Chamber of Commerce This comprehensive poster set includes:
California Notices:
Federal Notices:
For more information concerning required workplace notices, contact one of our attorneys, Timothy Bowles, Cindy Bamforth or Helena Kobrin.
“Piece work” compensation or “piece rate” is payment for work based on production. For decades, this method has worked to benefit worker and management in many industries. It has become common for trucking companies to pay drivers by the mile or by the delivery, for auto repair shops to pay mechanics by the task accomplished, and for service companies to pay technicians by the number of jobs completed. Businesses have been able to set their workers’ pay rates proportional to the enterprise’s ove
“Piece work” compensation or “piece rate” is payment for work based on production. For decades, this method has worked to benefit worker and management in many industries. It has become common for trucking companies to pay drivers by the mile or by the delivery, for auto repair shops to pay mechanics by the task accomplished, and for service companies to pay technicians by the number of jobs completed. Businesses have been able to set their workers’ pay rates proportional to the enterprise’s overall income generated from production while employees, commonly paid well above industry norms for their efforts, tended to be more invested in company success.
California’s Courts Changed the Rules for Piece Work Pay in 2013: Of course, piece work would only be acceptable if the compensation generated exceeded the applicable minimum wage. Overturning long-term workplace presumptions, two 2013 California Court of Appeal decisions (Gonzales v. Downtown L.A. Motors and Bluford v. Safeway) directed that acceptable piece work arrangements are not a simple matter of averaging an employee’s total pay against the hours he or she worked that week to confirm the figure was above the required hourly minimum. These cases concluded that:
a) California law requires employers to pay piece workers additionally for at least ten minutes of rest for every four-hour shift, by definition time a worker was not earning piece pay since he or she was required to be idle during this time; and
b) Employers must also pay piece workers additionally for other periods of working time where the employee is not engaged in the actual production that generates the piece pay, e.g., staff meetings, training seminars, clean-up time.
The appeals courts thus ruled that an employer is in violation of California’s minimum wage law – which requires such compensation for “every hour worked” – unless that business paid its piece workers separately for rest periods and for payable “non-production” time. Federal law, by contrast, allows businesses to merely average all piece pay over the hours worked in a payroll period to confirm the per-hour amount is at least equal to federal minimum wage.
Over the two-plus years since the Gonzales and Bluford decisions, numerous California industries with widespread piece work practices – trucking in particular – have found themselves increasingly targeted for legal actions seeking payment of back wages for such unpaid rest period and “non-production” time, going back for up to four years. Ironically, the companies affected could thus be potentially responsible for supposed back pay back to 2011 or even earlier even though these new interpretations of California labor law were not issued until 2013.
California Legislature Makes the Piece Work Pay Even More Complex Starting January 1, 2016: Apparently seeking to restore some balance, the California Legislature has responded with new Labor Code 226.2, effective January 1, 2016. However, the likely result is the widespread death of piece work systems in many companies which take the time to understand the implications of this new law.
Section 226.2 does carry a degree of “good news” for trucking outfits and other companies that have been mistakenly operating under inadequate piece work plans over the last several years. This new law gives such businesses the chance to fairly calculate and, within one year from now, by December 15, 2016, to make up the shortfalls to all persons underpaid by the Gonzales and Bluford rules since July 1, 2012. For example, if an affected piece work-paying trucking company has employed 100 drivers since July 1, 2012, it would have the next 12 months, to December, 2016, to calculate by strict formulas and come up with the back payments for the wages applicable to each such driver’s rest periods, staff meetings, training sessions, and other non-productive time. A company that takes advantage of this so-called “safe harbor” for catching up on back pay would not be subject to additional penalties it would otherwise owe for such non-payment.
To qualify for this “safe harbor” relief however, a company must give written notice to the Department of Industrial Relations (DIR) no later than July 1, 2016 that it is engaged in the back pay calculations and payments. The DIR will then post the name of the company on its public website until July 1, 2017. Thus, any business who opts for such a make-up program must announce publicly that it has likely been out-of-compliance with the law for up to the preceding 2 ½ years.
New section 226.2 is also definite that all employers must comply with the statute’s many vague and potentially complex accounting and recordkeeping standards for any piece work system after December 31, 2015. Among the many new standards are:
• Required additional pay for each rest and recovery period an employee takes each day, calculated by an uncertain and potentially complicated formula for averaging each worker’s hourly rate each workweek;
• Required additional pay at applicable minimum wage for all “other nonproductive work time,” vaguely defined as time under the employer’s control, exclusive of rest or recovery periods, that is not directly related to the activity being compensated on a piece rate basis. Just what activity is “not directly related” will no doubt be hotly contested by employers, employees and their respective lawyers, subject to the various views of the judges ultimately assigned to overseeing such disputes;
• Required separate entries on every future paycheck for the rest/recovery time compensation and “other nonproductive time,” including the numbers used for calculation; and
• Separate record keeping to establish each affected worker’s nonproductive work time, however a business seeks to define that term.
The degree of uncertainness and complexity Labor Code 226.2 now introduces into calculating and administering piece work will likely kill off such systems of pay for many companies aware of the changes, replaced by an “hourly-plus-bonus” or other more straightforward method of pay. A business that continues to utilize piece work pay without study, understanding and compliance with its obligations may eventually encounter a rude awakening of significant back pay, penalties and fines that could indeed threaten the life of that enterprise. Even a company that seeks to comply with the law may be exposed if that employer happens to judge its vague terms in a manner later disapproved by a court’s or agency’s judgment.
Our office can help company owners and managers better understand these fast-approaching changes in the law and a business’s options to deal with them. Contact Tim Bowles, Cindy Bamforth, or Helena Kobrin for more information.
Tim Bowles, December 4, 2015