On April 4, 2016, California jumped on the “living wage” bandwagon when Governor Brown signed Senate Bill-3 (SB-3) making California one of the first two states in the country to enact a $15 minimum wage. The other was New York, the measure signed into law by Governor Cuomo on that same day.

The California law follows a trend of minimum wage ordinances now in place for 18 cities and counties in this state. See our blogs, City of Los Angeles Minimum Wage Increasing Annually from 2016 to 2020, Oakland Minimum Wage Escalates to $12.55, San Francisco Minimum Wage Escalates to $12.25 on May 1, 2015 and Be Prepared for Statewide and Local Minimum Wage Increases. Also see UC Berkeley’s compilation of California municipalities with minimum wage laws.

SB-3 will increase the statewide minimum wage 50 cents per hour to $10.50 beginning January 1, 2017 and to $11.00 on January 1, 2018. The rate then increases $1.00/hour each year from 2019 until $15.00 in 2022. The minimum will then adjust annually by the cost of living with a maximum increase of 3.5%.

Businesses with under 25 on payroll do not need to begin complying with the state minimum wage hikes until 2018, but will need to follow any applicable local minimum wage in the interim.

A business operating in more than one city with a minimum wage ordinance is responsible for tracking all these individual laws, potentially obligated to pay employees working in one such city a different wage than in another. Even sending a single employee into an applicable city for one service call could affect his or her minimum wage requirement in the applicable pay period. Such municipal ordinances differ on the minimum numbers of hours worked within city or county boundaries for local law to apply.

These minimum wage hikes may create other new costs for California employers. For instance, minimum salaries for exempt-from-overtime employees will also increase annually, geared at double the minimum wage for a 40 hour week. Each hike will also raise the overtime premium, set at 1.5x or 2.0x a worker’s regular rate of pay. For instance, as of January 1, 2017, employees receiving minimum wage must be paid at least $15.75 for every 1.5 overtime hour and $21 for double time. Those overtime rates will be higher for any worker also receiving commissions, certain bonuses and/or piece work in addition to hourly compensation. See our blog Working Overtime in California.

These rising costs may require businesses to increase the costs of goods and services or to lay off employees or reduce hours to remain viable.

For further information, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

The Home Care Services Consumer Protection Act (HCOCPA) requires Home Care Organizations (HCO) to receive a license from the California Department of Social Services (CDSS) by July 1, 2016. Health & Safety Code 1796.61(b) and (c).

The law mandated that HCOs file licensing applications, as well as registration applications for all their caregivers – dubbed Home Care Aides (HCA) by the law – with the Home Care Services Bureau (HCSB) of the CDSS by March 1. See “Caregiver Agencies Must File License” (concerning March 1 filing deadline) and “Caregiver Agencies Must Comply with Home Care Services Consumer Protection Act or Cease Operation” (containing an overview of law).

For those that procrastinated and have not yet filed their applications, there is both good and bad news.

First, the good news. The HCSB is accepting applications from late filers. The Bureau is providing technical assistance to all applicants to help them complete their applications and obtain their licenses. Up through July 1, the HCSB will notify applicants of any errors or deficiencies and give them reasonable deadlines to comply, but will not engage in enforcement actions.

Unfortunately, the HCSB cannot guarantee that it will be able to process late applications by July 1. If an HCO does not receive its license by then, it will be in violation of the law. If the HCSB receives a complaint about an HCO after July 1, it will investigate. At some time after that date, the HCSB also will begin to send inspectors into the field to do routine inspections of HCOs for compliance with the HCSCPA.

If you operate an agency providing caregivers for people in their homes and have not filed your license application, you should not delay any longer. Find out now if you are subject to this law, and if so, get your license and registration applications in immediately. There is also another business model – a domestic referral agency (DRA) – that you may be able to adopt if the requirements for obtaining a license do not work for you. If you decide to do that, you should begin steps immediately to switch over to a DRA.

Our office has been working with owners of caregiver agencies on the requirements of this new law and on opening domestic referral agencies. Contact Tim Bowles, Cindy Bamforth, or Helena Kobrin for more information.

We welcome Pam Harder as a firm legal and administrative assistant.

Pam joins us with a solid background in personnel management. She is pursuing the ABA-approved paralegal studies program at Pasadena City College, with graduation and California paralegal certification slated for August, 2016.

Pam assists our attorneys with information compilation analysis and legal research. She also works with our office manager on administrative and personnel-related matters. Pam is also coordinating a project to convert the office to paperless operation.

She is also Clementine’s mom, named by many well-placed people as Most Adorable Child in Pasadena for 2014, 2015 and, so far, first quarter of 2016.

March 29, 2016

Under the California Fair Employment and Housing Act’s (FEHA) Pregnancy Disability Leave Law (PDL), California employers with at least five employees must provide unpaid leave to an employee who is disabled due to pregnancy, childbirth, or a related medical condition. FEHA also requires employers to give employees notice of their rights and obligations.

California’s Department of Fair Employment and Housing (DFEH) recently revised its FEHA regulations (the Regulations). Effective April 1, 2016, the Regulations require all California employers with at least five employees to post a new pregnancy disability leave notice, “Your Rights and Obligations as a Pregnant Employee” (New Notice).

In addition to eliminating existing Pregnancy Disability Notices “A” and “B,” the New Notice specifies:

Health Care Coverage During PDL: Currently, the employer must continue providing health group coverage to the employee on pregnancy disability leave. The New Notice further provides that such coverage must remain at the same level and under the same conditions during the leave.

Notification Requirements: To receive a reasonable accommodation, obtain a transfer to another job position or take pregnancy disability leave, the pregnant employee must provide advance notice to her employer. The New Notice requires that the employee provide such notice at least 30 days in advance of a foreseeable event (e.g., the expected birth of a child or planned medical treatment). For unforeseeable events, the employee must provide written or verbal notice as soon as practicable. If an employee fails to comply, the employer may defer the requested leave until the employee provides proper notice.

Additional Rights Under California Family Rights Act (CFRA) Leave: For California employers with 50 or more employees, certain eligible employees may also be entitled to unpaid CFRA leave for the birth, adoption, or for foster care placement of the child or for the employee’s or specified family member(s)’ serious health condition(s). The New Notice includes a CFRA rights summary and specifies that according to applicable law “employees may choose or employers may require use of accrued paid leave while taking CFRA leave.”

Employers should purchase an updated California and Federal Employment Notices Poster from the California Chamber of Commerce or other qualified vendor and be prepared to implement the new pregnancy disability leave regulations by the April 1 deadline.

For more information, please contact one of our attorneys, Timothy Bowles, Cindy Bamforth or Helena Kobrin.

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 items in some cases.

A. The First Nine Required Pay Stub Items: 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 requirements.

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

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.

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.

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.

We are extremely pleased to have Ms. Daniska Coronado Iberico as a legal assistant with the firm. Daniska is a licensed attorney in Peru, with business, commercial, and corporate law experience. She recently moved to the United States to become a lawyer here, now working full time at Bowles Law while fulfilling her formal educational requirements for the California bar.

Raised in a family of lawyers, Daniska received her Bachelor’s Degree in Law at the University of Lima in 2011, having served there as Associate Editor for the Lima University “Advocatus” Law Review. Following admission to the Bar of Lima, she served in Peru as in-house counsel for transnational companies in mining, construction and hydrocarbons sectors. Daniska also has considerable experience on human rights education projects in her native country, serving as a volunteer for Youth for Human Rights International.

In addition to proficiency in her areas of legal practice, Daniska brings her Spanish and English bilingual skills to the firm. We welcome Daniska and look forward to working with her.

February 5, 2016