Not a year goes by that the California legislature doesn’t take the opportunity to add to the ever-increasing list of regulations and statutes that employers ignore at their peril. Here are five new laws that took effect on January 1, 2016, that warrant special attention.
The Minimum Wage Increase And Its Effect On Other Wage/Hour Laws
While most employers are aware that California’s minimum wage increased to $10 per hour on January 1, 2016, other laws use the state minimum wage as a benchmark for compliance. For example, California’s Wage Orders make it legal for employers to require workers who “customarily” provide their own tools to do so, if the workers are paid twice the minimum wage. That was easy to satisfy when the minimum wage was $6 per hour. But with the latest jump up to $10, employers must now pay workers who are required to provide their own tools $20 per hour, or risk being held liable for failure to reimburse.
The same issue affects how employers must pay salaried workers classified as “exempt” from overtime and other wage/hour requirements. Exempt employees must meet strict duties tests to qualify for one of the “white collar” exemptions (administrative, professional and executive). You can’t simply pay someone a salary to avoid overtime. The worker not only must be performing specific types of work that qualify for exemption, and they must be paid a salary equal to twice the minimum wage for full time employment. The “salary basis requirement” now requires an annual salary of at least $41,600.
AB 1513: New Compensation Requirements For “Piece-Rate” Workers
This new law adds requirements for how employers must pay “piece rate” workers, which describes any worker paid by the job, or unit of production. Mechanics are often paid in this manner, per vehicle repair, according to “book rates.” The law created new California Labor Code section 226.2, which requires payment of a separate hourly wage for “nonproductive” time worked by piece-rate employees, as well for rest and recovery periods. If you are employing piece rate workers, you must start paying at least minimum wage for these gaps in time. The bill comes on the back of widespread lawsuits in which piece rate workers (as well as pure commission employees) began suing employers for periods such as meetings and rest breaks when they were not able to increase their pay by earning piece rates or commissions. Because California law does not allow for “averaging” of compensation over all hours of the day to measure minimum wage compliance, even highly compensated employees must be paid separately for “unproductive time.”
SB 579: Protected Time Off For Child Care
SB 579 expands the allowable reasons for which employees can take “job-protected” time off from work without fear of discrimination or discharge under the Family School Partnership Act. Workers can now take time off to 1) find, enroll, or re-enroll children in school or with a licensed child care provider, and 2) address a child care provider or school emergency. What qualifies as a “child care provider emergency?” A sitter or nanny’s unexpected availability, a child being sent home for disciplinary reasons, and other routine events. The law also allows employees to take time off to care for a broader number of individuals, such as step-parents, foster parents, grandparents and others who were not previously covered this particular law. The bottom line? It is getting to the point where time off for any “family-related” issue may be protected and off-limits as a basis for disciplinary action or termination.
SB 600: New Protected Categories Under California Law Governing Businesses
This addition to the state’s Unruh Civil Rights Act, California Civil Code sections 51 through 51.3, expands the scope of anti-discrimination law. The new law expands protection to immigrants – legal and undocumented. While the Unruh Act was enacted to protect consumers from discrimination by businesses, and is not an “employment law” per se, employers should make sure workers are aware of the law and do not treat customers or patrons differently based on immigration status. For example, businesses sometimes won’t accept foreign forms of identification, and promotional contests are often limited to “legal residents.” The new law forbids “discriminating” on these bases.
SB 358: Strengthens California Law Prohibiting Gender Pay Inequities
This new law increases the state’s equal-pay requirements. California employers must pay equal compensation to both sexes for “substantially similar work” across all locations, as opposed to equal pay for equal work in the same establishment. The bill places the burden on the employer to prove that a wage disparity between the sexes is based upon allowable factors, such as a seniority system, a merit system, quantity or quality of production, or some legal factor other than sex. While probably more relevant to large employers, local employers should still be aware that differences in pay, if not justifiable under the factors identified in the law, can subject them to lawsuits, even if the differences were unintentional.
The author, Chris Brown, recently returned to the Tahoe-Truckee area after 10 years of litigating California employment matters for the state’s largest employers. Mr. Brown is available to go over your current policies, questions and concerns so you can stop worrying about compliance, and focus on what you do best: running your business.
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The content contained and opinions expressed in this blog are solely those of the author. This blog contains content and opinions concerning the law generally, and is not intended to constitute legal advice or to create any attorney‑client relationship with the reader. The reader should consult with an attorney about any specific legal issues prior to embarking on any course of action or inaction involving legal matters.