Beginning January 2016, employers who want to claim the salaried executive, administrative, or professional exemption under California law, must begin paying a guaranteed salary of at least
$3,467 per month (or $41,600 per year). The guaranteed salary for a claimed exemption must be equal to at least twice the applicable minimum wage, and because the California minimum wage
rises to $10 per hour in January, the guaranteed salary must equal at least $20 per hour, or $3,467 per month. Our review of local Minimum Wage Ordinances (established by Cities) does not show any of them attempt to impact the definition of an executive, administrative, or professional worker for whom a business may claim an overtime exemption.
To claim the overtime exemption starting in January 2016, employers will still have to ensure such workers
(a) spend a majority of their time in high-level exempt functions and
(b) receive a guaranteed (not subject to reduction) salary equal to at least $3,467 per month.
California businesses should check their payroll information for managers, supervisors, and other high level personnel, to ensure that where an overtime exemption is being claimed, the minimum
salary equals at least $3,467 per month or $41,600 per year.
On January 1, 2016, the state of California along with virtually every city in the local area will be raising each entity’s respective Minimum Wage to a new higher level. The former state Minimum Wage will rise to $10.00 per hour on January 1.
On January 1, 2016, the following Santa Clara County entities are also affected and will have a $10.00 per hour minimum wage: Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Morgan Hill, and Saratoga.
These cities have adopted an even higher Minimum Wages which will also be in effect on January 1, 2016:
2015 brings an explosion of new laws benefitting employees and imposing new requirements on small businesses. This article provides a summary of the most important new laws. Please seek legal advice on how each law applies to your situation specifically.
Wage-Hour: Minimum Wages Are Increasing
The minimum wage requirement for several cities increases in 2015 and the state minimum wage also increases. The federal minimum wage has not increased in more than 5 years and is stuck at $7.25/hour. In 19 states, federal law still permits $2.19 an hour as the minimum wage for tipped employees. Yes, that’s correct: Two Dollars and Nineteen Cents per hour.
Wage-Hour: Employers Must Now Pay for At Least 3 Days Sick Leave
The new paid sick leave law goes into effect in July 2015 and covers essentially every small business in California. The new law’s requirements, including record keeping and notices for each pay check, require employers to acquire legal counsel to ensure compliance.
Wage-Hour: Required Written Notice to Each New Employee
Most employers still fail to comply with Labor Code Sec. 2810.5 which mandates a written (not verbal) notice of wage rates, pay dates, and worker’s compensation insurance information. In 2015 employers must also supply a paid sick leave notice on the new written form.
Wage-Hour: Client Employers Have New Liability When Using
The year 2013 saw new laws severely regulating client employers’ contracts with construction, farm labor, garment, janitorial, security guard, and warehouse contractors having their own workers. A new 2015 amendment makes client employers share the legal liability for wage and workers compensation failures when such contractors fail in their own legal obligations.
Wage-Hour: Liquidated Damages Are Equal to Unpaid Wages
When a minimum wage violation occurs, one new law makes clear such wage violations creating back pay, also create the full and equal amount of liquidated damages automatically being imposed on the employer, along with the unpaid wages.
Wage-Hour: Recovery from Heat Stress Is Paid Hours Worked
Most employers know rest breaks and working meal breaks must be compensated. A new Labor Code revision makes clear any mandated “recovery” period, required to prevent heat stress, is also compensable hours worked.
Wage-Hour: Public Works Employers Have New Exposure
New statutes broaden the definition of “public works” projects and enhance recovery of damages and liabilities against those companies employing workers on projects originally funded, at least in part, by public money.
Discrimination-Harassment: Undocumented Workers –
Drivers’ Licenses Must Be Accepted
The Fair Employment & Housing Act has been amended to prohibit discrimination against workers offering one of the new undocumented worker drivers’ licenses now available by the Dept. of Motor Vehicles.
Discrimination-Harassment: Anti-Bullying Training Is Now Required
Employers with at least 50 employees must already provide sexual harassment management training every two years, and beginning in 2015, that training must include training on abusive conduct, aka “bullying.” Bullying has been broadly defined by our legislature, to include such actions as derogatory remarks, insults, epithets, and undermining of work performance.
Privacy: Personal Computerized Information Has More Protection
California’s prior law protecting customer information has been updated to include new notice requirements to the customer when a data breach has occurred, payment for identity theft protection and other new requirements to protect such data.
Occupational Safety: Employers May Now Use Email to Report
Labor Code Sec. 6409.1 has been amended so employers aware of serious injuries, illness or death related to their businesses, may now report by telephone or email (instead of Telegraph).
Jury Trial Right: Arbitration is Banned for Certain Violence Related Claims
Two little-known statutes prohibiting violence against California workers have been amended, so persons who allege either violence or threats of violence cannot be forced into the secret arbitration process with their claims. The legality of this new law is still an open question.
Jury Trial Right: Arbitration Companies Must Post Understandable Data
After 10 years of avoiding compliance with California’s former law requiring disclosures by those organizations engaged in secret arbitrations (operating in place of judge and jury, outside the view of the public), the legislature determined 100% of such organizations have avoided full compliance with California’s disclosure laws. New reporting and disclosure requirements have been mandated to hopefully shed fuller light on this court-denial process.
Unemployment Insurance: New Certifying Persons Exist
Beginning in 2017, physicians’ assistants, under certain circumstances, may certify a worker’s disability status, so the worker can receive unemployment insurance claims through the EDD.
Unemployment Insurance: Appeals Time Limits Are Extended
Beginning in July 2015, the time for both employees and employer, to appeal an initial decision of the EDD, is extended to 30 days from the prior 20 days limit. The time for appealing a decision from an Unemployment Insurance Appeals Board Administrative Judge also becomes 30 days.
New minimum wages exist as of January 1, 2015. The cities of San Jose, Mountain View, and Sunnyvale California have all increased their respective minimum wages for 2015. The minimum wage for businesses within the city limits of San Jose and Sunnyvale now becomes $10.30 per hour. The Mountain View minimum wage becomes effective on July 1, 2015. All three cities allow for annual adjustments and increases to their $10.30/hour municipal minimum wage after 2015.
California’s state minimum wage remains at $9.00 per hour until January 1, 2016, when it rises to $10.00 per hour. The federal minimum wage stays at $7.25 per hour, where it has been since 2009, with no scheduled future increases. Remember: When a business is covered by several different Minimum Wage laws, the highest minimum wage is the one that needs to be paid to all employees.
California Employers who have at least 50 employees are required to provide at least two hours of sexual harassment training to their supervisors and managers every two years. New supervisors and managers must be trained within six months. This requirement exists in the Fair Employment & Housing Act at Govt. Code Sec. 12950.1.
The training has to be interactive, must be conducted by a qualified trainer, and must cover at least:
the policy against sexual harassment
definitions of sexual harassment
descriptions and examples of sexual harassment
responding to events of sexual harassment
preventing sexual harassment
protection against sexual orientation and gender identity harassment
bullying in the workplace
A 2005 survey indicated more than 60% of California start-up companies had no sexual harassment policy as is required by state and federal law. In reality, probably more than 90% of California small businesses fail to have sexual harassment policies that include prohibitions against same-sex harassment and gender identity harassment. Failure to have a written policy and statement against harassment is a violation of the law itself, which requires employers to take all measures available to prevent such harassment from occurring in the first place.
The Lesson: Maintain an up-to-date policy, and train your supervisors and managers if you have at last 50 employees.
Starting in 2015, California employers with at least 50 employees must contain a new Sexual Harassment – Anti-bullying training component: The training must advise each Manager on how to prevent “abusive conduct” in the workplace. Abusive Conduct is defined as: “conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests … [and] may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.”
Here’s the problem with the new law: The Legislature has decided that “abusive conduct” will remain legal. No laws have been passed to ban “abusive conduct.” But small businesses must take the time and expense to train their Managers on the definition and prevention of “abusive conduct” in the workplace despite the fact that such conduct is still legal.
It may be that the single benefit to this new law for employees is to identify another method for defining a “hostile work environment.” Employers are liable for allowing a hostile work environment to occur, when that hostile environment has some connection to the employee’s sex, race, ethnicity, religion, age, and/or disability. But a hostile work environment, or abusive conduct in that environment, is still legal when not connected with any legally protected characteristic. If you have any questions about whether the new “abusive conduct” definition applies to your work place, please contact your legal counsel.
Warning: New Paid Sick Leave Law Impacts the Usual Suspects
On Sept. 10, 2014, Gov. Jerry Brown signed the Healthy Workplaces, Healthy Families Act of 2014 (Assembly Bill 1522). The law goes into effect on July 1, 2015, and creates a new Labor Code Section 246(e). The law imposes radically new, ominous, and detailed requirements on small businesses in California, and 99% of those businesses are not yet ready to comply.
• All private employers are covered by the law.
• No exemptions exist for those with less than 15 or 5 employees.
• Some unionized and government work forces are excluded.
Benefits & Accruals Under the Paid Sick Leave Law:
• Workers in California performing at least 30 days of work in a year, earn paid sick leave.
• One hour is earned for every 30 hours worked.
• Full time workers will have earned 24 hours at the end of 24 weeks of full time employment.
• Employers must allow accrual of hours, but may limit total accrual to 48 hours, or 6 days.
• Employees need not be paid for the hours left unused at the time of termination.
• Employers may require reasonable advance notice of the leave.
Uses for the Paid Sick Leave Law:
• Hours may be used for preventive care.
• “Family” members include the usual persons, plus “spouse,” registered domestic partner, grandparent, grandchild, and sibling.
• Use must include time off for matters of domestic violence, sexual assault, or stalking.
• Employers may set a minimum number of hours to be used each time.
• Employers must provide written notice of accrual rights at hire.
• The Labor Commissioner will probably develop an updated template for notices.
• A Poster notice of these rights is required.
• An itemized (Labor Code 226) statement of earnings (or another writing) is required.
• This law automatically presumes retaliation exists under certain conditions.
• Those conditions include all adverse actions taken within 30 days of any formal or informal complaints filed about such leave.
Every small business needs to consult with legal counsel long before July 1, 2015 to ensure compliance with the radically new requirements of this surprising law.