ARIZONA TO VOTE ON RAISE TO MINIMUM WAGE AND SICK PAY

Arizona, following the trend in neighboring States like California, has initiative 206 on the November 8 ballot.  It seems probable at this point that the initiative may pass.  If it does, beginning January 1, the minimum wage will rise to $10 per hour and eventually get to $12 per hour by 2020.  Voters in Flagstaff are voting to raise the limit to $15 per hour.

Included in the proposition is also the addition of Paid Sick Leave.  Similar to the law established in California, it provides that the employee earns one hour of sick pay for every 30 hours worked.  Employers with less than 15 employees will have to provide 24 hours of sick pay and those over 15 employees will provide up to 40 hours per year.  The unused hours can roll over to the next year.  Alternatively, the employer can “front-load” all hours anticipated at the beginning of the regulation, which is July 1, 2017.  There is no payout of unused hours at the time of termination.  However, if an employee comes back to work for  you within 9 months they are started right where they left off and they can use any hours that were left on the books.

There are more rules to this, but let me warn everyone that retaliation or arguing with an employee about using their earned sick hours will not go well for the employer.  Experience in California has shown that trying to bully employees or retaliate for the use of this sick pay does not go well in court for the employer and the fines can be very expensive.

Below is from the review of the Proposition with links to read the rest of the bill.  It is pretty easy to read and there is a lot of information that bookkeepers and employers will have to know about this law.  As always, HR Mobile Services, Inc. has experience in these laws and will help guide the transition including the changes to your employee hire packets.

The Minimum Wage and Paid Time Off Initiative, also known as Proposition 206, is on the November 8, 2016, ballot in Arizona as an initiated state statute.

A “yes” vote supports raising the minimum wage to $10 in 2017, and then incrementally to $12 by 2020, and creating a right to paid sick time off from employment.
A “no” vote opposes this measure, keeping the minimum wage at $8.05, adjusted for cost of living, and retaining employers’ ability to decide whether or not to offer paid sick time off.

In November 2016, voters in Colorado and Maine are also voting on measures to increase their state minimum wages to $12. In Washington, citizens are voting on an initiative to increase the minimum wage to $13.50.

Overview

Minimum wage in Arizona

Arizona’s minimum wage is $8.05 per hour in 2016. The federal minimum wage is $7.25. Due to Proposition 202 of 2006, the state’s minimum wage increases with the cost-of-living. Without Proposition 206, Arizona’s minimum wage is expected to increase to $8.15 in 2017.[1] In November 2016, voters in Flagstaff, Arizona, are voting on whether to increase their city’s minimum wage to $15 an hour.[2]

Initiative design

Proposition 206 would increase the minimum wage to $10 in 2017, $10.50 in 2018, $11.00 in 2019, and $12 in 2020. Starting in 2021, the measure would increase the minimum wage with the cost of living. The measure retains Arizona’s law regarding tipping, which permits employers to pay employees who receive tips up to $3.00 less than the minimum wage.[3][4]

The initiative would also guarantee 40 hours of annual paid sick time to employees of businesses with 15 or more employees and 24 hours to those of businesses with less than 15 employees. Employees would be entitled to accrue one hour of paid sick time for every 30 hours worked. The measure would permit earned paid sick time to be utilized for an employee’s medical care, an employee’s need to care for a family member, a public health emergency, or addressing domestic violence.

State of ballot measure campaigns

Supporters had raised $1.5 million as of October 10, 2016. Living United for Change in Arizona had donated almost $1 million to the campaign. The Arizona Chamber of Commerce launched an opposition campaign, Protect Arizona Jobs, on September 19, 2016, and is expecting to spend over $1 million. Polls indicate that around 56 percent of Arizonans support Proposition 206.

Text of measure

Ballot title

The ballot title is as follows:[5]

INCREASES THE MINIMUM WAGE FROM $8.05 PER HOUR IN 2016 TO $12.00 PER HOUR BY 2020 AND ESTABLISHES THE RIGHT TO EARN PAID SICK TIME AWAY FROM EMPLOYMENT.A “yes” vote shall have the effect of increasing the minimum wage from $8.05 per hour in 2016 to $10.00 per hour in 2017, and then incrementally increasing the minimum wage to $12.00 per hour by the year 2020; entitles employees to earn 1 hour of paid sick time for every 30 hours worked with limits based upon the size of the employer; broadly defining the conditions under which paid sick time may be taken, including mental or physical illness, care of a family member, a public health emergency, or absence due to domestic violence, sexual violence, abuse or stalking; prohibiting various forms of retaliation against employees for exercising any rights under the law; and requiring employers to provide various notices to employees about the law.

A “no” vote shall have the effect of retaining the existing minimum wage (along with the existing method for annually increasing the minimum wage for inflation) and retaining employers’ existing ability to determine their own earned paid sick leave policy.[6]

Ballot summary

The ballot summary is as follows:[7]

The Fair Wages and Healthy Families Initiative increases minimum wage to $10 in 2017 then gradually to $12 by 2020; provides 40 hours annual “earned paid sick time” for employees of large employers (24 hours for those of small employers); time accrues at one hour earned for every 30 hours worked; time may be used to address circumstances caused by illness of employee or employee’s family, public health emergencies, or domestic violence; prohibits retaliating against employees using the benefit; allows for more generous paid time-off policies; and exempts employees who expressly waive the benefit under collective bargaining agreements.[6]

Full text

The full text of the measure can be found here.

Fiscal analysis

See also: Fiscal analysis statement

An extended summary of the fiscal analysis statement can be found here.

CALIFORNIA AND ARIZONA EMPLOYERS SHARE RISKS OF NEW MARIJUANA INITIATIVES

The article below is from the Arizona Chamber of Commerce in its entirety followed by an article from the Orange County Register in California.  The exact same arguments can be made for California.  There is almost no doubt that this will pass in California but the supporters refuse to allow questions on their websites and will not address the legalities that will face employers.

Factor into all of this is the new drug testing (or non-testing) standard set by OSHA on a Federal level and employers are in a real bind if they try to keep drugs out of the workplace.  Under Federal OSHA you cannot drug test post-injury unless the use of drugs or alcohol would be considered the proximate cause of the accident AND the test must be able to establish that the employee was under the influence at the time of the accident.  Since there is no legal test for THC levels, you will not be able to test for or fire someone just because THC from marijuana is in their body.  This is a major problem that no one wants to address until attorney’s get ahold of it in a big trial and sue the owner because they were aware the employee had marijuana in their system and did not remove them from operating equipment.  Just wait!

Here is the story.  In California, it is Proposition 64.  Below the Arizona comments is a article from the Orange County Register in California regarding their proposition:

__________________________________________________________________________________________________________

The Arizona Chamber of Commerce and Industry and No on 205 this Thursday, October 27 at 2 PM are hosting a tele-town hall for employers who are concerned about the effect of legalized marijuana in their workplace. Call 1-877-229-8493, PIN 115868.  

The proposed Regulation and Taxation of Marijuana Act, otherwise known as Proposition 205, would massively affect existing Arizona law. Put simply, Proposition 205 would negatively impact Arizona law and policy in a variety of significant ways, including how job creators manage their workforce and workplace.

The Arizona Chamber of Commerce and Industry is proud to spearhead efforts to defeat this job-killing initiative. In Proposition 205’s 20 pages of conflicting and contradictory legalese, there are two key provisions that are particularly problematic for employers: proposed A.R.S. §§ 36-2860(A) and 36-2860(B). These two provisions, and Proposition 205 in general, are poised to wreak havoc on Arizona in a manner not disclosed in the initiative or acknowledged by its out-of-state marijuana industry backers.

The aforementioned provisions would upend Arizona’s employment laws in the following ways:

  • It would rob employers of the ability to take disciplinary action against employees who test positivefor marijuana, despite having a statutorily approved drug-testing policy. Want a drug-free workplace? Proposition 205 makes that more difficult.
  • It would create an environment for an avalanche of wrongful termination lawsuitsfor employers that fire employees for using marijuana on the theory that the termination was in violation of Proposition 205.
  • It would tangle Arizona businesses in a web of regulations that conflict with federal lawregarding safe workplaces, safe roads and transport, and safe foods. Does your business have federal contracts? Under Proposition 205, you’ll be forced to navigate two conflicting sets of laws.

Proposition 205 would be a trial lawyer’s dream. Compounded with the clashes above, these provisions would create conflict within laws related to various Arizona benefit programs, too. For example:

  • Proposition 205 would create a situation where, under Arizona’s welfare laws, marijuana would be considered both legal and illegal, resulting in costly litigation.
  • Proposition 205 would also create a situation where Arizona’s unemployment insurance laws would require a person to be denied benefits, yet it would also prohibit such denial, again resulting in costly litigation.
  • Lastly, it would be virtually impossible for Arizona employers to receive a statutory discount on workers’ compensation premiums for having a zero-tolerance drug-free workplace.

Propostion 205 is a mess. Its passage would harm employers’ ability to keep marijuana out of their workplace, whille exposing them to expensive lawsuits. Arizona job creators who are concerned about our state’s ability to continue to attract and grow jobs should vote no on Proposition 205.

WHAT:           Tele-town hall on Proposition 205’s effect on employers

WHEN:           Thursday, October 27 at 2 PM

HOW:              Call 1-877-229-8493; enter 115868 when prompted for a PIN

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry

__________________________________________________________________________________________________________________________

 

Why Prop 64 is about more than just smoking marijuana

By BROOKE EDWARDS STAGGS

2016-10-24 14:33:08

Proposition 64, on its surface, poses a simple question: Should people be free to smoke pot in California?

But the 62-page initiative on the Nov. 8 ballot asks voters to determine much more than that.

It asks them to decide how much cannabis Californians should be allowed to carry, whether they should be able to grow it in their homes and what, if any, penalties consumers should face going forward.

RELATED: Prop 64 to legalize marijuana: Who’s backing it, who’s fighting it and why?

It also asks them to weigh the future of a multibillion-dollar industry, including everything from how marijuana businesses should be taxed to what warning labels should appear on edible products.

Depending on who you ask, either the devil or the redemption is in those details.

Supporters call Prop. 64 the “gold standard” of marijuana legalization, touting strict safeguards that build on lessons learned by the four states that already allow recreational pot.

Some opponents say the measure doesn’t go far enough to keep kids and roadways safe, while detractors on the other end of the spectrum say the measure includes too many regulations to be true “legalization.”

With the vote about two weeks away, here’s a closer look at what Prop. 64 means for California.

PERSONAL RIGHTS

Prop. 64 would allow California residents and visitors 21 and older to buy, carry and give away up to an ounce of marijuana. That’s enough to roll perhaps 40 average-sized joints.

They also could possess up to 8 grams of concentrated cannabis, such as waxes or oils that can be vaporized or mixed into foods.

Under the measure, residents could grow as many as six pot plants at home and keep what they harvest. But the plants couldn’t be visible to the public. And local governments could regulate how they’re grown, including requiring that it be done indoors.

No one could consume recreational pot in public. Consumption would be allowed only on private property or in “cannabis cafes” licensed strictly for marijuana use.

The initiative would uphold laws against driving while impaired or having an open container of marijuana in a car. But it wouldn’t establish a threshold, as Colorado and Washington did, for how much THC (the compound in pot that makes users high) drivers could legally have in their blood.

Prop. 64 backers say that’s because blood alcohol content isn’t a good measure for marijuana impairment, since pot stays in the system long after its mind-altering effects have worn off. So the initiative would direct tax revenue to law enforcement and researchers to develop better tests for drugged driving.

The measure would protect employer rather than employee rights, allowing companies to hire and fire based on drug tests.

But the penalties for most marijuana-related crimes, which studies show disproportionately affect minorities, would be lower if the measure passes. Adults convicted of possession with intent to sell would get six months in jail rather than two years in prison, for example, while teens caught with the drug would get counseling and community service instead of criminal records. And those changes would be retroactive, meaning marijuana offenders could be released from jail or have their records expunged if the measure passes.

Prop. 64 also would uphold existing rights for medical marijuana patients, allowing them to still grow more pot than recreational consumers and access medical marijuana at 18 years old. They would face some additional taxes, though they’d also gain privacy and child custody protections.

If the measure is approved, all of these personal rights would take effect the day after the election, on Nov. 9.

BUSINESS PLAN

It would take a bit longer for the taxed and regulated recreational marijuana industry promised by Prop. 64 to take shape.

Shops would start to open on or before Jan. 1, 2018.

That’s the date California officials expect to start issuing licenses to all medical marijuana growers, manufacturers and sellers under industry regulations signed into law in 2015.

Prop. 64 would largely extend the same regulatory framework to recreational marijuana production, with requirements for licensing, testing, child-resistant packaging, limited advertising and tracking pot from seed to sale.

The initiative would establish a 15 percent sales tax, plus a tax by weight for growers. That would be on top of taxes local governments tack on and regular state sales tax, though medical marijuana users would be exempt from the latter.

Small- and medium-sized businesses would get an edge coming out of the gate, since Prop. 64 bans large-scale cultivation for the first five years. But after Jan. 1, 2023, there would be no state cap on the size of marijuana farms.

Cities and counties would still have authority to regulate, tax or ban marijuana-related businesses in their borders. Many have already started passing laws in anticipation of Prop. 64, with 62 local measures related to marijuana on the ballot Nov. 8.

THE OUTLOOK

Nearly every poll on Prop. 64 suggests it will pass – though perhaps narrowly. Recent polls have ranged from 51 percent to 71 percent support, with many averaging around 60 percent.

But advertising to defeat Prop. 64 is being aired. And in California the popularity of measures often shifts in the final days before an election.

If the measure becomes law, industry experts predict that California’s legal weed market will reach $6.5 billion by 2020 and potentially spur legalization throughout the country.

The Legislative Analyst’s Office anticipates that tax revenue from the measure could top $1 billion annually, with the justice system potentially saving tens of millions more on enforcement costs.

The revenue won’t go to state or local general funds. Instead, it will be set aside to fund youth prevention programs, marijuana research, better drugged driving tests, environmental remediation and grants to impacted communities.

The impact legal marijuana has on highway safety, teen use and crime isn’t yet clear. There are conflicting reports coming out of states such as Colorado and Washington, which approved legal pot in 2012. And experts say they need more years of reliable data before they have definitive answers.

More research is also needed on how recreational marijuana use ultimately affects health and achievement, with particular concern over today’s increasingly potent pot. But studies increasingly suggest that, while marijuana consumption may pose some risks for young people and the mentally ill, responsible use appears to have little impact on healthy adults.

With valid concerns on both sides of the issue, Dr. Igor Grant, who heads up the Center for Medical Cannabis Research at UC San Diego, said it’ll be up to voters to weigh the impacts of prohibition against potential impacts of legalization.

“There’s a cost-benefit analysis that voters have to make,” he said.

Contact the writer: 714-796-7963 or bstaggs@ocregister.comTwitter: @JournoBrooke

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PETA IS OUT SPYING AGAIN

We had a report yesterday from a dairy in the Buttonwillow area that there was a person spying on the dairy from the road.  We have previously reported on this issue.  The herdsman saw a van with dark tinted windows parked on the road next to the dairy fence.  There was one man apparently with a camera focused on one of the corrals and as soon as the herdsman approached the van, they jumped in and drove off very fast.

Again, we advise that  you do not become overly confrontational or threatening.  You can have someone hold a blanket on a stick in front of the camera so they get discouraged and leave, but remember, if they are on the road, it is public property and you do not have a right to confiscate equipment.  If you feel they are bothering your employees or animals, you can contact the Sherriff’s office and ask that they not agitate the animals.

We are not sure of the actual affiliation of this group at this time, but we wanted everyone to be aware that the same events that were going on in Northern California, are now hitting the south valley area.  If you see someone, call your neighbors, or call us.

GOV. BROWN SIGNS INDOOR HEAT ILLNESS MANDATE

Yes, you read that correctly.  The State of California feels that people working in-doors deserve the same protections from Heat Illness training as outdoor workers.  Now, on some levels this makes sense.  For instance, a worker in a factory could be exposed to severe heat conditions. Other similar places could be electrical generation areas, greenhouses, building construction, attic insulation installers, electricians, plumbers, etc.  So, this could have some practical applications in the workplace.

That being said, it is a very poorly written bill, SB 1167 (Mendoza; D-Artesia) , which gives almost no direction as to the definition of an “indoor occupation” that would be covered under this act.  In fact, the entire project is left almost completely to Cal\OSHA to write and implement this program.  They have to begin the rule making process in 2017 to submit a proposed rule to the Cal/OSHA Standards Board by January 1, 2019.

This is a stakeholder driven process, so it is very important that your industry is part of the conversation.  If you have an advocacy group, get them involved early to state your position before the rules are written.  It is almost impossible to fight or have them re-written later.

 

GOVERNOR BROWN SIGNS BILL SETTING UP RETIREMENT FUND FOR LOW WAGE WORKERS

 

Before anyone panics, let me say up front that employers do not have to fund any of this with their own money, you just have to set this up in your payroll so that a percentage of an employees check goes to a State run retirement programSo now let me tell you what we know:

Gov. Jerry Brown is scheduled to sign legislation Thursday to automatically enroll nearly 7 million people in a retirement savings account, an attempt to address growing fears that many workers will be financially unprepared to retire.

The legislation creates a state-run retirement program for workers who don’t have an employer-sponsored plan, many of them working in lower-wage positions. It requires employers to automatically enroll their workers and deduct money from each paycheck, though workers can opt out or set their own savings rate. The account could also be carried from job to job.  It is suggested that originally 5% would be deducted and it would go up by 1% per year until it settles at 10%.  I do not know many workers, especially low income people that can afford 10% of their income being taken away for this program.

Supporters of the concept hope that requiring workers to affirmatively opt out will make them less likely to do so, but it is up to employers to make sure all employees will be aware of this program and that they can opt-out.  Experience from the health insurance program is that most employees will opt-out if it involves their own money.

This bill is known as SB1234 by Senate President Pro Tem Kevin de Leon, D-Los Angeles.  It will be called SECURE CHOICE.  You may thank him directly if you are so disposed or let him know what you think of his idea at   https://sd24.senate.ca.gov/contact/email

Below are some key points.  This program will not open until the 9 member panel charged with oversight of the program is installed, so this may not start for a year or two.

KEY FEATURES OF THE CALIFORNIA SECURE CHOICE RETIREMENT SAVINGS PROGRAM:

Governing and Oversight Board

The California Secure Choice Retirement Savings Investment Board (https://www.treasurer.ca.gov/scib/) is modeled after ScholarShare, California’s 529 College Savings Plan. The Board is comprised of nine members: the State Treasurer (Chair), State Controller, Director of the Department of Finance, a retirement savings and investment expert appointed by the Senate Rules Committee, an employee representative appointed by the Speaker of the Assembly, a small business representative appointed by the Governor, and three additional public members appointed by the Governor. Page 3 of 4

The Board is charged with the administration of the Secure Choice Program, and to date has overseen the completion of the legal analysis and the mandated market analysis and feasibility study. In moving forward with the full implementation of the program, the Board will be the ongoing administrator for the hiring of private firms to manage the investment portfolio and the individual retirement savings accounts.

Disclosures for Employees and Employer Liability Protections

Employees offered the opportunity to participate in the Secure Choice Program will receive a program information packet with a disclosure form that includes the benefits and risks of making retirement contributions, the mechanics of how to participate in or opt out of the program, the process for the withdrawal of retirement savings, and how to obtain additional information about the program.

The disclosure form will clearly inform employees that employers are not liable for their decisions whether to participate in or opt out of the program, or for employee investment decisions, and state that their employer is not a fiduciary of the California Secure Choice Retirement Savings Trust or program, the employer does not bear responsibility for how the program is administered, and the employer is not liable with regard to investment returns and benefits paid to program participants.

In addition, the disclosure form will notify employees that the program is not an employer-sponsored retirement plan, their employers are not in a position to provide financial advice, and that they should contact financial advisors if they want to seek financial advice.

To notify employees that the state is not liable for the retirement savings benefit, the disclosure form will also specify that the Secure Choice program fund is not guaranteed by the State of California.

Employees that choose to participate in the program will be required to acknowledge that they have received and read all of the disclosures.

Employee Participation in the Secure Choice Program

When the Secure Choice Board officially opens the program for enrollment, only employers that do not offer their own employer-sponsored retirement plan (such as a 401(k), SEP, or SIMPLE plan) or automatic enrollment payroll deduction IRA will have to perform the ministerial duty of supplying the information packet and disclosure form, and allow their employees to remit contributions through payroll deduction.

Employees will be automatically enrolled, and employee participation will be phased-in over a three year timeframe, starting with the largest employers:

 Employers with 100+ employees: allow employee participation within 12 months of the Board opening the program for enrollment;

 Employers with 50+ employees: within 24 months;

 All other eligible employers: within 36 months.

Participation by employees will be completely voluntarily, and employees will retain the ability to opt out at any time.

The default employee contribution rate will be set at 3%, with Board authority to adjust the amount between 2-5%. Through regulation, the Board could also establish an auto-escalation contribution rate, capped at 8% of salary with a limitation on increasing the rate no more than 1% annually. Employees will be able to specify their level of contribution if they do not want to contribute the default rate, and could also opt out of auto-escalation at any time. Page 4 of 4

Employees that already have access to a workplace retirement plan could also voluntarily participate in the Secure Choice Program. However, their employer will not be obligated to allow them to use their payroll system to make automatic payroll contributions to the program.

Role of Employers

Employers that opt to make the Secure Choice Program available to their employees will not bear any fiduciary responsibility and will not be required to pay administrative fees or comply with federal quarterly-reporting mandates. The administrative function of employers will be limited to providing employees with the program information packet and disclosure form, and allowing their employees access to their payroll system to make payroll deductions to the program.

Due to current federal prohibitions, voluntary employer contributions to employees’ individual retirement accounts will only be permitted if there is a future change in federal law and employer contributions would not cause the Secure Choice Program to be treated as an employee benefit plan under ERISA.

WE WILL WRITE MORE ON THIS TOPIC WHEN THERE IS MORE INFORMATION AND WE ARE NEARER TO IMPLEMENTATION.

MORE EFFECTS FROM THE CHANGE TO AGRICULTURAL WORK HOURS

With the coming change, beginning in 2019, to lower the hours worked in agriculture from 10 to 8 per day, there are also other changes to consider.  First, right now, we encourage our employers to give their employees 30 hours of sick pay per year.  As the hours drop after 2019, the hours of sick pay should also drop until they reach 8 hours x 3 days or 24 hours.  So employees will lose 6 hours of sick pay over time.  Again, you cannot make that change now, but understand it will be a change in a few years.

Second and more important, vacation hours will change.  In the past, it was not really correct to say you get “one week” of vacation because that does not define an exact number of hours offered.  So, we changed your employee packets to say 1 week (60 hours).  Now, we need to start changing that again and we need to do it soon.  Many customers also offer 2 weeks of vacation (120 hours) after anywhere from 2-5 years later.  So, an employee hired in 2017 may be seeing his hours reduced by as much as 20 hours in a week by the time they get that 2 week vacation.  For that reason, we are proposing a change to employee vacation policy that states the employee will earn the equivalent of one week of vacation based on the consistent average of the work weeks from the previous year.  In other words, if an employee works around 40 hours a week, they will get a 40 hour vacation.  If they average 45 hours a week, it will be 45 hours of vacation.  It does not have to be an exact average, but based on the common hours worked weekly.  The same will stand for the 2 week vacation.

If you are an HR Mobile Services, Inc. full-service customer, we will be working to change these policies over the next year.  We see the employee packet as a living document and we make changes large and small about 3 times a year for our customers.  If you have an employee handbook from an attorney, it may not be as up-to-date as Federal Law and State laws change constantly.

Don’t Touch That Cellphone!!

Californians!  Because our state government feels it must protect everything you do, the governor has signed AB 1785 written by (and you are going to love the name…) Assemblyman Bill Quirk.  It is known as the “Distracted Driving” update.  Originally passed a few years back, the old law said you should not text while driving and it attached a fine if you are caught.  This makes sense, because we have all driven behind some numbskull who is not paying attention to the traffic and playing with their phone.

So, now we have an update to that law and you should bring this to the attention of every employee you have that uses a company vehicle or drives on company business.  Basically, the new law says that if you touch your phone or other electrical device FOR ANY REASON while driving, it is a violation and subject to a ticket and fine.  Specifically, you can mount a phone or GPS device on the windshield and you are allowed to do a “one-swipe” gesture which allows for the use of GPS but does not allow texting or other items.

These changes were proposed to meet the 2014 appeals court decision to move the emphasis from the action (calling or texting) to the devices.

We are not posting this to cause a discussion on whether a change like this will eliminate accidents, but we feel a technological change would be better.  They  have software that can disable cellphone use while driving, but refuse to implement it.  So, please inform your employees so that they and you are not subject to fines or tickets.

DE MINIMIS IS NOT A MINIMAL PAY ISSUE

If you have any employees who do work before or after clocking out for the day, you should read on.  This is something very big to follow and it could affect almost all employers.

(from CalChamber HR Alerts)

It might not seem like something to worry about: an employee clocks out but then must set the security system and hustle out the door before the system arms itself. But that small period of uncompensated, work-related time (called “de minimis” time in legal parlance) is the source of an important lawsuit before the California Supreme Court.

The California Supreme Court has now agreed to hear the question of when an employer must pay employees for such de minimis time. A decision in this case could have important implications for employers and hopefully will provide much needed guidance in this area. The case before the California Supreme Court involves an employee at a coffee shop who sued the company, claiming that he should have been compensated for the brief time he spent closing up the store after he clocked out. For example, the employee argued that, after he clocked out, he engaged in the following activities that he was not paid for:

  • Exiting the store and locking the door after setting the alarm (he had to exit within a minute).
  • Walking co-workers to their cars (pursuant to store safety guidelines) which took about 45 seconds.
  • Occasionally reopening the store to let a co-worker grab a forgotten personal item.
  • Bringing patio furniture in once every couple of months.

The employee filed a lawsuit under the California Labor Code for unpaid wages and overtime. A federal district court sided with the employer, ruling that the time spent was de minimis and that the employee was not entitled to payment for it.

The employee appealed, to the Ninth Circuit, arguing that the de minimis doctrine does not apply to California wage claims.

The Ninth Circuit asked the California Supreme Court to decide whether the federal Fair Labor Standards Act’s de minimis doctrine applies to claims for unpaid wages in California, noting that California wage and hour laws often provide greater protections to employees than federal laws.

The California Supreme Court has agreed to decide this important question, and California employers will want to stay tuned.

Employers with specific questions regarding compensation for time spent before and after clocking out should consult legal counsel.

AB 1066 PASSES ASSEMBLY, UPDATE! SIGNED BY GOVERNOR BROWN

(updated comments) The governor signed AB 1066 into law and already we are seeing some of the consequences of that action.  One point being discussed is the exemption on page 3 of the document that exempts employers with collective bargaining agreements.  This is actually true for all wage orders and many labor regulations.  However, it drives speculation that the UFW was behind this action to increase their shrinking ranks.  We shall see.

You can go on-line and read the entire Bill and all of the amendments  https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1066  , but here is a short description:

First, presently Dairies, Ranch and farm labor are under wage order 14 in California.  If allows employees to work a 10 hour day or 60 hour workweek without overtime payment.  Now, beginning in 2019, employers with over 25 employees, will begin to work under new hourly rules.  Smaller employers with 25 or less employees, will start January 1, 2022.  It is a gradual reduction, but the numbers do not add up to a 6 day week anymore.  For instance, the first reduction is at 9 1/2 hours a day or 55 hours in a week.  Well, 6 days at 9 1/2 hours would be 57 hours for the week, so you would be into 2 hours of overtime or cut one of the days shorter.  This bad math continues on the rest of the reduction schedule until you are at 8 hours per day or 40 hours in a week which means employees will only work 5 days.

Here is what this will look like over the next few years:

 

AB1066

Change in Wage Order 14 to 8-hour work day

ALL DATES BEGIN ON JANUARY 1…….

EMPLOYERS w\ 25 OR LESS EMPLOYEES                                                                 EMPLOYERS w\ 26 OR MORE EMPLOYEES

2022 change to 9 ½ hours per day or 55 hours per week                             2019 change to 9 ½ hours per day or 55 hours per week

2023 change to 9 hours per day or 50 hours per week                                2020 change to 9 hours per day or 50 hours per week

2024 change to 8 1/2 hours per day or 45 hours per week                          2021 change to 8 1/2 hours per day or 45 hours per week

2025 change to 8 hours per day or 40 hours per week                                 2022 change to 8 hours per day or 40 hours per week

Further, beginning in 2022, there will be double time pay for all hours over 12 hours in a day.

Finally, I feel I must point out the math in this legislation.  It is tied to the minimum wage increases that are also being increased year after year until 2023 when all employers will be at $15 per hour and continue to increase thereafter.  Here is a little math for you:

If an employee makes $10 per hour now, and working 60 hours, they earn $600 per week.   When the new regulations are in place, an employee will make $15 per hour and work 40 hours and earn $600 per week.  So the employee is going to be no better off after a 50% increase in pay and the employer will be paying the same amount of money for  33% less productive work each week.  (this does not include increases in other employer required taxes and payments).  One other thing to note, you will no longer have to provide 30 hours of sick pay.  Under the new 8 hour day, you will only be required to provide 24 hours of sick pay benefits so the employee actually loses 6 hours of Paid Sick leave.

So, how does this law benefit the employee?  Well the employee will have more time to take a second job to increase their income.  However, the idea of this law was so employees had more “family” time.  Instead, they may be working more hours with a second job, likely not getting a day off at all and more tired and prone to being injured at work.  Not sure how any of this benefits the employee, but remember, all they told the farm workers was that they would be getting more overtime and didn’t mention their hours could be cut.

TWO NOTES OF WARNING!!

First, if you are not already, you really need to move toward paying an hourly rate.  You need to establish a time clock or other time keeping system, and log all hours worked.  Paying by the day, “salary” or other methods are going to get you in more trouble and could cost thousands of dollars.  You need to rely on HR Mobile Services, Inc. or your attorney to keep you out of trouble and follow their directions.

Second, be very careful of employees working at 2 locations that you are a partner or owner in.  For instance, if an employee works 5 days for you, they may want to work at another job.  They can work at another business that you are connected to under certain conditions

  • The other business must be completely separate with a it’s own FEIN number
  • It must be a separate payroll and a separate paycheck just like you get at any second job
  • You cannot be the person directing or encouraging the employee to work at the other job
  • Any disciplinary actions from one job cannot carry over to the other job

Understand that these 2 locations must be just like the employee is working at a dairy and a restaurant.  The can be in the same industry, but they have to be completely separated legally or you will be exposed as trying to circumvent the law and this could bring PAGA and other penalties in a Labor Commission hearing.

Please understand that there is plenty of time for changes, additions or other adjustments to this new law before it begins, so  pay attention to this space and to our mailings in the future.  WE WILL FIGURE THIS OUT TOGETHER!

 

 

Seattle, San Jose, and San Francisco are working on new labor laws that may affect you

Seattle, San Jose, and San Francisco are working on new labor laws that may affect you

According to an article from the AP, many employers will be subject to severe new rules regarding scheduling and once it gets a foothold, you can bet this will be going Nationwide and into other industries.  This is the next step in Socializing all employment.  Please note at the bottom that those with collective bargaining agreements (unions) are exempt.  I can’t imagine how an employer will comply with this law.  If an employee calls in sick or quits, the employer will face fines if they ask another employee to come in and work their shift, so they are forced to work the next 2 weeks short-handed or pay penalties.  – Jeff

By PHUONG LE

Associated Press

SEATTLE (AP) –Seattle leaders have proposed new rules for retail and food-service businesses with hourly employees, including requiring them to schedule shifts two weeks in advance and compensate workers for some last-minute changes – the latest push by a city that has led the nation in mandating worker benefits.

Seattle was among the first to phase in a $15 hourly minimum wage, mandate sick leave for many companies and offer paid parental leave for city workers.

Now, the mayor, city officials and labor-backed groups are targeting erratic schedules and fluctuating hours they say make it difficult for people to juggle child care, school or other jobs, to count on stable income or to plan for the future.

Seattle’s “secure scheduling” proposal also would require retail and fast-food companies with 500 employees globally to compensate workers with “predictability pay” when they’re scheduled but don’t get called into work or are sent home early; provide a minimum 10 hours rest between open and closing shifts; and offer hours to existing employees before hiring new staff.

“Creating equity in Seattle means providing workers with access to a reliable schedule that meets their life and financial needs, while balancing the daily realities facing large employers,” Mayor Ed Murray said earlier this month.

In 2014, San Francisco became the first major U.S. city to pass similar legislation. A District of Columbia bill requiring 14-day scheduling notice advanced out of a council committee in June but has yet to be taken up by the full council. A November ballot measure before San Jose, California, voters would require businesses to offer additional hours to existing part-time employees before hiring new staff.

The Washington Retail Association and other businesses have criticized the Seattle proposal, saying many employers already provide advance scheduling notice. They say the measure is too restrictive and will create more problems for workers.

“It will wipe out the scheduling flexibility that benefits both employ yees and employers,” said Jan Teague, association president. If store managers can’t add to labor costs to cover the predictability pay, they’ll operate with fewer employees or fewer hours when someone can’t make it into work, she said.

Others say they want to see changes to some provisions, such as ensuring employers aren’t penalized for offering shifts directly to workers who want them.

Across the country, companies have faced increasing pressure to make schedules more predictable. Last month, Wal-Mart launched a new scheduling system to give thousands of hourly employees more certainty about their hours.

The sponsors of Seattle’s ordinance say it’s as much about closing the city’s income gap as giving entry-level workers, many of whom are women and minorities, more control over schedules. Median household income, housing prices and rents have soared in booming Seattle as the city has grown to about 687,000 and added about 50,000 tech and other jobs in five years.

“We want this to be a city where our workforce, the people who are keeping this place running, can afford to live here,” said Councilwoman Lisa Herbold, a bill sponsor. “When people have more secure hours, they can do things that make the city more affordable, such as holding down a second job or going to school so they can get a better job.”

Crystal Thompson, who works at Domino’s Pizza, often scrambles to find child care when she gets her schedule one day before the work week begins. The short notice makes it difficult to plan her life.

“This will be good for a lot of people,” she said.

Oliver Savage, 22, a Starbucks barista, said he has asked to work 30 hours but currently gets 20. For a period this summer, a previous store manager scheduled him for only eight hours, reducing his one source of income. He said the store hired a new barista during that time, so he supports the provision requiring current workers be offered hours before additional staff is hired.

Jennifer England, who owns a Subway franchise, said she works with her three employees to accommodate their scheduling needs. She said she won’t be able to pay extra for last-minute shift changes if a worker wants time off or calls in sick.

“They’re making it harder for us to schedule and if anything comes up, we’re going to be penalized and we can’t afford that,” England said.

The bill exempts companies whose employees are covered by a collective bargaining agreement with similar scheduling provisions.