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UPDATE TO SICK PAY LAW: DO YOU KNOW HOW YOU ARE GOING TO ACCRUE HOURS?

Since we first heard of the new “Healthy Families” law in the State of California, there has been some clarification of responsibilities.  If you click here: https://s3-us-west-2.amazonaws.com/lockton-corporate-website/Compliance-Alerts/14_12_24_CA_Sick_Leave_Final.pdf  you will see an article that explains the process is clear detail.  It is not a long article, but I highly recommend you read it and make sure your bookkeeper reads it as well.

One of the key features of the act is that we must inform your employees how you plan to accrue the sick pay hours.  There are 4 choices, but really most of you only have 2 choices.  You can make sure your existing sick pay policy is as good or better than the state plan and that means the employees can still earn at least 24 hours within the first 720 hours of work (one hour accrued for every 30 hours worked).

The second is if you have a collective bargaining agreement already in place (usually if you are a union shop).

Third, you can accrue each payday based on the hours worked.  The formula is 1 hour of sick pay accrued for every 30 hours worked until you reach 24 hours.  This method requires a lot of time calculating every employee separately.  Overtime hours are included in the calculation as worked hours.  Your paycheck stub must have a line on it showing Sick Pay with the hours earned for that pay period and a total showing the total accrued sick pay hours.  Once the 24 hours is reached, you do not have to accrue any more for the rest of the 12 month period.  On the beginning of the next 12 months, you start accruing again.  In between those times, if an employee uses any sick pay hours, you would show a minus amount in the pay period column and subtract that amount from the total year to date number.

The Final and OUR RECOMMENDED BEST WAY  to handle the sick pay hours is to “grant” the hours up front.  In other words, start the employee with 24 hours in the year to date total.  They cannot access it until they have worked 90 days for your company so there is very little risk that you are paying ahead.  Also, at termination, you are not required to pay out any unused sick pay, so the risk of loss is very low and the savings in time is very high.  You also stay in compliance and out of trouble. 

As your HR company, we need to know which method you are going to use so we can provide the correct information in your employee packets as required by the law.

If you have any other questions regarding this law, please give Jeff at call at our office: (559) 625-2322.  We will continue to update material as it becomes available.

You May Be RESPONSIBLE for YOUR LABOR CONTRACTOR CIVIL LIABILITIES!!

So you thought hiring a labor contractor to do your work instead of hiring your own employees would save you from some litigation problems?  Well, in California, think again.

Beginning January 1, 2015, under AB 1897, a client employer will share civil legal responsibility and civil liability for all workers supplied by a labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage.

They define a “client employer” as a business entity that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.

This does not apply to a business with less than 25 workers (including those hired directly by the client employer and workers from the labor contractor), or businesses with 5 or fewer workers supplied by a labor contractor at any given time.

What this new law says, is that the client employer jointly liable with the labor contractor for civil liability relating to the payment of wages and/or failure to provide workers’ compensation coverage.  However, the statue expressly permits client employers to include indemnification provisions in their service contracts and to enforce those provisions as a remedy against the labor contractor for liability created by acts of the labor contractor.  Labor Contractors by also contractually agree to indemnity provisions in their favor for acts on the part of the client employer that lead to liability.  The statute sets forth one exception to the ability of the parties to shift to the labor contractor any legal duties or liabilities under Cal-OSHA.

Under the new law, a worker or his representative must notify the client employer of violations at least 30 days prior to filing a civil action against the client employer.  It also states that you are not allowed to take adverse action against any employee for making claims or civil actions.

Please discuss these issues with your labor contractor to make sure you are comfortable that they are paying and protecting their employees according to the law.  Between this new law and the increased emphasis on independent contractors, you need to know the law and how to protect yourself.  As always, if you have any questions, please contact us with your questions…..Jeff at 559-625-2322.

What Does the New California Sick Pay Rule Mean to Me?

Yet another reason to make sure you drop the “salary” rate for hourly workers and ensure a time clock or written time card is used by every employee including your supervisors and managers.  Please read below and understand just how important tracking hours will be.  We also do not have final rulings on this legislation, so interpretations will be clarified over the next few months regarding questions.  One question, in Agriculture we have a 10 hour day, does that mean the employee earns up to 10 hours for a sick day or only 8?  If I have Paid Time Off (PTO) instead of vacation or sick pay, is that ok?  Our take is that you should designate vacation days separate from sick days because they may accrue at different rates and if you now give a person 5 PTOs a year, that would be 3 sick days and only 2 days of vacation.  Please read the article below originally posted by CalSHRM:

California Enacts Bill Requiring Employers Provide Paid Sick Leave

By Michael S. Kalt1

1 Michael S. Kalt is a partner in the Labor and Employment practice group at Wilson Turner Kosmo LLP in San Diego, California and is also the Government Affairs Director for CalSHRM.  Wilson Turner Kosmo LLP San Diego, CA 92101 mkalt@wilsonturnerkosmo.com

On September 10, 2014, Governor Jerry Brown signed the “Healthy Workplaces, Healthy Families Act of 2014” (AB 1522) making California the second state (Connecticut is the other) to implement paid sick leave state-wide. This law takes effect July 1, 2015, and implements a number of new Labor Code provisions (sections 245 et seq.)

California employers should begin learning about its very detailed requirements and compare it against similar but different ordinances already enacted in San Francisco and being considered in San Diego. Accordingly, this article will provide an initial review of this bill’s numerous detailed requirements.

Employers Covered by and Exempted from this New Law

Likely one of the more controversial aspects of this new law is its scope. For instance, unlike Connecticut’s Paid Sick Leave law which applies only to employers with more than 50 employees and San Francisco’s Paid Sick Leave Ordinance which exempts smaller employers from certain obligations, this new law applies to almost all employers regardless of size, many public employers, the state, and municipalities.

Notably, however, like many other recent Labor Code amendments, this bill also contains carve-outs for employees covered by collective bargaining agreements (CBAs) with certain provisions. Specifically, this bill does not apply to employees covered by CBAs that expressly provide for the wages, hours of work, and working conditions of employees, as well as for paid sick days (with final and binding arbitration for any disputes regarding paid sick days), premium wage rates for all overtime, and a regular hourly rate of not less than 30 percent more than the state minimum wage.

Similarly, construction industry employees covered by a CBA with these provisions are not covered by this bill if the CBA was entered into before January 1, 2015, or if the CBA expressly waives the requirements of this new law in clear and unambiguous terms.

Responding to the State of California’s concern about costs, an amendment inserted at the eleventh-hour also exempts a provider of in-home supportive services under specified sections of the Welfare and Institutions Code.

Finally, certain individuals employed in the airline industry and covered by the federal Railway Labor Act are exempted provided they receive compensated time-off at least equal to this new law.

Accrual and Usage Rules

After July 1, 2015, employees who work in California for thirty or more days within a year from the commencement of employment will accrue paid sick leave at a rate of no less than one hour for every 30 hours worked. Exempt employees will be deemed to work 40 hours per week for accrual purposes, unless their normal workweek schedule is less than 40 hours, in which case they will accrue paid sick leave based upon that normal workweek.

Employees will be entitled to use accrued paid sick days beginning on the 90th day of employment, after which they may use paid sick days as they are accrued. Employers will also have the discretion to lend paid sick days to an employee in advance of accrual, and employers cannot require employees to locate a replacement worker to cover days on which an employee uses paid sick days.

While accrued paid sick days shall carry over to the following year of employment, employers may limit an employee’s use of paid sick leave to 24 hours, or three days, in each year of employment. However, no accrual or carry-over is required if the full amount of sick leave is received at the beginning of each year. An employer also has no obligation to allow an employee’s total accrual of paid sick leave to exceed 48 hours or six days, provided that an employee’s rights to accrue and use paid sick leave under this section are not otherwise limited. This six-day accrual limit appears intended to ensure the employee has their full sick leave rights both for the instant year and the beginning of the next year.

One of the bigger concerns about this proposed law was its potential impact on employers who already provide an equal amount of sick time or paid time off. New Labor Code section 246(e) addresses this concern by stating that an employer does not need to provide “additional” paid sick days if it meets certain requirements. Specifically, the employer is exempted from providing additional paid sick days if (a) it has a paid leave policy or paid time off policy, (b) the employer makes available an amount of leave that may be used for the same purposes and under the same conditions as specified in this new law, and (c) the employer’s policy does either of the following: (1) it satisfies the accrual, carry over and use requirements of this new law; or (b) it provides no less than 24 hours or three days of paid sick leave, or equivalent paid leave or paid time off, for employee use for each year of employment or calendar year or 12-month basis. Notably, unlike the exemptions provided to this entire new law for certain groups (discussed above), this particular exemption seems to apply only to the provision of “additional” time off, but does not exempt employers from other aspects of this new law (i.e., notices, posters, record-keeping, etc.).

Employers will not be required to compensate employees for unused sick days upon employment ending, but they must reinstate the previously unused balance if they rehire the employee within one year. In that instance, the rehired employee shall be entitled to use those previously accrued and unused paid sick days and to accrue additional paid sick days upon rehiring.

Employees will be entitled to use paid sick time for preventive care for themselves or a family member, as well as for the diagnosis, care, or treatment of their or their family member’s existing health condition. For purposes of this bill, “family member” means a (1) child (as defined), (2) parent (as defined), (3) spouse, (4) registered domestic partner, (5) grandparent, (6) grandchild, or (7) sibling. The employer shall also provide paid sick days for an employee who is a victim of domestic violence, sexual assault, or stalking, as discussed in Labor Code sections 230 and 230.1.

An employee may determine how much paid sick leave they need to use, but an employer may set a reasonable minimum increment, not to exceed two hours, for the use of paid sick leave. In response to employer concerns sick leave is more unpredictable than many other leaves (e.g., FMLA, etc.), this bill requires employees to provide “reasonable” advance notification if the need for paid sick leave is foreseeable. Where the need for paid sick leave is unforeseeable, the employee shall provide notice of the need for leave as soon as practicable.

Employees using paid sick leave shall be compensated at the employee’s normal rate during regular hours of work. If the employee in the 90 days of employment before taking accrued sick leave had different hourly pay rates, was paid by commission or piece rate, or was a nonexempt salaried employee, then the rate of pay shall be calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.

Notice, Posting and Record-Retention Rules

This new law also furthers a recent trend of new California laws that enact substantive rights and impose administrative responsibilities, although arguably in less expansive form due to last-minute amendments proposed by human resources organizations.

For instance, this law amends Labor Code section 2810.5 to require employers to provide at the time of hiring written information about this new paid sick leave entitlement. Specifically, this law requires that the notice employers have been required to provide since 2012 concerning pay-related information now also include language advising employees of their right to accrue and use paid sick leave, their right to be free from retaliation, and their right to file a complaint. Fortunately, this particular Labor Code section generally requires the Labor Commissioner to develop a template employers may use, so presumably the Labor Commissioner will develop an updated form. An earlier but-since deleted provision of this law would have required employers to essentially develop and distribute written notice in at least five languages but was silent as to what the notice would have been required to say or when it needed to be distributed.

An employer will also be required to display in a conspicuous place in each workplace of the employer a poster notifying employees of these paid sick leave rights. The Labor Commissioner will be responsible for preparing this poster. Employers who willfully violate the posting requirements will be subject to a civil penalty of not more than $100 per offense.

Employers will also be required to provide employees with written notice identifying the amount of paid sick leave available, or paid time off an employee provides in lieu of sick leave, for use on either the employee’s itemized wage statement required under Labor Code section 226 or in a separate writing provided on the designated pay date with the employee’s payment of wages. An employee alleging failure to provide such notice shall be entitled to the penalties specifically enumerated under this law (discussed below) rather than under Labor Code section 226.

New Labor Code section 247.5 also requires employers to retain, for at least three years (rather than the five years originally proposed), records documenting the hours worked, paid sick days accrued, and paid sick days used by each employee. These records may be inspected by the Labor Commissioner under Labor Code section 1174, or by an employee under Labor Code section 226. Troublingly, and in another example of a recent trend in California, this section provides that if an employer fails to maintain adequate records, it shall be presumed that the employee is entitled to the maximum number of hours accruable under this new article, unless the employer proves otherwise by clear and convincing evidence. In other words, an employer cannot simply prevail by satisfying the preponderance of the evidence standard traditionally used, but must satisfy the much more rigorous “clear and convincing” standard traditionally reserved for punitive damages purposes.

Retaliation Protections and Enforcement

This bill also prohibits discrimination or retaliation against employees for using accrued sick days, or for filing a complaint regarding any sick day policy violation. However, similar to last year’s protections against “immigration-related practices” (AB 263), this bill creates a rebuttable presumption of unlawful retaliation if an employer takes an adverse employment action (including denying the right to use sick days) within 30 days of an employee (1) filing a complaint with the Labor Commissioner or in court alleging violations of this article; (2) cooperating with an investigation or prosecution of an alleged violation of this article; or (3) opposing a policy, practice or act that is prohibited by this article.

Under Labor Code section 248.5, the Labor Commissioner may enforce this new law by awarding reinstatement, back pay, and payment of sick days unlawfully withheld, plus the payment of an additional sum in the form of an administrative penalty to an employee whose rights were violated. Where paid sick leave is unlawfully withheld, the employee shall recover the dollar value of the paid sick days withheld, or $250 multiplied by three, whichever is greater, but not to exceed an aggregate penalty of $4,000. If a paid sick leave-related violation results in “other” harm to the employee or person, the administrative penalty shall include a sum of $50 for each day that the violation occurred or continued, not to exceed $4,000.

If the employer fails to promptly comply, the Labor Commissioner may take “appropriate” enforcement action to ensure compliance, including filing a civil action. In such instances, the violating employer may be ordered to pay up to the state of California $50 for each day a violation occurs of continues.

Employees or other persons may report suspected violations to the Labor Commissioner, and to encourage such reporting, the Labor Commissioner may keep the reporting employee’s identifying information confidential.

The Labor Commissioner or the Attorney General may also file a civil action in court against the employer or any person violating this article. The Labor Commissioner or Attorney General may recover appropriate legal and equitable relief, including reinstatement, back pay, the payment of sick days improperly withheld, and liquidated damages of $50 to each employee for each violation each day, plus reasonable attorneys’ fees and costs. (A provision authorizing employees to file civil actions was deleted by recent amendment while another amendment clarifies that these administrative actions would be maintained on “behalf of the aggrieved,” suggesting any penalties would ultimately be awarded to the employee.) Subdivision (b) to Labor Code section 245 clarifies that the provisions of this new article “are in addition to and independent of any other rights, remedies or procedures under any other law.

Lastly, proposed section 249, subdivision (d), specifies this bill establishes “minimum” requirements for paid sick days and does not preempt, limit or otherwise affect the applicability of any other law or ordinance that provides greater accrual of use of paid sick days. California employers already must consider slightly different variations in San Francisco and, unless stayed by referendum, San Diego shortly, and this legislative invitation for municipalities to enact still-broader versions suggests employers may soon need to have multiple versions of their paid sick leave policies.

OBAMA EXECUTVE ORDERS AND YOUR BUSINESS

We have been fielding a number of calls lately regarding Executive Orders signed by President Obama.  You must first understand that an Executive Order only affects Federal Laws and the interpretation of regulations for Federal workers and those who have contracts with the Federal government.  Private businesses are, for the most part, exempt from these orders.  So, your minimum wage will not be affected by an Executive Order unless your state takes all of their labor law from the Federal Department of Labor.

The same applies to the order regarding overtime.  If your company is in California, for example, you already have a series of Wage Orders and Labor Regulations that further define exempt and non-exempt status of employees.  The Federal Law is not as defining of work status in regards to overtime law.  Many States follow Federal Labor law but institute their own standards for overtime and minimum wages. In general, the rule is the law that is more favorable to the employee is the prevailing law.  Sometimes, this can create a conflict.

For instance, is an employee better served by a law that allows them to work four 10 hour days instead of requiring only 8 hours in a day or they incur overtime.  Is the employee better off working 4 days vs 5 days for the same amount of hours?

The take-away from this message is that these Executive Orders do not affect most of you, but beware that States are following what is happening on a Federal level and often adjust in accordance.

Governor Approves Driver License for Undocumented Workers

 

Today, Oct. 3, 2013, Governor Brown of California signed into law a bill that grants Drivers Licenses to Undocumented workers in Calfornia as long as they apply and pass the driver’s test we all have to pass.  The thinking is that this will make our roads safer because they will be able to purchase car insurance now and will better understand our driving laws.  We are not so sure that is going to be the results, but there is another issue that is very important to all employers. 

If an employee gets this type of driver’s license, it will be marked with the initials DP (driver’s privilege) rather than DL (driver’s license) followed by the numbers.  As of right now, this new document is not allowed for federal forms and a worker, who is not a US citizen, will still need to provide a copy  of their Permanent Resident card to be eligible to work and for the I-9 form.