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ALERT!! NEW CALIFORNIA SUPREME COURT RULING ON OVERTIME–MUST READ!

Overtime pay in California is based on the employee’s “regular rate of pay,” which is not always an employee’s normal hourly wage and must include almost all forms of pay that the employee receives.

Yesterday, the California Supreme Court ruled that an employer must calculate the regular rate of pay by dividing the employee’s total compensation by the number of non-overtime hours an employee worked during the pay period, rather than the total number of hours the employee worked, including overtime hours (Alvarado v Dart Container Corporation of California).

Many of you may pay your employees a premium for working on a weekend or a night shift and you should be aware of this distinction in the law.   Others may pay a “make up amount” to compensate workers who have changed from a daily or weekly rate to an hourly rate and have a separate line to increase their pay to meet a minimum payment.  It may be subject to increased overtime rates as well.  This may eventually extend to housing or other items that are considered part of the regular compensation package.  It may all need to be included at some point as this ruling evolves.

In the case, Dart Container Corporation of California, allegedly maintained a policy of paying a flat “attendance bonus” of $15 per day to employees who worked Saturday and Sunday shifts, regardless of the number of hours worked on the weekend shift. An employee sued, claiming he was improperly paid overtime during the weeks that he earned the weekend attendance bonus.

The employee argued that overtime pay on any flat sum bonus should be divided only by the “regular” hours he worked that week (the method in the Division of Labor Standards Enforcement [DLSE] manual), not by the “total” hours worked during the week (regular hours plus overtime hours worked, the federal formula). For example, to determine the employee’s regular rate of pay, you would divide only by 40 regular hours instead of 48 total hours (regular hours plus overtime hours). This would result in a higher regular rate of pay and, thus, a higher overtime rate.

The California Supreme Court unanimously reversed the lower court and approved the DLSE method of calculating the regular rate of pay when a flat sum bonus is involved: Employers must divide the employee’s total compensation by the employee’s non-overtime hours worked (not by the total hours worked).

The Court reasoned that a flat sum bonus is not tied to the number of hours worked – the $15 will be paid when an employee picks up a weekend shift, regardless of how many hours the employee worked that week. Because the flat sum bonus was payable even if the employee didn’t work overtime, only the non-overtime hours should be considered when calculating the regular rate of pay.

The Court also based its ruling on two other policy factors:

  • California law requires premium overtime pay which is meant to discourage employers from imposing overtime work.
  • California labor laws are interpreted liberally in favor of worker protection.

The Court also decided that this ruling should apply retroactively, not just going forward.

This decision is limited to flat-sum bonuses, but we may see employees argue that it should apply to other types of extra compensation.

We strongly urge employers who want to give “extra pay” to hourly workers should consult legal counsel.

Final Thoughts on 2016 and a Caution to Legislators and Employers for 2017

I will begin this by saying that some of this article is focused on California, while much can be applicable to the rest of the United States.  The San Joaquin Valley is a microcosm of what has taken place across this country.  The rural, farming and agriculture areas of this country are tired of being ignored.   And finally, they stood up in November and got the attention of the people that think that life is only lived in big cities.

California politicians are very good at double speak.  They say they are supportive of Agriculture, but none of them every actually come to the Valley to talk to business owners.  On the rare occasion they do come to the Valley it is to talk to the workers or to point at a High Speed Rail train that is not going to do anything for people here.

The fact is, California, and many State governments across the country, would prefer if Agriculture would just go away.  They would much rather we were all working in a state full of Silicone Valley businesses.  They are cleaner, there would be no fight over water, and we could just ignore it altogether.  In the past election, we did not get visits by Hillary (Trump dropped in quickly) and Kamala Harris (the new Senator) didn’t bother with and knows nothing about this side of California.  The Governor has only been to Fresno a few times in 6 years and that is never to learn about real issues (he knows it all I guess).

For the rest of the country, the story is similar.  President Obama flew over the rest of the US and only visited a few coastal states in 8 years in office.  He came to California almost monthly to San Francisco or Los Angeles to attend a fund raiser, but on the ONE occasion that he came to the valley to discuss the drought, he got off the plane, went to a dirt field for about 1 hour and then flew out because he had a golf date in Southern California (where they had water to make beautiful greens for his putting).  We never saw a thing done about the drought after that and still have not until last week when a bill (0pposed by outgoing Senator Barbara Boxer) was signed by the President to help us build dams.  This was not because of any work done by the President, but by the work of our Representatives from the Valley that finally got enough support from  enough people in both parties to get this to the President despite Barbara Boxer.

One of the most telling examples of how Legislators view business owners is how they write regulations.  Almost all regulations start with the assumption that most employers are bad.  In fact, many times it is actually written into the introduction and states that this bill must be passed to protect the workers, etc.  The reality is that most employers work very hard with their employees to create a family atmosphere.  The regulations get in the way of much of this.  Every time the government mandates a benefit that many people are already doing for their employees, they add cumbersome requirements, and many pages of fines and penalties if you do not do it exactly right.  In a more practical world, doing your best should count for something, but not according to our Legislators.  So, every time they add a benefit, many employers remove another benefit so they can afford the one the government wants.  There is only one pot of money, but Legislators think employers can just invent more money like Congress does and it just isn’t the case.

If there is one takeaway from the recent Presidential elections is that middle-America and rural areas are tired of being ignored or shoved aside by our representatives.  If you don’t visit and really listen to their issues, you run the chance of being replaced.  Not all issues affecting business and employees can be handled by looking out the window in Los Angeles or Sacramento or Washington, D.C.  I hope they pay attention or 2018 could be a very turbulent year as well.

BUT THERE IS A RESPONSIBILITY OF THE OWNER\EMPLOYER AS WELL:

In 1999, in California, Governor Gray Davis signed the labor bills establishing daily as well as weekly overtime rules.  It also established a 30 minute employee meal with stern regulations.  Here we are 17 years later and there are still a number of employers who ignore, or do not know of these laws, or simply choose to go their own way.  This affects all of us.  When an employer does not follow the simple laws and refuses to do things like installing a time clock and paying people for the hours they work, they give every employer a black eye and give every Legislator an easy excuse to add new laws and regulations.  In other words, a few stubborn bad employers are making business hard for everyone else.  Instead of just complaining about the State or the Federal government, if  you know an employer that is not following the law, talk to them and let them know they are a big part of the problem.

The easiest way to pay people with the least amount of work on your part is to pay people exactly what they work based on a time clock.  Anything else you are doing is why we keep getting more “wage theft” headlines.  Let’s all resolve in 2017 to pay people for what they work and hold them accountable for the job.  Spend your hard time enforcing your rules instead of working hard to explain a poor payroll practice.  With minimum wages going up and other regulations coming to many States, 2017 is a good year to get on board the right train.  HR Mobile Services, Inc. is there to help you do it, but you have to follow the program to make it successful.

Have a Happy and Prosperous New Year!!!

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.

CALIFORNIA DEFEATS OVERTIME BILL FOR AGRICULTURE AGAIN…..BUT…..

On Friday, there was a heated debate in Sacramento regarding a bill that would remove the exemptions for agriculture workers and bring them into the 8 hour day and 40 hour workweek.

First, a little history:

The Federal Government exempted agriculture workers back in the 1940’s from the FLSA and left the regulation of overtime to the States if they wanted to improve on this standard.  NO OTHER STATE DID…..EXCEPT CALIFORNIA.  In 1976 Jerry Brown (the first time as Governor), signed bills that established the 10 hour day and 60 hour work-week.  This was included in the Wage Orders that were established about 2001, specifically, Wage Order 14 with some agriculture work being moved to the 8/40 schedule with wage orders 8 and 13.

In 2010 and again in 2011, they tried to change the rules to 8/40 but it was defeated again with Governor Arnold Schwarzenegger stating:

“Unfortunately, this measure, while well-intended, will not
improve the lives of California’s agricultural workers and
instead will result in additional burdens on California
businesses, increased unemployment, and lower wages.  In order
to remain competitive against other states that do not have such
wage requirements, businesses will simply avoid paying overtime.
Instead of working 10-hour days, multiple crews will be hired
to work shorter shifts, resulting in lower take home pay for all
workers.  Businesses trying to compete under the new wage rules
may become unprofitable and go out of business, resulting in
further damage to our already fragile economy.”

So again on Friday, we had the arguments for and against.  3  pro-8/40 Assembly members felt it was important to quote Bible Scripture.  While interesting, this is not really the argument.  There were supporters from the usual groups, UFW, Labor leaders on one side and Agriculture employers on the other.  What was missing was those who really represent the interests of the employee.

Right now, a dairy worker generally works 60 hours a week, 10 hours a day.  If you pass this law, that employee will be working 40 hours a week, or 8 hours per day (5 days a week).  Since employers will not want to pay overtime, they will do one of 3 things.  They will change from two 10-hour shifts a day, to 3 8-hour shifts per day.  Or, they will reduce the size of their herds so they can be handled in 8 hours and this will further reduce the number of employees needed.  Finally, they can just close up and go to one of the other 49 states that want to work with agricultural employers.

When you reduce the worker’s income by 20 hours per week, you are not doing them a favor.  In fact, you may be creating a much worse situation.  In order to make up for the lost income (can you afford to lose $200 + per week in your pay?) the employee will have to look for a second income.  This means working at another dairy 2 days a week or working a second shift at another dairy.  This increases the likelihood of injuries due to being over tired, less time with family and most likely they will not have a day off at all.  Right now they get one or two days off a week, but if they have a second job, that will most likely go away.  YOU ARE NOT HELPING A PERSON WHEN YOU REDUCE THEIR HOURS, INCOME AND DAYS OFF.

Though well intentioned, this shows a real lack of understanding of the actual on the ground situation.  Typical of State Legislators, they sit in their Sacramento office and listen to advocates instead of getting their shoes dirty and talking to the actual people involved.  I would extend an invitation to any State Legislator to come and spend a day in our office to see the impact of some of their legislations.  I can guarantee there are at least 10 things that they do not know exist or the impact it has on employers and employees, and the environment.

Meanwhile, contact your representatives directly, not through an organization, and point out to them the tremendous loss to employees if this legislation goes through.  They won’t listen to your problems, but they may listen if you are discussing your employee’s concerns.

YOU CANNOT COMBINE REST PERIODS!

For some time now we have been advising our clients that they must separate 10 minute rest periods into each half of the day as per the wage orders.  Now there has been the first court trial after the Brinker decision to address the issue of combined rest periods.  Below is an edited version of an article from HRCalifornia white paper sponsored by the California Chamber of Commerce.  There is contact information on the bottom if you wish to read the full account but the important information is here:

California Court Affirms Rest Break Timing Requirement

A California court recently affirmed that, in general, rest breaks cannot be combined (Rodriguez v. E.M.E., Inc., 2016 WL 1613803 (2016)).

Relying on the California Supreme Court’s guidance in Brinker Restaurant Corp. v. Superior Court, the appellate court ruled in Rodriguez that “rest breaks in an eight hour shift should fall on either side of the meal break, absent factors rendering such scheduling impracticable.” The court acknowledged that unusual or exceptional circumstances may permit variation from the norm.

The Rodriguez case is one of the first since Brinker to expand on the issue of rest-break timing. In Rodriguez, the court ruled that whether the company can show that unusual circumstances justify its practice of combining rest breaks into a single 20-minute break before the meal period is an issue that cannot be decided on a motion to eliminate the case before trial (known as a motion for summary judgment).

The Rodriguez court remanded the case to a lower court so the issue can go before a jury.

General Guidance

The court relied on the Wage Orders, Division of Labor Standards Enforcement opinions and the Brinker decision to reaffirm the general rule that rest periods should fall in the middle of work periods and separated by the meal break “insofar as practicable” — which the court interpreted to mean “to the extent feasible.”

Following the Brinker guidance, the timing of such breaks in an eight-hour shift is that one rest break should fall on either side of the meal break.

Limited Departure From the General Rule

Now we know the general rule. But when is a departure from the permissible schedule allowed? According to the Rodriguez court, a departure from the general rule is allowed only if the departure can meet the following two-prong test:

1.   The departure will not unduly affect employee welfare; and
2.  The departure is tailored to alleviate a material burden that would be imposed on the employer by implementing the preferred schedule.

A departure from the preferred schedule that is “merely advantageous” to the employer will not meet the above test. Instead, the employer must show that the preferred schedule imposes a material burden and that departure from the norm is necessary to alleviate that burden.

In coming up with this rule, the court noted that the overall intent of California’s Wage Orders is to protect employee health and welfare.

Combined Breaks

The court also rejected the notion that employers are allowed to combine rest breaks, as the company in this case did. Again, the court reiterated the preferred schedule of one rest break on each side of a meal break.

A company has no right to combine rest breaks as a matter of law.

However, unusual or exceptional circumstances may permit a combined rest break. The court noted that there was only one circumstance that the former Industrial Welfare Commission had discussed allowing a combined rest break: where the business requires shifts in which the meal period occurs soon after the employee reports to work. The Rodriguez court noted that those facts were not before it.

Note: Employers are advised to consult legal counsel if they think they have a situation that allows them to depart from the general rule of a rest break on each side of a meal break.

Question for a Jury

In this particular case, the employer submitted declarations from employees that the combined rest break wasn’t harmful to them and that they preferred it.

The company also submitted evidence that the combined rest break was necessary because the nature of the production process meant that the employees needed a long time to prepare for the break and also time to resume activities after break. The company claimed that a departure from the preferred rest break schedule enabled the company to avoid material economic losses due to lost production time preparing for breaks and resuming activities after.

However, the employee who brought the case submitted his own declaration claiming that employees lost little or no work time in taking breaks, countering the argument that employees following the preferred break schedule would place a material burden on the company. Because of this declaration, the employer was not able to get rid of the case before trial, and further proceedings will be necessary.

This case has now been remanded, and we will see if the employer can prove that its departure from the general rule was justified. Or the case may be appealed to California’s Supreme Court. In the meantime, this published decision is good law.

Best Practices
Comply with break timing requirements. Provide the preferred schedule of one rest break falling in the middle of the work period before the meal period and one rest break falling in the middle of the work period after the meal period.
If you think your company has unique burdensome circumstances that would allow you to depart from the preferred schedule, consult legal counsel. It can’t be stressed enough: meal and rest break claims continue to be a source of costly litigation, penalties and fines.
Review your policies to make sure they are compliant with the preferred rest break timing.
Educate managers about their obligations relating to meal and rest periods and discipline managers who do not follow policy.
You may use this contact for more information from the California Chamber of Commerce Services: hrcalifornia.service@calchamber.com

US Dept of Labor Issuing new Rules for Salary Exemptions

Below is a release from the US Department of Labor.   Many states take their labor rules directly from the US  DOL but many others have their own rules under which employees are eligible for overtime pay.  For instance in California, a salaried person must be paid twice the minimum wage and be in a largely administrative position not doing the same work as the hourly employees.  They must exercise independent thought and actions and this is a pretty high standard to be exempt from overtime requirements.  Further, if you have salaried people, you better have a written agreement of what the salary covers as far as expected hours of work each day\week and if there is any overtime figured into the salary.  Otherwise, it is not considered as covering overtime due.  Check with your own state for their rules on overtime, but here is the statement from the US Department of Labor:

 Wage and Hour Division (WHD)

Notice of Proposed Rulemaking: Overtime

President Obama signing the memorandumToday the Department of Labor has announced a proposed rule that would extend overtime protections to nearly 5 million white collar workers within the first year of its implementation. Failure to update the overtime regulations has left an exception to overtime eligibility originally meant for highly-compensated executive, administrative, and professional employees now applying to workers earning as little as $23,660 a year. For example, a convenience store manager, fast food assistant manager, or some office workers may be expected to work 50 or 60 hours a week or more, making less than the poverty level for a family of four, and not receive a dime of overtime pay. Today’s proposed regulation is a critical first step toward ensuring that hard-working Americans are compensated fairly and have a chance to get ahead.

On March 13, 2014, President Obama signed a Presidential Memorandum directing the Department to update the regulations defining which white collar workers are protected by the FLSA’s minimum wage and overtime standards. Consistent with the President’s goal of ensuring workers are paid a fair day’s pay for a fair day’s work, the memorandum instructed the Department to look for ways to modernize and simplify the regulations while ensuring that the FLSA’s intended overtime protections are fully implemented.

Following issuance of the memorandum, the Department embarked on an extensive outreach program, conducting listening sessions in Washington, DC, and several other locations, as well as by conference call. The listening sessions were attended by a wide range of stakeholders: employees, employers, business associations, non-profit organizations, employee advocates, unions, state and local government representatives, tribal representatives, and small businesses. In these sessions the Department asked stakeholders to address, among other issues: (1) What is the appropriate salary level for exemption; (2) what, if any, changes should be made to the duties tests; and (3) how the regulations could be simplified. The Department’s extensive outreach helped in shaping a proposed rule that is intended to be responsive to concerns raised by the regulated community.

The Notice of Proposed Rulemaking (NPRM) was published on July 6, 2015, in the Federal Register (80 FR 38515) and invited interested parties to submit written comments on the proposed rule at www.regulations.gov by September 4, 2015. Only comments received during the comment period identified in the Federal Register published version of the NPRM will be considered part of the rulemaking record.

Written comments received during the comment period will be helpful in shaping any final rule. Based on past experience and extensive work with the regulated community on other FLSA-related matters, we believe a 60-day comment period provides sufficient time for interested parties to submit substantial comment. Equally important, a comment period of this length, coupled with the feedback already received during the initial outreach sessions, will meet the goal described above of ensuring the Department has the level of insight from the public needed to produce a quality regulation. For these reasons we will not be extending the comment period.

Additional Information

 

   

California is Reaching into Your Pockets AGAIN – 6 weeks Paid Time Off

I may be jumping the gun a little on this one, but yesterday, the city council of San Francisco UNANIMOUSLY voted that employers with over 20 employees will be required to allow family leave AT FULL PAY for 6 weeks!!

California already has California Paid Family Leave Act in place.  It is run through the EDD and is similar to State Disability Insurance.  It is paid for through payroll deductions and the employee receives about 55% of their normal pay while they are “bonding” with the new baby.  Now, San Francisco wants every employer to make up the 45% difference so that the employee is receiving 100% of their normal pay.  They do not say where this mystery money is supposed to come from, but you can imagine higher costs for everything, again, and another reason NOT to go to San Francisco.

I bring this new law up now because as we are painfully aware, all of our State Leaders come from San Francisco with a couple from Los Angeles.  So, every time San Francisco does something like this, it ends up in Sacramento a few months later.  So don’t be surprised when we are discussing this on a State level within the year.

So let’s review…..

We are raising payroll by 50%, then requiring that you give people at least 3 free days a year called sick pay, then we mandate that you provide health insurance and now you have to pay someone 45% of their normal wages for 6 weeks of non- productive work time.  And economists will tell you this will have no effect on business…..which shows the quality of education in California universities.  But that is for another day.

UPDATE!!!!!!.

On Monday, Governor Brown signed a new addendum that increases the payout to people on Paid Family leave to 60%.  This benefit could, in the future also create a new classification of worker.  Under a new definition, if an employee is earning below the poverty line they could fall into this new classification and be eligible for increased State funding for a variety of payouts.  This could mean that they would receive 70% of normal pay while other employee would only receive 60% for the same Paid Family Leave.  This could be extended to Unemployment Benefits, State Disability Pay and even employer covered expenses such as temporary disability under worker’s compensation benefits.  The costs to tax payers and employers just keep surging with no end in sight.

CALIFORNIA MINIMUM WAGE PART 2…..

Please look at this graph that shows the minimum wage increase path for small and large employers.

201603290916

It shows that small employers (25 or fewer employees) and large employers (26 or more employees) will pay at a different rate.  Beginning in 2017, large employers will increase to $10.50 per hour.  Smaller employers will not increase until 2018.

Small employers will continue to be one  year behind the large employers until all employees are covered at $15 per hour by 2023.  The increase starts like this…

Large Employer                    Small Employer

2017 – $10.50                          NO Raise

2018- $11.00                           $10.50

2019 – $12.00                          $11.00

2020 – $13.00                         $12.00

2021 – $14.00                        $13.00

2022 – $15.00                        $14.00

2023……………………………..$15.00 + yearly cost of living increases set each year so you don’t have much time to set new prices to adjust for the unknown increase each year.

This could all be changed before it is signed into law, but this is the proposal as of yesterday.  Also, there is a component that would tie the increases after this to inflation rates and also a “hold” feature if the economy goes down, but considering how the State lies about the real debt and economic problems (they still claim they are a employer friendly state), I don’t hold out much hope for a “hold” being used.  It is, after all, in the State’s interest to increase pay so they can increase the amount of taxes collected from everyone.  There is no incentive to lower the amount to be taxed.

Stay tuned……..

LOOK, UP IN THE SKY, IT’S A BIRD, IT’S A PLANE, NO…IT’S A DRONE!!

By now, I am sure that most of you have heard about the efforts to photograph activity on dairies and other companies by use of drones.  Unfortunately, again, our State and Federal leaders have left us unprotected and with little in the way of resources to combat these intrusions into our businesses.

To begin, you may own your land, but you may not own the sky above it.  Interestingly, the government still holds many of you accountable for the air above your property when it contains methane or other substances, but not if it is polluted with aircraft overhead.  If your neighbor has a tree that hangs over your fence and you want to trim it back, you can.  But you can’t stop a jet from flying over at 30,000 feet.  So where is the actual cut off?

“There is gray area in terms of how far your property rights extend,” said Jeramie Scott, national security counsel

at the Electronic Privacy Information Center. “It’s going to need to be addressed sooner rather than later as

drones are integrated into the national airspace.”

The issue is becoming more urgent as drones are crowding America’s skies: The Consumer Technology Association

estimated 700,000 were sold last year.

According to the Federal Aviation Administration, every inch above the tip of your grass blades is the government’s

jurisdiction. “The FAA is responsible for the safety and management of U.S. airspace from the ground up,” said an

agency spokesman, echoing rules laid out on its website.

But common law long held that landowners’ rights went “all the way to Heaven.” And today, it’s clear that they have

some rights.

California’s Governor vetoed all of the bills that came before him at the end of the 2015 Legislative Session.  Most probably needed to be reworked.  So, there are about 6 bills working their way through the system again.  However, we really need to turn to the FAA to get guidance, and so far, the only real answers they have is that drones need to be registered with the FAA.  The FAA refers to drones as UAVs or Unmanned Arial Vehicle Systems.

So what do we do while we wait for the government to catch up with an issue that started a couple of years ago?

This is from the AgWeb website:

The FAA administers the air space from the ground surface (soil, grass, top of building) upward. If it finds there is a problem, it can rule that the UAV was in violation due to careless and reckless operation and issue a fine or other penalty. Well-equipped UAV systems with cameras and sensors can cost from $7,500 to $40,000 or more, creating a substantial loss if destroyed.

Woldt says concerns often are based on a need for safety and potential infringements of property and privacy. The former is addressed by federal aviation regulations, while property and privacy concerns are addressed by civil and perhaps even criminal law. Someone can fly a UAV equipped with a camera over a neighbor’s backyard and be adhering to aviation law, but infringing on someone’s personal privacy. It gets back to one’s expectation of privacy in different settings, Woldt said.  If a person feels that their privacy has been infringed upon, then the same recommendation applies — contact appropriate authorities with as much information about the UAV as can be obtained, without confrontation.

Landowners can take steps to create a no-fly zone over their property by documenting their preferences at https://www.noflyzone.org/. The No Fly Zone organization works with manufacturers and UAV software developers. While it cannot guarantee that individual no-fly zones will be respected, it will provide the information to leading manufacturers, who can incorporate these areas into their software.

Proposed Changes to UAV Regulations

Earlier this month the FAA released a set of proposed regulations to more fully integrate UAS into the National Air Space. When approved, these regulations would open the door to much wider UAS use, including for a breadth of possible agricultural applications.  For more information on the proposed FAA regulations, and to provide comments to the FAA on the regulations, see:

As you can see, this is a very murky situation with a lot of what you can’t do and very little on what you can do.  You can confront the person if you find them, but you cannot threaten or use physical force.  You can contact the Sherriff’s department and claim that they are disturbing your animals (if indeed they are doing so).  Chasing animals with drones could be considered animal abuse in some situations, but in all cases, consult your attorney or law enforcement, do not take action into your own hands.  Remember, in the long run, you don’t want to lose the public opinion on an issue while the legislature is trying to provide solutions or you could end up on the bad side of that solution.

Contact your Assembly and Senate members and let them know your position.  Attend meetings, get organized and most of all, communicate to everyone you know when you see drone activity in your area.  Together we can work to stop this.