Posts

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!!!

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 ASSEMBLY BILL TO END AG OVERTIME EXEMPTION (AB2757) PASSES COMMITTEE

AB 2757 (Gonzalez), which seeks to repeal longstanding law allowing California Agriculture to pay overtime after 10 hours of work in a day passed the California Assembly’s Labor and Employment Committee on April 6, 2016.

Presently, Labor Code section 554 exempts agricultural employees from Labor Code provisions regarding wage and hour, meal break requirements and other working conditions.  Known as the Phase-In Overtime for Agricultural Workers Act of 2016, this bill would remove this exemption and would create a schedule that would phase-in overtime requirements for agricultural workers over the course of four years, beginning in 2017.  Under the proposed legislation, beginning July 1, 2017, agricultural workers would receive overtime for all work after nine and one-half hours daily or in excess of 55 hours in one workweek.  The thresholds for daily and weekly overtime would be further reduced each subsequent year until January 2020, at which point agricultural employees would receive overtime for work beyond eight hours daily or 40 hours weekly.

Obviously, California Agriculture should do everything it can to oppose this ill-thought legislation. Sagaser, Watkins & Wieland PC will continue to monitor AB 2757 and all other pending employment and labor law bills pending in the California Legislature.  Please call us at 559-421-7000 if you have any questions.

This bill will reduce the paychecks of thousands of agriculture workers.  This bill forces employers to cut 20 hours a week out of the agriculture workers check.  It also reduces their mandated sick pay hours to 24 (from 30) and most of these families will not be able to exist on this amount of pay.  This could mean the end of Agriculture in California.  If employees cannot feed their families they will move away.   If they go, there won’t be anyone to tend the animals and crops.  This is a bill that needs to see the light of day and have a vigorous voice from all Ag employers.  Do it today!!

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.

Attention ALL States: California is at it Again – Double Holiday Pay!!!!!

Hot on the heals of establishing a mandatory 3 days of sick pay for all employees in the state, California is now considering Double Pay for certain holidays.  Please read the analysis below from the California Chamber of Commerce Alert Bulletin regarding this legislation (more commentary at the end):

_________________________________________________________________________________________________________________________

Assembly Committee Passes Double Holiday Pay Bill

March 20, 2015 Jennifer Barrera

The Assembly Labor and Employment Committee this week approved a California Chamber of Commerce-opposed bill requiring double pay for work on certain days.

During testimony to the committee on AB 67 (Gonzalez; D-San Diego) CalChamber Policy Advocate Jennifer Barrera explained that the bill increases costs, creates a competitive disadvantage, and potentially violates employers’ constitutional rights by forcing employers to recognize certain days as “family holidays” and compensate all employees with double pay for work performed on those days.

Violates Religious Freedom

AB 67 provides that employers shall compensate an employee at no less than twice the employee’s regular rate of pay on a “family holiday,” defined as “December 25 of each year” and “the fourth Thursday of November of each year,” commonly referred to as Christmas and Thanksgiving.

While the recognition of these holidays may seem benign to some persons, employers who have non-Christian-based beliefs or are immigrants to America might not see the recognition the same way. The Legislature should not mandate certain days as more significant based upon religious or cultural beliefs that are not maintained by all.

Further questions about the First Amendment implications of AB 67 were raised during the hearing and directed at Barrera, but she was stopped from answering them by the committee chair, who cited procedural precedent issues.

Unavoidable Increase in Costs

Although some employers may close their place of business on a “family holiday” to accommodate their employees, others do not realistically have that option for their business models.

Competitive Disadvantage

AB 67 would also unilaterally increase the cost of doing business only for those employers who have a physical presence in California, thereby automatically placing them at a competitive disadvantage with online companies and out-of-state businesses that would not be subject to this cost.

Recently, the Legislature tried to even the playing field between online retailers and brick-and-mortar stores in the sales-tax arena. AB 67 would further distort this playing field by increasing the cost of doing business for local employers, as opposed to online retailers, who would not have to comply.

Regular Rate of Pay/PAGA Enforcement

Determining the regular rate of pay of many employees requires a detailed calculation that goes beyond just an employee’s hourly pay. As defined by the Division of Labor Standards Enforcement, the “regular rate of pay includes a number of different kinds of remuneration, for example hourly earnings, salary, piecework earnings, commissions, certain bonuses, and the value of meals and lodging.” While this calculation is performed for overtime purposes, it is subject to good faith errors as to what types of “remuneration” should be included in the calculation.

Due to being included in Section 511.5 of the Labor Code, the provisions of AB 67 are subject to the Private Attorneys General Act (PAGA) (Labor Code Section 2699 et seq.). Therefore, errors in calculating the regular rate of pay or failures to comply with other provisions of this mandate would add another threat of litigation against California employers.

Key Vote

AB 67 passed the Assembly Labor and Employment Committee 5-2.

 

Ayes: Chu (D-San Jose), Hernández (D-West Covina), Low (D-Campbell), McCarty (D-Sacramento), Thurmond (D-Richmond.

 

Noes: Harper (R-Huntington Beach), Patterson (R-Fresno).

 

The bill now heads to the Assembly Appropriations Committee; no hearing date has been set.

_________________________________________________________________________________________________________________________

This bill puts a direct strain on any employer who works with living beings, animal or human.  Zoos, dairies, pet stores, aviaries, animal conservatories, laboratories and research facilities, all would fall under this.  Not mentioned are the thousands of employees who work with the elderly and infirmed.  Now, many places fully staff on the holidays so that people who may not have family or a place to celebrate a holiday, have a great day.  Now they will cut back to a bare minimum of workers and hours and this will also reduce the enjoyment of holidays for those people.

This is a well intentioned bill but not a well thought out bill.  Notice that Sick Pay, Paid leave, and now Holiday pay do not affect the State employees because they can just close on those days or they already have a better package of specialties, or, what the heck, it is just tax payer money so there are no real consequences to State agencies.   Hmmmm……..

One positive, there is almost no reason to join a union any more.  They are already in the California Legislature.

We ask that you contact your representatives and express your opinion about this legislation. 

 

Cattle Rustling is on the Rise

SACRAMENTO, Calif.  —   A crime that was at the center of many Western movies is thriving in  modern-day California as reports of cattle rustling are on the rise,  state livestock officials said.

Greg Lawley, chief of the state’s Bureau of Livestock Identification,  said 1,317 head of cattle were stolen or reported missing last year. He  told the Sacramento Bee (    https://bit.ly/1cka3Jb  ) that it’s a 22 percent increase from prerecession numbers.

The USDA reports that cattle prices hit record highs in 2011 and 2012. One steer can sell for $1,000 or more.

Cattle ranchers hope a bill setting tougher fines and punishments that  goes into effect Jan. 1 will serve as a deterrent. Previously, there  were no set fines for cattle rustling. Next year, the crime will be  punishable as a felony or misdemeanor with up to a $5,000 fine.

Currently, it can be common for rustlers to plead charges down to a misdemeanor.

“They’ll get probation,” said Justin Oldfield, vice president of  government relations with the California Cattlemen’s Association. “When  people are punished, it’s usually a fine and not jail time. There  doesn’t seem to be a whole lot of seriousness from the courts.”

Oldfield told the Bee that he is uncertain whether the new law will  deter cattle theft, but he believes that it will create awareness.

“When you’re talking about the value of a steer worth $1,000 or more,  and you lose five of those – that’s a substantial impact to an  operation,” he said. “It can make or break the bottom line for that  year.”

There are roughly 3 million head of cattle in California, most of them  dairy cows. But 575,000 head roam the range, often with no more  protection than a brand.

Last year, the livestock identification bureau identified and returned  cattle worth $1.4 million to the owners. State officials say the crime  probably is under-reported.

In 2010 Red Bluff rancher Candace Owen lost 25 calves to thieves.

“It’s a terrible crime when you steal someone’s livelihood,” she said.

Officials say most thefts are inside jobs. Rustlers can load up a  livestock trailer and be in another state in a matter of hours.

“The thing with stealing livestock, and especially cattle, is you can  get 100 percent of its value, especially with unbranded animals,” Lawley said. In most cases a brand is the only way to establish ownership.

The rise in cattle theft in California is part of a national trend. In  2012, more than 10,400 head of cattle and horses were reported missing  or stolen to the Texas and Southwestern Cattle Raisers Association – a  36 percent increase from 2010.

Information from: The Sacramento Bee,    https://www.sacbee.com 

The Associated Press

Farm Bill for New Farmers\Ranchers Debated

This may be of interest to our 4H and Future Farmers out there.

A group of bipartisan Representatives and Senators has asked House and  Senate farm bill conferees want to provide legislation with programs meant to break down the barriers that make it difficult to enter agriculture.  The Senate letter urged the conferees to maintain the strongest possible support for beginning farmers and ranchers through targeted programs  that provide new and young farmers with education and training, access  to credit and access to affordable land with support for conservation  programs.

Both letters specifically ask for adoption of funding for the  Beginning Farmer and Rancher Development Program at no less than the  House-passed level of 20-million dollars per year; House-passed  provisions that expand credit options for new farmers – including an  authorization for USDA to make microloans for beginning and veteran  farmers and to launch an intermediary lending pilot modeled after other  successful cooperative lending programs such as the Rural  Microentrepreneur Assistance Program; Senate-passed funding levels for  the Conservation Reserve Program Transition Incentives Program; and the  House-passed provision that increases the amount of funding a beginning  or socially disadvantaged farmer can receive up front through the  Environmental Quality Incentives Program.