December 2015-New Laws for 2016

Well I am not sure how it happened, but it’s the end of the year again …. and with year-end comes planning to implement all the new laws which take effect in 2016, and let’s not forget planning some holiday festivities.  Below is a summary of many of the new laws effecting employers and business operations.  All laws are effective January 1, 2016 unless otherwise noted.

Employers should review their handbooks and policies to ensure such are up to date and comply with these news laws.

Also below is our yearly reminder of the “do’s and don’ts” for your holiday gatherings.

LEAVE LAWS

•    School activities’ leave expanded

•    ‘Kin care’ law expanded

WAGE & HOUR LAWS

•    Fair Day’s Pay Act: Individual Liability & Labor Commission’s Powers Expanded

•    Private Attorney General Act (PAGA) Amended Wage Statement Violations Correction

•    Piece-Rate Employees Must be Paid for “Non Productive Time”
•    Amount of Wage Garnishment Restricted

•    Whistle blower protections expanded

•    E-Verify Use Restricted

Currently, employers with 25 or more employees must provide up to 40 hours of unpaid time off annually to employees who are a parent, guardian, or grandparent with custody of one or more children who are in kindergarten or grades 1 through 12 or are attending a licensed daycare facility to participate in school activities. The time off can be limited to eight hours in any calendar month.

The reasons for which employees can take leave is expanded to include the following:

(1) to find or enroll or re-enroll their child in a school or with a licensed childcare provider and

(2) to address a childcare provider or school emergency.

“Childcare provider or school emergency” means  that an employee’s child can’t remain in school or with a childcare provider because of one of the following:

•    The school or childcare provider has requested that the child be picked up or has an attendance policy, excluding planned holidays, that prohibits the child from attending or requires the child to be picked up;
•    Behavioral or discipline problems;

•    The closure or unexpected unavailability of the school or childcare provider, excluding planned holidays; or

•    A natural disaster such as a fire, earthquake, or flood.

The time-off protections are also expanded to cover employees who are stepparents, foster parents, or stand in loco parentis ( “in the place of a parent”) and eliminates the requirement that grandparents must have custody of the child to take leave under this law.

The term licensed “child daycare facility” has been replaced with the term “licensed childcare provider.”

Labor Code Section 233 (Kin Care) currently provides that employees be permitted to use 50% of their accrued and available sick leave entitlement to attend to an illness of a child, parent, spouse, or domestic partner.

Kin Care now allows employees to use such leave for the same reasons allowed under California’s new mandatory sick leave law which includes:

•    The diagnosis, care, or treatment of an existing health condition of, or preventive care, for an employee or the employee’s family member;

•    Certain absences resulting from domestic violence, sexual assault, or stalking.

The term “family member” has been modified to match the definition in California’s paid sick leave law which includes:

•    child, parent, spouse, or registered domestic partner
•    a parent-in-law, grandparent, grandchild, or
•    sibling.

This law is intended to crack down on “wage theft” by giving the Labor Commissioner new enforcement powers against employers who steal employees’ wages and expands the scope of personal/individual liability.

Wage Theft: The illegal withholding of wages by an employer that are lawfully owed to an employee.

Wage theft can occur when an employer fails to pay overtime owed, fails to pay minimum wage, makes unlawful deductions, forces off the clock work or fails to pay employees for all hours worked.

This bill expands liability to any employer or “other person acting on behalf of an employer” who violates or causes to be violated any provision regulating the minimum wages or hours and days of work in any Wage Order, or for violating or causing to be violated several labor code sections pertaining to waiting time penalties, content of wage statements, meal and rest periods minimum wage and overtime, or reimbursement of expenses paid by employees.

“Other person acting on behalf of an employer” means a natural person who is an owner, director, officer, or  managing agent of the employer.  This means that an “aggrieved employee” can bring wage theft claims against the owners of the employing entity as well as anyone else who acts “on behalf of” the employer.  This, in effect, creates individual liability for wage and hour violations.

The Labor Commissioner can now place a lien on an employer’s property or levy the business’ bank accounts and/or accounts receivable.  And if the employee incurred attorneys’ fees, the Labor Commissioner can include those attorneys’ fees in the lien or levy.

As a result of these changes, the Labor Commissioner can now seize the personal property and bank accounts of individual owners and others who violate California wage and hour laws.

Also once an employer is found to have engaged in “wage theft”, the Labor Commissioner can require that employer to post a bond in order to continue to do business in the state.  The bond amount ranges from $50,000 to $150,000 depending on the amount of wages found owing.  Employers who fail to post the required bond can have their business license revoked by the Labor Commissioner.

Civil penalties for wage theft violations are also permitted and would be owed in addition to any wages and attorneys’ fees owed to the employee.  The penalty is $2,500 for the first offense and $100 for each calendar day the employer continues to do business in violation of the law (up to $100,000).

The law also focuses on property services companies and the long term care industry by providing for joint and several liability for unsatisfied judgments on the part of parties who contract for these services.

•    “Property Services” is defined to include janitorial services, security guard services, valet parking services, and landscaping and gardening services.  This does not extend to such services performed at individual primary residences.

•    Long term care industry refers to skilled nursing facilities, retirement communities, hospices, and similar businesses.

An employer who contracts to provide such services is now required  to provide written notice to the party to the prospective contract of any unsatisfied final judgments against the employer for nonpayment of wages.

Failure to give such notice does not provide a defense to joint and several liability for either party.  Instead, both parties to the contract may be held jointly and severally liable for the judgment.

The law also specifically precludes an employer from closing its business and then re-opening under a new name in order to avoid debts to their employees. Any new business that is “similar in operation and ownership” to the guilty employer is also liable for the wages owed.

A “new business” will be considered the “same employer” for purposes of liability if :

•     the employees of the successor employer are engaged in “substantially the same work in substantially the same working conditions under substantially the same supervisors,”or

•    the new entity has “substantially the same production process or operations, produces substantially the same products or offers substantially the same services, and has substantially the same body of customers.”

California’s Private Attorney General Act (PAGA) authorizes an employee to file a civil action to recover certain penalties that the Labor and Workforce Development Agency would seek to recover on behalf of current or former employees for violations of the Labor Code.

Many of the ever-so-prevalent “wage and hour” claims include PAGA allegations based on an employer’s failure to comply with Labor Code Section 226 which requires an itemized wage statement be provided to employees. The statement must include, among other things, the inclusive dates of the pay period and the name and address of the legal entity that is the employer.

Now, before an employee can file a PAGA claim for noncompliant wage statements, the employer must be provided notice of the violation and an opportunity to fix (or cure) the incorrect statements. A violation will be considered “cured” only upon a showing that the employer has provided a fully compliant itemized wage statement to each aggrieved employee for each pay period for the three-year period before the date of the employee’s written notice of the violation. An employer’s right to cure these violations is limited to once in a 12-month period.

Following several recent court decisions, this law was passed to require employers to compensate piece-rate workers for “rest and recovery” periods and other “non-productive time” separate from the piece-rate compensation.

What this means is that piece-rate paid employees must be paid for rest and recovery periods at a regular hourly rate that is no less than the higher of:

(1) the applicable minimum wage;  or
(2) an average hourly rate determined by dividing the total compensation for the workweek, excluding compensation for rest and recovery periods and any premium compensation for overtime, by the total hours worked during the workweek, excluding rest and recovery periods.

Also other nonproductive time must be paid at an hourly rate that is no less than the minimum wage.  “Other nonproductive time” is time under the employer’s control that is not directly related to the activity being compensated on a piece-rate basis.

The itemized wage statement provided to piece-rate paid employees must include:

•    For the total hours of compensable rest and recovery periods,
•    the rate of compensation, and
•    the gross wages paid for those periods during the pay period and

•    For the total hours of other nonproductive time,
•    the rate of compensation, and
•    the gross wages paid for that time during the pay period.

SAFE HARBOR: The law provides a safe-harbor provision from civil actions for unpaid rest and recovery periods and other nonproductive time before December 31, 2015, if, by December 15, 2016, the employer fully compensates piece-rate employees for previously uncompensated or under-compensated rest and recovery periods and other nonproductive time from July 1, 2012, to December 31, 2015.

Currently, a withholding order cannot exceed the lesser of :
•    25 % of an individual’s weekly disposable earnings or
•    the amount by which the disposable earnings for the week exceed 40 times the state minimum hourly wage.
Effective July 1, 2016, the law is amended to reduce the maximum amount of disposable earnings subject to wage garnishment to the lesser of

•    25% of the individual’s disposable earnings for that week or
•    50 % of the amount by which the individual’s disposable earnings for that week exceed 40 times the state minimum hourly wage in effect at the time the earnings are payable.

Currently employers are prohibited from discharging, discriminating against, retaliating against, or taking any adverse action against an employee or applicant because the employee has engaged in “protected conduct” which includes:

•    Making a written or oral complaint that the employee is owed unpaid wages or filing a claim relating to rights under the jurisdiction of the labor commissioner (Labor Code Section 98.6);

•    Reporting suspected violations of a state or federal statute, rule, or regulation to a government or law enforcement agency, to a person with authority over the employee, or to another employee who has the authority to investigate, discover, or correct the violation or noncompliance (Labor Code Section 1102.5); or

•     Reporting unsafe working conditions (Labor Code Section 6310).

Now, employees who are a family member of a person who engaged in or were perceived to engage in protected conduct under the Labor Code is also protected.

The concept of “joint employers” is also impacted by this law because the definition of “employer” under these anti-retaliation laws now include “client employers” which has been defined to include a “business entity, regardless of its form, that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.”

An “unlawful employment practice” now prohibits an employer, or any other person or entity, from using the E-Verify system to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment, at a time or in a manner not required by a specified federal law or not authorized by a federal agency memorandum of understanding except as required by federal law or as a condition of receiving federal funds.

An employer that uses the E-Verify system must also provide the affected employee with any notification issued by the Social Security Administration or the United States Department of Homeland Security containing information specific to the employee’s E-Verify case or any tentative non-confirmation notice.

The following portion of the newsletter may seem a bit “humbug” but this time of year can be stressful for employees and employers alike and certain activities can lead to potential liability following office “festivities”.

While employers are trying to keep employees productive and focused on doing their job, employees are easily distracted by trying to figure out how to get everything done to prepare for the holidays with their family and friends and maybe spend a little too much time “on line” shopping during business hours.  Employers need to be prepared for a variety of challenges during this time of year and the following tips should help get you through the season.

Tip 1:  Last Minute Requests for Time off:

Employers may be focused on completing end of year projects, but employees may be focused on visiting relatives or last – minute shopping.  There will likely be those last requests for time off and the challenge comes with accommodating such requests but maintaining business operations.

Of course, if the time off requests pertain to religious beliefs, they must be reasonably accommodated unless they would create an undue hardship on the business.
Employers should implement a policy addressing how time off requests will be handled such as how far in advance the request should be made, whether seniority or first to request prevails, etc.  Then if the employee does not follow procedure, the request may not need to be granted.

“Undue hardship” is a strict standard and many factors must be considered, including:
•    The size of the employer, the number of employees, and the size of the budget.
•    The type of operation – is the business open 24 hours per day, seven days per week?
•    The composition and structure of the workforce.
•    The nature and cost of the accommodation involved.
•    Any available reasonable alternative accommodation.

So, while some employers may feel that granting time off creates an undue burden on business operations or other employees, courts have held that minor changes in schedules do not impose an “undue hardship” on employers or a severe burden on other employees.

In addition, some religions observe certain dress or grooming standards and those also must be accommodated, as long as they do not interfere with the safety of any business operations.

It’s best to notify employees in advance of changes in schedules during the holidays and if the business intends to close early on any particular day so that employees can plan their work and their personal matters around such schedule changes.

Tip 2: Practical Advice on Holiday Celebrations

While company holiday gatherings provide an opportunity for co-workers to enjoy some “downtime” and “holiday cheer” with their co-workers, these gatherings need to be managed so that the holidays do not result in new year’s “hangover” of potential liability. Employers should take the time to consider how best to celebrate the season.

Tip 3:  Is it ok to say “Merry Christmas”

Employers should be mindful of the different religious beliefs of their employees and that some may find the term “Christmas” to be politically incorrect.   References should be to a “holiday party” or “holiday celebration”.

Also, be mindful of those who also do not wish to participate in any seasonal festivities whether for religious reasons or just their personal preference.

Tip 4: Holiday Decorations

Many employers permit holiday decorations around the workplace.  Again, be mindful of the various religious (or non-religious) beliefs of your employees so as not to offend.

Employers will want to consider the needs of all employees as they decorate their offices and ensure that seasonal displays are unrelated to religious observances. It’s best to keep office decorations simple and unrelated to religious tenets.

Apply any limits on holiday decorations uniformly to all employees, regardless of their religious beliefs. Keep in mind that if you allow employees to decorate their cubicles year-round but then tell them they can’t put up religious decorations during holidays, you may face a discrimination complaint.

Moreover, if you let one worker put up Christmas symbols in his/her cubicle, then you will need to let other workers put up Hanukkah or Kwanza symbols.

Tip 5:  To Party Or Not To Party

•    Determine the scope of the party:

•    Will the event be held during the day, after hours at work or during the evening  off site.
•    Will spouses or other significant others to be included or employees only.
•    Will clients, vendors or other non-employees be included.
•    Will there be a gift exchange, or a “white elephant” gift game.

•    Attendance – Is it Voluntary:

When announcing plans for the holiday gathering, make sure that it is announced as a “voluntary” event. No employee should be pressured or feel coerced to attend (especially if due to their beliefs, they do not participate in religious celebrations).

Also as a voluntary event, potential liability can be avoided for certain injuries that may arise out of the holiday celebration. Workers’ compensation claims may be denied if someone claims that they are injured at a holiday celebration if it was a voluntary social activity (and especially if alcohol is involved in the incident).

If the party is during the normal work-day and you require employees to attend, non-exempt employees must be paid for the time.   If the attendance is not mandatory and the employees can choose not to participate in the social activities and leave work early, then non exempt employees would not need to be compensated for attendance.

•    Alcohol – to have or not to have?

With the consumption of alcohol many people find that their inhibitions have been loosened and they find themselves engaging in inappropriate conduct with fellow employees or others in attendance. Which leads to concerns of sexual harassment during a holiday party which can lead to liability-depending on the circumstances even if the party is held off-site and after hours.

Also, recent cases found employers liable for drunk driving accidents following company parties.

As a result, many employers may choose to serve only non-alcoholic beverages at their holiday events. If you do choose to serve alcohol, take measures in advance to limit the amount people can drink.

If alcohol is to be served, the following tips should be taken into consideration:

•    Before the event, circulate a memo to all employees advising that while alcohol will be served, they are to drink responsibility.  Remind employees that while you want everyone to enjoy themselves, the standards of conduct still apply and any misconduct at or after the party can result in disciplinary action.

•    At the event, limit the number of drinks.  If it is an “open bar”, assign someone to monitor the consumption of the attendees.   You may want to hire a professional bartender and not have an employee behind the bar.
•    Serve plenty of food and non-alcoholic beverages and water so employees have a choice.

•    Provide alternate forms of transportation to the employees.   Provide a taxi service at no cost to the employees, have a designated driver or encourage the use of Uber or other types of transportation to and from the party.

•    Schedule the party during the day – lunchtime events lead to less alcohol consumption.   Limit the party to just a few hours, and stop serving drinks at least one hour before the function is scheduled to end.

•    Monitor Behavior – Executives, Managers and Supervisors should be expected to set an example and not engage in their own inappropriate conduct.  They should be reminded to stay alert to any conduct that could be seen as inappropriate, harassing or vulgar. They should react quickly, quietly and with discretion.

•    If music is played during the party, make sure that the songs do not include any suggestive lyrics.    No “kissing santa” holiday songs should be played.

Tip 5:  Gift Giving:

If there will be a gift exchange, make sure that you notify employees that the gifts must be appropriate and in-line with the company’s policies on sexual harassment and workplace conduct.

Charitable Giving at Holiday Event – Some employers encourage their employees to do something charitable during the holiday season.  Employers can place a “giving tree” in the lobby to allow employees and others visiting the workplace to make gift donations or take up a collection (food, gifts or monetary donations) to be given to a charity selected either by the employer or the employees.

Organize an event where employees can volunteer their time to deliver the donations once received.  This can help employee morale by providing employees an opportunity to give back during this holiday time.

With all of the above being said, it is still a time to celebrate with our friends, family and co-workers… so

This Newsletter is intended as a brief summary of employment law.  While every effort has been made to ensure the accuracy of the information contained herein, it is not intended to serve as “legal advice,” or to establish an attorney-client relationship.  If additional information is needed on any of the topics contained herein, please contact our office. All rights reserved.  ©2015.