New Law Promises More Liability for Employee Wages

California has been a pioneer in terms of enforcing the state’s wage and hour laws.  No sooner is a problem identified than a new law is passed to resolve the problem. This year, the governor signed SB 588 to help ensure employers pay employees the wages they are owed.  It creates powerful enforcement mechanisms for the Labor Commissioner, but it also expands who can be sued when an employee thinks s/he is owed wages.

New Law Promises More Liability for Employee Wages

The new law promises more liability for employee wages by making employers, directors, officers and managing agents responsible for unpaid wage claims.

SB 588 creates Labor Code section 588.1, which provides:

Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation.

In other words, directors, officers and managing agents of the employer can be personally liable for the failure to pay wages owed.  This new law may apply to any persons that have control over an employee’s wages, and will make it easier for employees to sue a variety of people to recover allegedly unpaid wages.  The move is seen as a strong tool in the effort to ensure employees are paid properly.  Unfortunately, in the wrong hands, it can also mean more individuals will be sued even when they were “just following orders.”

SB 588 also gives the Labor Commissioner the power to mail a notice of levy to anyone possessing any credits, money, or property belonging to the judgment debtor, or who owe any debt to the judgment debtor at the time they receive the notice of levy.  For example, if a customer owes the employer money, and the employer fails to pay the Labor Commissioner’s award, the customer could receive a notice of levy informing the customer to pay the Labor Commissioner instead of the employer.  If the customer fails or refuses to pay, the customer could be liable to the Labor Commissioner for the amount it should have turned over to the Labor Commissioner

If an employer fails to pay a Labor Commissioner judgment within 30 days, the employer can be prohibited from conducting business in California unless the employer obtains a bond equal to about 10 times the amount of the actual judgment. Failure to obtain a bond can result in a stop notice and, in the instance of a long-term care facility, result in denial of licensure.

SB 588 goes into effect on January 1st. The new law promises more liability for employee wages. In addition to reviewing your policies to ensure compliance with California law, employers should also consider Employer Practices Liability insurance and Directors and Officers Liability insurance to help defray the increasing costs of litigation.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

New Hourly Rates for Software Workers and Physicians

New Hourly Rates for Software Workers and Physicians

Although most exempt employees must receive a set salary, computer software employees and licensed physicians/surgeons can receive an hourly wage and still be exempt from California’s overtime requirements.  The minimum hourly wages are set by the Department of Industrial Relations, and goes up every year.

On October 7, 2015, the DIR announced new hourly rates for software workers and physicians will take effect on January 1, 2016.

Computer Software Engineers

Effective January 1, 2016, the minimum hourly rates for computer software engineers will increase to $41.85 an hour, which is equivalent to $87,185 per year or $7,265.43 per month.

Licensed Physicians and Surgeons

Effective January 1, 2016, licensed physicians and surgeons must receive minimum hourly rate of $76.24 an hour.

Employees must still meet the “duties” test to be exempt from California’s overtime requirements.  The employees may be exempt under one or more of the other exemptions.

I have been representing employees and employers in unpaid wage claims, including unpaid overtime claims resulting from misclassification issues, for almost 20 years.  Failing to pay an employee the correct wage rate significantly reduces an employer’s ability prove an employee is exempt from California’s overtime requirements. Beginning January 1st, employers must pay the new hourly rates for software workers and physicians to meet California’s exempt requirements.

If you have questions about your exempt status or the status of your employees, contact the Nuddleman Law Firm, P.C.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

New California Employment Laws for 2016

Lest you think the California Legislature and Governor Brown have been idling away their time in office, the following is a list of the new California Employment Laws for 2016 passed in our state.  Some will affect all employers, others just a few.  Be on the look out for more in depth analysis of the new laws in upcoming articles.

AB 202 by Assemblymember Lorena Gonzalez (D-San Diego) – Professional sports teams: cheerleaders: employee status.

AB 215 by Assemblymember Luis Alejo (D-Watsonville) – Local agency employment contracts: maximum cash settlement.

AB 219 by Assemblymember Tom F. Daly (D-Anaheim) – Public works: concrete delivery.

AB 229 by Assemblymember Ling-Ling Chang (R-Diamond Bar) – State employees: travel reimbursement.

AB 285 by Assemblymember James M. Gallagher (R-Nicolaus) – Professions and vocations: registration.

AB 304 by Assemblymember Lorena Gonzalez (D-San Diego) (7/13/15) – Sick Leave: Accrual and Limitations; Clarification.

AB 359 by Assemblymember Lorena Gonzalez (D-San Diego) – Grocery workers. A signing message can be found here.

AB 375 by Assemblymember Nora Campos (D-San Jose) – School employees: sick leave: paternity and maternity leave.

AB 506 by Assemblymember Brian Maienschein (R-San Diego) – Limited liability companies.

AB 546 by Assemblymember Lorena Gonzalez (D-San Diego) – Peace officers: basic training requirements.

AB 599 by Assemblymember Susan Bonilla (D-Concord) – Clinical laboratories: cytotechnologists.

AB 621 by Assemblymember Roger Hernández (D-West Covina) – Drayage truck operators: Motor Carrier Employer Amnesty Program.

AB 622 by Assemblymember Roger Hernández (D-West Covina) – Employment: E-Verify system: unlawful business practices.

SB 623 by Senator Ricardo Lara (D-Bell Gardens) – Workers’ compensation: benefits

AB 630 by Assemblymember Eric F. Linder (R-Corona) – Public officers and employees: oath of office.

AB 705 by Assemblymember Susan Talamantes Eggman (D-Stockton) – Psychologists: licensure exemption.

AB 830 by Assemblymember Susan Talamantes Eggman (D-Stockton) – Civil actions: gender violence.

AB 852 by Assemblymember Autumn R. Burke (D-Inglewood) – Public works: prevailing wages.

AB 868 by Assemblymember Jay P. Obernolte (R-Big Bear Lake) – Public Employees’ Retirement System: contracting agencies: transfer of membership.

AB 897 by Assemblymember Lorena Gonzalez (D-San Diego) – Grocery workers.

AB 963 by Assemblymember Susan Bonilla (D-Concord) – Teachers’ Retirement Law.

AB 970 by Assemblymember Adrin Nazarian (D-Sherman Oaks) – Labor Commissioner: enforcement of employee claims.

AB 987 by Assemblymember Marc B. Levine (D-San Rafael) – Employment discrimination: unlawful employment practices.

AB 991 by the Committee on Public Employees, Retirement, and Social Security – State teachers’ retirement.

AB 1093 by Assemblymember Eduardo Garcia (D-Coachella) – Public safety: supervised population workforce training: grant program.

AB 1168 by Assemblymember Rudy Salas Jr. (D-Bakersfield) – Peace officers: basic training requirements.

AB 1245 by Assemblymember Ken Cooley (D-Rancho Cordova) – Unemployment insurance: electronic reporting and funds transfers.

AB 1267 by Assemblymember Richard H. Bloom (D-Santa Monica) – Lawsuits, liens, and other encumbrances against public officials or public employees.

AB 1270 by Assemblymember Eduardo Garcia (D-Coachella) – California Workforce Innovation and Opportunity Act.

AB 1291 by Assemblymember Das G. Williams (D-Santa Barbara) – The County Employees Retirement Law of 1937.

AB 1308 by Assemblymember Henry T. Perea (D-Fresno) – Apprenticeship programs: approval.

AB 1339 by Assemblymember Miguel Santiago (D-Los Angeles) – School district employees: merit system: appointments.

AB 1422 by Assemblymember Jim Cooper (D-Elk Grove) – Transportation network companies.

AB 1506 by Assemblymember Roger Hernández (D-West Covina) – Labor Code Private Attorneys General Act of 2004.

AB 1509 by Assemblymember Roger Hernández (D-West Covina) – Employer liability.

AB 1513 by Assemblymember Das G. Williams (D-Santa Barbara) – Employment: workers’ compensation and piece-rate compensation.

AB 1514 by the Committee on Insurance – Employment Development Department: training benefits: reports.

SB 99 by the Committee on Budget and Fiscal Review – State public employment.

SB 216 by Senator Richard Pan (D-Sacramento) – The Public Employees’ Retirement System.

SB 221 by Senator Hannah-Beth Jackson (D-Santa Barbara) – State public employees: sick leave: veterans with service-related disabilities.

SB 327 by Senator Ed Hernandez (D-Azusa) – Industrial Welfare Commission: wage orders: meal periods.

SB 342 by Senator Hannah-Beth Jackson (D-Santa Barbara) – California Workforce Investment Board: responsibilities.

SB 358 by Senator Hannah-Beth Jackson (D-Santa Barbara) – Conditions of employment: gender wage differential.  Press conference statement can be found here.

SB 354 by Senator Bob Huff (R-San Dimas) – California Public Employees’ Pension Reform Act of 2013: joint powers authority: employees.

SB 386 by Senator Ben Allen (D-Santa Monica) – Unlawful business practices.

SB 432 by Senator Tony Mendoza (D-Artesia) – Public works: aliens.

SB 501 by Senator Bob Wieckowski (D-Fremont) – Wage garnishment restrictions.

SB 546 by Senator Mark Leno (D-San Francisco) – Health care coverage: rate review.

SB 560 by Senator William W. Monning (D-Carmel) – Licensing boards: unemployment insurance.

SB 579 by Senator Hannah-Beth Jackson (D-Santa Barbara) – Employees: time off.

SB 588 by Senator Kevin de León (D-Los Angeles) – Employment: nonpayment of wages: Labor Commissioner: judgment enforcement.

SB 644 by Senator Loni Hancock (D-Berkeley) Limited Examination and Appointment Program: persons with developmental disabilities.

SB 667 by Senator Hannah-Beth Jackson (D-Santa Barbara) Disability insurance: eligibility: waiting period.

 

Provided by Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

 

Wage Deductions for Exempt Employee Absences

Wage deductions for exempt employee absences

Most exempt employees must receive a guaranteed salary. The employee is paid for the work performed, not the hours worked.  This means an exempt employee gets paid the same amount regardless of whether s/he works 8 hours a day, or 1 hour a day.  Employers that fail to pay the exempt employee’s salary risk losing the exempt status, and possibly subjecting the employer to significant overtime liabilities.

So, when can you an employer make wage deductions for exempt employee absences?  There is a useful DLSE Opinion Letter on the topic, but weeding through the 13-page opinion letter and the letter that prompted the opinion is not easy.  Hopefully the following provides some clarification for employers and employees regarding when an employer can make wage deductions for exempt employee absences.

Full Week Deductions are OK

If an exempt employee performs no work in a workweek for “personal reasons” and does not have vacation or PTO to cover the time off, the employer does not have to pay the employee’s salary for that week.  If the employee has available accrued PTO or vacation pay, the employer can require the employee to use the available PTO/vacation.  If the employee does not have sufficient PTO/vacation to cover the full week, the employer can just pay the available PTO/vacation and does not have to pay wages for the rest of the week (because the employee has performed no work).

There are a few exceptions: If an employee misses work for a protected reason, such as jury duty, attendance as a witness, or temporary military leave, the absence is not “personal” time off and therefore the employer is obligated to pay the exempt employee for the full workweek

Deductions from Vacation/Paid Time Off/Paid Sick Leave Balances

Employers can require employees to use available vacation, paid time off or paid sick leave balances before taking unpaid time off or to cover partial day, full day or full week absences.  Employers should not, however, require an employee to use Paid Sick Leave under the Health Workplaces Healthy Families Act unless the absence is for one of the reasons specified in the Act.

Full Day Deductions — Personal Reasons

If an exempt employee performs no work in a workday for personal and has no accrued vacation or PTO, then the employer can deduct the equivalent of one day’s pay from the exempt employee’s salary.  Caution: The employee must perform no work—this means no emailing, no phone calls.  If the employee performs any work, the employer must pay the employee’s full salary.

See the exception above about absences that are not for “personal reasons.”

Partial Day Deductions — Personal Reasons

If an exempt employee works any portion of a work day, the employer must pay the employee’s full salary for that day. However, an employer can require the employee to use available vacation or PTO to cover the hours not worked. (Conley v. Pacific Gas & Electric Co., 131 Cal.App.4th 260 (2005) and Rhea v. General Atomics, 227 Cal.App.4th 1560 (2014)).  The employer is not reducing the employee’s salary—it is just requiring the employee to use available PTO/vacation.

For example, if an employee works two-hours, then leaves for the day, the employer can require the employee to use 6 hours of vacation/PTO to cover the absence.  The employee receives his/her full salary and therefore the employer is not making a wage deduction for exempt employee absences.

If the employee does not have available vacation or PTO, the employer cannot make a wage deduction for a partial day absence.

Full Day Deductions – Paid Sick Leave

Every California employer must provide mandatory paid sick leave (PSL) benefits as of July 1, 2015. The PSL law specifies the different reasons for taking PSL, and if an exempt employee takes a full or partial day absence under the mandatory PSL law, the employer can charge the absence against the exempt employee’s accrued mandatory paid sick time.

But what if the exempt employee does not have any more PSL?  Employers can make wage deductions for exempt employee absences of one full day or more caused by sickness, an accident or a disability if the employer has a “bona fide plan, policy or practice of providing compensation salary loss due to sickness, accidents or a disability.” Since every employer is required to provide PSL, presumably every employer has a qualifying plan, policy or practice.  Of course, this assumes the employer actually adopts and complies with the Healthy Workplaces Healthy Families Act.

Partial Day Deductions – Paid Sick Leave

If the exempt employee is only absent part of the day due to sickness or illness, and the employee has exhausted his/her available PSL, the employer may not deduct the remaining time from the employee’s salary.  For example, if the employee works two hours, and then goes home sick, but does not have sufficient available PSL to cover the absence, the employer is still required to pay the employee for the full day.

Other times when an employer can make wage deductions for exempt employee absences

There are a few other odds and ends when an employer can make wage deductions for exempt employee absences without violating the “salary” rules:

  • Employers do not have to pay the full week’s salary for the first and last weeks worked if the employee only works a partial day.
  • Absences under the FMLA are specifically unpaid absences, and therefore an employer can deduct for partial-week, and possibly partial-day absences, covered under FMLA.
  • If an employee is sent home for a safety-infraction, the employer may not be required to pay the full day’s or full week’s salary.

Recap

Any time you deduct money from an employee’s wages, you run the risk of violating the law.  Employees who do not receive the wages they are expecting are more likely to seek outside assistance.

  • Employers do not have to pay the week’s salary if no work is performed during the workweek.
  • Employers may deduct for full day absences caused by “personal reasons” or if the employee takes time off for an illness and the employee has exhausted his/her available PSL.
  • Employers should not dock an exempt employee’s salary for a partial day absence. If the employee does not have sufficient vacation/PTO or PSL to cover the missed partial day, the employer should pay full day’s salary.
  • The employer can require an employee to use available vacation/PTO or PSL for partial day absences (the PSL minimum increment is two hours).
  • Do not deduct from the employee’s PSL balance unless it is for one of the reasons specified in the Health Workplaces Healthy Families Act.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

PAGA Waiver in Arbitration Agreements

Arbitration Agreements

Plaintiffs attorneys and defense attorneys are waging a battle over arbitration agreements.  A new Ninth Circuit decision is considered a win for the plaintiffs’ bar.  A few years ago, it was difficult for an employer to enforce an arbitration clause in California.  Recently, the U.S. Supreme Court in AT&T v. Concepcion made it clear that the Federal Arbitration Act prohibits states (or courts) from creating special exemptions from arbitration.  As a result, more and more employers require employees to waive their rights to court trials in favor of arbitration.

Since Concepcion, state and federal courts have been more willing to require parties to use arbitration when they sign a valid arbitration agreement.  Many plaintiff attorneys don’t like arbitration for a number of valid reasons, and therefore try to find ways to keep their cases out of arbitration.  Many defense attorneys prefer arbitration, and therefore look for ways to ensure the case can be kept in arbitration.  I believe arbitration is an acceptable forum for the right case, but some cases need to be resolved by the courts.

A significant reason why employers like arbitration agreements is that they may limit an employee’s ability to bring a representative action (e.g., class action).  Most arbitrations are not currently set up to handle class action cases.  If an employee signs an otherwise valid arbitration agreement, the employee could be forced into arbitration without the ability to bring a class action.

PAGA Waiver in Arbitration Agreements

But what about PAGA claims?  Can an employer include a PAGA waiver in arbitration agreements? California’s Labor Code Private Attorney General Act is similar to a class action in that any aggrieved employee can sue an employer for any violation of the Labor Code, and the employee can bring the claim on behalf of himself/herself as well as “any other aggrieved employee.”  This is very similar to a class action.  PAGA claims, however, are not class action claims and therefore are not subject to the same strict procedures and guidelines governing class actions.

In Iskanian v. CLS Transportation, California’s Supreme Court said employees have an unwaivable right to bring representative PAGA actions, and refused to force an employee to litigate his PAGA claims in arbitration. This created a mad dash by Plaintiff’s lawyers to include PAGA claims in all litigation to avoid arbitration.  Some Plaintiff firms will only bring PAGA actions.  Many federal district court decisions refused to follow Iskanian, and continued to force employees to bring PAGA claims in arbitration.  Defense lawyers began looking for any reason to remove cases to federal courts to ensure the arbitration agreements would be enforced.  We ended up with a rift between the federal courts and California’s Supreme Court.

The Ninth Circuit recently concluded that the FAA did not bar the holding in Iskanian, and that an employer could not enforce a PAGA waiver in arbitration agreements with employees.  The Luxottica case is another blow to employers trying to avoid representative actions.

I expect we will continue to see several cases on this issue in the upcoming year.  If you use arbitration agreements, or are considering whether to use an arbitration agreement, speak with a knowledgeable attorney who can help you decide the best course of action.  If you are an employee contemplating litigation but are concerned about being forced into arbitration, you should consult with an employment attorney with experience representing employees in court and in other forms of alternative dispute resolution.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.