San Jose Employers Must Provide More Hours to Workers

More Hours for San Jose Employees

San Jose employers will need to offer more hours to existing part-time workers before hiring new workers in 2017.  San Jose voters approved Measure E, which will take effect sometime in the first quarter of 2017. Businesses with less than 36 employees are exempt, and other businesses can apply for a “hardship” exemption. The full text of Measure E is here.

Impartial Analysis of Measure E

The following excerpts are from the “impartial analysis” prepared by the office of the San Jose City Attorney:

  • An employee is any person who has performed at least 2 hours of work for an employer and is entitled to the State minimum wage.
  • An employer is any person that employs or exercises direct or indirect control over wages, hours or working conditions of any employee, and either is subject to San Jose’s business tax or maintains a place of business in San Jose which State law exempts from San Jose’s business tax.
  • The offer of additional work requirement does not apply where the part-time employees would be paid a premium rate or when an express waiver of the additional work requirement has been agreed to in a collective bargaining agreement.
  • It applies to welfare-to-work programs except participants may opt out.
  • Businesses with 35 or fewer employees would be exempt from the ordinance.
  • The number of employees of a chain business is determined by the combined number of employees at every location of the business, whether or not located in San Jose.
  • For a franchisee, the total number of employees would be determined by the combined total number of employees at every location owned by the franchisee, whether or not located in San Jose.
  • [T]he City may grant hardship exemptions for up to 12 months at a time to employers who demonstrate that they have exercised reasonable steps to comply and full and immediate compliance would be impracticable, impossible or futile.
  • Employers would be required to annually post a bulletin of the additional work hour requirement in various languages at the workplace.
  • The City would be authorized to issue administrative fines and penalties for noncompliance.
  • A civil action based on a violation of the ordinance can be brought by any person harmed, any person on behalf of the public, or the City.

If you work in San Jose, you may find more opportunities to work additional hours. If you have employees in San Jose, you will need to offer more hours to existing employees before hiring new employees or giving the hours to contractors.

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. We cannot answer questions about specific situations or provide legal advice over the Internet. 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. Do not post confidential or time-sensitive information in this blog. The 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.

Happy Thanksgiving and Christmas Trees

As we get ready to spend time with the family, eat more than we should and fall asleep watching football, I want to wish everyone a Happy Thanksgiving. I treasure this holiday because I get to spend it with my immediate and extended family. This usually means 60+ people gathering on the farm and catching up on the past year. Not to mention skeet shooting in the cotton fields. Unfortunately, we have to leave our doberman at home this year, but we have someone staying with her to make sure she’s happy and fed.

This may be the last year on the farm, and I remember fondly the summers spent on the farm in the blistering heat, and the comforting tule fog in the fall. Most of all, it’s about family. We have been blessed to have 5 generations gather for the feast and fellowship. Whether you join with a large group, or a small one, take a moment to remember those that are with us and those that have passed. Enjoy the day, and give thanks for all you have.

OK, now a shameless plug for my Boy Scout Troop’s Christmas Tree Lot. This is our annual fundraiser for Troop 999. We open on November 25th (the day after Thanksgiving). All proceeds help our scouts attend camp, buy camping supplies and engage in other scouting events. If you are in the area, and need a tree for the holidays, come on by. We just completed our Scouting For Food project where we collected thousands of canned goods for the Second Harvest Food Bank. The tree lot presents an opportunity to meet with those in my community and help them find the right tree for their home. I believe Troop 924 is still offering free tree pick up and disposal after the holidays. Donations are always welcome.

Tree Lot

Happy Thanksgiving from the Nuddleman Law Firm, P.C. Drink, be merry and count the blessing in your life.

Salary Requirement for Federal and California Overtime

UPDATE ON THE UPDATE: The Department of Labor filed an appeal on the injunction. The notice of appeal aims to lift a temporary injunction against overtime changes that were scheduled to take effect December 1. The appeal was filed in the U.S. Court of Appeals for the Fifth Circuit in New Orleans. Forbes wrote a decent article about the appeal.

UPDATE 11/22/16: A Federal Judge in Texas issued an injunction blocking the new salary requirement from going into effect. This means the new salary requirement will not go into effect on December 1st. We’ll have to wait and see if the Department of Labor intends on fighting the injunction. With the new administration taking over in January, it is unclear how the DoL will proceed.

I’m leaving the rest of the article intact because it still provides useful information about the difference between the federal and the state salary requirement and duties test for exempt employees, and the outcome of the litigation is still anyone’s guess.

Several clients ask the following question (or very similar questions) about the new federal overtime salary requirement:

I have a quick question. It looks like there is a change coming on December 1, 2016 regarding the minimum salary requirement for exempt employees. We currently have our office manager set up with a $46,000.00 annual salary. I think this may fall under the new federal minimum salary requirement. Can you confirm this and also tell me if there is a different amount for California?

Because this issue confuses a lot of employers and employees, I thought I’d share my typical response.

Federal Overtime Salary Requirement

Federal laws requires overtime compensation when a non-exempt employee works more than 40 hours in a week.  Effective December 1, 2016, in order to qualify as an exempt employee under the federal overtime laws,  the employee must receive a guaranteed salary of $913.00 per week or $47,476 per year. The employee’s primary duty must be to perform exempt duties as defined by the FLSA.

The exempt employee must regularly and customarily exercise discretion and independent judgment regarding matters of consequence. Many office managers qualify under the administrative exemption. Additionally, if the office manager supervises 2 or more people and can hire and fire employees, the office manager may also qualify under the executive exemption.  I’m going to assume for the moment that the office manager is primarily engaged in performing exempt duties. Many people misapply the exemption, thinking that because the “office manager” can decide which vendors to use that means the exemption applies. In order to ensure she remains exempt, you will need to give her a raise effective December 1st.

California Overtime Salary Requirement

California has a slightly lower minimum salary requirement. To qualify as an exempt employee under California laws, the employee must receive a guaranteed salary equal to two times the state minimum wage (currently $10.00 per hour). That comes out to $41,600 per year (2 x minimum wage x 40 hours per week x 52 weeks per year). The minimum wage will increase over the next couple of years according to the following schedule:

Rate (Jan. 1) 26 Employees or More 25 Employees or Less
2017 $10.50 $10.00
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 $15.00
2024 Indexed* Indexed*

* Rate adjusted to changes in Consumer Price Index (if any) to a cap of 3.5 percent each year. (Source)

As the minimum wage increases, so does California’s minimum salary requirement. By 2019, barring any changes in the law, employers with 25 or more employees must employees more than the federal minimum wage. Employers with less than 25 employees can get away with paying the federal minimum wage until 2020. As I mentioned, this assumes no further changes to California or Federal law. With the recent election, it’s anyone’s guess as to what the future holds.

Required Duties

Other major differences exist between state and federal law overtime exemptions. To qualify as exempt under California law, the employee must be “primarily engaged in” exempt duties. That sounds similar to the federal “primary duty,” but differs significantly. “Primarily engaged in” exempt duties under California law means the employee spends more than 50% of her time performing exempt duties. An employee’s “primary duty” under federal law means the employee can perform other, non-exempt duties, so long as the primary purpose of the position is to perform exempt duties.

Take the classic fast food manager example. Her primary duty is to oversee and run the restaurant. Because the restaurant is understaffed, the manager spends most of her time running the cash register and flipping burgers. The manager might meet the federal overtime exemption because her primary duty is to oversee the restaurant’s operations. The manager is not exempt under state law because she is not primarily engaged in performing exempt duties.

I hope this helps.  Feel free to give me a call if you have any questions.

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. We cannot answer questions about specific situations or provide legal advice over the Internet. 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. Do not post confidential or time-sensitive information in this blog. The 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.

Piece Rate Deadline Fast Approaching

Last year California passed AB 1513 requiring new information on pay stubs for piece rate workers. The new law requires employers to include rest and recovery periods and non-productive time on the employee pay stubs.

Piece Rate Compensation

Piece rate workers get paid based on the number of items they produce. In law school, we always talked about people making widgets–whatever the heck a “widget is–when we discussed piece rate workers. You find piece rate work in a variety of situations. For example, car dealerships oftentimes pay mechanics based on the number and types of jobs performed. That’s why a brake job costs the same amount regardless of whether it takes an hour or three hours. Some plumbers get paid by the job, rather than by the hour. Hair stylists oftentimes receive payment based on the number of hair cuts.

These workers are not paid hourly. Although sometimes an employer refers to the piece rate as a “commission,” it’s not really a commission. Some dispute whether a commission can only be for the sale of goods or services.

Employees paid solely on the number of items they produce get paid nothing for required rest breaks. California law mandates 10-minute “paid” rest break for every four-hours worked. A piece rate does not compensate employees for the “paid” rest break. It also does not cover non-productive times, such as waiting for customers, attending mandatory training, etc. The employee must still get paid for that time.

Affirmative Defense for Piece Rate Work

The new Labor Code Section 226.2 creates a temporary affirmative defense against unpaid wages and various penalties for employers that previously did not track and pay for rest and recovery periods and non-productive time for piece rate workers. In order to qualify for the affirmative defense, employers needed to notify the Labor Commissioner of its intent to pay workers the wages owed, and actually pay the workers by December 15, 2016. Employers that do not timely pay piece rate workers cannot take advantage of the affirmative defense

My crystal ball tells me to expect a lot of lawsuits over the next couple of years regarding unpaid rest and recovery periods and non-productive time for piece rate workers. I currently represent a class of hair stylists and other piece rate workers regarding unpaid rest and recovery periods. I advised my employer clients to move away from piece rate work, and shift to hourly wages possibly with a bonus system based on productivity.

If you have questions about your pay or how you pay your employees, contact a knowledgeable employment attorney as soon as practical.

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. We cannot answer questions about specific situations or provide legal advice over the Internet. 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. Do not post confidential or time-sensitive information in this blog. The 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.

Vacation, Sick Leave and PTO. Oh My!

With the different paid sick leave laws adopted by different cities and counties, not to mention California’s Healthy Families Healthy Workplaces Act, employers and employer are confused. Some employers combined their vacation and sick leave into PTO. Others  separated PTO into vacation and sick leave. Given the number of calls I receive from employers and employees regarding the difference between PTO, Sick Leave and Vacation, I thought a quick refresher would help.

Sick Leave

Sick leave is for sickness, illnesses and injuries.  California law requires employers to allow employees to use up to one-half of the employee’s annual sick leave to care for family members.  The Healthy Families Healthy Workplaces Act also allows employees to use paid sick time for certain domestic violence related purposes.

Vacation

Vacation, on the other hand, is for any purpose. You can use vacation for a day in the sun, to go on a trip, or just lounge around the house.  You can, of course, also use vacation pay for illnesses. Employees typically plan vacations. Employees only sometimes plan sick leave. Employers must provide paid sick leave, but not vacation.

PTO

Paid Time Off (PTO) is a hybrid of sick leave and vacation. You can use PTO for anything you want, including sicknesses and illnesses.  Vacation and PTO are essentially the same.  You can use PTO to satisfy the paid sick leave requirement so long as the PTO offers the same or better benefits than the sick leave laws.  Some employers don’t want to track vacation separately from sick leave and so they lump them together as PTO. If an employer lumps sick leave and vacation together as PTO, the employer must treat PTO as vacation.

So, what’s the real difference? Vacation is a wage. Once an employee accrues that wage, the employer must pay it out. If the employee still has accrued vacation when the employment relationship ends, the employer must pay out the vacation at the employee’s current rate of pay. Sick leave, on the other hand, is not a wage. An employee is not entitled to use paid sick time unless the employee “meets the condition precedent” of being sick. That’s a fancy way of saying if you’re not sick (or have some other qualifying reason for taking sick leave), you’re not entitled to sick pay.

Having a bona fide sick leave policy allows employers, under certain circumstances, to reduce an otherwise exempt employee’s salary if the employee has exhausted his/her available sick time and takes additional time off for sickness or illness.  I’ve addressed this issue a number of times in prior articles.  Since PTO can be used for illnesses and sicknesses, it is a bona fide sick leave policy allowing the reduction mentioned above.

Employers should be careful whenever they reduce an exempt employee’s salary or they could find themselves losing the exemption entirely. Keep in mind: paying  a salary does not mean the employee is exempt from overtime. But that’s a topic for another discussion.

If you have questions about paid sick time requirements, vacation policies or PTO plans, contact a knowledgeable attorney and get the right answers.

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. We cannot answer questions about specific situations or provide legal advice over the Internet. 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. Do not post confidential or time-sensitive information in this blog. The 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.