Posts

The Magnificent Seven Wage and Hour Rules

The Magnificent Seven

The Magnificent Seven is one of my all-time favorite movies. The story is timeless and has been adapted several times. Yes, I know the Magnificent Seven is an adaptation of Akira Kurosawa’s Seven Samurai. Even Pixar came out with it’s own version in A Bug’s Life. I never tire of the story-line and the actors in the original Magnificent Seven. I even bare a scar on my forehead from when my brother tired to imitate James Coburn’s knife throwing skills. Thankfully the butt-end of the screwdriver hit me instead of the other end. Thanks, David!

When I saw the remake coming out with some of my current favorite actors, it definitely made my “must-see” list. It also got me thinking: what other Magnificent Sevens are worth considering?

The Magnificent Seven Wage and Hour Rules

Those familiar with my law practice know that I represent a lot of employers and employees regarding wage and hour disputes. I also frequently present seminars to attorneys, HR staff and payroll specialists regarding how to pay employees correctly. Therefore, I thought it would be fun to provide my Magnificent Seven Wage and Hour Rules.

In no particular order, here is my list of seven wage and hour rules to follow if you want to avoid problems in the workplace:

  1. Only pay a salary to employees if they are truly exempt from overtime.
  2. Keep accurate records of the hours worked for at least 4 years.
  3. Have policies in place providing for regular rest and meal breaks, and have employees clock out for unpaid meal breaks.
  4. Just because you think someone is an independent contractor, doesn’t mean the government or the courts will agree.
  5. Know if local ordinances require different rules for employees working in different cities and counties.
  6. Commission and bonus agreements should be in writing and identify when a commission or bonus is earned.
  7. Tips belong to the employees, not to the employer!

Employing workers in California can be difficult. Most employers make mistakes out of good intentions rather than evil objectives. Regardless of the intent, however, employers are responsible for following state and federal wage and hour laws. Hopefully this short list will help employers and employees avoid the most common wage and hour problems.

Now, go buy your ticket for the new Magnificent Seven. I don’t know if Denzel Washington, Chris Pratt and Ethan Hawke can match Yul Brynner, Steve McQueen and James Coburn, but I’m sure it will be a good time.

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.

State Penalized for Failing to Timely Pay Final Wages

Prompt payment of final wages. It’s not just a good idea. It’s the law. The State of California apparently didn’t get the memo on that one. The California Supreme Court had to tell the state that retiring employees are entitled to their final wages on their last day of employment. Labor Code sections 202 and 203, requires employers to make prompt payment of the final wages owed to employees who quit. Failure to timely pay final wages allows a court to impose statutory penalties. In McLean v. State of California, a retired deputy attorney general, sued the State of California on behalf of herself and a class of former state employees who did not timely receive their final wages when they quit or retired.

The state argued that sections 202 and 203 do not apply when employees retire. It also argued that McClean should have sued the state agency for which she worked instead of the State. The court concluded that:

Labor Code sections 202 and 203 apply when employees retire from their employment. We also conclude that McLean‟s decision to name the State of California as a defendant rather than the Department of Justice is not a basis for dismissing her suit.

When Are Final Wages Due?

For most California employees, final wages are due immediately upon termination (Labor Code section 201). It does not matter whether the employee is fired or laid off. If the employer is the moving party (i.e., the one to end the relationship) then it is a termination.

In contrast, California employees who quit their employment without notice must be paid within 72 hours of his last day of work(Labor Code section 202). There is an exception when an employee provides at least 72-hours notice. In that case, the final wages are due on the last day of employment.

There are some slightly different rules for:

Penalties for Failing to Timely Pay Final Wages

Employers willfully failing to timely pay final wages pay a penalty. (California Labor Code section 203). And don’t forget that “wages” includes accrued vacation or PTO (but not paid sick leave in most cases).

This “waiting time” penalty is calculated by multiplying the employee’s daily wage by the number of days until the employee is paid. There is a 30-day maximum on the waiting time penalties, but the penalty is imposed every day–not just every working day. There are a lot of cases where the penalty exceeds the actual wages owed. The penalties are almost mandatory unless an employer can show a good faith dispute that the wages were owed.

As the State of California just learned, employees must promptly receive their final wages. Employers cannot hold the wages hostage pending return of the employer’s keys or other equipment. If you have questions about California wage and hour issues, call an experienced employment attorney.

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.

Good Reminder About Year-End Bonuses

Many employers pay year-end bonuses to employees.  Paying and receiving bonuses can have unintended consequences, including tax consequences, if not handled properly.  From a wage and hour perspective, there is a difference between a discretionary bonus and a non-discretionary bonus.  An example of a discretionary bonus is a Christmas bonus, where the employee doesn’t know whether he or she will get a bonus, or how much it will be.  A discretionary bonus is not considered a wage as long as the employer has the discretion whether to provide the bonus and how much the bonus will be.  If, on the other hand, the employee or the company has to meet certain goals, or if the bonus is based on identifiable criteria, then the bonus is non-discretionary and becomes a wage.  Even if a non-discretionary bonus has some discretionary aspects (e.g., supervisor subjectively determines employee’s “contribution” to a project), if the employee has some measurable goals she or he can achieve to earn the bonus, it is considered a wage.

It is important to keep discretionary bonuses discretionary and separate from non-discretionary bonuses.  Since a non-discretionary bonus is a wage, that means an employee who earned overtime wages during the bonus-earnings period may be entitled to an overtime premium on the bonus.  Non-discretionary bonuses should be in writing.  Although the law does not require written bonus plans–at least not yet–it is important to clearly spell out what has to happen in order for the employee to earn the bonus.  Smart employers also consider what happens if an employee leaves the employment after having achieved the necessary goals, but before the bonus is paid out.

Year-End Bonuses

So, are year-end bonuses discretionary or non-discretionary?  That depends on how the bonus is set up.  If the employer decides to give the employee some money at the end of the year as a way to show the employer’s appreciation or as a gift, but the employer has not set any expectations that the employee is entitled to the bonus, then the bonus is most likely a discretionary bonus.  On the other hand, if the employer tells the employee that it will pay the employee a bonus based on billable hours, or number of widgets made, or possibly even company profitability, then if the employee (or the company) achieved the goals then the bonus is likely a wage.

Regardless of whether the year-end bonuses are discretionary or non-discretionary, they are taxable income.  I am not qualified to advise anyone on tax issues, so speak with your CPA or payroll specialist about year-end bonuses.

The following is from an article written by BenefitMall, a payroll and benefits company. Full disclosure: I use BenefitMall for my running my payroll–even an employment attorney knows it’s easier to use an outside payroll service–and I’ve referred BenefitMall to a number of my clients.  Putting aside any professional relationship, I thought they had some really good things to consider.  Enjoy

Year-End Tips for Handling Bonus Payments

Each year companies reward employees with bonuses for their hard work. This reward is an addition to expected yearly wages and is handed out as either cash or non-cash. Regardless of what the bonus is, employers must withhold income taxes. To help you ease your way into the new year with less stress than necessary, take a look at the bonus payment tips below for information on year-end tax preparations.

1. Coordinate Payroll Schedules – Make sure your payroll is run in chronological order. Specifically, don’t run a payroll with a check date that comes before a payroll with a check date that has already been processed. Also, run your bonus payroll on a separate day than your regularly scheduled payroll, so that two payrolls are not being processed on the same day.

2. Employee Tax Brackets – Consider the employee’s tax bracket when giving bonuses. Check out these easy to use Payroll Calculators to determine tax-withholding information. There are various formulas to choose from:

  • Percentage Method Bonus Calculator – Calculates federal withholdings using a 25 percent rate for bonuses paid up to one million dollars, and a 39.6 percent rate or the highest rate of income tax for the year for bonuses paid in amounts more than one million dollars.
  • Aggregate Method Bonus Calculator – This method calculates bonuses as a part of standard payroll. While the employee may have more money withheld initially using this formula, more will be returned during tax season.
  • Gross Pay Calculator – The employee receives the full bonus pay. The gross amount of the bonus is determined using the calculator and then the tax is added to the net pay.
    Be sure to account for all local, state and federal taxes regardless of what formula is used. And equally important, make sure bonus pay is included in your payroll and W-2s.

3. Federal Tax Liability Threshold – To avoid penalties, be sure to account for the tax liability threshold. Employers should report and deposit taxes of payroll deposit periods that meet or exceed $100,000 to the IRS on the first business day after the check date.As you continue to prepare for the end of the year and the start of 2016, we hope that you find these tax tips helpful. BenefitMall understands how much time and energy is put into handling year-end payroll tasks. To make sure your company remains compliant with standard tax regulations, please visit our Year-End Site at BenefitMall.com/YearEnd for more valuable payroll resources.

 

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, Berkeley, San Ramon, Concord, 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.

Labor Commissioner to Enforce Local Minimum Wage Laws

I have represented scores of employees and employers before the California Labor Commissioner. Recently, with more and more cities and counties passing local ordinances raising the minimum wage for employees working within specific cities, the Labor Commissioner has sometimes taken the position that it is authorized to enforce local minimum wage laws.  I’ve spent a great deal of time reviewing the minimum wage ordinances passed in Oakland, San Jose, San Francisco and Emeryville, and to my knowledge none of the ordinances grant the Labor Commissioner authority to enforce those laws.  More importantly, the California legislature did not give the Labor Commissioner the power to enforce local minimum wage laws.

Labor Commissioner to Enforce Local Minimum Wage Laws

AB 970, which becomes effective on January 1, 2016, will now allow the Labor Commissioner to enforce local minimum wage laws.  AB 970 amends several Labor Code sections, including Labor Code section 558 (c), which will now state:

In a jurisdiction where a local entity has the legal authority to issue a citation against an employer for a violation of any applicable local overtime law, the Labor Commissioner, pursuant to a request from the local entity, may issue a citation against an employer for a violation of any applicable local overtime law if the local entity has not cited the employer for the same violation. If the Labor Commissioner issues a citation, the local entity shall not cite the employer for the same violation.

Labor Code section 1197 will now read:

The minimum wage for employees fixed by the commission or by any applicable state or local law, is the minimum wage to be paid to employees, and the payment of a lower wage than the minimum so fixed is unlawful. This section does not change the applicability of local minimum wage laws to any entity.

The law does not require the Labor Commissioner to enforce the minimum wage laws, but it gives them the authority to do so if it chooses.  Additionally, the law prohibits local agencies and the Labor Commission from issuing citations against the same employer for the same violations.  Employers don’t have to worry that a city will cite them and then the Labor Commissioner will cite them for the same violation.  Of course, the Labor Commissioner can cite the employer for other violations outside the local government’s authority.

From my experience, the local agencies are not yet prepared to enforce the local minimum wage laws.  With the recent rise of local minimum wage laws, it is unclear how easily an already burdened Labor Commissioner will be able to enforce local minimum wage laws.  These new laws will give employees a new way to enforce local minimum wage laws.

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, Berkeley, San Ramon, Concord, 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.

Don’t Retaliate Against Desperate Housewives

OK. I admit it.  For a short-time I watched Desperate Housewives.  I’d like to say I only watched it because my wife made me, but the truth is, I liked the show.  I also learned you don’t retaliate against desperate housewives.  So, when I heard that actress Nicolleta Sheridan—who played my favorite character, Edie Britt—was suing Touchstone Television Productions, it piqued my interest.

Apparently, Sheridan sued Touchstone under Labor Code section 6310, alleging that Touchstone fired her in retaliation for her complaint about a battery allegedly committed on her by the show’s creator, Marc Cherry.  Touchstone claimed Sheridan failed to “exhaust her administrative remedies” by filing a claim with the Labor Commissioner.  Although the trial court agreed with Touchstone, the appellate court made it clear you don’t retaliate against desperate housewives.

Don’t Retaliate Against Desperate Housewives

Sheridan alleged that “during a September 24, 2008 rehearsal, Sheridan attempted to question Cherry about the script, and he struck her in response. Sheridan complained about the alleged battery to Touchstone.”  When Touchstone did not renew Sheridan’s contract for the 6th season—I had stopped watching by then—she sued Touchstone for wrongful termination in violation of public policy.  In true Hollywood fashion, the jury deadlocked and the court declared a mistrial.  Sheridan filed a second amended complaint, alleging that Touchstone “retaliated against her in violation of section 6310 for complaining about Cherry’s alleged battery.”

Touchstone argued that Sheridan had to first file a claim with the Labor Commissioner under sections 98.7 and 6312.  Touchstone’s position had some merit, since a depublished case said employees had to exhaust their administrative remedies before filing a retaliation claim.  But in 2013, the legislature amended the Labor Code to specifically state “An individual is not required to exhaust administrative remedies or procedures in order to bring a civil action under any provision of this code, unless that section under which the action is brought expressly requires exhaustion of an administrative remedy.”

The appellate court, which was not bound by the previously depublished decision, found that the plain language of sections 6312 and 98.7 before the 2013 amendments allowed filing a Labor Commissioner complaint, but did not require exhaustion. The court went on to find that the 2013 amendment to the Labor Code “merely clarified existing law.”

So, Sheridan will get another day in court and we get to find out if Touchstone should have headed my advice: Don’t retaliate against desperate housewives.

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 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.

Attorney’s Letter Did Not Comply With PAGA Notice Requirements

The Ninth Circuit Court of Appeals recently held, in Alcantar v. Hobart Service, that an attorney’s letter did not comply with PAGA notice requirements, and therefore dismissed plaintiff’s PAGA claims.  According to the court, “the letter in which plaintiff disclosed his allegations against the employer did not contain sufficient facts to comply with the statute’s notice requirements.”

PAGA allows an employee to bring an action against an employer to recover civil penalties for violations of the California Labor Code. Cal. Lab. Code § 2699(a). This powerful statute allows plaintiffs to bring claims on behalf of other aggrieved employees, without requiring the employee to follow typical class action protocols.

PAGA Requires Written Notice of Facts and Theories

Shortly after PAGA was passed, the legislature amended the statute to cure perceived abuses of the Act. Before filing a lawsuit, the employee must give “written notice by certified mail to the Labor and Workforce Development Agency and the employer of the specific provisions of [the California Labor Code] alleged to have been violated, including the facts and theories to support the alleged violation.” Cal. Lab. Code § 2699.3(a)(1). This provides the LWDA and the employer an opportunity to review the allegations and determine whether a violation has occurred and to assess the seriousness of the allegations.

Attorney’s Letter Did Not Comply With PAGA Notice Requirements

After Alcantar filed suit seeking compensation for his commute time and for missed meal and rest breaks, the employer argued that the attorney’s letter did not comply with PAGA notice requirements. The court agreed.

Alcantar’s letter contained a series of legal conclusions, but no facts or theories:

Our offices have been retained by Joseluis Alcantara [sic] (Plaintiff). Plaintiff is a former employee of ITW Food Equipment Group, LLC aka Hobart Service (Defendant). Plaintiff contends that Defendant (1) failed to pay wages for all time worked; (2) failed to pay overtime wages for overtime worked; (3) failed to include the extra compensation required by California Labor Code section 1194 in the regular rate of pay when computing overtime compensation, thereby failing to pay Plaintiff and those who earned additional compensation for all overtime wages due; (4) failed to provide accurate wage statements to employees as required by California Labor Code section 226; (5) failed to provide reimbursement for work related expenses as required by Labor Code § 2802; and, (6) failed to provide off-duty meal periods and to pay compensation for work without off-duty meal periods to its California employees in violation of California Labor Code sections 226.7 and 512, and applicable Industrial Welfare Commission orders. Said conduct, in addition to the forgoing, violated each Labor Code section as set forth in California Labor Code section 2699.5.

The court held “[t]he only facts or theories that could be read into this letter are those implied by the claimed violations of specific sections of the California Labor Code…” and determined “[t]his is insufficient.”

Plaintiff’s letter—a string of legal conclusions with no factual allegations or theories of liability to support them—is insufficient to allow the Labor and Workforce Development Agency to intelligently assess the seriousness of the alleged violations. Neither does it provide sufficient information to permit the employer to determine what policies or practices are being complained of so as to know whether to fold or fight.

The court specifically referenced an unpublished opinion, Archila v. KFC U.S. Properties, Inc., 420 F. App’x 667, 669 (9th Cir. 2011), in which the court affirmed a district court’s dismissal of a PAGA claim, observing that “none of the materials Archila submitted to KFC or the LWDA contain ‘facts and theories’ to support his allegations” and the demand letter “merely lists several California Labor Code provisions Archila alleges KFC violated and requests that KFC conduct an investigation.”

Because Archila was unpublished, it carried little if any weight, and employers could not cite to Archila.  Alcantar may have revived Achila.

Employees must provide sufficient facts and theories in their PAGA notices to allow the employer and the LWDA to assess the seriousness of the alleged violations and provide sufficient information to permit the employer to determine what policies or practices are being complained of. Employers should carefully review any PAGA notice to ensure it states the facts and theories upon which the claims are based. If the PAGA notice does not contain sufficient facts to comply with the PAGA notice requirements, the employer may be able to dismiss the PAGA claim.  Alcantar is not entirely binding, however, since it is a Ninth Circuit decision interpreting California law.  We’ll have to wait and see if any California courts follow Alcantar’s reasoning.

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.