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Fair Pay Act Investigations

California recently enacted new standards to combat discriminatory pay practices. California’s Fair Pay Act prohibits paying any employee less than the amount paid to employees of the opposite sex, race or ethnicity for doing “substantially similar work.” Employers have the burden of demonstrating that pay differential are based entirely and reasonably upon:

  • Seniority system, merit system, or system that measures earning by quantity or quality of production; or
  • Bona fide factor that is not based on or derived from sex-based differential compensation and that is job-related and consistent with business necessity.

Fair Pay Act Presentation

I recently attended a great presentation sponsored by the Alameda County Bar Association where Hillary Benham-Baker, Jamie Rudman and Carolyn Rashby did an excellent job describing the interplay between the various state and federal statutes, regulations and orders regarding equal pay. Jamie described a speaking engagement where Julie Su, California’s Labor Commissioner, discussed enforcing California’s Fair Pay Act. The Labor Commissioner discussed what questions Deputy Labor Commissioners would typically ask during Fair Pay Act investigations to determine what constitutes “substantially similar work.” I asked Jamie’s permission to share the information, as they represent excellent questions employers should ask themselves when evaluating whether they are complying with the law.

Fair Pay Act Questions To Determine What Constitutes “Substantially Similar Work”

·         What are the actual tasks performed for each job?  What percentage of time is spent on each?

·         What experience, training and education are required for each job?

·         What knowledge is required to perform each job?

·         What kinds and amounts of physical and/or mental effort are required for each job?  Is one job more physical difficult or stressful?

·          What programs, equipment, tools or products are required for each job? What training is needed to use the programs, equipment, tools or products?

·         What is the working environment?  Does one job involve an exposure to hazards or damages?

·         Does one job require supervision of other employees?

·         What is the difference in terms of the job obligations, levels of authority and/or degrees of accountability?

·         What are the programs, equipment, tools or products used for each job?

·         What kinds and amounts of physical and/or mental effort required for each job?

Employers need to understand what constitutes substantially similar work so they can properly evaluate whether or why employees should be paid the same. Pay disparities must be justified by legitimate business reasons.

If you have questions about equal pay, fair pay or any other employment-related issues, contact me at your convenience.

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.

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.

New Labor Law Posters for San Francisco

Every year, federal and state employment laws alter the landscape for employers. More recently, cities and counties have entered the mix with their own rules and regulations. Companies doing business in San Francisco are likely familiar with the ever-changing rules and posters.  Effective July 1, 2016, there are some new labor law posters for San Francisco companies that must be displayed in the workplace.  Which posters you have to display depends on how many employees you have working in San Francisco.

San Francisco Labor Law Posters

You can obtain nice laminated posters from various sources, but you have to be sure the posters are up to date and appropriate for your location and the size of your company. Alternatively, you can hunt around the Internet to find the new labor law posters. In order to make it easy for you, I’m including links to the new labor law posters for San Francisco in this article with a brief description of when you need the poster.  The links and posters are accurate as of July 1, 2016, but as I’ve said before, the laws keep changing so it is always a good idea to check with an employment law specialist.

San Francisco Minimum Wage Notice with New $13.00 per hour Minimum wage

On July 1, 2016, pursuant to Proposition J, which passed in 2014 with more than 76% of the vote, San Francisco’s minimum wage increases to $13.00.  All employers, regardless of where they are located, must pay their employees who perform work in San Francisco the San Francisco minimum wage.

The current SF Minimum Wage Notice can be downloaded here.

San Francisco has a helpful FAQ about the SF Minimum Wage requirements.

San Francisco Health Care Security Ordinance (HCSO) Notice with Rate Increases for 2016

Businesses with 20 or more employees (and nonprofit organizations with 50 or more employees) must spend a minimum amount on health care benefits for each of their “covered employees” – generally, those employees who work 8 or more hours per week in San Francisco and have been employed for more than 90 days. Employers with 20-99 employees must spend at least $1.68 for each hour payable for each covered employee. Employers with 100+ employees must spend at least $2.53 for each hour payable for each covered employee. These expenditures must be made for each employee within 30 days following the end of each calendar quarter.

The current SF HCSO can be downloaded here.

You can find more information regarding the SF HCSO, including reporting requirements, here.

San Francisco Family Friendly Workplace Notice

The San Francisco Board of Supervisors passed the Family Friendly Workplace Ordinance (FFWO) on October 8, 2013 and it became effective on January 1, 2014. This ordinance gives certain employees the right to request a flexible work arrangement and gives the employer the right to refuse for legitimate business reasons.

The FFWO requires that employers with 20 or more employees allow any employee who is employed in San Francisco, has been employed for six months or more by the current employer, and works at least eight hours per week on a regular basis to request a flexible or predictable working arrangement to assist with caregiving responsibilities. The employee may request the flexible or predictable working arrangement to assist with care for:

  1. a child or children under the age of eighteen;
  2. a person or persons with a serious health condition in a family relationship with the employee;  or
  3. a parent (age 65 or older) of the employee.

The official notice can be downloaded here.

The SF Office of Labor Standards Enforcement has a helpful FAQ regarding the FFWO.

San Francisco Paid Sick Leave Notice

The San Francisco Paid Sick Leave Ordinance became effective on February 5, 2007.  All employers must provide paid sick leave to each employee (including temporary and part-time employees) who performs work in San Francisco. Although statewide Paid Sick Leave Requirements went into effect on July 1, 2015, employers with employees performing work in San Francisco are required to comply with both laws. Unfortunately, compliance with the statewide Paid Sick Leave Requirements does not guarantee compliance with San Francisco Paid Sick Leave Ordinance.

The official poster that must be posted in the workplace can be downloaded here.

There is a helpful FAQ regarding the SF Paid Sick Leave Ordinance compared to the California paid sick leave requirements.

Knowing which labor law posters to post and when to get updates is not always easy. Hopefully this article will help companies comply with the posting requirements for the various labor law posters in San Francisco.

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.

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.

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.

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.

Employer Must Pay for Commute Time

Joseluis Alcantar sued his employer, Hobart Service, alleging Hobart did not compensate its technicians for the time they spent commuting in Hobart’s service vehicles from their homes to their job sites and from those job sites back home.  The general rule is that employers are not required to compensate employees for their commute to and from work.  So why did Joseluis think his employer must pay for commute time to and from work?  Because Hobart’s policies placed Joseluis under Hobart’s control while commuting.

Employer Must Pay for Commute Time

Employers must compensate an employee for all “hours worked,” which includes any time the employee is under the employer’s control.  Although Hobart did not require employees to bring company vehicles home, Joseluis alleged Hobart did not provide sufficient protected parking at the home office.  Since Joseluis was responsible for the safety of the vehicle and the expensive equipment in the vehicle, and because Hobart’s home office did not have sufficient space for all company vehicles, Joseluis felt he had to take the company vehicle home in order to keep it safe.

Hobart’s policies, among other things, severely restricted Joseluis’ off-work use of the company vehicle:

Personal use of the service vehicle, other than commuting from home to the first work assignment and from the last work assignment to home, is strictly prohibited unless prior written approval is granted by management. (An example of personal use for which prior approval could be granted would be in case of a dental appointment which cannot be scheduled after hours or on a weekend.)

Hobart also prohibited employees from carrying passengers without prior approval, and from transporting alcohol.  Hobart also required Joseluis to respond to telephone calls on his company-issued cell phone while commuting.

According to the court:

An employee’s commute is not typically compensable under California labor law, even “when the employee commutes in a vehicle that is owned, leased, or subsidized by the employer.” Cal. Lab. Code § 510(b). The time may be compensable, however, if the employee can classify it as “hours worked.” The Industrial Welfare Commission has defined “hours worked” as “the time during which an employee is subject to the control of an employer,” including “all the time the employee is suffered or permitted to work, whether or not required to do so.” See Cal. Code Regs. tit. 8, § 11040(2)(K).

Joseluis argued that, as a practical matter, he was required to commute in the company vehicle, and since the employer controlled what he could and could not do during that commute, the employer must pay for commute time.  The court concluded that a reasonable jury could conclude that Joseluis’ commute time was compensable.

Employers who allow employees to use company vehicles to commute to and from work should carefully review their policies and procedures.  Too many restrictions on employee use of the company-vehicles could lead a court to conclude the employer must pay for commute 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, 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.

On-Call Rest Break Claim Appeal Granted

Did employee received compliant rest break while they were on-call?

In January I posted an article about Augustus v. ABM Securities.  In that case, the appellate court held that employees were provided a compliant rest break even though the employees were technically “on-call” and had to carry pagers and/or radios during their breaks.  Well, the California Supreme Court granted review in the case.  Therefore, employers are cautioned that relying on ABM Securities as binding authority may be risky until the Supreme Court decides the case.

The Supreme Court’s decision will take several months at the least.  We’ll keep track of the case and post a new article once the Supreme Court issues its decision.  In the meantime, you should review your rest and meal break policies to ensure they comply with the law.