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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.

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.

Hours Worked for Calculating Worker Pay

What are the “Hours Worked” for Purposes of Calculating Employee Pay?

Employers must pay employees for all “hours worked.”  But does an employer have to pay an employee when the employee is not actually rendering services on behalf of the employer?  The answer may surprise you.

Definition of Hours Worked

The Industrial Welfare Commission, the agency charged with promulgating California regulations regarding the terms and conditions of employment, typically define “hours worked” as ” the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.”  This includes any time the employee is required to be in a specific location, and any time the employee actually performs work, even if the work is not previously approved.

Wage Order 5 regarding the Public Housekeeping Industry, adds a special definition “in the case of employee required to reside on the employment premises.” For employees required to reside on the premises (such as residential care facilities and apartment managers) “hours worked” is the “time spent carrying out assigned duties.”  This special definition only applies to persons employed in the Public Housekeeping Industry, which includes “any industry, business, or establishment which provides meals, housing, or maintenance services whether operated as a primary business or when incidental to other operations in an establishment not covered by an industry order of the Commission.”

Employees working in the health care industry also have a special definition of “hours worked: “the time during which an employee is suffered or permitted to work for the employer, whether or not required to do so, as interpreted in accordance with the provisions of the Fair Labor Standards Act.”

These differing definitions lead to confusion and potentially costly mistakes.  Employees and employers need to understand which hours are counted as hours worked so that employees can be properly compensated.

Sleep Time

Recent California Supreme court decisions make it clear that, unless the employee is covered by Wage Order 5, employees that are required to remain on the premises are entitled to compensation, even if the employee spends some of that time sleeping.   There are a few exceptions, such as ambulance drivers, but for the most part employers are required to compensate employees for all hours worked.

On-Call Time

Some employers need employees to be available to answer cell phone calls and/or email messages.  Depending on several factors, the time spent waiting for the phone to ring or for the email to come may be compensable or not.  Is the employee “waiting to be engaged?” or “engaged to wait?”  State and federal law define compensable on-call or stand-by time differently.  Although technology has made it easier for employees to work away from the job site, that same technology also creates new liabilities for employers.

Meals and Rest Breaks

All employees are entitled to take regular meal and rest breaks.  Failure to provide required rest breaks to non-exempt employees can carry significant penalties.  Employers are required to maintain accurate records of the hours worked, including meal breaks taken.  Employers that do not maintain accurate records of meal breaks have a difficult time defending meal and rest break violation claims.  Courts and the Labor Commissioner continue to struggle with how much control an employer can exercise over an employee during the required breaks, and how far an employer has to go to ensure the employee is afforded the opportunity take all required breaks.

Despite the media attention given to this topic, many employers still fail to adequately relieve employees, and large and small companies routinely face litigation involving meal and rest break claims.  Employers are much more likely to violate wage and hour laws than anti-discrimination laws, and employees are much more likely to pursue wage claims.

Understanding the employer and employee rights and obligations is the first step in resolving any potential issues.  Robert Nuddleman has advised and litigated unpaid wage claims on behalf of hundreds of clients. Because he represents employees and employers, he understands the motivating factors behind the dispute, and how to avoid issues before they become problems, and how to resolve problems when they occur.

New Laws Require Overtime for Caregivers, Personal Attendants and Companions

California and federal law requires overtime for caregivers, personal attendants and companions.  Different laws could apply depending on whether the employee is hired by a third-party employer or directly by the home owner.  Robert Nuddleman helps families, care agencies and caregivers understand their respective rights and obligations.

California’s Overtime Requirements for Caregivers

Prior to 2014, persons hired to work in the home to dress, feed and/or supervise a person who cannot care for themselves as a result of age and disability were not entitled to overtime pay.  The Domestic Workers Bill of Rights, which became effective January 1, 2014, eliminated the “personal attendant” exemption from Wage Order 15, which applies to workers employed by the household owner.

Although some employees whose wages are paid by state or county programs (i.e., In-Home Supportive Services, Lanterman Developmental Disabilities Services Act, California Early Intervention Services Act, etc.) are still exempt from California’s overtime laws, most other personal attendants working in the home are entitled to overtime compensation at one and one-half times the employees’ regular rate of pay for all hours worked in excess of 9 hours per day or 45 hours per week.  The overtime obligation applies regardless of whether the worker is employed by the family or a third-party employment agency.  The only exception is if the wages are paid through one of the listed state or county programs or if the person providing the services is the “parent, grandparent, spouse, sibling, child, or legally adopted child of the domestic work employer.”

Federal Overtime Requirements for Companions

Since its inception, the FLSA exempted certain domestic workers (i.e., persons employed about the home).  In 1974, Congress amended the FLSA to include some, but not all, domestic workers.  Companions, sometimes referred to as “elder sitters,” or “personal attendants”, were not covered by the FLSA.  Effective January 1, 2015, new Department of Labor regulations modified the definition of companion and when those workers must be paid overtime.

The revised regulations eliminate the companion exemption for any worker employed by a third-party employer.  This means that if a family uses a third-party agency to provide companion care for a family member, the companion must be paid one and one-half times the employee’s regular rate of pay for any hours worked in excess of 40 hours per week.   Workers employed directly by the family are still exempt from the FLSA’s overtime requirements.

The regulations also narrow the type of work that constitutes “companion” services.  Under the new regulations, the term “companionship services” means “the provision of fellowship and protection for an elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself.” Companionship services also includes the provision of “care” if the care is provided “attendant to and in conjunction with the provision of fellowship and protection and if it does not exceed 20 percent of the total hours worked per person and per workweek.”

The FLSA provides the minimum protection, and employers are still required to comply with state laws that either mirror the FLSA or provide greater protections for workers.  The revised FLSA regulations are somewhat historic in that it is one of the only occasions where federal law provides greater protection for the workers than California law.  Because employers are required to comply with state and federal law, many families must now pay overtime when the employee works more than 9 hours in a day (state) or more than 40 hours in a week (federal).

Shortly before the federal regulations were to go into effect, a D.C. circuit court judge declared the regulations void. On August 21, 2015, an appellate court overturned the decision, declaring the regulations valid. The Ninth Circuit and the U.S. Supreme Court have not yet ruled on the issue, therefore it is unclear whether California workers are entitled to the protections provided by the new federal regulations.

The recent changes in California and federal law require many employers and employees employed about the home to renegotiate the terms of employment.  Knowing the lawful ways to employ household workers and understanding employee rights to overtime will enable both parties to negotiate fair and reasonable terms of employment.

Whether the employee is hired directly by the family, through a care agency or a referral agency, and where the services are performed alter the rights and responsibilities of the employee and the employer.  Robert Nuddleman has been representing and advising employers and employees regarding wage and hour obligations for over two decades.  He frequently presents seminars and training regarding domestic worker rights and obligations. If you have questions about your rights or responsibilities, contact Robert Nuddleman.