SDHR Consulting, Inc. Connie s Corner VETO. December A Legislative Update

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1 What s New? December 2015 Helping You Sail Smoothly Into 2016 Happy Holidays From SDHRC California s Equal Pay Act What It Means For You Increased Labor Costs In 2016 California now has one of the most progressive Equal Pay laws in the nation. The new law (SB 358) signed by Governor Brown mandates equal pay for substantially similar work, as well as giving employees the right to compare salaries with co-workers without fear of retaliation. The phrase substantially similar work is the kicker. It means employees do not need to have the exact same set of duties to demand equal pay, but rather they simply need to hold equal value to the company. Of course, certain considerations like job seniority and merit pay are still allowed, although if there is a claim, the burden will be on the employer to prove gender was not a motivating factor. Going into 2016, it is a good idea to audit your labor costs and review your pay scales to ensure compliance with the new law. SDHR Consulting is here to help! That s right, the cost to do business in California is going up. Minimum wage $10.00 per hour Minimum annual salary for executive and administrative overtime exemption is now $41,600 per year. The computer software employee overtime exemption is also increasing: from $41.27 to $41.85, with the minimum monthly salary from $7, to $7,265.43, and the minimum annual salary exemption from $85, to $87, San Diego Human Resources Consulting, Inc info@sdhrconsulting.com

2 SDHR Consulting, Inc. December 2015 Connie s Corner VETO A Legislative Update The end of the year is a time for celebration. While the holiday party offers many positive rewards, it can also carry with it some unintended negative consequences for employers. Employers may face liability for the conduct of employees who become intoxicated during office parties and thereafter behave inappropriately or illegally. Some of the more common claims that arise in this situation are: Sexual harassment claims Discrimination claims Premise liability Injury to third parties So, what can employers do to minimize the risks? Hold parties only during off duty hours. Make them optional; don t give out awards or recognitions. Limit the length of the party to a few hours and have a certain end time. If serving alcoholic drinks, set a 2 drink limit Make sure food is served. Encourage carpooling and designated drivers. Offer company-sponsored taxi and/or Uber rides. Provide managers or assigned spotters to assist if any employee has over indulged. Employment arbitration agreements are alive and well. Governor Brown vetoed AB 465, which would have barred mandatory employment arbitration agreements. Governor Brown called AB 465 a far-reaching approach that has been consistently struck down in other states for conflicts with federal law. He further noted, California court have addressed this issue of unfairness by insisting that employment arbitration agreements must include numerous protections to be enforceable, including neutrality of the arbitrator, adequate discovery, no limitation on damages or remedies, and a written decision that permits some judicial review and limitations on the costs of arbitration. While this is a win for California employers, we still advise that you take a very close look at your alternative dispute resolution agreements to make sure they comply with all the legal requirements under state and federal law to actually be enforceable. Unilateral arbitration policies buried in an employee handbook will likely never be enforceable. Checking off another win for California Employers, Governor Brown signed AB 1506, which gives employers a chance to cure technical violations in itemized wage statements before being subjected to costly litigation. Because of the strict time limitations to prove alleged defects have been remedied, employers are advised to consult with human resource professionals or legal counsel if they receive any notices about alleged wage and hour statement violations from any source. Because this amendment was deemed urgent, it went into effect immediately. Yippee! As a preventative measure on the front end, if an outside payroll service is preparing your itemized statements, we recommend a yearly audit to ensure all the necessary information is being included in the statements. Do not assume they do. This is especially important in light of new requirements for paid sick leave. Continued on Page 4 Your HR Partners Full Throttle, Madam Mediator, The Ninja, The Oracle, JJ, MacGyver, Smartie, The Closer, Power House, Clutch, The Channel, Mad Dog, and the Fearless Leader! 2 Yep! We nicknamed them all! Read our full bios at

3 SDHR Consulting, Inc. December 2015 The ACA Headache Continues As one of the biggest challenges for businesses in years, the Affordable Care Act (ACA), continues to add stress and confusion. Here is what you need to know as we approach the first deadlines. Did your company have 50+ full- time or Equivalent (FTE) employees? The measurement and stability periods for answering this question are now over. So, if you are a Large Employer there will much to d o. Determining if you are a Large Employer can be a straightforward calculation for any FT employee who worked an average of 30+ hours per week or 130 hours per calendar month or it can be d etermined by using a look back or stability period. Don t forget part- time employees count toward the FTE calculation. Starting this January, Large Employers must report health insurance information to the IRS as well as provide statements to their employees. The new Form C must be provided to employees annually, along with their W - 2, by no later than January 31, The C is necessary for employees to use when completing their tax returns, and it will show if they or their family members had q ualifying health coverage for some or all months during the year. Form C must also be filed with the IRS. Note that if filed electronically, employers have until March 31, 2016 for both forms. The ACA also provides a big headache for those companies utilizing staffing firms to fill positions that put them in the Larger Employer category. Staffing companies also need to be mindful of the premium charge back requirements to invoice clients in order to comply with ACA requirements. Call SDHRC if you need help (or an aspirin). Form 1094c pdf/f1094c.pdf Form 1095c pdf/f1095c/pdf Employee or Independent Contractor How Do You Know? The Department of Labor issued an Administrative Interpretation Opinion, No , on July 15, 2015, indicating that, most workers are employees under the FLSA s broad definitions. In so concluding, the DOL stated that it is a sixfactor economics realities test that will determine if a worker is properly classified: The Latest From California Courts An inability to work under a particular supervisor, even when the supervisory oversight is causing medically documented anxiety, is not a valid disability under FEHA. Higgins-Williams v. Sutter Medical Foundation, 2376 Cal.App.4th 78 (2015) If an employer is successful in defending against a harassment claim, the employer cannot be held liable for failure to prevent the harassment. Dickson v. Burke Williams, Inc., 234 Cal.App.4th 1307 (2015). While this ruling will help employers defending a claim, employer should still be mindful that any allegation of harassment (whether it turns out viable or not) should be promptly reviewed and remedied. (1) the extent to which the work performed is an integral Employers will be held liable for violations of the FEHA part of the employer s business; (such as harassment, or failure to prevent (2) the worker s opportunity for profit or loss depending on harassment) for conduct directed at or experienced by his/her managerial skill; independent contractors in your workplace. Whether (3) the extent of the relative investments of the employer an employee or a contractor, the employer is and the worker; responsible for ensuring a harassment-free work (4) whether the work performed requires special skills and environment. Hirst v. City of Oceanside, 236 initiative; Cal.App.4th 774 (2015). (5) the permanency of the relationship; and (6) the degree of control No single test will determine a person s status. Rather, it is the analysis of all the exercise by the factors that will determine whether the worker is economically dependent on the employer. employer or truly in business for himself. While this approach is different from California s control test, an employer s compliance with the control test will 3 not necessarily be sufficient to satisfy the IRS.

4 SDHR Consulting, Inc. December 2015 Connie s Corner Continued Labor Commission Can Now Pack a Punch The Labor Commissioner is now authorized to investigate and enforce local overtime and minimum wage laws and to issue citations and penalties for violations. The law also authorizes the Labor Commissioner to issue citations and penalties to employers that violate the expense reimbursement provisions of Labor Code Section 2802 (SB 970). In addition, the Labor Commissioner can issue a lien on an employer s property for amounts owed to an employee, such as unpaid wages, and other compensation, penalties, and interest. The law also provides that an owner, director, officer or managing agent of the employer may be held personally liable for violations of minimum wage and hours worked requirements. (SB 588) School Activities. The new law expands the circumstances under which employees may take school activities leave, now including leave to address a childcare provider emergency, a school emergency, finding, enrolling, and re- enrolling a child in a school or childcare. The pool of eligible employees is expanded to include employees who are stepparents, foster parents or stand in loco parentis to a child. The law also requires employers to permit employees to use sick leave, and it prohibits an employer from denying or retaliating against such employee for using sick leave. (SB 579) Wage Garnishments. Effective next July 1, 2016, the calculation for the amount an employer should deduct to comply with a valid wage garnishment order is the lesser of either: (1) 25% of the employee s weekly earnings, or (2) 50% of the amount by which the employee s earnings for the week exceed 40 times the minimum wage. Companies are looking for creative and new ways to attract and retain employees. Sometimes salary cannot be adjusted so companies are considering other enticements. Here are a few trends: Paternity Leave. There is no mandated law for new fathers and paternity leave. Generally new fathers can apply for and use FMLA (if eligible) to spend time with a new child. Some major US tech firms have started to offer between 6-17 weeks paid paternity leave. Other companies offer paternity leave paid in full, some partially paid and others allow for unpaid leave to bond with a new child. With the new child for FaceBook s CEO and his announcement of taking 90 days paternity leave, trends are shifting regarding paternity leave. Personal Days. Not sick but don t want to use a vacation day? Personal days are the answer. Twenty- six percent of companies offer paid personal days in addition to vacation days. Enjoy an opening season game, a shopping or spa day or anything that makes you happy while you get paid. For companies that do offer paid personal days, this is another way to retain and attract employees. Birthday Days. Paid birthdays are another way companies can provide a day and celebrate an employee. Employment Volunteer Program. More and more companies are recognizing the value service/volunteer opportunities provide to employees, to the company and to the programs employees choose to service. What is an EVP? It is a planned, managed effort that seeks to motivate and enable employees to effectively serve the community. Under this program, employers pay employees for their volunteer service time. It is a win- win for all involved! Unlimited Time Off. Some companies have gone to unlimited time off, giving employees the autonomy to choose how much time they need off in a year. In deciding whether an unlimited PTO policy is right for your business, look at the pros and cons. An unlimited PTO policy removes the administrative tracking headache and decreases labors costs when it comes to banking and paying out PTO at termination. However, it can disrupt operations and may actually discourage employees from taking time off if there are no set parameters or the policy does not align with production/service goals. 4 Laws of Attraction and Retention Family Whistleblowers. Effective January 1, 2016, employers are prohibited from retaliating against an employee who is a family member of an employee who has or is perceived to have engaged in protected conduct or made a protected complaint (whistleblowing). (AB 1509)

5 Requesting A Religious Or Disability Accommodation Is A Protected Activity This year s amendment to the Fair Employment and Housing Act (FEHA) provides that an employer is prohibited from retaliating or discriminating against an employee for requesting a reasonable accommodation, regardless of whether the accommodation is actually granted. While many employers already considered such activity protected, it is now officially a legally protected activity within the meaning of FEHA. This amendment was largely in response to the California Court of Appeals decision in Rope v. Auto-Clor Systems of Washington, Inc. (2013) 220 Cal.App.4 th 635, which found that requests for reasonable accommodations, even repeated requests, did not equal protected activity. The California Employment Lawyers Association sponsored the bill and argued that an employee should not be retaliated against for requesting a reasonable accommodation for a disability or a religious need. What does this mean for operations? It s important for your managers, supervisors, and human resources professionals to know how to handle a request for a religious or disability accommodation and understand that in light of the heightened sensitivity to retaliation claims, all accommodation requests must be handled correctly. Required Employment Posters 2016 Do you have the new required workplace posters for 2016? Call (760) to place your order today! Celebrating 10 years. We sincerely thank you for your business and support in 2015, and it is our wish for 2016 to be prosperous and rewarding for you and your business!