A tangle of new California employment laws has taken effect recently or will take effect soon, creating fresh challenges for many California employers. Here's what you need to know to avoid running afoul of new legislation.
Mandatory paid sick leave
California's Healthy Workplaces, Healthy Families Act took effect July 1, 2015, then was amended July 13, 2015. In brief, it states that all employees are entitled to accrue one hour of sick pay for every 30 hours worked. Employers may put limits in place, such as a cap on accruals or use of sick pay, but must clearly spell out the rules and communicate them to employees. The law also includes notice, posting and recordkeeping requirements.
Action item: Learn more about the rules and create a written sick leave policy for your business.
Time off for child-related activities
Employees of organizations with 25 or more workers gained expanded rights Jan. 1, 2016, to take time off from work for school and child care related activities. These include:
Time off for most of these activities is limited to eight hours in one month and 40 hours a year.
Action item: Review your employee handbook and update as necessary.
Gender pay equity
Effective Jan. 1, 2016, the Fair Pay Act expands the prohibition on gender-based pay inequality. It requires equal pay for employees of both genders when they do substantially similar work based on a composite of skill, effort and responsibility, even if the employees work in different locations. This is a change from the law's previous wording of "equal work within the same establishment." It also states employers cannot ban employees from disclosing their own wages, discussing the wages of others or inquiring about another employee's wages.
Action item: Be prepared to affirmatively show that any wage differential is based entirely and reasonably on one or more of the listed acceptable factors, such as seniority or merit systems.
Restrictions on use of E-Verify
Employers cannot use the federal E-Verify system at a time or in a manner not required by federal law. For instance, it cannot be used to check the employment authorization status of an existing employee or a job applicant who has not been offered employment. There is a penalty of $10,000 for each violation.
Action item: Use E-Verify in accordance with federal law to check the employment authorization status of a person who has been offered a position with your organization.
New rules for piece-rate workers
Employers must pay piece-rate employees (workers who are paid by the number of units produced or tasks performed) for rest and recovery periods and other nonproductive time at specified minimum hourly rates, separate from the piece-rate compensation. In addition, they must include specific information, such as the total hours of compensable rest and recovery periods, on employees' pay stubs.
Action item: Make back payments to employees by Dec. 15, 2016, if you haven't properly paid them for rest and recovery periods in the past. Notify the Department of Industrial Relations of your intention to use this safe harbor provision by July 1, 2016.
New federal overtime rules
The U.S. Department of Labor is expected to issue new rules this summer concerning overtime pay. It's anticipated the rules will mean salaried workers earning less than an estimated $50,440 a year will be entitled to overtime pay for working more than 40 hours a week.
Action item: Evaluate time spent on different tasks by employees to determine whether they are properly classified as exempt from overtime pay or nonexempt.
Resources for you
Along with up-to-date information, a local partner like California Bank & Trust can help your business succeed. For more business tips, explore the California Bank & Trust Business Resource Center. [cite::171::cite] [cite::172::cite]