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California Agencies Fund Grant for Small Businesses with Employees on Paid Family Leave (PFL)

Jul 25, 2022 in

The California Employment Development Department (EDD) administers Paid Family Leave (PFL), which provides eligible employees with up to 8 weeks of wage replacement benefits when an employee is off work for certain qualifying reasons.
Recognizing that small businesses with employees using PFL experience increased ancillary costs such as cross-training existing staff and hiring and training new or temporary employees to cover for the employees on leave, the California Employment Training Panel and California Labor and Workforce Development Agency have funded a grant program for small employers.
Small businesses in California with 1 to 100 employees who have at least one employee on PFL on or after June 1, 2022, may be eligible for grant monies, up to $2,000 per employee. A grant recipient must be registered to do business in the State of California, on an active status with the California Secretary of State and have an active California Employer Account Number under which employees are listed for payroll.
Employers interested in applying for the grant can apply through the grant website: Californiapfl.com.

IRS Raises Mileage Reimbursement Rate, Which Can Be Important For Required Employee Reimbursement

Jul 15, 2022 in

The California Labor Code (Sec. 2802) requires employers to reimburse employees for necessary expenses incurred in executing their job duties. A reimbursement obligation arises where an employee is required to use her personal vehicle for work purposes, such as driving between work sites (though not for her regular commute to/from work).
The reimbursement requirement can be satisfied in different ways, including actual expense, mileage reimbursement or a stipend method, provided the employer can establish the employee was fully reimbursed.
The most common method is to reimburse based on mileage. The California Labor Commissioner issued an opinion that using the IRS mileage rate as a multiplier establishes adequate reimbursement of work-related auto expenses, in the absence of evidence to the contrary.
In response to the recent drastic increases in fuel prices, the IRS announced on June 9, 2022, that it would increase the business travel rate to 62.5 cents per mile,effective July 1, 2022. This is a special adjustment for the final six months of 2022. Employers tying reimbursement to the IRS rate should consider increasing their reimbursement to 62.5 cents/mile for the near term.

US Supreme Court Permits Arbitration of Individual PAGA Claims

Jul 13, 2022 in

In a favorable opinion for California employers, the US Supreme Court, in Viking River Cruises v. Moriana, held employees may be compelled to submit individual Private Attorney General Act (PAGA) claims to binding arbitration (thereby waiving their rights to a jury trial).
By way of background, PAGA permits an “aggrieved” employee who allegedly had their Labor Code rights violated, to step into the shoes of the state Labor Commissioner and enforce certain violations of California labor law. PAGA allows for civil penalties against employers on behalf of the state. Further, only an individual employee brings a claim under PAGA, while other allegedly “aggrieved” employees do not participate in the lawsuit. The default PAGA civil penalty is $100 per employee per pay period for an initial violation and $200 per pay period for subsequent violations.
Prior to Viking River Cruises, PAGA claims could not be compelled into arbitration. In those cases in which an employee was bound by an arbitration agreement, the lawsuit would be split, with non-PAGA claims submitted to arbitration first and PAGA claims decided after the arbitration was completed, essentially subjecting the employer to multiple trials and no benefit of arbitration of PAGA claims.
A second important thrust of Viking River Cruises is that, because an employee bound to arbitrate her PAGA claims lacks standing to prosecute claims on behalf of other similarly “aggrieved” employees, the remaining PAGA claims must be dismissed upon submission of the case to arbitration.
It is important to remember that, based on the current status of California’s Assembly Bill (AB) 51, it remains unclear whether an employer can require a new hire to sign an arbitration agreement as a condition of employment. It remains to be seen how the Supreme Court will address this issue. At this time, it is safest to make an agreement to arbitrate employment claims voluntary.
Additionally, it is critical to understand both the costs and benefits of binding arbitration of employment claims in California, as employers are required to shoulder 100% of the arbitration fees, which can be quite substantial. Employers contemplating adopting an arbitration policy or who wish to fully understand the costs vs. benefits of employment arbitration, should contact us for further information.

Deadline Looms for Employers with 5+ Employees to Offer A Qualified Retirement Savings Plan

Jun 7, 2022 in

Employers with just five (5) W-2 employees must be prepared for the June 30, 2022 deadline to offer a qualified retirement savings plan (including a 401(a), 401(k), 403(a), 403(b), 408(k), 408(p), or 457(b)) to their employees.
One option for employers that do not already have a plan in place is to register with the California state offered Calsavers program (formerly known as Secure Choice). Information about this plan is available here.
If employers fail to offer a plan by the deadline, they may receive a notice of noncompliance and face steep fines. A penalty of $250 per eligible employee if noncompliance extends 90 days or more after the notice. If found to be in non-compliance 180 days or more after the notice, the employer is responsible for an additional penalty of $500 per eligible employee.

Be Prepared for July 1st Minimum Wage Increases & Inflation

May 31, 2022 in

California employers in several cities and counties must be prepared for July 1, 2022 minimum wage increases. While most California localities previously imposed a different minimum wage for employers with more or less than 26 employees, all municipalities listed below, except West Hollywood, will now impose the same minimum wage regardless of size. Here is a quick list of localities where the minimum wage will climb effective July 1st:
  • Alameda: $15.75/hour
  • Berkeley: $16.99/hour
  • Emeryville: $17.68/hour
  • Fremont: $16.00/hour
  • Los Angeles City: $16.04/hour
  • Los Angeles County: $15.96/hour
  • Malibu: $15.96/hour
  • Milpitas: $16.40/hour
  • Pasadena: $16.22/hour
  • San Francisco: $16.99/hour
  • Santa Monica: $15.96/hour
  • West Hollywood (49 or fewer employees): $16.00/hour
  • West Hollywood (50+ employees): $16.50/hour
California employers must also be mindful of the likelihood that the statewide minimum wage may climb faster than expected due to rising inflation. In 2017, California initiated an annual planned increase of the statewide minimum wage, with all employers, regardless of size, scheduled to reach $15.00 per hour effective January 1, 2023.
However, the minimum wage ordinance included an exception triggering an accelerated increase if the U.S. Consumer Price Index (CPI-W) exceeds 7 percent over a specified period of time. Based on current projections, the CPI-W will have risen by 7.6 percent in the period ending in July. On May 12, 2022, when Governor Gavin Newsom announced his proposal for a state inflation relief package, he also announced that California’s minimum wage is now projected to increase to $15.50 per hour, rather than $15.00 per hour, on January 1, 2023, for all businesses regardless of size. Of course, a business operating in any of the listed municipalities must ensure compliance with the higher local minimum wage.
Employers with exempt employees must remember that certain exempt employees must receive a salary of at least twice the state minimum wage (the “Salary Threshold”), in addition to meeting the general duties and other requirements. Whenever the state minimum wage increases, this impacts the Salary Threshold and may cause exempt employees to suddenly become improperly classified. To be clear, the Salary Threshold is tied to the California state minimum wage, not any city or county minimum wage ordinance.

Understanding Exempt vs. Nonexempt Employees in California

Apr 21, 2022 in

We are frequently surprised that many businesses fail to grasp and correctly apply the criteria for determining when an employee can be classified as Exempt from overtime and/or meal and rest break laws. Employers often assume, based on a worker’s position in the organization, or because s/he is paid a salary, that s/he is automatically Exempt. 
We are surprised, not because the standards for determination of Exempt status are straightforward and easy to apply (Sometimes they are not!), but because the consequences of misclassifying an employee as Exempt can be major, including administrative claims or civil lawsuits for unpaid wages, unpaid overtime, failure to provide rest/meal breaks, liquidated damages, waiting time penalties and related damages (including the employee’s attorney’s fees). Have we got your attention?
The Labor Commissioner applies two (2) standards to determine when an employee can be properly classified as Exempt: (1) the Duties Test; and (2) the Salary Threshold. Exempt employees must fit within one of the following limited list of categories: Executive, Administrative, Professional, Computer/Software, Outside Sales, state or county employees, and a few others.
The Duties Test examines the work performed by the employee during the workweek. For example, the Executive Exemption is limited to an employee whose “duties and responsibilities involve the management of the enterprise or a department or subdivision of the enterprise, who customarily and regularly directs the work of two or more other employees, and who has authority to hire or fire other employees or whose views as to the hiring, firing, advancement, promotion or any other change of status of other employees will be given weight, and who customarily and regularly exercises discretion and independent judgment. There is a different Duties Test for each category of Exempt employee.
The Salary Threshold requires one exempt under the Executive Exemption to earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. Full-time employment means 40 hours per week. There is a similar Salary Threshold for most other Exempt categories.
Depending on the circumstances, these tests may be easy or difficult to apply regarding a given employee. Additionally, there are traps for unwary with regard to the Salary Threshold where the worker, for example, meets the Salary Threshold most weeks, but falls below it on a given week.
Employers looking to follow best practices should have their Exempt classification decisions reviewed by employment law counsel or, at minimum, someone with significant Human Resources experience, such as an HR Consultant or a member of the Society for Human Resource Management (SHRM) or its affiliate, Professionals in Human Resources Association (PIHRA).

California Appeals Court Delivers Victory for Employers on “Suitable Seating” Claims

Apr 14, 2022 in

A California appellate court recently affirmed a trial court victory on behalf of Ralphs Grocery Co., in a case alleging the grocer should have provided suitable seating to its cashiers. 
By way of background, most California Industrial Wage (IWC) orders require employers to provide workers “suitable seating” under two circumstances: (1) when the nature of the work reasonably permits the use of seats; and (2) when an employee is not actively engaged in duties that require standing, or during “lulls in operation.”
Former Ralphs employee Jill LaFace sued Ralphs, arguing that cashiers could reasonably perform their cashiering duties while seated and that the company was also obligated to provide seats for cashiers to use during “lulls in operation.” Following a nonjury trial, Los Angeles Superior Court Judge Patricia Nieto held that the nature of LaFace’s work did not permit sitting because “Ralphs cashiers continuously perform work that should or even must be performed while standing.” She also held that Ralphs had no obligation to provide seating for use during “lulls in operation” because the cashiers were expected to remain busy between customers.
LaFace appealed. The appellate court ruled that an employer does not have to provide seating where the employer expects employees to keep busy and not stand, which functionally means there is no “lull” in duties. The court also held that employees bringing suitable seating claims and other claims for penalties under California’s Private Attorneys General Act (PAGA) are not entitled to a jury trial, which may also be seen as a victory for California employers.
For employers of workers where there is some question whether seating may be required, this case highlights the need for an established, clearly comunicated policy. Either employees may be permitted to sit while performing their job or during lulls, in which case suitable seating should be provided, or written policies communicated to workers should make it clear that employees are expected to remain busy, even during lulls in operation.

Congress Eliminates Mandatory Arbitration of Workplace Sexual Assault and Harassment Claims

Feb 26, 2022 in

On February 10, 2022, the Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual harassment Act of 2021 (HR. 4445). When signed by President Biden (expected any day), it will amend the Federal Arbitration Act (FAA) to bar forced pre-dispute arbitration of workplace sexual assault and sexual harassment claims. The law will also bar waivers by employees of the right to bring such claims on a class basis.
The new law also requires that a court—not an arbitrator—decide whether a claim constitutes sexual harassment or sexual assault, even if the arbitration agreement requires such decision be made by the arbitrator.
In light of this development, we suggest employers who require employees to sign mandatory arbitration agreements include a “carve-out” for claims of workplace sexual assault or harassment. At a minimum, any arbitration agreement should contain a carve-out for disputes that are barred by applicable federal or state law.

California Resurrects COVID-19 Supplemental Paid Sick Leave for 2022

Feb 24, 2022 in

 

On February 9, 2022, Governor Newsom signed Senate Bill (SB) 114 which resurrects COVID-19 Supplemental Paid Sick Leave (the “SPSL”) for 2022.
This version of SPSL took effect February 19, 2022, however, it applies retroactively to January 1, 2022. It expires September 30, 2022. Employers with more than 25 employees are covered.
The following are covered reasons for using SPSL:
  • The employee is subject to a Covid-related quarantine or isolation period.
  • The employee is attending an appointment for themselves or a family member to receive a Covid vaccine or vaccine booster.
  • The employee is experiencing symptoms or caring for a family member experiencing symptoms, related to a COVID-19 vaccine or vaccine booster that prevents the employee from being able to work or telework.
  • The employee has symptoms of COVID-19 and is seeking a medical diagnosis.
  • The employee is caring for a family member who is subject to an order or guidance or who has been advised to isolate or quarantine.
  • The employee is caring for a child, whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.
SPSL benefits:
  • A full-time employee is entitled to 40 hours of SPSL. A part-time employee is entitled to a proportionate number of hours of SPSL based on the type of schedule the employee maintains.
  • Both full and part-time employees are entitled to an additional amount of time, equal to their allotment for the reasons detailed above if the employee or family member for whom the employee is caring for tests positive for COVID-19 (e.g., full-time employees are entitled to an additional 40 hours). Employers are permitted to require documentation of the positive test to provide leave for this reason.
  • The maximum amount of SPSL a full-time employee can take during the period from January 1 to September 30, 2022, is 80 hours.
Additional Facts About SPSL:
  • Employers may limit the leave for symptoms for each vaccination or booster to 3 days or 24 hours unless the employee provides verification from a health care provider that the employee (or their family member) is continuing to experience adverse symptoms.
  • Employers must provide employees with written notice that sets forth the amount of SPSL the employee has used through the pay period in which it was due on either the employee’s itemized wage statement or in a separate writing provided on the designated pay date. The employer shall list zero hours used if a worker has not used any SPSL.
  • Employers are required to post a notice to be developed by the Labor Commissioner about this new SPSL benefit. A copy of the notice can be found here. If an employer’s covered employees do not frequent a workplace, the employer may satisfy this requirement by disseminating the notice through electronic means, such as e-mail.
  • Non-exempt employees shall be compensated based on one of the following: (1) calculated in the same manner as the regular rate of pay for the workweek in which the employees uses SPSL; or (2) calculated by dividing the total wages, not including overtime premium pay, by the total hours worked, in the full pay periods of the prior 90 days worked.
  • The maximum amount an employer can be required to pay for SPSL: not more than $511 per day and $5,110.00 in aggregate.

California Court Allows Covid-19 Claim of Non-Employee Catching Virus from Employee to Move Forward

Jan 20, 2022 in

Just before Christmas, a California appeals court gave the green light to a wrongful death lawsuit claiming that an employee brought Covid-19 home from work and infected a family member, who subsequently died.

The employer, See’s Candy, had asked the courts to shut the case down because the claim falls under the exclusive remedy of the California Workers’ Compensation Act (WCA). Under the WCA, employees who suffer illness from the workplace are entitled to compensation without needing to sue the employer in court. Since early in the Covid-19 pandemic, it has been clear that employees who link their own Covid-19 infection to their job get WCA benefits.

The courts refused to dismiss the case, reasoning that WCA benefits do not extend to injuries or illness by non-employees, and so they are not prohibited from pursuing the employer in civil court.

Importantly, the family still faces several hurdles, including establishing that the employer owed a “duty of care”* to the employee’s relative (a question not answered in the See’s Candy opinion), that the employer breached such a “duty of care,” and, perhaps most difficult, that the employer was the source of the deceased relative’s infection.

Employers’ best takeaway from this case is to ensure your practices align with all state and federal government and OSHA mandates (such as those discussed above). This will not only reduce the spread of infection, but may be valuable evidence, if you are confronted with such a case, to prove you did not act unreasonably.

*Deepest apologies for the unavoidable legalese.

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