Commission-Based Employees in California Must Receive Separate Pay for Rest Breaks

Last week, in Vaquero v. Stoneledge Furniture, LLC, Case No. B269657, the California Court of Appeal decided that hourly employees that are exclusively compensated on a commission basis must also be separately paid for required rest periods.

Under California law, employers must provide their non-exempt workers with paid ten-minute rest breaks for each four hours of work (or major fraction thereof). In Vaquero, two former sales associates brought suit alleging that they had not been paid for the rest breaks that Stoneledge provided. Under Stoneledge’s commission plan, the employer tracked all hours worked by the commissioned salespersons and compensated them in one of the two ways:

  • If the sales associate’s earned commissions exceeded the guaranteed minimum [$12.01 per hours worked], then the associate would receive the actual commissions earned based on a “percentage of sales”;
  • Alternatively, if the sales associate’s earned commissions fell below the guaranteed minimum, then the sales associate would be compensated based on a $12.01 per hour basis, which would serve as an advance against future commissions.

In other words, in the event a commissioned salesperson failed to make the equivalent of $12.01 per hour, Stoneledge would provide that worker with an advance that would be paid back through clawed back deductions from future paychecks. However, to ensure that its sales associates were never paid less than the $12.01-per-hour guaranteed minimum, Stoneledge’s plan never took repayment if it would result in payment of less than guaranteed minimum.

In moving for summary judgment, Stoneledge asserted that the rest period claim failed because of its guaranteed minimum plan: “all time during rest periods was recorded and paid as time worked identically with all other work time,” such that sales associates were paid at least $12.01 per hour even if they made no sales at all. The trial court agreed, concluding that “Stoneledge’s payment system specifically accounted for all hours worked. . . and guaranteed that [sales associates] would be paid more than the $12 an hour for those hours [such that w]ith this system there was no possibility that the employees’ rest period time would not be captured in the total amount paid each pay period.”

The Court of Appeals, however, disagreed with the trial court, finding that the Stoneledge’s plan did not properly compensate the commissioned salespersons for rest break time in part because the “plain language of Wage Order No. 7 requires employers to count ‘rest period time’ as ‘hours worked for which there shall be no deduction from wages.’” In so finding, the Vaquero Court cited Bluford v. Safeway, Inc.(2013) 216 Cal. App. 4th 864, a case that involved Safeway truck drivers who sued Safeway for, among other things, failing to provide paid rest periods. In Bluford, Safeway paid the drivers “based on mileage rates applied according to the number of miles driven, the time when the trips were made, and the locations where the trips began and ended,” and, similar to Stoneledge, Safeway asserted that its compensation system subsumed payments for rest periods into the mileage rates Safeway negotiated in the drivers’ collective bargaining agreement, but none of the bases on which Safeway paid its drivers directly compensated them for rest periods.   The Bluford court determined that because the applicable wage order similarly prohibited employers from “deduct[ing] wages for rest periods,” employers “must separately compensate employees for rest periods where the employer uses an “activity based compensation system” that does not directly compensate for rest periods.

Relying on Bluford, the Court of Appeal in Vaquero first determined that “nothing about commission compensation plans justifies treating commissioned employees differently from other [hourly] employees,” and then held that “Wage Order No. 7 requires employers to separately compensate employees for rest periods if an employer’s compensation plan does not already include a minimum hourly wage for such time.” Among other things, the Vaquero court reasoned that the “commission agreement used by Stoneledge [was] analytically indistinguishable from a piece-rate system in that neither allows employees to earn wages during rest periods. Indeed, the purpose of a rest period is to rest, not to work.” Finally, in reaching its conclusion that Stoneledge’s commission plan did not separately compensate its sales associates for rest breaks, the Vaquero court highlighted the fact that the commission agreement did not compensate for rest periods taken by sales associates who earned a commission instead of the guaranteed minimum.

Takeaways

Going forward, California employers with commissioned-based compensation plans and those with piece-rate compensation plans should review and revise such plans to ensure that they separately account for – and pay for rest periods – to comply with California law and Wage Order 7. Further, employers should ensure that this separate break-out of paid rest periods is not subject to any deduction.

-Derek Ishikawa

Looking Ahead: Immigration & International Programs Under the Trump Administration

President Trump’s recent Executive Order 13769 (EO) on immigration caused tumult for many colleges and universities when it was implemented. With more than 20 lawsuits challenging the EO, on Feb. 9 the 9th Circuit Court of Appeals upheld a national temporary restraining order (TRO) granted by U.S. District Court in Washington state. While this is a major victory for the rule of law and constitutional separation of powers, it’s only temporary. Additional court rulings and executive orders on immigration are expected, and the approach is difficult to predict.

(To continue reading this post, click here.)

-Leigh Cole

 

Take a Seat: Takeaways from Bank of America’s $15 Million Suitable Seating Settlement

As we previously blogged here, in April 2016, in Kilby v. CVS Pharmacy, Inc., the California Supreme Court ruled, without providing much guidance, that suitable seating is required “when the nature of the work reasonable permits the use of seats.” Last fall, Bank of America (BofA), in a similar representative action, agreed to settle a suitable seating lawsuit for $15 million, filed on behalf of all of its California non-exempt tellers.  The settlement provides some interesting insights about settlements of class and representative actions, and provides some guidance on the suitable seating requirement under California law.

The Players: The settlement involved two cases that were filed between 2011 and 2013.  In April 2011, two plaintiffs, Rhonique Green and Olivia Giddings, filed a putative class action complaint in Los Angeles County Superior Court (the Green action), seeking damages and civil penalties under the California Private Attorneys’ General Act (“PAGA”) on behalf of themselves and all current and former BofA California tellers.  The plaintiffs alleged BofA required them to stand while working, in violation of California’s Wage Order, even though there was “ample space behind each counter to allow for the use of a stool or seat by Bank of America’s tellers during the performance of their work duties.”  BofA removed the Green case to federal court.  In October 2013, Nicole Garrett filed another complaint (the Garrett action) against BofA in Alameda County Superior Court, seeking civil penalties through a PAGA “representative action.”  The Green action was stayed pending resolution of the Garrett action.

Who Got Paid: Upon settlement of the Garrett Action, after $5 million (1/3 of the settlement) plus litigation costs went to plaintiffs’ counsel, 75% of the settlement was distributed to the State of California (the Labor Workforce Development Agency, or “LWDA”), leaving 25% to the allegedly aggrieved employees.  The three named plaintiffs each received a $25,000 enhancement before the remaining 25% was divided among the representative group of employees.

Interesting Features of the Settlement: In addition to the $15 million settlement, BofA agreed to non-monetary terms that should help prevent future suitable seating litigation against it.  Specifically, BofA agreed to provide suitable seating for its tellers at all California BofA branches.  BofA agreed to inform tellers (via managers and meetings with tellers) that they have the right to use seats while working when the nature of their work reasonably permits sitting.  Under the settlement agreement, the term “reasonably permits sitting” requires BofA to provide seats to tellers when they are working on the teller line and/or at a teller window, including when they are assisting customers. However, the “suitable seating” provision does not apply when it is not possible for the teller to remain seated while performing his or her job, such as when the teller is printing.  Also under the agreement, BofA now instructs tellers to advise management if a seat is not available so management can promptly provide a suitable seat.  Last, BofA agreed to post documentation regarding its suitable seating policy for employees to access along with other policies and procedures.

The Bottom Line: The terms of this settlement don’t necessarily have a ripple effect beyond BofA and the putative class, and the agreement does not do much to illuminate the “suitable seating” requirement.   The law is still fairly undefined as to when the workplace “reasonably permits the use of seats.”  Because of that uncertainty, and the substantial potential damages and penalties that may be sought in a PAGA or class-wide suitable seating action, employers should evaluate whether their workplace reasonably permits the use of seats, using the Court’s reasoning in Kilby v. CVS Pharmacy, Inc. as a guide. If such provision of seating is warranted, then the next step is to prepare a written suitable seating policy; to disseminate and inform employees of this policy and the availability of suitable seating, and to provide suitable seating pursuant to that policy. Further, because the law is murky as to when work “reasonably permits” seating, employers should conduct such an analysis with the aid of counsel.

-Alison Hamer

 

Employers Beware: On-Duty and On-Call Rest Breaks Are Prohibited

On December 22, 2016, the California Supreme Court issued a decision, Augustus v. ABM Security Services, Inc., concluding that state law prohibits on-duty and on-call rest periods. This decision reverses a January 2015 decision in which the Court of Appeal ruled that such rest periods were lawful, even though employees might have to respond to an emergency call during a rest period.

The Supreme Court held that “during rest periods, employers must relieve employees of all duties and relinquish control over how the employees spend their time,” relying upon their 2012 decision in Brinker Restaurant Corporation v. Superior Court. In other words, employees cannot be restricted in how they use their time, where they spend their time, and cannot be subjected to any other employer restrictions during their 10 minute legally mandated rest breaks. The Supreme Court made clear that its holding applied both to on-duty rest periods (where an employee is actually working) as well as on-call rest periods (where an employee is not working, but is prepared to and will return to work during the rest period upon request from the employer).

Acknowledging there are times an employer may “find it especially burdensome to relieve their employees of all duties during rest periods- including the duty to remain on call,” the Court provided that Employers “may (a) provide employees with another rest period to replace one that was interrupted, or (b) pay the premium pay set forth in [the Wage Order].”

This decision creates genuine problems for employers who have a legitimate business need for on-duty or on-call employees. For example, there are certain employees who may lawfully be able to agree to have on-duty meals due to the nature of the job (see e.g. Wage Order 4-2001 11(A)). Because there is no similar provision for rest breaks, however, based on this decision, employers who need employees to remain on duty during rest breaks should review the impact of this case and the potential need to pay a premium if a lawful off-duty rest break is not authorized or permitted.

Recommendations for Employers:

  • Advise managers against calling employees while they are on break.
  • Do not require that employees carry a cell phone other mandated communication devices (such as a “walkie talkie”) during breaks.
  • Do not restrict employees from leaving the premises during a break.
  • Consider implementing a policy advising employees to inform management if a rest break is interrupted, or if they feel they are unable to take a rest break so that management can provide either an uninterrupted rest break or a rest break premium.

-Sarah Hamilton

City of Los Angeles “Bans The Box” Regarding Applicants’ Criminal History for Private Employers

As we first discussed here, “ban the box” state laws and local ordinances are picking up traction nationwide.  Both California and Los Angeles (in 2013 and 2014 respectively) passed legislation regulating public entities’ ability to inquire about a job applicant’s prior criminal history.  Beginning January 1, 2017, Los Angeles will join the growing number of jurisdictions also regulating a private employer’s ability to make such an inquiry.

Who Is Covered? 

The ordinance covers private employers that are located or do business in the City of Los Angeles and who employ 10 or more employees.  For the purposes of this ordinance, an employee is any person who performs at least two hours of work on average each week in the City of Los Angeles and who qualifies as an employee entitled to minimum wage under California’s minimum wage law.

Notably, the ordinance defines “employment” to include, but not to be limited to, temporary or seasonal work, part-time work, contracted work, contingent work, work on commission, and work through the services of a temporary or other employment agency, as well participation in a vocational or educational training program with or without pay.

The ordinance specifically exempts (1) employers who are required by law to obtain conviction information; (2) positions where the applicant would be required to use a firearm in the course of employment; (3) positions where a prior conviction would legally bar employment; and (4) employers who are prohibited by law from hiring an applicant convicted of a crime.

Requirements

Prohibited inquiries: Employers subject to the ordinance may notinclude on any job application any questions seeking the disclosure of an applicant’s criminal history.  An employer may also not at any time or by any means inquire or require the disclosure of an applicant’s criminal history unless and until a conditional offer of employment is made.

What if I make a conditional job offer and discover an applicant’s criminal history? – Acting upon the information: If an applicant’s criminal history is revealed after the employer makes a conditional offer of an employment, the employer may not take any adverse action against the applicant unless the employer first performs a written assessment linking the applicant’s criminal history with risks inherent in the duties of the job sought.

    • At a minimum, the written assessment must consider 8 factors identified by the EEOC (https://www.eeoc.gov/laws/guidance/arrest_conviction.cfm) and any other factors as may be required by any rules or guidelines promulgated by the City’s Department of Public Works, Bureau of Contract Administration (Department), which will have responsibility for administering the Ordinance.
    • Additionally, prior to taking any adverse action the employer must provide the applicant with a “Fair Chance Process.”  This process allows the applicant at least five business days to review a copy of the written assessment and provide information regarding the accuracy of the criminal record or any other information including but not limited to evidence of rehabilitation or other mitigating factors.  The employer must consider this new information and provide a written reassessment.  If after performing the reassessment, the employer still decides to take adverse action against the candidate, the employer must notify the candidate and provide the applicant with a copy of the reassessment.

No Retaliation: An employer may not take any adverse employment action against an employee for asserting his or her rights under this ordinance.  Activity protected from retaliation is broad, including but not limited to complaining to the City regarding an employer’s compliance or anticipated compliance, opposing a practice proscribed by the ordinance, participating in proceedings related to the ordinance, seeking to enforce his or her rights or otherwise seeking to assert any rights under the ordinance.

Notice: An employer must (1) affirmatively state on solicitations or advertisements seeking applicants for employment that the employer will consider applicants with criminal histories in a manner consistent with this law; (2) post a notice in a conspicuous place at each worksite informing applicants of the provisions of this ordinance.

Record Keeping: An employer must retain all records related to an applicant’s employment applications for a period of three years.

Enforcement: an applicant may bring a civil action an employer and is may seek the penalties set forth in the ordinance as well as any other legal or equitable relief appropriate to remedy the violation.  Before filing a private lawsuit against an employer the applicant must report the alleged violation to the City’s Department of Public Works, Bureau of Contract Administration, which must be filed within one year of the alleged violation, and a determination before a hearing officer has been reached, including conclusion of any hearing.  Any civil action must be filed within one year of the completion of the Department’s enforcement process or the issuance of any decision by a hearing officer, whichever is later.

Penalties for violations of the notice and recordkeeping requirements are set at $500.  Violations of other provisions are set at $500, $1,000, and $2,000 for the first, second, and third-or-subsequent violation respectively.  The Department will not impose any penalties or fines until July 1, 2017.  Before that date, the Department will only issue written warnings.

Takeaways

Employers should review existing applications and policies to ensure that they are in compliance with the ordinance.  Additionally, it will be critical to provide appropriate training for managers and supervisors responsible for hiring decisions.  The training should cover both the scope of permissible inquiries as well as implementation of the “Fair Chance Process.”  Employers may also wish to take the opportunity to review their pre-employment screening policies with respect to running background checks and credit checks as regulated by both federal and state law.

Benjamin Treger

Expect Big Changes in Labor and Employment From the Trump Administration

Since at least the 1920s, Republicans have been viewed as the party of commerce, small government and less regulation. And, to be sure, most Republicans still are. But Donald Trump challenged all of those assumptions by running a populist campaign directed to the working class in which he has often touted “yuge” government. Indeed, Trump garnered more votes from union households than any Republican candidate in decades.

  Continue reading

$15 is the New $10: California’s Minimum Wage Increase, and the Balancing Act with the New Federal Salary Threshold for Exempt Employees

We recently blogged about the U.S. Department of Labor’s dramatic increase in the salary threshold for exempt employees.  The federal changes put California in the unusual position of having (at least as to one corner of the wage and hour universe) less favorable standards than federal law.  But have no fear—California has recently raised its own minimum wage, which surpasses the federal standards.  Together, the federal and California state law changes will have costly affects for California employers who employ exempt employees earning less than $47,476 by December 1, 2016.  California employers should start planning now to make adjustments for compliance with both state and federal exemption laws.

What is California’s Minimum Wage?  The current minimum wage for employers with at least 26 employees in California is $10.00 per hour – but not for long!  Beginning January 1, 2017, the minimum wage will increase annually until it reaches $15 per hour by January 1, 2022:

  • January 1, 2017 through December 31, 2017: $10.50 per hour.
  • January 1, 2018 through December 31, 2018: $11 per hour.
  • January 1, 2019 through December 31, 2019: $12 per hour.
  • January 1, 2020 through December 31, 2020: $13 per hour.
  • January 1, 2021 through December 31, 2021: $14 per hour.
  • Beginning January 1, 2022: $15 per hour.

How Does the FLSA Regulation Affect California Employers with Exempt Employees?  Under California’s salary basis test, exempt employees must (among other requirements) earn at least twice the state’s minimum wage, meaning that under the current $10 per hour minimum wage, exempt employees must earn an annual salary of $41,600 ($10 per hour x 2 x 40 hours per week x 52 weeks per year).  But due to recent amendments to the FLSA, it is not enough to simply follow the scheduled annual increases to the state minimum wage.

The new FLSA regulation, which takes effect December 1, 2016, more than doubles the current federal salary threshold for exempt employees from $455 a week to $913 a week or $47,476 per year.  Historically, federal exemption regulations did not have a major impact on California employers since their requirements were much lower than the state level – until now.  This federal threshold exceeds California’s minimum exemption salary until the state minimum wage reaches $12.00 per hour on January 1, 2019.  However, the DOL will update the minimum salary threshold for exempt employees every three years, starting January 1, 2020, compelling employers to re-assess compliance under the FLSA standard once again.

This regulation will force many California employers to choose between raising the salary of exempt employees to the federal threshold of $47,476 (until it increases again in 2020) or reclassifying employees entirely to hourly (and therefore eligible for overtime pay).  For those who choose the latter option, keep in mind that the state minimum wage will reach $15.00 per hour by 2022.

What Can Employers Do Now?  Employers are encouraged to start assessing their workforce and compensation policies to prepare for dramatic annual increases to compensation for exempt employees who are at or close to the current state minimum allowable salary.  Though entry level managerial positions are likely to be the most affected by the federal increase in the exempt salary threshold, employers should consider conducting an audit, through counsel, of their workforce to determine what portion of their workforce will be affected by the new regulation and whether re-classifying some workers as non-exempt is the less-costly option.

Ferry Lopez

Misappropriation of Trade Secrets: Make a Federal Case Out of It (Under the Defend Trade Secrets Act)

 

Last month, President Obama signed the Defend Trade Secrets Act (“DTSA”) into law, which permits plaintiffs to bring civil claims for misappropriation of trade secrets in federal court.  While trade secret theft has been a federal crime since 1996, civil claims for such theft were, until now, generally available only through the state courts.  That state-level relief is provided though the Uniform Trade Secrets Act, which was adopted, modified and interpreted differently by California and 47 other states—resulting in varying levels of protection among the different jurisdictions.  The DTSA brings true uniformity to trade secret lawsuits to the extent that complaints are brought at the federal level.  At the same time, the new law adds a layer of complexity for companies seeking to protect trade secrets: since the DTSA does not preempt state law, trade secrets issues are now governed by federal and state law.

Significant aspects of the new law include:

Whistleblower Immunity

The DTSA provides civil and criminal immunity for employees, contractors and consultants who disclose trade secrets to a government official or an attorney “solely for the purpose of reporting or investigating a suspected violation of law” or in a court filing made under seal.  In addition, employers must give notice of this immunity in any confidentiality or trade secret agreement entered into with an employee or contractor after May 11, 2016.   Employers who fail to do so will not be able to recover exemplary damages or attorneys’ fees provided for in the DTSA.

Employee Mobility

Under an “inevitable disclosure doctrine” in effect in many states, employers are able to enjoin employees from accepting employment elsewhere by showing that the employment would inevitably lead to a disclosure of the employer’s trade secrets.  California courts have rejected this doctrine as an unlawful restraint on employee mobility.  The DTSA also rejects the doctrine by specifying that federal courts may not use the doctrine to enjoin individuals from entering into employment relationships.  However, the Act permits courts to impose conditions on a new employment relationship where there is evidence of threatened misappropriation—a higher bar than an injunction premised on “inevitable disclosure,” i.e., merely on the basis of an employee’s knowledge.

Ex Parte Seizure

The DTSA provides employers with a new powerful tool to protect trade secrets that is currently not available under California state law: ex parte orders for the seizure of property necessary to prevent propagation or dissemination of a trade secret.   However, the usefulness of this tool is limited by the requirements for the issuance of such an order.  To issue a seizure order, a court must find that:

  • another form of equitable relief would be inadequate because the party to be enjoined would evade, avoid, or otherwise not comply;
  • an immediate and irreparable injury will occur if such seizure is not ordered;
  • the harm to the applicant outweighs the legitimate interests of the person against who seizure would be ordered and substantially outweighs the potential harm to third parties;
  • the applicant is likely to succeed on the merits;
  • the person against whom seizure would be ordered has actual possession of the trade secret;
  • the application describes with reasonable particularity the matter to be seized;
  • the person against whom seizure would be ordered would destroy, move, hide, or otherwise make such matter inaccessible to the court; and
  • the applicant has not publicized the requested seizure.

Additionally, the order itself must detail these findings of fact and meet various other requirements.  In short, an ex parte seizure order will be permitted only in “extraordinary circumstances,” and a plaintiff hoping to use the seizure process should complete a full factual investigation before seeking this relief.

The DTSA applies to any claims for alleged trade secret misappropriation crossing state and national borders that occurred on or after May 11, 2016.  Going forward, employers will need to carefully consider the benefits of proceeding with trade secret theft claims in federal court.  More immediately, employers should, with the aid of counsel, review their employment and confidentiality agreements to ensure that the agreements contain either the required DTSA immunity notice or a cross-reference to the employer’s policy document for reporting a suspected violation of law.

-Jacob Swiss

Final Regulations from the U.S. Department of Labor Raise Exempt Employee Salary Threshold to $47,476 and Extend Overtime Protections to 4 Million Employees

Yesterday, the U.S. Department of Labor (DOL) released the long-awaited Final Rule on overtime pay applicable to employers across the country, which, when implemented on December 1, 2016, is expected to extend overtime pay protections to over 4 million workers within the first year.

Most significantly, the Final Rule increases the salary level for the white collar exemption to the federal overtime pay requirements under the federal Fair Labor Standards Act (FLSA) to $913 a week or $47,476 annually for a full-year worker. (This is the rare case where federal law is now more favorable to employees than California, as the new salary level exceeds California’s minimum salary level for exempt status, which as of January 1, 2016 is $800 a week and $41,600 annually.) The new FLSA salary level represents a slight reduction from the expected level of $50,440 per year, which was identified by the DOL in its proposed rule last year; however it still more than doubles the previous salary level for this exemption.

The FLSA requires most employees be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half of their regular rate of pay for all hours worked over 40 in a workweek. However, the FLSA provides an exemption from both minimum wage and overtime pay for workers employed in certain jobs, including executive, administrative and professional employees (referred to as the “white collar” exemption). For an employee to be exempt: (1) their job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (“duties test”); (2) they must be paid on a salary basis not subject to reduction based on quality or quantity of work (“salary basis test”); and (3) their salary must meet a minimum salary level, which after December 1, 2016, will be $47,476 annually for a full-year worker (“salary level test”).

Key Provisions of the Final Rule

  • The new minimum salary level threshold has been set at $47,476 per year.
  • For the first time, employers may use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the salary level, provided such payments are paid on a quarterly or more frequent basis. Employers are permitted to make a “catch-up” payment.
  • Employers must be in compliance with the new regulations by Thursday, December 1, 2016. As the effective date is a Thursday, any salary increases to ensure continued use of the exemption for weekly/biweekly employees must be made for the workweek (or pay period) that includes December 1.
  • The DOL did not make any changes to the existing job duties test to qualify for exemption (although some states, such as California, already have a more stringent standard requiring that more than half the employee’s time be spent performing exempt functions).
  • The compensation level for highly compensated employees (HCE) subject to a more minimal duties test was raised from its previous amount of $100,000 to $134,004 annually (the annual equivalent of the 90th percentile of full-time salaried workers nationally).
  • The salary level will increase automatically every three years, beginning on January 1, 2020.  Each update will raise the standard threshold to the 40th percentile of full-time salaried workers in the lowest-wage census region (currently the South), estimated to be $51,168 in 2020. The DOL will post new salary levels 150 days in advance of their effective date, beginning August 1, 2019.

DOL Resources on the Final Rule

The Final Rule is scheduled to be published in the Federal Register on May 23, 2016. The DOL has prepared and posted guidance on the Final Rule on the DOL Wage and Hour Division Webpage on the Final 2016 Overtime Rule, including Fact Sheets for the Non-Profit and Higher Education sectors, as well as for States and Local Governments.

Action Items for Employers

Employers should become familiar with the new regulations, as misclassification of employees as exempt from FLSA overtime requirements is a costly mistake. Employers should conduct an audit of all exempt job positions to identify all of the employees in their organization who currently earn less than $913 per week or $47,476 annually, and calculate the costs involved if the salaries of those positions were increased to the threshold minimum level.

In light of the number and type of implicated positions, employers should evaluate options available and develop a proposed course of action. Options may include increasing salary levels to meet the threshold level, evaluating and realigning employee workload, tracking and compensating overtime for all hours worked in excess of 40 per week above a salary, re-classifying employees as non-exempt, reductions in force, or outsourcing certain functions.

Employers should evaluate each impacted position on a position-by-position basis to ensure that positions are properly classified as exempt in the first instance, and any reclassifications take into account both State and federal requirements. Most likely, employers will consider adopting a combination of the above.

California Amends Paid Sick Leave Law

This week, California Governor Jerry Brown signed into law an amendment to the Healthy Workplaces, Healthy Families Act of 2014, a law passed last year which requires employers to provide paid sick leave. The law has been incredibly confusing for California employers and the amendments were designed to correct some of the more obvious drafting errors in the law.  The major changes are described below. Continue reading