California Increases Minimum Exempt Pay Rates for Computer Professionals and Licensed Physicians/Surgeons

California Labor Code sections 515.5 and 515.6 provide an overtime exemption for certain computer professionals and licensed physicians/surgeons who meet specified criteria for exemption.  One of those criteria is that they earn specified minimum pay, the amount of which is subject to annual adjustment by California’s Department of Industrial Relations (DIR).  The DIR has announced increases to the minimum pay for these workers as follows:

  • The DIR has increased the computer software employee's minimum hourly rate of pay for exempt status from $38.89 to $39.90, the minimum monthly salary from $6,752.19 to $6,927.75, and the minimum annual salary from $81,026.25 to $83,132.93, effective January 1, 2013; and
  • The DIR has increased the licensed physicians and surgeons employee's minimum hourly rate of pay for exempt status from $70.86 to $72.70, effective January 1,2013.

The DIR’s announcements are here and here.  Employers relying on these exemptions for  exempt computer professionals and licensed physicians/surgeons will want to take note of these changes and adjust their pay practices accordingly.

Webinar: New Laws & Regulations in the Golden State for 2013

2012 has been one of the most active years in California labor and employment law in recent times.  Changes have been made in many fields, including, but not limited to, wage and hour law and regulation, personnel file inspection rules, immigration, social media regulations, and California discrimination laws.  Some of these updates are already effective.  Many others become effective on January 1, 2013.  Please join CDF Partners Mark Spring and Robin Largent for a complimentary webinar on November 27, 2012 from 10:00 a.m. to 11:00 a.m. PST, during which they will update attendees on these legal developments, as well as what changes employers will need to make to policies and practices to ensure compliance with these developments.  For more information and to register, click here.  This webinar is approved for MCLE and HRCI credit.

California Governor Signs Some Employment Bills and Vetoes Others

Yesterday was the last day for California’s Governor to sign or veto legislation passed by the California Legislature this term.  In the past few days he finally acted on various pieces of employment-related legislation, by signing several bills into law and vetoing a couple.

Bills Signed Into Law

AB 2386 (FEHA amendment):  This bill includes breastfeeding and conditions related to breastfeeding under the definition of “sex” under FEHA, making clear that discrimination against a woman because of breastfeeding (or related conditions) is unlawful.

AB 1744 (temporary services employers):  This bill amends Labor Code section 226 relating to itemized wage statement requirements to impose additional requirements on temporary services employers (with the exception of security services companies) effective July 1, 2013.  In addition to the information already statutorily required to be included on employees’ wage statements, temporary services employers will also need to provide itemized information concerning the rate of pay and total hours worked for each assignment.  The bill also amends Labor Code section 2810.5—the statute requiring employers to provide written notice to new employees of certain wage-related information—to require temporary services employers (effective July 1, 2013) to provide the name, physical and mailing address and telephone number of the main office of the legal entity for whom the employee will perform work.  Again, security services companies are exempt from this requirement.

AB 2103 (fixed salaries and overtime):  This legislation overturns a 2011 California court decision in Arechiga v. Dolores Press (see our prior post on the case here), which held that an employer and employee can agree to a fixed salary that includes payment of overtime compensation.  Under the new law, Labor Code section 515 is amended to provide that payment of a fixed salary to a non-exempt employee will be deemed to be payment only for the employee’s regular non-overtime hours, notwithstanding any private agreement to the contrary.

AB 2674 (inspection of personnel records):  This bill amends Labor Code section 1198.5, which allows employees to inspect certain of their personnel records.  First, the new law makes clear that the inspection right applies to both current employees and former employees.  Second, the new law requires employers to maintain personnel records (including records relating to an employee’s performance and to any grievance concerning the employee) for at least three years after termination of employment.  Third, the new law requires that a current or former employee (or any authorized representative) is entitled to inspect (and to receive a copy, upon request) personnel records relating to their performance and/or to any grievance concerning the employee within 30 days of making a request.  The employee or representative must make the inspection request in writing, but may request a form from the employer to do so, which then must be provided by the employer.  The employer may redact the name of any non-supervisory employees referenced in the records, prior to making them available for inspection.  The employer may charge the employee the actual cost of reproduction if copies are requested.  The employer is not required to comply with more than 50 requests in any calendar month by a representative of employees for personnel records.  Additionally, if a former employee has an employment-related lawsuit pending against the employer, the employer is not required to make personnel records available under Section 1198.5 during the pendency of the lawsuit.  Finally, the new law establishes that if an employer fails to comply with inspection and copying requests under Section 1198.5, either the employee/former employee or Labor Commissioner may collect a penalty of $750.

AB 2675 (commission contracts):  Last year, legislation was enacted requiring commission payment arrangements to be in writing for California employees.  AB 2675 amends Labor Code section 2751 to exempt certain payments from this requirement.  Specifically, it exempts temporary, variable incentive payments that increase, but do not decrease, payment under the written contract.

SB 1255 (penalties for wage statement violations):  Under this new law, it will be easier for employees to prove “injury” for itemized wage statement violations and thereby recover damages or penalties.  The new law provides that employees are “injured” if the employer fails to provide a wage statement or fails to provide an accurate and complete wage statement from which the employee can promptly and easily determine the amount of the gross or net wages paid to the employee during the pay period or other specified information, the deductions the employer made from the gross wages to determine the net wages paid to the employee during the pay period, the name and address of the employer or legal entity that secured the services of the employer, and the name of the employee and only the last 4 digits of his or her social security number or an employee identification number other than a social security number, as specified.

AB 1844 (social media policies):  This legislation prohibits an employer from requiring or requesting an employee or applicant for employment to disclose a username or password for the purpose of accessing personal social media, to access personal social media in the presence of the employer, or to divulge any personal social media.  This legislation also prohibits an employer from discharging, disciplining, threatening to discharge or discipline, or otherwise retaliating against an employee or applicant for not complying with a request or demand by the employer that violates these provisions.

Vetoed Bills:

AB 1450 (discrimination against unemployed):  This bill would have made it unlawful for employers to place ads for employment that include a requirement that applicants be currently employed to be eligible.  It also would have made it unlawful to discriminate against applicants because of their status as unemployed.

AB 889 (domestic employee wage and hour requirements): This bill would have placed onerous wage and hour requirements (including relieving employees of duty for meal and rest breaks) on employers of domestic services employees (e.g. babysitters and nannies).

New laws take effect January 1, 2013 unless otherwise noted.  Employers should review their personnel policies and procedures to ensure compliance with these new laws and to minimize risk and exposure to lawsuits, particularly in the area of wage statement compliance  and personnel records inspection.

California Expands Religious Accommodation Requirements

California's Governor has signed into law AB 1964, which modifies California's Fair Employment and Housing Act's provisions relating to employment discrimination based on one's religious beliefs.  FEHA has always prohibited discrimination against applicants and employees based on their religious beliefs, and has also required reasonable accommodation of employees' religious beliefs and observances, so this much is not new.  The new law makes clear that "religious beliefs" include religious dress practices and religious grooming practices, meaning that employers cannot discriminate against applicants or employees bases on these practices and must also reasonably accommodate such practices in the workplace.  According to the new law, “religious dress practice” shall be construed broadly to include the wearing or carrying of religious clothing, head or face coverings, jewelry, artifacts, and any other item that is part of the observance by an individual of his or her religious creed.  “Religious grooming practice” shall be construed broadly to include all forms of head, facial, and body hair that are part of the observance by an individual of his or her religious creed.  The new law further explains, in pertinent part, that it is an unlawful employment practice:

(l)  (1)  For an employer or other entity covered by this part to refuse to hire or employ a person or to refuse to select a person for a training program leading to employment or to bar or to discharge a person from employment or from a training program leading to employment, or to discriminate against a person in compensation or in terms, conditions, or privileges of employment because of a conflict between the person’s religious belief or observance and any employment requirement, unless the employer or other entity covered by this part demonstrates that it has explored any available reasonable alternative means of accommodating the religious belief or observance, including the possibilities of excusing the person from those duties that conflict with his or her religious belief or observance or permitting those duties to be performed at  another time or by another person, but is unable to reasonably accommodate the religious belief or observance without undue hardship, as defined in subdivision (t) of Section 12926, on the conduct of the business of the employer or other entity covered  by this part.  Religious belief or observance, as used in this section, includes, but is not limited to, observance of a Sabbath or other religious holy day or days, reasonable time necessary for travel prior and subsequent to a religious observance, and religious dress practice and religious grooming practice as described in subdivision (p) of Section 12926.  (2)  An accommodation of an individual’s religious dress practice or religious grooming practice is not reasonable if the accommodation requires segregation of the individual from other employees or the public.

While AB 1964's changes to FEHA arguably are intended simply to clarify existing law, the express modification of FEHA and highlighting of religious discrimination issues may lead to increased focus and scrutiny in this area and, thus, a greater likelihood of religious discrimination suits against employers.  The full text of AB 1964 is here.

Legislative Update:  Proposed Employment Legislation Pending in California

California employers may want to be aware of a number of employment-related bills still pending before the California Legislature, each of which is listed below.  This list does not include employment bills that have already died in various committees during this legislative session.  Pending bills must be passed by each house by August 31.  After that, the Governor has until September 30 to sign or veto the legislation.

AB 2386:  This bill would expand the definition of “sex” under the Fair Employment and Housing Act to include breastfeeding and medical conditions relating to breastfeeding, making discrimination on those grounds a violation of FEHA with a correlating private right of action.

AB 2373:  This bill would add a new section to the Labor Code setting forth 17 factors to consider to determine whether a worker is an employee or an independent contractor.  The enumerated factors are similar to those employed by California courts analyzing independent contractor/employee status.

AB 1450:  This bill would make it unlawful for an employer to exclude from the applicant pool or refuse to hire someone based on their unemployed status.  It would also prohibit job advertisements stating that current employment is a requirement for consideration for the job.

AB 1999:  This bill would add “family caregiver status” as a protected class under FEHA, thereby prohibiting discrimination in employment against a person based on the person being a family caregiver.  For purposes of the legislation, “family caregiver” is defined as an individual who provides medical or supervisory care for a child, parent, spouse, domestic partner, parent-in-law, sibling, grandparent or grandchild.

AB 2039:  This bill would expand the circumstances under which employees could take leave under the California Family Rights Act (CFRA) by (1) eliminating current age and dependency requirements from the definition of “child,” thereby permitting an employee to take leave to care for an adult child, (2) expanding the definition of “parent” to include parents-in-law, and (3) permitting an employee to take leave to care for a grandparent, sibling, or grandchild.

AB 1844:  This bill would prohibit an employer from requiring or requesting that an employee or applicant disclose user name or password information for personal social media, or to divulge any personal social media.

SB 1255:  This bill would specify circumstances under which “injury” would be presumed to an employee as a result of an employer not providing wage statements, or providing incomplete wage statements.  Presumed injury would allow the employee to recover penalties and/or actual damage.  Presumed injury could be shown by the failure to provide a wage statement at all, or by the failure to include the employee's name and last 4 digits of the social security number.  It could also be shown by failing to provide complete wage information, causing the employee to be unable to determine (from the statement alone) gross and net wages earned, deductions therefrom, and the name and address of the employer.

AB 1744:   This bill would require temporary services employers to include additional information on itemized wage statements for employees, including the rate of pay for each assignment, the name and address of the entity that secured the services and total hours worked for each entity.

AB 2674:  This bill would amend section 1198.5 of the Labor Code relating to employee rights to inspect personnel files.  The bill would require employers to maintain employee personnel files for at least 3 years following termination of employment, and to permit current and former employees (or their designated representatives) to inspect and copy personnel records, within 30 days of a request to do so by the employee.  The bill specifies that an employer is not required to comply with more than 50 (whaaat?) requests for copies of personnel records by a representative of employee(s) in one calendar month.

AB 1964:  This bill would add to the current requirement under FEHA that employers reasonably accommodate religious beliefs and observances of employees, by specifying that a religious dress practice or grooming practice are covered “beliefs and observances.”

AB 1875:  While not technically an employment bill, this bill would impact employment litigation by limiting depositions in state court cases to 7 hours (as is the limitation in federal court).

As you can see, most if not all of these bills have the effect of adding new prohibitions on employment actions and increasing burdens on California employers, simultaneously giving rise to new potential legal claims for violations.  Bills that aimed to reduce burdens on California employers, add flexibility to the workplace, and/or reduce litigation were largely killed by the California Legislature.  We will continue to keep you updated on the progress of these bills as the close of the legislative session nears.

San Jose Considering Double Digit Minimum Wage

Following in the footsteps of San Francisco, the city of San Jose is considering raising the minimum wage for all work performed in the city limits to $10 an hour, with automatic annual increases based on inflation (consumer price increase).  The Council will vote on the proposed ordinance Tuesday, May 22.  If you have employees who are working in San Jose and wish to be heard on this issue, contact information for the City Council members is available here, and you can email or call them in advance of the vote. 

Even if this measure fails, the minimum wage issue in San Jose is not dead.  A group of San Jose State University students received enough petition signatures to put the measure on the November ballot.  Thus, the citizens of San Jose will have a second opportunity to enact a higher minimum wage for San Jose employees in November when they go to the ballot box. 

For restaurant, retail and other businesses in San Jose that employ workers at or near the minimum wage level, you will want to keep an eye on these developments.  Of course, we will continue to keep you informed. 

In addition, because this effort was spearheaded by local college students at SJSU, it is getting a lot of media attention and social networking discussion.  If successful, it is very likely that other college students will use this as a model and similar attempts to raise the local minimum wage will increase in the coming months and years, particularly if the state minimum wage remains at $8 per hour and the economy and job market for college students remains difficult.  Thus, the success of this proposal may have much broader implications than just for those doing business in the city of San Jose.

D.C. Circuit Temporarily Enjoins NLRB From Requiring Employee Rights Poster

As we reported yesterday, a South Carolina District Court ruled that the NLRB did not have authority to mandate the Employee Rights Poster.  The ruling is in conflict with the only other court to rule on the issue thus far--the District Court for the District of Columbia--and that decision is on appeal.  Well, this morning the D.C. Circuit Court of Appeal granted the National Association of Manufacturers' request for a temporary injunction enjoining the NLRB's posting requirement pending appeal.  The court reasoned that the uncertainty regarding enforceability of the posting requirement counsels in favor of temporarily preserving the status quo pending appeal.  The NLRB has not yet affirmatively postponed its April 30 effective date for employer compliance, but with this ruling it appears employers will not need to comply effective April 30 and will instead need to stay tuned for developments in the ongoing legislation.  The D.C. Circuit Court of Appeal's decision is here.

Labor Commissioner Makes Further Changes to Wage Protection Act Notice

California employers trying to comply with the recently enacted Wage Theft Protection Act should take note that the Labor Commissioner has again modified the notice template, effective April 12, 2012.  The new law, which went into effect January 1, 2012, requires California employers to provide non-exempt new hires with written notice of wage and related information.  Most of the information required to be provided is set forth in the statute itself.  However, the Labor Commissioner has authority to prescribe additional categories of information to be provided in the notice.  Given that authority, the Labor Commissioner was also tasked with publishing a template that employers can use to satisfy their notice obligations.  Causing challenge to employers is the fact that the Labor Commissioner waited until close to January 1 to publish any template and then prescribed additional content beyond that set forth in the text of the statute.  If that is not confusing enough, the Labor Commissioner's office cannot seem to make up its mind about the contents of the template or the requirements of the Act.  The Labor Commissioner has at least twice revised the FAQ on the Act's notice requirements, and has now issued a revised template.  Employers who downloaded the original template will want to review the newly published template and newly revised FAQ.  Most of the changes are fairly minor, but the newly revised template has different language on the subject of whether there is a written or oral employment agreement.  It appears that this was in response to concern from employers that checking one of these boxes suggests the employee actually has some sort of employment agreement, weakening the at-will nature of the employment relationship.  The new template (and FAQ) are revised to make clear that all this is referring to is whether the rate of pay is set forth in writing or was communicated only verbally.  The revisions also make clear that the acknowledgement of receipt portion is optional, not mandatory.  The new template and revised FAQ are available here and here.  Employers will want to review these forms to ensure compliance.  Unfortunately, there is no practical way for employers to stay apprised of continued changes by the Labor Commissioner going forward other than to periodically check the Labor Commissioner's website.  We will of course try to report on changes on this blog.

NLRB Poster Must Be Up by End of This Month

This is a reminder that all employers covered by the National Labor Relations Act, which includes union and non-union employers, must post the 11" x 17" National Labor Relations Board's Employee Rights Poster at their workplace on or before April 30, 2012.  If you have questions about the poster and the posting requirements, the NLRB has a wealth of information available on its website (including copies of the poster in multiple languages) here.  There are still lawsuits pending trying to stop the implementation of the rules related to this poster, but the NLRB has stated that it is not going to further delay implementation.

California Bill Seeks to Expand CFRA Leave

There have been many changes to leave laws in recent years, both under the FMLA and under California’s CFRA.  Proposed legislation recently has been introduced in California to further expand employees’ leave entitlements under CFRA.  CFRA currently allows eligible employees to take up to 12 weeks of leave in a year as needed for the birth or placement of a child, or to care for their own serious health condition or that of a child (up to 18 years of age or an adult dependent), parent (which includes a step parent and/or person who stands in loco parentis to the child), or spouse/domestic partner.  AB 2039 seeks to expand CFRA leave to allow employees to take such leave to care for siblings, parents in law, grandparents, and adult children.  If enacted, AB 2039 will obviously increase employee leaves, resulting in additional burden to California employers.  This is particularly true because California employers covered by CFRA are typically also covered by FMLA, meaning they have to comply with both laws and their employees are entitled to leave under the terms of both laws.  Because FMLA does not provide for leave to care for parents in law, siblings, and grandparents, an employee who uses leave for that purpose under CFRA will not have exhausted their FMLA leave because the CFRA leave could not be concurrently counted as FMLA leave.  In other words, the employee could theoretically take 12 weeks of leave under CFRA for a parent-in-law, grandparent or sibling, and then still be entitled to an additional 12 weeks of leave under FMLA for a spouse or child.  This very scenario already exists in California where leave is taken for disability caused by pregnancy or to care for a domestic partner.  Differences between CFRA and FMLA on these two categories result in leave not running concurrently under these two laws in these situations.  AB 2039 would add further differences between CFRA and FMLA, making leave tracking even more complicated for California employers.

The full text of AB 2039 is available here.  We will keep you posted on the status of this and other pertinent employment-related legislation pending in California.

Editor
Cal Labor Law

Robin E. Largent is a Partner in CDF’s Sacramento office and may be reached at 916.361.0991 or rlargent@cdflaborlaw.com BIO »

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