New 2014 Employment Laws

Employment Advisory:

2014 Employment Law Update For California Businesses

A new year has come, and with it a slew of new laws affecting employers in California. The courts and legislature have been busy. The following summary reviews some of the more significant changes that will impact employers in 2014. If you have questions or would like to discuss how these laws will impact your business, please feel free to contact us at your convenience.

Increased Minimum Wages. AB 10 raises the state minimum wage from $8.00 per hour to $9.00 per hour effective July 1, 2014. The state minimum wage will increase to $10.00 per hour effective January 1, 2016. The increased minimum wage not only means hourly minimum wage employees will see an increase, but also the minimum salary for exempt workers increases. Effective July 1, 2014, employees under the professional, executive and administrative exemptions must receive a guaranteed salary of no less than $37,440.00 per year. On January 1, 2016, that amount will increase to $41,600.00

San Jose Minimum wage will also increase to $10.15 per hour on January 1st. In San Francisco, employees must receive at least $10.74 per hour.

Computer software workers will have to receive at least $40.38 per hour ($7,010.88 per month and $84130.53 per year) in order to qualify for the computer software exemption.

Certain licensed physicians and surgeons will continue to be exempt from the overtime requirements stipulated in Labor Code Section 510 as long as they receive at least $73.57 per hour.

Modified Definition of Sexual Harassment. In order to avoid the consequences of a 2011 ruling in Kelly v. Conoco, SB 292 modifies the Fair Employment and Housing Act to make it clear that an employee does not have to prove that the harassment was motivated by sexual desire.

If your supervisors have not received sexual harassment prevention training within the last two years, now is the time to schedule the training.

Time Off for Victims of Stalking and Domestic Violence. Existing requires many employers to provide time off so the employee can attend to issues arising out victims of domestic violence and sexual assault. SB 400 extends the protections to victims of stalking and requires employers to provide reasonable accommodations to employees who need time off to attend court appearances or obtain counseling and related services.

In a related bill, SB 288 requires an employer to provide victims of certain specified crimes time off to attend court-related proceedings. The employees must be allowed to use any accrued vacation, personal leave or compensatory time off for the court-related proceedings.

Expanded Paid Family Leave. SB 770 expands the Paid Family Leave program administered by the Employment Development Department to provide benefits to employees who take time off to care for a seriously ill grandparent, grandchild, sibling or parent-in-law. This is not a leave protection statute (i.e., guarantee of employment once the leave ends), but rather is a wage replacement program allowing an employee to receive disability benefits during the specified leave.

Veteran Status Added to FEHA. (AB 556) The legislature added veteran status to the list of characteristics protected by the Fair Employment and Housing Act. California's Military and Veterans Code as well the Uniformed Services Employment and Reemployment Rights Act remain unchanged. The new law offers employees an alternative avenue and remedy for discrimination based on veteran status.

Immigrant Driver's License. AB 60 allows undocumented persons to lawfully obtain drivers' licenses, provided the individuals can establish California residency, prove their identify and meet all other licensing requirements. The licenses will state they cannot be used to establish eligibility for employment.

In-Home Caregivers Entitled to Overtime. AB 241 modifies the personal attendant exemption requiring caregivers to receive overtime when they work more than 9 hours in day or 45 hours in a week. With the increase in minimum wages and the new overtime requirements, many families may experience a significant increase in the cost of in-home care.

Increased Penalty for Retaliation. SB 732 amends Labor Code sections 98.6 prohibiting retaliation against an employee who has complained about his or her wages or participated in a government complaint regarding unpaid wages. The complaint can be directly to the employer, or through one of the state agencies. Employers who violate Labor Code section 98.6 may be subject to a $10,000.00 civil penalty.

The new law also makes it clear that employees are not required to exhaust administrative remedies before pursuing claims under Labor Code sections 98.6 and 98.7.

SB 732 also adds Labor Code section 1019, which prohibits an employer from directing others to engage in "unfair immigration-related practices against any person" for exercising their rights. "Unfair immigration-related practices" includes requesting more or different documents than are required under 8 USC Section 1324a(b) for verifying an applicant's ability to work, refusing to honor employment verification documents that reasonably appear to be genuine, using the federal E-Verify system at a time or manner not required by 8 USC Section 1324a(b), threatening to file or filing a false police report, or threatening to contact or contacting the immigration authorities.

Higher Damages for Failure to Pay Minimum Wage. Existing law allows the Labor Commissioner to recover liquidated damages for the failure to pay minimum wage. AB 442 amends Labor Code sections 1194.2 and 1197.1 expands the penalty and restitution provisions to also subject the employer to payment of liquidated damages to the employee. The penalty for an initial violation under Labor Code section 1197.1 is $100.00 for each underpaid employee for each pay period for which the employee is underpaid. The penalty increases to $250.00 for each subsequent violation.

Quicker Liens for the Labor Commissioner. In the past, if an Order, Decision or Award from the Labor Commissioner is not appealed, the Labor Commissioner could send the ODA to the court and have judgment entered in the amount of the ODA. The Labor Commissioner could then file an abstract of judgment with the County Recorder to place a lien on any real property. AB 1386 allows the Labor Commissioner to bypass obtaining the judgment and file the lien as soon as the time for appeal expires.

Failure to Remit Pension and Benefit Funds is a Crime. Labor Code section 227 requires employers to remit required money withheld from employee wages to pension and benefit funds. SB 390 expands the scope of conduct that can be considered a misdemeanor or felony.

More Rest and Meal Breaks. All Wage Orders require employers to provide specified meal and rest breaks. Failure to provide the rest or meal breaks can require an employer to pay specified penalties. SB 435 adds OSHA rest and meal breaks to the mandatory breaks subject to Labor Code section 226.7 penalties.

Clarified Sleep Time Rules. A California Appellate court clarified the rules regarding when you do or do not have to pay an employee for sleeping. Employers may not have to pay for up to 8 hours of on-call sleep time if: 1) the employee is working a 24-hour shift, 2) the employee is provided a comfortable place to sleep, 3) the employee regularly receives at least 5 hours of uninterrupted sleep, and 4) there is an agreement (oral, written or implied) that the employee will not be compensated for sleep time. Although not required, we highly recommend employers set forth any sleep time arrangements in writing.

Union Agent/Represented Employee Privilege. AB 729 protect confidential communications between a union agent and a represented employee or represented former employee. Such communications can be privileged and the agent or the employee may refuse to disclose any confidential communications while the union agent was acting in his or her representative capacity.

Substantial Motivating Factor. Harris v. City of Santa Monica (2013) 56 Cal.4th 203 held that if a discriminatory motive was a substantial factor in the decision to terminate an employee, an employer can still cut off damages by proving that, even in the absence of any discriminatory motive, it would have made the same decision to terminate the plaintiff.

Phillip J. Griego

Robert E. Nuddleman

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