New Developments on Federal Unemployment Extensions (Updated August 24, 2010)

August 30, 2010

We have been receiving a number of calls inquiring about the federal extentions. As you probably already know, on Thursday, July 22, 2010, President Obama signed federal legislation authorizing further access to federal unemployment extension benefits. Approximately 510,000 people ended up experiencing disruptions in federal extension benefits before the reauthorization was approved. Staff at the Employment Development Department responded quickly to catch up on retroactive extension benefits owed to many of these claimants. Federal unemployment claims have been filed and claim forms sent out to all potentially eligible claimants. The large influx of claim forms submitted back to EDD so far have been processed for retroactive benefits dating back to June 2, 2010.

The new legislation has allowed EDD to resume automatically filing the next level of extension claim for eligible unemployed workers once they run out of their regular state unemployment benefits or one of the four tiers of federal extension benefits. November 30, 2010 is now the new deadline for starting any next tier of federal extension benefits available. But the new legislation did not provide any additional benefits to the current maximum of up to 99 weeks of unemployment benefits. EDD will be closely monitoring any developments on a new bill introduced in Congress that could add an additional tier of extension benefits to the maximum of 99 weeks. But at this point, no significant movement on the bill is reported.

Former employees who experienced disruptions in extension benefits are those who were collecting on the separate extension called the FED-ED extension in California. Due to the lapse in benefit reauthorization, FED-ED benefits had to be abruptly halted in early June. The new federal legislation allows FED-ED benefits to resume. As long as California continues to meet the unemployment requirement to file FED-ED extensions, EDD can continue filing new FED-ED extensions that provide up to 20 additional weeks of benefits. The FED-ED claim must begin by November 30, 2010.

  • state unemployment benefits or one of the four tiers of extension benefits between now and November 30, 2010. Continuing benefits will always be dependent on continuing to meet all UI eligibility requirements.

We will keep you posted if an additional federal extention is passed.

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Important Payroll Tax Changes in 2011

August 23, 2010

Change to Quarterly Reporting

Starting with the first quarter of 2011, employers will begin filing new:

  • Quarterly Contribution Return and Report of Wages (DE 9)
  • Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C).

Employers will report their Unemployment Insurance, Employment Training Tax, and State Disability Insurance contributions, along with the Personal Income Tax withholdings, quarterly on the DE 9 instead of annually on the Annual Reconciliation Statement (DE 7). Detailed wage items for each worker will be reported on the DE 9C instead of the Quarterly Wage and Withholding Report (DE 6). Employers will still use the DE 6 and DE 7 for years prior to 2011.

The change to quarterly reporting will allow EDD and employers to identify overpayments more quickly, which will result in faster refunds. In addition, EDD will be able to promptly notify employers of any amounts due.

Registered employers will receive the new forms automatically by mail starting in 2011. The new forms will also be available online and at local EDD offices in December 2010.

Employers will continue to make deposits using the Payroll Tax Deposit (DE 88ALL) form. The quarterly reporting change will not affect deposit and return due dates. Please refer to the California Employer’s Guide (DE 44) for deposit and reporting requirements.

NOTE: This quarterly reporting change does not affect Annual Household employers, Disability


Employee Wage Statements-Are You in Compliance?

August 16, 2010

A recently published California case, Morgan v. United Retail Inc., illustrates just how ridiculous the wage and hour litigation front in California has gotten.  In this case, the plaintiff brought a putative class action against her employer alleging the employer’s pay stubs failed to comply with California Labor Code section 226 because the stubs did not have a separate line listing the employee’s total hours worked.  Instead, the stubs separately listed the total regular hours and the total overtime hours, but did not also provide the sum total of those two numbers on a separate line.  The plaintiff succeeded in getting a class certified but then lost the war when the court granted the employer’s motion for summary judgment.  In finding for the employer, the court held that the employer’s pay stubs satisfied the requirements of Labor Code section 226 by listing the total regular hours and the total overtime hours. The fact that the stubs did not separately list the sum total of these hours was insufficient to establish a violation of section 226. 

Let’s be clear regarding section 226 of the California Labor Code. Every employer has to provide either a detachable part of the paycheck, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing:

1. gross wages earned,

2. total hours worked (not for exempt/salaried employees),

3. the number of piece rate units earned if the employee is paid by piece rate,

4. all deductions

5. net wages earned,

6. the inclusive dates of the period for which the employee is paid,

7. the name of the employee and the last four of their social security number (or an identification number),

8. the name and address of the legal entity (employer) and,

9. all applicable hourly rates and the corresponding number of hours worked 

Please make sure you are in compliance. We have had several Labor Board claims regarding wage statments. It’s a waste of money for not meeting these simple requirements.  
 


2010 EEO-1 Survey-The Deadline is Approaching

August 12, 2010

The U.S. Equal Employment Opportunity Commission (EEOC) collects workforce data from employers with more than 100 employees (lower thresholds apply to federal contractors). Employers meeting the reporting thresholds have a legal obligation to provide the data; it is not voluntary. The data is collected using the reports noted below and is used for a variety of purposes including enforcement, self-assessment by employers, and research. Each of the reports collects data about gender and race/ethnicity by some type of job grouping. This information is shared with other authorized federal agencies in order to avoid duplicate collection of data and reduce the burden placed on employers. Although the data is confidential, aggregated data is available to the public.

In 2007, the EEO-1 report was modified. The major changes involved dividing the job category of “Officials and Managers” into two levels. Revised race/ethnic categories were also implemented. The EEOC plans to update the other reports to use the same race and ethnic categories as the new EEO-1 but, before doing so, will give respondents a full reporting cycle to change their recordkeeping.

The Employer Information Report EEO-1, otherwise known as the EEO-1 Report, is required to be filed with the U.S. Equal Employment Opportunity Commission’s EEO-1 Joint Reporting Committee. The filing deadline for the 2010 EEO-1 Survey Is September 30, 2010.

The preferred method for completing the EEO-1 reports is the web-based filing system. Online filing requires you to log into your company’s database with a Login ID and Password. All companies should receive  EEO-1 filing materials by mail no later than mid August 2010. If you cannot locate your Login ID and/or Password, contact the EEO-1 Joint Reporting Committee at e1.techassistance@eeoc.gov.

  • No Installation: The online form is totally web based. There is no Software to download or install.
  • Data Reuse: As much as possible, information is pre-filled from the previous year to speed up data entry.
  • Secure: Data is transferred over the Internet using encryption, assuring your privacy.
  • Historical Access: Access up to 10 years worth of EEO-1 data for your establishments.

EEO-1: Who Must File

Standard Form 100 (EEO-1) must be filed by —

  1. All private employers who are:
    1. subject to Title VII of the Civil Rights Act of 1964 (as amended by the Equal Employment Opportunity Act of 1972) with 100 or more employees EXCLUDING State and local governments, primary and secondary school systems, institutions of higher education, Indian tribes and tax-exempt private membership clubs other than labor organizations;

OR

  1. subject to Title VII who have fewer than 100 employees if the company is owned or affiliated with another company, or there is centralized ownership, control or management (such as central control of personnel policies and labor relations) so that the group legally constitutes a single enterprise, and the entire enterprise employs a total of 100 or more employees.

 All federal contractors (private employers), who:

    1. are not exempt as provided for by 41 CFR 60-1.5,
    2. have 50 or more employees, and
      1. are prime contractors or first-tier subcontractors, and have a contract, subcontract, or purchase order amounting to $50,000 or more; or
      2. serve as a depository of Government funds in any amount, or
      3. is a financial institution which is an issuing and paying agent for U.S. Savings Bonds and Notes.

If the above applies to you as an employer please do not miss the deadline.


Employer Found Liable Based On The Actions Of Employee’s Former Employer

August 9, 2010

Last week a California court expanded the reach of California’s public policy against non-compete agreements by holding that an employer may be held liable for terminating an employee based on a desire to honor the employee’s illegal non-compete agreement with a former employer.  Thus, even though the new employer did not draft the non-compete agreement and was not a party to the non-compete agreement, the new employer could still be held liable to the employee on a wrongful termination claim simply because it honored the agreement.

In Silguero v. Creteguard, Inc., the plaintiff, a salesperson, signed a confidentiality agreement with her then employer, FST, that precluded her from working in sales for eighteen months following termination from FST.  Shortly thereafter she was terminated and found employment with Creteguard.  FST contacted Creteguard and asked it to honor the confidentiality agreement.  Creteguard terminated Plaintiff’s employment in a writing that stated “Although we believe that non-compete clauses are not legally enforceable here in California, [Creteguard] would like to keep the same respect and understanding with colleagues in the same industry.”

The plaintiff sued Creteguard for wrongful termination in violation of California’s public policy against non-compete agreements.  Creteguard tried to get the case dismissed, arguing that it could not be held liable for another company’s illegal non-compete agreement.  The trial court agreed with Creteguard and dismissed the case.  However, the plaintiff appealed and the appellate court agreed with the plaintiff.  The court reasoned that even though Creteguard was not a party to the illegal non-compete agreement itself, Creteguard’s honoring of the agreement (while knowing it was illegal) was tantamount to a no-hire policy or agreement whereby Creteguard agreed not to hire FST’s employees.  The court explained that such an agreement unfairly limits the mobility of employees and would be void and unenforceable under California law even if standing alone.

Employers should proceed with caution when faced with requests from an employee’s former employer to honor the terms of a non-compete or similar agreement containing restrictions on the employee’s work-related activities.  Assuming the Silguero case is not further appealed and remains good law, this opens to the door to potential litigation and liability against companies who refuse to hire a prospective employee (or who terminate a current employee) based on the employee’s non-compete agreement with a prior employer.

Creteguard tried to do a good thing by working with an industry colleague but failed to understand any action taken against an employee based on an illegal practice was also illegal


The Required Postings and How To Get Them Free!

August 3, 2010

Industrial Welfare Commission (IWC) wage orders IWC wage orders regulate wages, hours and working conditions and are numbered by industry or occupation group. Not sure which order you need? Use the alphabetical index of businesses and occupations to make that determination.

Labor Code section 1183(d)

All employers
Minimum wage (state) Sets forth California’s minimum wage and can be downloaded in English and Spanish. All employers
Payday notice Must specify the regular paydays and the time and place of payment. An employer-developed notice is permitted.

Labor Code section 207

All employers
Safety and health protection on the job Contains pertinent information regarding safety rules and regulations. Available in English and Spanish.

Labor Code section 6328; poster print date: Feb 2010

All employers
Emergency phone numbers Lists emergency responders’ phone numbers.

Title 8, California Code of Regulations, Construction Safety Orders section 1512 (e)

All employers
Access to medical and exposure records Provides information about rights of employees working with hazardous/toxic substances. Available in English and Spanish.

Title 8, California Code of Regulations, General Industry Safety Order section 3204

All employers using hazardous or toxic substances
Operating Rules for Industrial Trucks Employers using industrial trucks shall post and enforce a set of operating rules. Available in English and Spanish.

Poster print date: April 2007

Employers operating forklifts and other types of industrial trucks or tow tractors
Notice to employees — injuries caused by work Advises employees of workers’ compensation benefits. Claims administrators and employers need to revise the notice they are currently using and send it to the DWC administrative director for review and approval or they may download and use this version. NOTE: Employers may obtain professionally printed copies of the poster and workers’ comp claim form from their claims administrator.

Title 8, California Code of Regulations, Division of Workers’ Compensation section 9810

All employers
Notice of workers’ compensation carrier and coverage States the name of the employer’s current compensation insurance carrier, or the fact that the employer is self-insured. Obtained from the employer’s workers’ compensation insurance carrier.

Labor Code section 3550

All employers
Whistleblower protections Must be prominently displayed in lettering larger than size 14 type and include a list of employee rights and responsibilities under the whistleblower laws, including the telephone number of the whistleblower hotline maintained by the office of the California Attorney General.

The Division of Labor Standards Enforcement has prepared a sample posting that it believes meets the requirements of Labor Code Section 1102.8(a), except for being larger than size 14 type. To view this sample, click here (acrobat small logoPdf) (wordDoc). This sample is not the only option though, as employers are free to develop their own posting.

Labor Code section 1102.8

All employers
No smoking signage Signage must be posted designating where smoking is prohibited/permitted in a place of employment. This law is enforced by local law enforcement agencies.

Labor Code section 6404.5(c)(1)

All employers
Log and summary of occupational injuries and illnesses Form 300 is for logging recordable injuries, form 301 is for collecting details and form 300A is the annual summary form. All three forms are available in various downloadable formats with instructions on the Cal/OSHA publications page.

Title 8, California Code of Regulations, Division of Labor Statistics and Research sections 14300 et seq.

Employers with 11 or more employees in the previous year
Farm labor contractor statement of pay rates Reference DLSE poster 445. Must be displayed prominently where work is to be performed and on all vehicles used by the licensee for transportation of employees. Must be at least 12 inches high and 10 inches wide.

The downloaded version of this posting may not comply with the law as it may not be at least 12 inches high and 10 inches wide.

Labor Code section 1695(7)

Farm labor contractors licensed by the Division of Labor Standards Enforcement (DLSE)
Prevailing wage rate determinations The body awarding any contract for public work or otherwise undertaking any public work shall cause a copy of the prevailing wage determination for each craft, classification or type of worker needed to execute the contract to be posted at each job site.

Labor Code section 1773.2

Public works awarding bodies and contractors

In addition to postings required by the Department of Industrial Relations, other state and federal agencies have posting obligations. Additional requirements include (this list is not all inclusive):

Posting Additional information Who must post
Discrimination and Harassment in Employment are Prohibited by Law The latest information can be obtained from the Department of Fair Employment and Housing (DFEH), reference number 162, available in English and Spanish.
1 (800) 884-1684

Fair Employment and Housing Act, Government Code section 12900 et seq.

All employers
Pregnancy disability leave The latest information can be obtained from the Department of Fair Employment and Housing (DFEH), reference notice A.
1 (800) 884-1684

Title 2, California Code of Regulations section 7291.16(d)

Employers of five to 49 employees
Family care and medical leave (CFRA leave) and pregnancy disability leave The latest information can be obtained from the Department of Fair Employment and Housing (DFEH), reference notice B.
1 (800) 884-1684

Title 2, California Code of Regulations sections 7297.9 and 7291.16(e)

All employers with 50 or more employees and all public agencies
Notice to employees Advises employees of potential unemployment insurance, disability insurance and paid family leave insurance benefits. The latest information can be obtained from the Employment Development Department, reference number DE 1857A; also available in Spanish, Vietnamese, and Chinese. <!–English, Spanish, Vietnamese and Chinese.
–>
(916) 322-2835.
All employers
Notice to employees: unemployment insurance benefits The latest information can be obtained from the Employment Development Department, reference number DE 1857D; also available in Spanish, Vietnamese, and Chinese. <!–English, Spanish, Vietnamese and Chinese.
–>
(916) 322-2835.
All employers
Notice to employees: time off to vote Not less than 10 days before every statewide election, every employer shall keep posted conspicuously at the place of work, if practicable, or elsewhere where it can be seen as employees come or go to their place of work, a notice setting forth the provisions of section 14000.

Elections Code section 14001 et seq.

All employers
Equal employment opportunity is the law Includes Americans with Disabilities Act (ADA) poster. The latest information can be obtained from the U.S. Equal Employment Opportunity Commission.
1 (800) 669-3362
All employers
Minimum wage (federal Fair Labor Standards Act) The latest information can be obtained from the U.S. Department of Labor, reference number WH 1088.
(415) 744-5590
All employers
Notice: Employee Polygraph Protection Act The latest information can be obtained from the U.S. Department of Labor, reference number WH 1462. Also available in Spanish.
(415) 744-5590
All employers
Family and Medical Leave Act (federal FMLA) The latest information can be obtained from the U.S. Department of Labor, reference number WH 1420. Also available in Spanish.
(415) 744-5590
All employers with 50 or more employees and all public agencies