New Minimum Wage Law Updates!

July 25, 2016

First Article:

Update: The New Minimum Wage Law

As usual, the lawmakers have to re-think some of the craziness they put into effect so here we go again. A group of lawmakers have introduced legislation aimed at easing the sting of the new federal overtime exemption regulations that currently are slated to take effect December 1, 2016. Under the new regulations, the minimum annual salary to qualify for exempt status increases over 100% from $23,660 to $47,476. Under proposed legislation dubbed the “Overtime Reform and Enhancement Act”, implementation of the new overtime regulations would be revised to gradually phase in the salary increase over three years, beginning with a 50% increase to $35,984 effective December 1, 2016. In subsequent years, the minimum salary threshold would increase as follows:

• $39,814 effective Dec. 1, 2017;
• $43,645 effective Dec. 1, 2018;
• $47,476 effective Dec. 1, 2019.

The legislation would also eliminate the regulations’ current provision for automatic triennial adjustments to the minimum salary.
Business groups have voiced support for the bill, while the Secretary of Labor quickly voiced strong opposition to the bill. We will keep you posted with developments on this favorable bill.

Second Article:

City of Los Angeles and the UNINCORPORATED areas of Los Angeles County have new minimum wage requirements.

We have been getting a huge number of calls for clarification. If you are in an incorporated city, the law does not apply to you! You can go on the City of Los Angeles’s website and it will give you a list of the INCORPORATED cities. If your city name is on that list the new law does not apply to you. Here is the new law just for clarification.

Effective July 1, 2016, employers with 26 of more employees, must pay employees who perform at least two hours of work within the geographic boundaries of the City of Los Angeles within a particular week at least $10.50 for each hour worked.

Following suit, Los Angeles County’s equivalent minimum wage rate increase schedule also becomes effective on July 1, 2016. Under the Los Angeles County wage ordinance, for employers with 26 of more employees, $10.50 per hour must be paid to employees who perform at least two hours of work in a particular week within unincorporated areas of Los Angeles County.
The equivalent Los Angeles County minimum wage rate increase has created some confusion as to its breadth of application, which only applies to unincorporated areas of Los Angeles County. Incorporated cities in Los Angeles County may have (or will have) their own minimum wage increase schedules and requirements. For example, the City of Long Beach’s set minimum wage increase does not take effect until January 1, 2017 for certain employers.
For the City the Los Angeles and unincorporated areas of Los Angeles County, this new $10.50 hourly rate is an increase from $10.00 per hour for employers with 26 of more employees. For employers with 25 or fewer employees, the minimum wage rate will not increase to $10.50 until July 1, 2017. Thereafter, the minimum wage rate increases will following the below schedules:
For employers with 26 or more employees:

• July 1, 2017: $12.00 per hour
• July 1, 2018: $13.25 per hour
• July 1, 2019: $14.25 per hour
• July 1, 2020: $15.00 per hour

For employers with 25 or fewer employees:

• July 1, 2018: $12.00 per hour
• July 1, 2019: $13.25 per hour
• July 1, 2020: $14.25 per hour
• July 1, 2021: $15.00 per hour

Despite the identical minimum wage rate increase schedules, the City of Los Angeles and Los Angeles County wages ordinances include some differences. For example, under the City of Los Angeles wage ordinance, it permits nonprofit organizations with more than 25 employees to apply for coverage under the small business schedule. Additionally, by example, beginning in July 1, 2022, the minimum wage rate increases will be determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in the Los Angeles metropolitan area under the City of Los Angeles wage ordinance. Under the Los Angeles County wage ordinance, increases will be determined by an adjusted CPI measure.

This Blog Article Today is for “Guys” Only!

July 18, 2016

This message is truly going out to the “guys!” Yes ladies, the “guys.” But ladies if your curiosity gets the best of you, please read on.

Men, in general, are very protective of women when they are pregnant. In the work environment this can translate into a lawsuit simply because paternalism and pregnant workers do not mix. A recent case confirms my point.

According to the Equal Employment Opportunity Commission (EEOC) the agency sued an employer that operates a retail-furniture franchise for pregnancy discrimination.

According to EEOC’s complaint, the company hired a woman and assigned her to work as a shop apprentice at the company’s temporary training facility. The job required the use of various chemicals to repair furniture. Two days later the new hire informed the company’s shop trainer that she was pregnant. Later that same day, she was pulled into a meeting with the company’s shop trainer, shop manager and regional shop manager and was asked to confirm that she was pregnant. The EEOC said that during the meeting, the regional shop manager showed the pregnant worker a can of lacquer thinner that contained a warning that the contents could potentially pose a risk to a woman or her unborn child, and discussed the warning with the pregnant employee. The EEOC said that the employee was then told that because she was pregnant, she could no longer work at the facility. Make sense?

It clearly shows that the employer was acting out of good intentions. It feared (reasonably or unreasonably) for the safety of this employee’s unborn child and there may have also been a concern about a Workers Comp claim. That concern, however, does not excuse pregnancy discrimination according to the EEOC. A spokesperson for the EEOC (female) stated that “Pregnant women have the right to make their own decisions about working while pregnant, including the risks they are willing to assume. Companies must not impose paternalistic notions on pregnant women as doing so can result in unlawful discrimination.” Fears or outdated paternalistic notions about pregnancy (and the limits it may, or may not, impose on an employee) are off limits for employers. An employer has zero business trying to protect a pregnant worker or her fetus. Those decisions are left to the employee, and, as this case illustrates, the EEOC will not hesitate to help prove that point.

The take away is simple. Good intentions can get you sued. When an employee announce she is pregnant, congratulate her and move on. Sad but true. I also understand that you may have a fear of her being injured but remember, just because a woman is pregnant, it does not mean she is helpless. They do have sense enough to know their limitations and when she is no longer able to do the job she will speak up (hopefully)!


The New Compensation Rate for Exempt Employees: A Few Suggestions!

July 11, 2016

Before you know it, the new compensation rate for exempt employees under the Fair Labor Standards Act (FLSA) is going to be upon us. This ruling is prompting many organizations to change the way they do things, especially time tracking and payroll.

Preparing for and implementing new processes to ensure compliance is a key component to an organization’s ability to successfully manage their time, attendance, and payroll records.

The ruling redefines the salary threshold to a higher benchmark for exempt status classification. Organizations will have to re-categorize members of their workforce. This ruling extends “the right to overtime pay to an estimated 4.2 million workers who are currently exempt,” according to the Department of Labor.

Newly nonexempt employees will now have to manage their time, track their time, and potentially ask for permission to work overtime.

Communicating these changes to employees should be clear and concise. It may be beneficial to hold time and attendance tracking training for newly nonexempt employees who have never had to track their time before.

Knowing who to track, why to track, what to track, and how to track time, attendance and payroll, is important information to know when implementing the new ruling. Here are a few key takeaways about how the FLSA rule will affect time tracking and payroll:

Time tracking and payroll recording benefits employees and employers

From the employer’s perspective, having to time-track more employees may be seen as an administrative burden however, let me point out that tracking time, attendance, and payroll protects employers in the case of an audit.

It also may help organizations protect themselves in legal cases when there is a discrepancy on time, attendance and payroll records.

One of the most common lawsuits is the wage and hour lawsuit, where employees claim that employers have not paid them for all hours worked or for owed overtime. What do you think is going to happen when these new nonexempt managers don’t get paid for overtime?

The newly nonexempt employees also benefit from time tracking and payroll recording although they may initially hate the idea.

Although it may seem like a burden to both parties, it is mutually beneficial to both the employee and the employer.

Know who to track

It is important to first find out who the nonexempt employees are and prep for compliance. This is possible by conducting an analysis to identify employees near the $47,476 threshold and conducting a time study to determine which potentially impacted employees work more than 40 hours per week.

To prepare for the potential effect on payroll, perform a market analysis to see if pay levels are competitive for potentially impacted employees, update salary budgets to account for potential increase in overtime, and, as always, consult legal counsel to ensure compliance with the new rules.

Include payroll in on the discussion

Tracking time, attendance, and payroll is a shared responsibility between the employee, the manager, and the payroll department.

I would strongly urge you to make sure payroll is a part of the conversation when the organization is doing their deliberations and determining the best way to manage these upcoming changes.

If an organization has a significantly higher number of employees they have been using their time and attendance management system, it may have a noteworthy impact on the payroll process.

Implement redundancies in the time tracking process

The most time-consuming part for the payroll department is making sure all timecards are approved by the supervisors. With an increase in the number of employee timecards needing approval, it is important to make sure that there are redundancies during the approval process. The interesting part will be “who is approving the managers’ timecards?”

If you have a policy that requires employees to seek authorization from management to work overtime, both parties must accurately report that in the time and attendance system.

It is important to ensure that all individuals report accurate data and to have a system in place between the time and attendance management and payroll systems.

This is coming. Get out in front of it so you can be prepared.

“At-Will”is a Ghost of the Past!

July 5, 2016

Let me put it out there that in my humble opinion, employment at-will is a terminology that employers should just erase from their arsenal of defense.

I hear it all the time from clients. “Aren’t we an at-will employer? Why can’t we fire this employee! This is *!%#*!”

Ok, “yes, your employees are at-will” (depending on the state you are in) but not if the termination is in violation of some public policy! You may not intend for your actions to be so but if you do violate some public policy you are “toast.”

Do you have the right to fire an employee for no reason? Absolutely. Yet, if that employee is African-American, Other-American, a woman (or a man), pregnant or recently pregnant, suffering from a medical condition (or related to someone with a medical condition, or you think has a medical condition but doesn’t), injured, on a medical leave or returning from a leave, religious, older (i.e., age 40 or above), LGBT, serving in the military or a veteran, a whistleblower, or otherwise a complainer, the law protects their employment. Which means that if you fire them, you better have done so for a good reason. And, if you look at those categories, most of your employees fall under one of more of them. In other words, while you are an “at-will employer,” that doesn’t really mean anything anymore. Employees just have too many protections.

So, “what should I do,” you ask? To start, follow the Golden Rule of “Do unto your employees as you would have your employer do unto you.” If you treat your employees as you would want to be treated (or as you would want your wife, kids, parents, etc. to be treated), most employment cases would never be filed, and most that are filed would end in the employer’s favor. Juries are comprised of many more employees than employers, and if jurors feel that the plaintiff was treated the same way the jurors would want to be treated, the jury will be much less likely to find in the employee’s favor. What does this mean for the poor performing employee who takes an FMLA leave? Does that employee understand his performance problems? Was he given sufficient counseling and warnings before he took his leave? Another common failure by managers. Also, the other serious misstep is the timing of terminations. Did you terminate right after some complaint being filed?

The end result to all of the above is simple. Do not think of “at-will” as an easy way to get rid of an employee. Concentrate on “why” you want to fire an employee and have the backup documentation supporting your actions while also watching the “timing factor.”

Enough said!