Comp Time, in-Lieu-of Overtime?

April 24, 2017

Right now, if a non-exempt employee works more than 40 hours in a week (or more than eight hours in one day, in California) you have to pay them time-and-a-half for the extra hours. So if an employee earns $10 an hour and works 45 hours in one week, she receives $400 ($10 x 40) in straight time and $75 ($15 x 5) in overtime pay.

But what if she would prefer to take comp time instead? That is, if she worked 45 hours this week, she’d prefer to work 35 hours next week and take home $800. Right now, in the private sector, this is illegal however the Working Families Flexibility Act of 2017, has now been introduced to Congress which allows for comp time in the private sector, but with a couple of twists.

  1. Employer and employee have to agree.

The manager doesn’t get to unilaterally decide to stop paying overtime and offer comp time instead. Both have to agree, or else it defaults to overtime pay.

  1. Comp time, like overtime pay, is at 1.5 times.

So if your employee works 45 hours this week, she’s entitled to 7.5 hours of comp time. So, what does this mean? If both the employer and the employee agree (more on this in a minute), or if it’s provided in a collective bargaining agreement, the employer can provide “comp time” hours at the rate of one and a half hours for every hour of overtime the employee works. For example, if I work 45 hours this week, instead of five hours of overtime pay, I would get 7.5 hours of comp time put in my bank (5 overtime hours times 1.5 = 7.5 hours).

Use of comp time. If an employee asks to use his or her accrued comp time, the employer must grant the request “within a reasonable period” after the request, as long as doing so will not “unduly disrupt the operations of the employer.”

According to the ACT, there are limits and payout guidelines. The limit on accrued comp time is 160 hours per year. Any comp time not taken by the end of the calendar year (or another year designated by the employer) would be paid out at the employee’s regular rate when the comp time was accrued or at the employee’s current regular rate, whichever is higher. The payout would have to be made no later than 31 days after the end of the “comp time year.” If employment terminates voluntarily or involuntarily, the employer is required to pay out all accrued comp time to the employee.

If the employer gives 30 days’ notice to the employee, it can pay out any accrued comp time that exceeds 80 hours for the year. The employer can discontinue comp time whenever it wants by providing 30 days’ notice to the employees.

This seems like a win for both employers and employees. The employee and manager must agree before the work is performed and the employee must have worked at least 1000 hours before they are eligible for comp time, so the employer and employee have an established relationship. If an employee quits or is fired with time left in her bank, its’ payable upon termination.

Flexibility is always high on the list of things employees want–especially female employees–and this kind of situation gives it to them. Right now, exempt employees have more opportunities for flexibility than hourly paid employees, but this bill could change that. It seems like a great deal for all concerned.

New Immigration Bill: “Fines Between $10,000-$25,000”!!

April 17, 2017

It is no secret that California lawmakers and the Trump administration do not agree on immigration policy.  With the Trump administration stepping up enforcement efforts against illegal immigration, California is trying to thwart those efforts, including through a new bill that seeks to throw California employers into the crossfire. AB 450 (Chiu) would prohibit California employers from providing federal government enforcement agents access to worksites or to employment records (including I-9 forms) without a judicial warrant or subpoena. The bill would authorize the Labor Commissioner to recover civil penalties of between $10,000-$25,000 for employer violations of these requirements.

The bill would also require employers to provide at least 24 hours’ advance written notice to employees and to the Labor Commissioner of impending immigration worksite enforcement actions (audits or inspections of I-9 forms or other employment records, worksite interviews, investigations, and/or raids). The employer also would have to give the Labor Commissioner access to the workplace and allow the Labor Commissioner to conduct its own investigation(s) — including into unrelated labor standards matters.  In the event a federal immigration agent appears at the worksite without advance notice, the employer would have to notify the Labor Commissioner immediately and provide the Labor Commissioner access to the worksite.  Under the bill, the Labor Commissioner would have the authority to notify affected employees that they have the right to remain silent, the right to speak to a lawyer before answering questions, and the right to speak to his or her foreign consulate. Again, an employer’s failure to comply with these notice provisions would subject the employer to fines of between $10,000-$25,000.

The employer’s notice obligations would continue after a worksite investigation/audit as well, with the employer being required to notify affected employees of the results of the audit within 24 hours.

Finally, the bill would limit an employer’s ability to conduct self-audits related to immigration. The employer would be required to notify the Labor Commissioner (and provide the Labor Commissioner access to the worksite) before conducting a self-audit or inspection of I-9 forms and before checking work authorization documents of a current employee in a manner not required by federal law. The employer of course would be subject to penalties of between $10,000-$25,000 for non-compliance.

The foregoing provisions include an exception for where the employer is “required by federal law” to act in a manner that is contrary to these requirements.  Of course, an employer is not going to know what this means or whether this exception applies in a given situation.  This is a bad bill for California employers, who should not be at the center of what really is a policy battle between California legislators and the federal government. It is of course still early in the legislative process and it is far from clear that this bill will pass both legislative houses and be signed into law.

I will obviously keep you posted!

New Criminal Check Background Law!

April 10, 2017

California has given final approval to regulations governing employer use of applicant criminal history in making employment decisions.  These new regulations take effect July 1, 2017.  The regulations reiterate that employers may not use criminal history information in a manner that has an adverse impact on certain protected classes (e.g. race, national origin, gender). The regulations go on to provide that an applicant or employee bears the burden of demonstrating that the policy of considering criminal convictions has an adverse impact.

The California Legislators have determined that an adverse impact may be established through the use of conviction statistics or by offering any other evidence that establishes an adverse impact. State or national statistics showing substantial disparities in the conviction records of one or more categories enumerated in the Fair Employment & housing Act (FEHA) are presumptively sufficient to establish an adverse impact. This presumption may be rebutted by a showing that there is a reason to expect a markedly different result after accounting for any particularized circumstances such as the geographic area encompassed by the applicant or employee pool, the particular types of convictions being considered, or the particular job at issue.

If the policy or practice of considering criminal convictions creates an adverse impact on a protected class of applicants or employees, the burden shifts to the employer to establish that the policy is nonetheless justifiable because it is job-related and consistent with business necessity (example: a conviction for fraud or theft and the job involves cash handling). The criminal conviction consideration policy or practice needs to bear a demonstrable relationship to successful performance on the job and in the workplace and measure the person’s fitness for the specific position, not merely to evaluate the person in the abstract.

In order to establish job-relatedness and business necessity, any employer must demonstrate that the policy or practice is appropriately tailored, taking into account at least the following factors: (A) the nature and gravity of the offense or conduct; (B) the time that has passed since the offense or conduct and/or completion of the sentence; and (C) the nature of the job held or sought.

Demonstrating that a policy or practice of considering conviction history in employment decisions is appropriately tailored to the job for which it is used as an evaluation factor requires that an employer either:

(A) Demonstrate that any “bright-line” conviction disqualification or consideration (that is, one that does not consider individualized circumstances) can properly distinguish between applicants or employees that do and do not pose an unacceptable level of risk and that the convictions being used to disqualify, or otherwise adversely impact the status of the employee or applicant, have a direct and specific negative bearing on the person’s ability to perform the duties or responsibilities necessarily related to the employment position. Bright-line conviction disqualification or consideration policies or practices that include conviction-related information that is seven or more years old are subject to a rebuttable presumption that they are not sufficiently tailored to meet the job-related and consistent with business necessity affirmative defense; or

(B) Conduct an individualized assessment of the circumstances and qualifications of the applicants or employees excluded by the conviction screen. An individualized assessment must involve notice to the adversely impacted employees or applicants (before any adverse action is taken) that they have been screened out because of a criminal conviction; a reasonable opportunity for the individuals to demonstrate that the exclusion should not be applied due to their particular circumstances; and consideration by the employer as to whether the additional information provided by the individuals or otherwise obtained by the employer warrants an exception to the exclusion and shows that the policy as applied to the employees or applicants is not job-related and consistent with business necessity.

Regardless of whether an employer utilizes a bright line policy or conducts individualized assessments, before an employer may take an adverse action such as declining to hire, discharging, laying off, or declining to promote an adversely impacted individual based on conviction history obtained by a source other than the applicant or employee (e.g. through a background check), the employer must give the impacted individual notice of the disqualifying conviction and a reasonable opportunity to present evidence that the information is factually inaccurate. If the applicant or employee establishes that the record is factually inaccurate, then that record cannot be considered in the employment decision.

Importantly, under the new regulations, even if an employer successfully demonstrates that its policy or practice of considering conviction history is job-related and consistent with business necessity, adversely impacted employees or applicants may still prevail on a FEHA claim if they can demonstrate that there is a less discriminatory policy or practice that serves the employer’s goals as effectively as the challenged policy or practice, such as a more narrowly targeted list of convictions or another form of inquiry that evaluates job qualification or risk as accurately without significantly increasing the cost or burden on the employer.

These new regulations, along with recent EEOC guidance and the increasing number of city ordinances restricting the use of criminal history information, are a good reminder for employers to review their practices to ensure that their use of criminal history information complies with applicable law.

Workplace Posters: An Overview

April 7, 2017

We receive a number of calls regarding the required postings. As you know, State and federal laws require that all employers have posters conspicuously placed in the workplace.

What posters are you required to post? There are a number of them and the list is getting longer! Keep in mind there are some variables depending on the size of your business. The safe bet, post them anyway.

  • Employee Polygraph Protection Act (all employers)
  • Employee Rights for Workers with Disabilities/Special Minimum Wage (all employers with disabled workers employed under special minimum wage certificates)
  • Equal Employment Opportunity is the Law (all employers with 15 or more employees, and all federal contractors and subcontractors with contracts of $10,000 or more)
  • Equal Employment Opportunity is the Law Supplement (all federal contractors and subcontractors with contracts of $10,000 or more)
  • E-Verify Participation and Right to Work (all employers participating in E-Verify)
  • Fair Labor Standards Act (all employers)
  • Family and Medical Leave Act: Your Rights Under the FMLA (all employers with 50 or more employees in 20 or more workweeks in the current or preceding calendar year)
  • Federal Minimum Wage for Contractors (all employer who contract with the federal government)
  • Notification of Employee Rights Under Federal Labor Law (all federal contractors and subcontractors)
  • OSHA Job Safety and Health: It’s the Law (all employers)
  • OSHA Form 300, 300A, and 301 (most employers with 10 or more employees)
  • Uniformed Services Employment and Reemployment Rights Act: Your Rights Under USERRA (all employers)
  • State Minimum Wage (all employers)
  • State poster: The Industrial Welfare Commission Order (very critical). This postings is by State & industry.

Finally, states have their own additional posting requirements and must post on unemployment, workers’ comp, minimum wage, child labor laws, workplace violence, and fair employment practice laws. Please check your local jurisdiction. The good news is that all of these posters are available for free from state and federal agencies. Just make sure they are posted conspicuously.


California Proposing to Raise Exempt Salary Threshold?

April 3, 2017

As you are probably aware, the minimum salary to qualify for a “white collar” overtime exemption in California has been higher than that required under federal law for many years.  Because California’s exempt salary threshold is tied to the state minimum wage (an exempt employee generally must earn a salary of at least two times the state minimum wage), it goes up as California’s minimum wage goes up.  The current minimum salary for exempt executive, administrative, or professional status in California is $43,680 per year.  However, as employers know, last year the federal Department of Labor enacted regulations increasing the minimum salary to qualify for exempt status under the federal Fair Labor Standards Act (“FLSA”) to $47,476 per year.  California employers would have had to comply with the higher salary threshold under the FLSA, except that the regulations were blocked by a Texas court late last year.  The Texas court’s ruling is now on appeal, but most believe that the overtime regulations will not be reinstated — at least in current form — under the Trump administration.

California is now seeking to accomplish what the Obama administration could not accomplish at the federal level, by proposing to raise the minimum annual salary to qualify for exempt status in California to $47,472.  AB 1565 (Thurmond) is a spot bill that was amended last week to propose the salary hike.  Under the bill, the minimum salary for exempt executive, administrative, or professional workers would be $47,472 or twice the state minimum wage, whichever is greater. As California’s minimum wage continues to rise, a salary of twice the state minimum wage eventually will be a number greater than $47,472. Until that time, $47,472 would be the minimum salary for exempt status in California.

This is brand new proposed legislation, and it remains to be seen whether it will pass.  I will keep you posted of developments on this issue.