In speaking to a few groups of California employers this week, a common question kept coming up about what are the essential Booksemployment policies California employers must have?  While there are more than five, this week’s Friday’s Five starts with what I consider to be critical policies that every California must have in place.

1. At-will policy

Under California law, it is presumed that all employment is terminable at-will. California Labor Code section 2922 provides: “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” The at-will doctrine means that the employment relationship can be terminated by either party at any time, with or without cause, and with or without advanced notice. There are some major exceptions to this rule, but generally California law recognizes that employers and employees may, at any time, and for any legal reason, terminate the employment relationship.

2. Anti-harassment, discrimination and retaliation policy

California’s Fair Employment and Housing Council published new regulations pertaining to anti-discrimination and anti-harassment requirements effective April 1, 2016.  Employers need to review and potentially update their policies in order to meet the new requirements.  The full text of the regulations can be obtained here.

3. Timekeeping policy

California law requires employers to track start and stop times for hourly, non-exempt employees. The law also requires employer to track the start and stop times for the employee’s thirty minute meal periods. The time system needs to be accurate, and the employer needs to be involved in the installation and setup of the system. Do not simply use the default settings for the hardware and software. Understand what the system is tracking and how it is recording the data. Since the statute of limitations for California wage and hour violations can extent back four years, it is recommended that employers take steps to keep these records at least four years.  Employers should also have a complaint procedure in place and regularly communicate the policy to employees in order to establish an effective way to remedy any issues.

4. Meal and rest break policy

As I’ve written about many times previously, employers must have a compliant meal and rest break policy.  Indeed, given the California Supreme Court’s ruling in Augustus v. ABM Security Services in December 2016, employers should review their rest beak policy to ensure it complies with this ruling.

5. Paid sick leave policy

Many local governments in Southern California have passed laws increasing the minimum wage and amount of paid sick leave that must be provided to employees.  Employers must ensure they are complying with the law that provides the most benefits to employees.  Here is a brief summary of some of the local laws in Southern California:

State/City Minimum Wage Paid Sick Leave
1) California $10/hr January 1, 2016; $10.50 January 1, 2017; $11/hr January 1, 2018; $12/hr January 1, 2019; $13/hr January 1, 2020; $14/hr January 1, 2021; $15/hr January 2022* Current: 3 days or 24 hours
2) Los Angeles – City (click here for more information about Los Angeles City’s minimum wage and paid sick leave laws) July 1, 2016: $10.50/hr; July 1, 2017 $12; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00 * (click here for more information about Los Angeles’s minimum wage ordinance) July 1, 2016: 48 hours*
3) Los Angeles – County Same as LA City (see above) No specific requirement – state law applies
4) San Diego City July 2016: $10.50 (date not set yet – likely effective in first half of July 2016); January 1, 2017 $11.50; January 1, 2019 $11.82; January 1, 2020 $12.15; January 1, 2021 $12.49; January 1, 2022 $12.84 5 paid sick days
5) Santa Monica (click here for Santa Monica’s website for details of the law) $10.50 July 1, 2016; July 1, 2017 $12.00; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00* January 1, 2017: 32 hours for small businesses, 40 hours for large businesses; January 1, 2018: 40 hours for small business, 72 hours for large businesses*
*Employers with 25 or fewer employees the implementation is delayed one year.

Happy Memorial day weekend!

Almost two years after California’s requirement to provide employees with paid sick leave, there are still many outstanding questions about California’s Healthy Workplace Healthy Family Act of 2014.  These issues still exist even after Governor Jerry Brown signed Senate Bill 3 on April 2016 amending the Act attempting to clarify a few provisions of the law.

In this Friday’s Five video I discuss a few of the common questions employers still have about the law, such as:

  • When can attendance policies violate the law?
  • Can employers require doctor’s notes from employees who take paid sick leave?
  • Can employers discipline employees to taking leave and not providing advance notice after they exhausted their paid sick leave?

For more information, visit the Department of Industrial Relations frequently asked questions page here.

Also, don’t forget to subscribe to the Employment Law Report’s YouTube channel to receive notification about new videos.

Sorry for the late post, but there were some server upgrades for my blog on Friday.  Have a great week.

With the arrival of 2017, many employers are recognizing the difficulties in navigating the complex set of paid leave laws in Southern California.  For regular readers of the blog, this may seem like a repeat, but this post is five items employers need to remember about paid sick leave laws in Southern California.

1. The law – either state or local –  that provides the most generous benefits to the employees must be followed by the employer.

California’s paid sick leave law applies to all employers and provides employees with 24 hour or 3 days of paid sick leave.  As set forth below, many local cities and counties have implemented their own paid sick leave requirements.  Employers must comply with the law that provides the most benefits to employees.

2. Southern California cities and counties that have implemented paid sick leave laws

State/City Minimum Wage Paid Sick Leave
California $10/hr January 1, 2016; $10.50 January 1, 2017 for employers with 26 or more employees Current: 3 days or 24 hours
Los Angeles – City July 1, 2016: $10.50/hr; July 1, 2017 $12; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00 * July 1, 2016: 48 hours*
Los Angeles – County Same as LA City No specific requirement – CA law applies
San Diego July 2016: $10.50; January 1, 2017 $11.50; January 1, 2019 indexed to inflation 5 paid sick days (effective July 11, 2016)
Santa Monica $10.50 July 1, 2016; July 1, 2017 $12.00; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00* January 1, 2017: 32 hours for small businesses, 40 hours for large businesses; January 1, 2018: 40 hours for small business, 72 hours for large businesses*
Malibu $10.50 July 1, 2016* No specific requirement – CA law applies
Pasadena $10.50 July 1, 2016* No specific requirement – CA law applies
* Employers with 25 or fewer employees the implementation is delayed one year.

3. How to determine which law applies to your business operating in the County of Los Angeles

There is a lot of confusion about what law applies to businesses operating in Los Angeles County.  The County of Los Angeles’ ordinance only applies to unincorporated cities within the county.  Here is a list of the incorporated cities in the County of Los Angeles. If the employer is located in an incorporated city, the employer must comply with the incorporated city’s paid sick leave requirements, and if the city does not have any requirements, California’s paid sick leave law would apply.

4. Understand the difference between use cap and accrual caps

Under California state law, employers may apply an accrual cap at 48 hours or 6 days per year.  The employees must be allowed to accrue up to this amount and carry it over from year to year.

The accrual cap is different from the annual use cap.  The annual use cap allows employers to limit the amount of paid sick leave used by the employee within one year.  Under California state law, employers can also impose an annual use cap of 24 hours or 3 days (whichever is greater) each year.

Employers need to pay careful attention about the differences in the state and local laws that apply to their companies in this regard.  For example, under Santa Monica’s paid sick leave ordinance, the accrual cap is 40 hours for large employers in 2017.  However, because accrual cap is less than what is permitted under California law, employers must follow California’s more generous requirements of allowing accrual of up to 48 hours or 6 days per year) and 72 hours in 2018.

5. Can employers change accrual methods after one has been implemented?

Yes, there is nothing that prohibits employers from changing accrual methods (i.e., up-front grant or the accrual method).  However, as employers are already required to provide non-exempt employees with an individualized Notice to Employee as required under Labor Code section 2810.5 that sets forth the employer’s accrual method, employers should consult an employment attorney about how to provide advanced notice to employees prior to changing the policy and how to treat already accrued and unused paid sick leave under the old policy.

The City of San Diego passed the Earned Sick Leave and Minimum Wage Ordinance which took effect on July 11, Coronado Bridge2016.  Now, less and two months later, the City has approved an “Implementing Ordinance” clarifying the law’s regulations.  The Implementing Ordinance takes effect on September 2, 2016.  This Friday’s Five provides five issues that have been updated by the City of San Diego’s Implementing Ordinance:

1. The “Implementing Ordinance” is effective September 2, 2016.

The original ordinance became effective on July 11, 2016.  However, there was a lot of confusing issues that left employers concerned about how to comply with the law, and many issues that were simply not addressed by the original ordinance.  In an attempt to clarify the issues, the City passed the Implementing Ordinance clarifying some issues.  The Implementing Ordinance is effective as of September 2, 2016.

2. Employers are required to provide a written notice to employees about its paid sick leave policy by October 1, 2016.

The Implementing Ordinance requires that every employer must also provide each employee at the time of hire, or by October 1, 2016, whichever is later, written notice of the employer’s legal name and any fictitious business names, address, and telephone number and the employer’s requirements under the law.  The notice must also include information on how the employer satisfies the requirements of the law, including the employer’s method of earned sick leave accrual.  The notice must be provided to employees in English and in each employee’s primary language, if it is a language if it is spoken by at least five percent of the employees at the employer’s workplace.  Employers may provide this notice through an accessible electronic communication in lieu of a paper notice.  The City published a form notice to comply with these requirements, which can be downloaded here.

3. Under the Implementing Ordinance, employers may set a cap on the total amount of accrual at 80 hours.

Under the Implementing Ordinance, employers may cap an employee’s total accrual of earned sick leave at 80 hours.  The language under the original ordinance did not permit employers to cap the amount of accrued sick leave.  The law does not automatically set the cap for employers, but merely states that employers are allowed to set the cap.  Therefore, employers with employees that are covered by the City’s law should develop a written policy that sets this cap if desired.

4. The implementing ordinance allows employers to front load no less than 40 hours of sick leave at the beginning of each benefit year.

An employer may satisfy the accrual and carry-over provisions of the law if no less than 40 hours of earned sick leave are awarded to an employee at the beginning of each benefit year.  This front-loading of the 40 hours must be provided to all employees regardless of their status as full-time, part-time, or temporary workers.

5. Employers may set minimum increment for use, but not more than two hour increments.

Employees may determine how much earned sick leave they need to use, provided that employers may set a reasonable minimum increment for the use of earned sick leave not to exceed two hours.

The City of San Diego’s minimum wage increase and paid sick leave were made effective on July 11, 2016.  Therefore, all employers that have workers who work within the City of San Diego for two hours or more in any week must comply with the minimum wage increase ($10.50/hour) and paid sick leave requirements.  The minimum wage will increase as follows:

Effective Date Minimum Wage Rate
July 11, 2016 $10.50
January 1, 2017 $11.50
January 1, 2019 and each following year Increase tied to Consumer Price Index (CPI)

The City is considering an Implementing Ordinance that would clarify and change some of the provisions of the law, such as:

  • Allowing employers to cap the paid sick leave at 80 hours (currently the ordinance does not permit at cap)
  • Employees may determine how much earned sick leave they need to use, provided that Employers may set a reasonable minimum increment for the use of earned sick leave not to exceed two hours
  • Would allow employers to issue an up-front grant of 40 hours at the beginning of each benefit year as an alternative method of providing employees the paid sick leave (currently the ordinance only permits employers to grant one hour of paid sick leave for every 30 hours worked by the employee)
  • Require employers to provide written notice of the employer’s legal name and any fictitious business names, address, and telephone number.  The notice must also include information on how the employer satisfies the requirements of the law, including the employer’s method of earned sick leave accrual.  This notice must be translated to the employee’s primary language if that language is spoken by at least five percent of the employees at the employer’s workplace.

Employers with employees working within the City of San Diego must take immediate steps to comply with the new requirements, and need to continually monitor what changes to the law that may or may not be made under the Implementing Ordinance.

The City’s Frequently Ask Questions can be viewed here.  Also, employers can review if any of their employees work within the City with reference to the City’s geographical boundaries.

Surfing - Crab BoyWelcome to this weeks Friday’s Five.  In the last two weeks in early June 2016, many local governments in Southern California have passed laws increasing the minimum wage and the amount of paid sick leave benefits to employees.  This Friday’s Five is a summary of five minimum wage and paid sick leave requirements that employers in Southern California should understand.  Employers are required to comply with the law that provides the most benefits to the employees, therefore it is important for employers to understand which laws apply to their operations and to take steps to comply with the quickly approaching deadlines.

State/City Minimum Wage Paid Sick Leave
1) California $10/hr January 1, 2016; $10.50 January 1, 2017; $11/hr January 1, 2018; $12/hr January 1, 2019; $13/hr January 1, 2020; $14/hr January 1, 2021; $15/hr January 2022* Current: 3 days or 24 hours
2) Los Angeles – City (click here for a previous article about Los Angeles City’s minimum wage and paid sick leave laws) July 1, 2016: $10.50/hr; July 1, 2017 $12; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00 * (click here for more information about Los Angeles’s minimum wage ordinance) July 1, 2016: 48 hours*
3) Los Angeles – County Same as LA City No specific requirement – state law applies
4) San Diego City July 2016: $10.50 (date not set yet – likely effective in first half of July 2016); January 1, 2017 $11.50; January 1, 2019 $11.82; January 1, 2020 $12.15; January 1, 2021 $12.49; January 1, 2022 $12.84 5 paid sick days (date not set yet – likely effective in first half of July 2016)
5) Santa Monica (click here for Santa Monica’s website setting for details of the new law) $10.50 July 1, 2016; July 1, 2017 $12.00; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00* January 1, 2017: 32 hours for small businesses, 40 hours for large businesses; January 1, 2018: 40 hours for small business, 72 hours for large businesses*
*Employers with 25 or fewer employees the implementation is delayed one year.

Photo: crab boy

I’ve been fielding a lot of questions from clients about California’s paid sick leave at the beginning of 2016.  There has been a lot of confusion about accrual rates and tracking paid sick leave for employees, and if the employee’s paid sick leave accrual re-sets at the beginning of the calendar year.  This week’s Friday’s Five is five reminders about California’s paid sick leave for 2016:

1.     Employers must remember to keep the two different methods of providing paid sick leave (up-front grant vs. accrual) separate when analyzing their obligations under the law. 

Many employers get confused because they examine the requirements of the law without understanding which requirements apply to the the up-front grant method or the accrual method.  Employers must keep these two different methods distinct when analyzing their obligations under the law.  For example, if employers provide the three days or 24 hours up-front to employees (i.e., the employees do not have to accrue the sick leave), then there is no need to set a cap on accrual.  This is because the law states that employers using the up-front grant do not have to carry over any unused paid sick leave to the next year.

2.     Employee’s accrual and usage is usually tracked based on the employee’s anniversary date.

Generally, the law requires that the employer must provide the employee with three days or 24 hours (whichever is greater) of paid sick leave from the employee’s hire date.  Therefore, the calendar year usually does not apply when tracking and resetting the amount of paid sick leave employees are eligible to use.

3.     Under the accrual method, employers have different options of how to set the accrual rate of paid sick leave.

The law originally required that employers provide employees with an accrual of one hour for every 30 hours worked and allow use of at least 24 hours or 3 days (whichever is greater) each year.  The law was amended in October 2015 to allow employers to use an alternative accrual method as long as it is (1) on a regular basis, and (2) the employee has no less than 24 hours or three days paid sick leave or paid time off by the 120th calendar day of employment, or each calendar year, or in each 12-month period.

I’ve written about the other amendments made to the law in this previous article and discussed the amendments in this video.

4.     At the time of hire, employers must provide notice to most employees about paid sick leave.

The DIR has generated a Notice to Employees that most California employers should be providing to their non-exempt employees.  Among other things, the notice sets forth information about the employer’s paid sick leave policy.

5.     Employers must review their record keeping and pay stub requirements.

The law requires that employers keep records about how much paid sick leave employees earned and used for three years.  Employers are also required to provide employees with information about how much paid sick leave the employee has available to use on their pay stub or on another writing provided to the employee at the same time the employee is paid.

Click here for a video discussing some of the other general requirements of the paid sick leave law.

Speaking with some clients, I sense their overwhelming confusion in setting up employment policies in California. While it can be a daunting task, I remind them that the key is to approach it in a systematic process, and once the system is in place, compliance can be very easy. While there are many issues employers need to review on an ongoing basis, there are five that are a good starting point:

 1)  Meal and rest breaks

Yes, California employers are still being sued for meal and rest break violations. This should be a primary concern for all California employers, and simply part of standard operating procedures by now.

 2)  New hire process and packets

Employers should review their hiring process, including:

3)  Paid sick leave compliance

As of July 1, 2015, employers must allow employees to accrue paid sick leave under California law. I’ve written about the law, as well as the amendment to clarify the law signed by Governor Brown on July 13, 2015.

The DIR provides a great resources page every employer should review.

 4)  Exempt vs. non-exempt employee classifications

5)  Uncompensated work-time

Employers need to be careful and have policies in place to address claims from employees that they were not paid for all time worked. These claims can take many different forms:

  • Travel time may have to be paid
  • Off-the-clock work
  • On-call time
  • Pre-shift or post-shift work. In 2014, Amazon workers sued their staffing company claiming that the post-shift security check employees had to undergo should have been compensated work-time. The U.S. Supreme Court ruled in the staffing company’s favor, but nevertheless, it was a costly case for the company and required protracted litigation.