As I wrote about recently, on March 23, 2018, the Consolidated Appropriations Act, 2018 signed by President Trump changed federal law on the issue of tip pools and allows employers to share tips with back of the house employees.  In connection with the new law, the Department of Labor issued a memorandum this week further explaining the law.  Of importance to California employers, the DOL’s memo sets forth that:

In the meantime, given these developments, employers who pay the full FLSA minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools. The Act prohibits managers and supervisors from participating in tip pools, however, as the Act equates such participation with the employer’s keeping the tips.

The full Field Assistance Bulletin NO. 2018-3 can be read here.

My prior article setting forth common issues for California employers in regards to tip pools can be read here.

In addition, I recently posted a video explaining some tip pooling issues facing California employers:

In a huge development in the last couple of weeks, a change in federal law now permits California employers to include back of the house employees in tip pools.  This week’s post is an update and a general discussion about issues facing restaurants, hotels, and other industries where tipping and gratuities are left for employees.  This simple concept is surprisingly complex for employers.  Here are five issues employers should understand about tips in California.

1) Who owns a tip?

California law is clear that voluntary tips left for an employee for goods sold or services performed belong to the employee, not the employer. Labor Code section 351 provides, “No Employer or agent shall collect, take or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron…. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.”

2) Is employer mandated tip pooling legal?

Yes. In the seminal 1990 case on tip-pooling, Leighton v. Old Heidelberg, Ltd., the court held that an employer’s practice of tip pooling among employees was not prohibited by section 351 because the employer did not “collect, take, or receive” any part of a gratuity left by a patron, and did not credit tips or deduct tip income from employee wages. The court relied upon the “industry practice” that 15% of the gratuity is tipped out to the busboy and 5% to the bartender, which was “a house rule and is with nearly all Restaurants.” However, owners, managers, or supervisors of the business cannot share in the tip pool.  Employers need to be careful to exclude any employees who direct the work of other employees from tip pools, as lead shift supervisors, floor managers, and others who do not have the authority to hire or fire may still be considered a supervisor for tip pooling purposes.

There must be a reasonable relationship between tip pooling arrangements.  The following examples of mandatory tip pooling percentages have been approved by a court, the DLSE or DOL:

  • A policy in which 80 percent of tips were allocated to waiters, 15 percent to busboys and five percent to bartenders
  • A policy in which cocktail service must give one percent of tips to bartender
  • The Department of Labor responsible for enforcing Federal law has stated that a policy that requires servers to share 15 percent of their tips with other employees is presumptively reasonable
  • A policy in which a server contributes 15 percent to a tip pool, and other employees in the chain of service receive a portion of these tips based on the amount of hours they worked

The following examples were tip pooling policies disapproved by courts or the DLSE and therefore employers cannot legally establish them:

  • A policy providing 90 percent of tips to hostesses who spend only a small amount of time seating customers
  • A policy requiring food server to share 10 percent of tips with floor managers

3) When do tip tips left on credit cards have to be paid, and can a deduction made for processing the credit card transaction?

If a patron leaves a tip on their credit card, the employer may not deduct any credit card processing fees from the tip left for the employee. Moreover, tips left using a credit card must be paid to employees no later than the next regular payday following the date the credit card payment was authorized. See Labor Code § 351.

4) Can California employers have back of the house employees share in a tip pool?

On March 23, 2018, the Consolidated Appropriations Act, 2018 signed by President Trump changed federal law on this issue and allows employers to share tips with back of the house employees.  Therefore, as of March 24, 2018, California employers may include back of the house employees in any tip pooling arrangements.  Prior to President Trump’s approval on the new law, this was not the case, as a Court in Oregon Restaurant and Lodging Association v. Perez, the Ninth Circuit Court of Appeals, which covers California, held in February 2016 that the Department of Labor’s regulations about who can participate in tip pools applies to states like California which do not permit tip credits.  The DOL had issued regulations that under the FLSA a tip pool is only valid if it includes employees who “customarily and regularly” receive tips, such as waiters, waitresses, bellhops, counter personnel who service customers, bussers and service bartenders.  According to the DOL past rule, a valid tip pool “may not include employees who do not customarily and regularly receive[] tips, such as dishwashers, cooks, chefs, and janitors.”  The Plaintiffs in Oregon Restaurant filed a petition for review to the United State Supreme Court.  Given the new law that took effect, the Supreme Court’s review of the case is not necessary.

While some states provide the employer with a “tip credit”, California law does not allow this. However, with the recent passage of the increase in California’s minimum wage, there is more discussion of examining whether a tip credit should be considered in California. However, current law does not allow employers to “credit” an employee’s tips towards the minimum wage requirement for each hour worked.

A service charge added to a customer’s bill is not a tip or gratuity and remains the property of the employer.  Therefore, the employer may distribute the service charge to its employees, including back of the house employees as it wishes.  However, if a service charge is distributed to employees, it is considered wages and effects the employee’s regular rate of pay for overtime purposes as discussed below.

5) Do tips change an employee’s regular rate of pay for overtime calculations?

No. Because tips are voluntarily left by customers to employees, tips do not increase an employee’s regular rate of pay used to calculate overtime rates.

However, if an employer implements mandatory service charges and shares these service charges with employees, the service charges must be considered wages for overtime and tax purposes.  Therefore, the employee’s regular rate of pay for overtime purposes will be higher when mandatory service charges are distributed to the employees.  To calculate an employee’s regular rate of pay, the employer must divide all compensation for the week by the total number of hours worked by the employee.

**Additional issue: Pay attention to other requirements under local ordinances regulating service charges.

For example, Santa Monica’s minimum wage ordinance requires employers to “distribute all Service Charges in their entirety to the Employee(s) who performed services for the customers from whom the Service Charges are collected.”  Santa Monica Municipal Code § 4.62.040.  “Service Charge” is defined as “any separately-designated amount charged and collected by an Employer from customers, that is for service by Employees, or is described in such a way that customers might reasonably believe that the amount is for those services or is otherwise to be paid or payable directly to Employees…under the term ‘service charge,’ ‘table charge,’ porterage charge,’ ‘automatic gratuity charge,’ ‘healthcare surcharge,’ ‘benefits surcharge,’ or similar language.”  Santa Monica Municipal Code § 4.62.010(g).

I just posted a new video on my YouTube channel about the issues facing employers with the state and local minimum wage increases in 2018 (embedded below).  At the end of the first quarter in 2018, it is a good time to review compliance with the state and local minimum wage laws, and to start to prepare for the local minimum wage increased on July 1, 2018.  For example, Los Angeles city and county minimum wage rates will increase to $13.25 per hour from the current $12.00 per hour for employers with 26 or more employees on July 1.  In addition to my regular blog posts, I’ll be featuring more videos on my channel as well, so please subscribe to both.

Employers need to understand their rights and obligations when they receive notice of a complaint through the Labor Commissioner.  The process can seem daunting, but with a little preparation it can be managed effectively.  This  Friday’s Five post sets out a brief explanation of the five steps that most Labor Commissioner proceedings follow:

Step one: Notice of claim

Employers usually become aware of a complaint to the Labor Commissioner when they receive a Notice of Claim and Conference from the Labor Commissioner’s office.  Employers are not required to file any paperwork in response to the notice of conference, but the employer or an employer’s representative is required to appear at the conference at the date and time indicated on the notice.  The conference is not the actual hearing on the matter, rather the conference is structured as a non-binding settlement conference during which the Labor Commissioner discusses the various allegations, the employer’s response, and will attempt to mediate a resolution between the parties.  Here is typical notice of claim that is sent to employers in most cases:

https://www.scribd.com/document/372844865/Sample-Notice-of-Claim-and-Conference-California-Labor-Commissioner

The Labor Commissioner can only hear disputes for “any action to recover wages, penalties, and other demands for compensation.”  Labor Code section 98(a).  Therefore, the Labor Commissioner cannot adjudicate any other types of employment claims, such as harassment or discrimination.  Likewise, if the employer has a counter claim against the employee, it cannot be heard by the Labor Commissioner, but must be filed in court.

Neither the employee and the employer are required to have an attorney during any stage of the Labor Commissioner process.  Whether or not an employer decides to have legal representation during the process depends on how comfortable the employer is with handling these issues and how well they understand the law in order to articulate the appropriate defenses available to them.

Step two: Preparing for the settlement conference

It is important for employers to review the paperwork provided from the Labor Commissioner’s office to ensure that they gather and bring the required paperwork to the settlement conference.

Usually the Labor Commissioner requires the following background information from the employer:

  1. Completion of the DLSE’s Report of Workers’ Compensation Insurance
  2. City business license
  3. Articles of information filed with the Secretary of State
  4. Any documentation that may be applicable to the employee’s claims: payroll records, time sheets, handbook and applicable policies, correspondence with the employee, etc.…

The employer should also review the employee’s allegations in the notice of claim and prepare an outline of defenses and facts that support their position.

Step three: Settlement conference

Although it is not mandatory, most Labor Commissioner offices will often set the matter for a settlement conference.  Employers often misunderstand the purpose of the initial settlement conference.  The settlement conference is not the hearing on the matter in which the Labor Commissioner takes sworn testimony and makes a decision.  While this step is not the actual hearing that will determine who should prevail, employers should prepare evidence and documents that will be persuasive during the settlement conference to establish defenses to the employee’s claims.  It is also good to listen to the employee’s facts and learn what they are claiming, what evidence they may have, and who may be witnesses.  It is important to learn this information in the event that the case does not settle and is set for a formal hearing.

Employers should also understand the arguments in support of their defenses so that those can be articulated to the employee and Labor Commissioner.  The more persuasive the employer’s case is, the more likely that the case can be resolved for a nominal amount during the settlement conference.

Employers should be prepared to negotiate during the settlement conference and be prepared with a range of how much they would be willing to settle the case. An experienced employment law attorney can help address the strengths and weaknesses of the claims and can help advise on the appropriate settlement offer, if any, that could be made.

Step four: Hearing

If the case does not settle at the settlement conference, or if there was never a settlement conference set, the Labor Commissioner will set the matter for a hearing pursuant to Labor Code section 98(a).  The hearings are often referred to as “Berman” hearings after the name of the legislator who sponsored the bill creating this procedure.  The basic idea behind Berman hearings is to provide a relatively fast way to resolve wage disputes.  However, with the state budget constraints, the hearings are usually set for about one year from the date that the settlement conference takes place.

The hearing takes place in the Labor Commissioner’s office, and is usually in a conference room.  The Labor Commissioner will tape record the hearing, and all witnesses’ testimony is provided under oath, just like it would be if they were testifying in court.  The Labor Commissioner can issue subpoenas compelling the attendance of parties at the hearing, as well as compelling parties to produce documents at the hearing.

Generally, employers need to be prepared but flexible for how the hearing will proceed.  The Labor Commissioner conducting the hearing has a lot of flexibility on how the parties are to present witnesses and conduct cross-examinations.  The rules of evidence are not controlling in the proceeding, but the Labor Commissioner generally has discretion to control the evidence presented during the hearing.  The Labor Commissioner can, and usually will, ask questions of their own to get a better understanding of certain issues.

After the hearing, the Labor Commissioner will issue a written order that must be served on all parties.  Unless this order is appealed, it is a binding judgment against the parties, and a certified copy of the order is filed with the superior court and judgment is entered.

For some additional tips about preparing for and attending a Labor Commissioner hearing, see my prior post here.

Step five: Potential appeal

Both the employee and the employer have the right to appeal the Labor Commissioner’s order within 10 days after it is served.  The order must be a written order, and will normally be served on the employer through the mail.  If the employer appeals the order, the appeal moves the case to the appropriate superior court.  The appeal is a de novo appeal, meaning that the case starts from the beginning in superior court and the Labor Commissioner’s order is given no weight.  Employers wishing to appeal the Labor Commissioner’s order must also post a bond in the full amount that was awarded in the order.  Given the short 10-day deadline to file an appeal, employer wishing to appeal Labor Commissioner orders must seek counsel immediately once they receive the order from the Labor Commissioner.

Employee terminations and resignations must be planned for in advance to avoid common pitfalls for California employers.  I’ve recently written about go-to hiring practices for employers, so I thought it would be appropriate to follow that post up with this list of go-to termination practices.  This Friday’s Five focuses on critical management and legal considerations for employers during the separation process:

1. Documentation of the reason for termination

What is the reason for termination? Is there a company policy that was violated? [Note: Is the company policy in writing?  Has it been distributed to the employee?  Is there a signed acknowledgement of the policy in the employee’s file?]  Who was involved in termination decision? Review documentation for termination if “for cause” and ensure this documentation is maintained in personnel file.

2. Final pay and accounting

Employers need to prepare the employee’s final paycheck and ensure that any unused accrued vacation time is also included.

Final wages must be paid within certain time limits, including the following:

  1. An employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination.
  2. An employee who gives at least 72 hours prior notice of quitting, and quits on the day given in the notice, must be paid all earned wages, including accrued vacation, at the time of quitting.
  3. An employee who quits without giving 72 hours prior notice must be paid all wages, including accrued vacation, within 72 hours of quitting.
  4. An employee who quits without giving 72-hours’ notice can request their final wage payment be mailed to them. The date of mailing is considered the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting.
  5. Final wage payments for employees who are terminated (or laid off) must be made at the place of termination. For employees who quit without giving 72 hours’ notice and do not request their final wages be mailed to them, is at the office of the employer within the county in which the work was performed.

Employers should also review if commissions, bonuses, or expense reimbursement owed to employee?  Obtain all expense reimbursement forms form employee.

Employers with multiple locations need to ensure that the final wages are made available.  The place of the final wage payment for employees who are terminated (or laid off) is the place of termination. The place of final wage payment for employees who quit without giving 72 hours prior notice and who do not request that their final wages be mailed to them at a designated address, is at the office of the employer within the county in which the work was performed. Labor Code Section 208.

 3. Company property and passwords

Obtain all company property from employee and reset passwords.  Also, has employee returned all company provided uniforms?  Have all company keys been returned?  The company should also develop a list of all passwords employee had access to and ensure the passwords are reset.

4. Final notices

Employers need to ensure that all required notices are provided to the employee.  For example, common notices include:

  • Notice to Employee as to Change in Relationship (download here)
  • For your Benefit (Form 2320) (download here)
  • COBRA and Cal-COBRA Notices from insurance provider
  • Notify insurance provider
  • Health Insurance Premium (HIPP) Notice (download here)

5. Retention of employee files

Employers need to take measures to secure and save employee’s file, wage, and time records.  For more information, see my prior post, Five best document storage and retention practices for California employers.

Makeup time is one of the rare occurrences under California law that employees have flexibility to adjust their work schedule to accommodate for important life events that come up from time to time. Makeup time allows employees to take time off and then make it up later in the same workweek, without triggering the obligation for the employer to pay overtime.  This Friday’s Five covers five issues employers should keep in mind about makeup time:

  1. An employee may work no more than 11 hours on another workday, and not more than 40 hours in the workweek to make up for the time off;
  2. The time missed must be made up within the same workweek;
  3. The employee needs to provide a signed written request to the employer for each occasion that they want to makeup time (and if employers permit makeup time, they should have a carefully drafted policy on makeup time and a system to document employee requests);
  4. Employers cannot solicit or encourage employees to request makeup time, but employers may inform employees of this option; and
  5. Remember, if these requirements are not met, time and a half overtime is due for (1) time over eight hours in one day or (2) over 40 hours in one week or (3) the first eight hours worked on the seventh consecutive day worked in a single workweek; and double time is due for (1) time over 12 hours in one day and (2) hours worked beyond eight on the seventh consecutive day in a single workweek.  The DLSE provides a good overview of the overtime requirements and calculating overtime payments here.

Happy Friday!

My firm is hosting a seminar for business owners, in-house counsel, human resource professionals, and managers to learn about and how to implement best practices at the start of 2018.  Plus, get to see the newly renovated Proud Bird and enjoy some light food and drinks during the mixer.

Our attorneys will be speaking about:

  • New case law developments facing California employers in 2018
  • Minimum wage increases on state local levels in Southern California and how to plan for the year
  • New hiring prohibitions – employers cannot ask about prior salary and new restrictions on conducting background checks, so what can employers still ask?
  • New immigration requirements facing employers under California’s Immigrant Worker Protection Act
  • New case law developments on the enforceability of arbitration agreements

Space is limited, so register early to reserve your spot.

Thursday, February 15, 2018 4:00 PM – 5:00 PM (presentation); 5:00 PM – 6:00 PM (mixer)

The Proud Bird
11022 Aviation Blvd.
Los Angeles, CA 90045

Seminar Program: 4:00 – 5:00 pm
Mixer: 5:00 – 6:00 pm

Cost: Free for firm clients/friends of the firm (if you are a subscriber to the blog, the fee will be waived)
No charge for parking.

To register, visit: www.zallerlaw.com/seminar

California employment law is a mind field that carries huge exposure for employers not proactively monitoring legal developments and potential legal issues.  There are some statements employers in California should never make, and this Friday’s Five reviews misaligned statements that can create significant liability for an employer.

1. My company has employment practices liability insurance, so there cannot be much exposure from employment lawsuits.

In California, it is very common for insurance companies to exclude wage and hour claims from the employment practices liability (EPLI) coverage.  This applies to single plaintiff and class action claims and representative claims under California’s Private Attorney General Act (PAGA).  This is a significant area of potential exposure for employers, and therefore, the costs and benefit analysis of an EPLI policy must take these considerations into account.

Moreover, under California law an insured cannot buy insurance to cover willful acts.  See Insurance Code section 533.  Therefore, if the employment lawsuit alleges willful acts, it is also likely not going to be covered by insurance.

Employers should seek coverage counsel to assist in reviewing the exclusions and limitations of any EPLI policies prior to purchasing in order to completely understand the coverage that is being purchased for the cost of the policy.

2. I’m busy right now, can you tell me about your workplace complaint tomorrow?

California employers have a legal obligation to conduct workplace investigations.  California Government Code section 12940(j) provides that it is “unlawful if the entity, or its agents or supervisors, knows or should have known of this conduct and fails to take immediate and appropriate corrective action.”  The law also provides that employers are liable if they “fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.”  Gov. Code section 12940(k).  If the employer fails to take the preventative measures, they can be held liable for the harassment between co-workers.  If the harassment occurs by a manager, the company is strictly liable for the harassment.  If the harassment occurred by a non-management employee, the employer is only liable if it does not take immediate and appropriate corrective action to stop the harassment once it learns about the harassment.  Investigations must follow certain parameters in order to be deemed adequate under the law.  Click here for more information about conducting adequate investigations.

3. There is no need for our company to record meal breaks, all of the employees know that they can take breaks whenever they want.

Meal breaks taken by the employees must be recorded by the employer. However, there is no requirement for employers to record 10-mintute rest breaks.  For more information about meal and rest break obligations, see my previous article.

4. Our company’s handbook is current, it was updated four years ago.

Any California employer can attest, the employment legal landscape changes on a yearly (if not more often basis).  Employers should have someone well versed on employment law reviewing the employee handbook on at least a yearly basis.

5. I’m sure my payroll company is issuing compliant pay stubs.

Employers are cautioned not to rely on their payroll companies for compliant itemized wage statements, as these companies often times do not understand the legal requirements of the Labor Code. Ensuring the required information is properly listed on the itemized wage statements is an item that employers should review at least twice a year for compliance.

Labor Code Section 226(a) requires the following information to be listed on employees’ pay stubs:

  1. Gross wages earned
  2. Total hours worked (not required for salaried exempt employees)
  3. The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece rate basis
  4. All deductions (all deductions made on written orders of the employee may be aggregated and shown as one item)
  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 digits of his or her social security number or an employee identification number other than a social security number
  8. The name and address of the legal entity that is the employer
  9. All applicable hourly rates in effect during the pay period, and the corresponding number of hours worked at each hourly rate by the employee

Here is an example of an itemized wage statement published by the DLSE.

Also, do not forget that under California’s paid sick leave law that went into effect on July 1, 2015 employers have additional reporting information regarding employees’ accrued paid sick leave and usage. Employers must show how many days of sick leave an employee has available on the employee’s pay stub or a document issued the same day as a paycheck.

Companies are ultimately liable for these violations, so it is best to double check your payroll company’s work to ensure compliance.

California’s state minimum wage increased for California’s employers on January 1, 2018.  California’s minimum wage law provides for two different rates based on the size of the employer, and the minimum wage increases are reflected in this chart:

Date Minimum Wage for Employers with 25 Employees or Less Minimum Wage for Employers with 26 Employees or More
January 1, 2017 $10.00/hour $10.50/hour
January 1, 2018 $10.50/hour $11.00/hour
January 1, 2019 $11.00/hour $12.00/hour
January 1, 2020 $12.00/hour $13.00/hour
January 1, 2021 $13.00/hour $14.00/hour
January 1, 2022 $14.00/hour $15.00/hour
January 1, 2023 $15.00/hour

 

Once the rate reaches $15 per hour, it will be adjusted annually based on inflation.  Here are five potential pitfalls California employers need to be careful to avoid with the increase in the state minimum wage.

Pitfall #1: Who is considered an employee?

California’s Department of Industrial Relations website provides the following explanation:

Labor Code section 1182.12 defines “employer” as: “any person who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person [and] includes the state, political subdivisions of the state, and municipalities.”

Any individual performing any kind of compensable work for the employer who is not a bona fide independent contractor would be considered and counted as an employee, including salaried executives, part-time workers, minors, and new hires.

The DIR admits that California’s minimum wage statute does not specify how employers should count employees to determine if they have more or less than 26 employees.  For example, the law does not provide a time period that employers could use to calculate the average number of employees in determining whether or not they meet the 26 employee threshold.  Therefore, employers should be very conservative in making this calculations, and if there is any doubt or the calculation is close, employers should consider paying the higher minimum wage rate rather than risk an audit or costly lawsuit over the difference in rates.

Pitfall #2: The salary level to qualify as an exempt employee increases based on the state minimum wage.

Employers need to review the base salary for all exempt employees to ensure the employees meet the salary required to be exempt.  To be exempt from the requirement of having to pay overtime to the employee, the employee must perform specified duties in a particular manner and be paid “a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.” (Lab. Code, § 515, subd. (a).)  For more information about the salary basis test for exempt employees, see my previous article here.

With the increase in the state minimum wage in 2018, the equivalent of two times the minimum wage of $10.50 per hour for small employers equals $43,680 per year, and two times the minimum of $11.00 per hour for large employers equals $45,760 per year to qualify for the white collar exemptions.

It is important to note that the salary basis test is set according to the California state minimum wage, not the applicable minimum wage that may apply in the various local city and counties in California.

Pitfall #3: Which minimum wage rate applies if the number of employees raises and falls below 26 employees throughout the year? 

The California Department of Industrial Relations provides that: “An employer with 26 or more employees at any time during a pay period should apply the large-employer minimum wage to all employees for that pay period.”  It is important to note that the DIR’s opinion is not binding on a court of law, but it can be instructive of the position the state would take in its own enforcement actions.

Changing the rate of pay for each pay period raises another pitfall about the notice employers are required to provide employees before changing their rate of pay (see pitfall #4 below).

Likewise, employers with exempt employees who are earning at or near the two times salary basis required to qualify as an exempt employee (see pitfall item #3 above), and whose number of employees may increase during the year to 26 or more employees, need to be careful about the salary amounts being paid to employees.  If there is a chance that the employer’s workforce could increase to 26 or more employees, the employer should take a conservative approach and pay the higher salary amounts required for employees to meet applicable exemptions.

Pitfall #4:  Employers are required to update the notice to employees setting forth the employee’s rate of pay. 

California employers are required to provide non-exempt employees with certain information upon hire as required by the Wage Theft Protection Act.  The law became effective in 2012 and is codified at Labor Code section 2810.5.  Many employers use the Labor Commissioner’s template to meet this notice requirement.

However, employers who pre-populate the form will need to revise the forms to ensure that the wage rates comply with the increased minim wage rate in 2018.  Likewise, it is a good practice to review the notices mid-way through the year to ensure compliance with  the various local cities and counties (such as Los Angeles and Santa Monica) that typically increase their minimum wage rates in July each year.

Employers are not required to re-issue the Notice to Employee to existing employees with updated wage information as long as new increased rate is show on the employee’s pay stub with the next payment of wages.  The DIR publishes a great FAQ on the law here that employers should review.

Pitfall #5: Employers still need to comply with local city or county minimum wage requirements if those laws provide a higher minimum wage rate. 

Employers need to review any applicable local city or county laws that may provide for a higher minimum wage than the state minimum wage requirement.  Employers must comply with the highest minimum wage rate applicable to their workforce.  It is also important to review the local minimum wage ordinances as many ordinances differ in how to determine if the employer is small or large, and usually contain their own notice requirements.  A list of the various local minimum wage ordinances across the United States is published by UC Berkley Labor Center.

Happy New Year.  I started the Friday’s Five articles in the summer of 2014, and the interest in the articles has been more than I expected.  I appreciate everyone who has read them and provided comments and feedback. If you have any topics you would like me to address, please let me know. With that said, here is a list of five resolutions for California employers in 2018:

1. Relax – Still need to make sure your employees are taking their meal and rest breaks.

2. Train – All supervisors must be trained to comply with California’s required sexual harassment prevention training for employers with 50 or more employees.

Since 2015 the training must discuss bullying in the workplace to be legally compliant, and as of January 1, 2018, the training also needs to cover harassment based on gender identity, gender expression, and sexual orientation.

3. Read – Update employment handbook policies on a yearly basis.

2018 has a few new laws that should be addressed the employee handbook and new hire packets.

4. Run – Sorry, no play on words with this one, you just need to get outside and run a bit.

5. Organize – and keep employment files, time records and wage information for at least the length of any applicable statute of limitations.

Employers should review their systems to ensure there is a process in place on how to organize and maintain employment information for the required time periods, it is required under the law and can help defend the company should litigation ensue.

A final more bonus resolution:
Learn – more by attending my webinars on California employment laws to stay up to date.

In the next month, I will be hosting a seminar on the new laws facing employers in 2018 and what steps should be taken to comply. The date is still to be determined, but drop me an email if you are interested and I make sure you are notified once we set the date and location.

Wishing you the best in 2018!