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New Parent Leave Act Benefits Employees Not Covered by FMLA/CFRA

California’s New Parent Leave Act (NPLA), which goes into effect on January 1, 2018, will expand family leave benefits to employees who are ineligible for FMLA (Family Medical Leave Act) and CFRA (California Family Rights Act). The new law allows eligible employees to take up to 12 weeks of leave to bond with a new child. The law applies to employers with at least 20 employees, whether or not they are covered by FMLA/CFRA. This is lower than the 50-employee threshold required by FMLA/CFRA.

The NPLA provides eligible employees with 12 weeks of leave to bond with a child within one year of the child’s birth, adoption, or foster care placement. This is in addition to any leave provided under the Pregnancy Disability Leave (PDL) law.

In order to be eligible for the NPLA, employees must have more than 12 months of service with the employer, and have worked at least 1250 hours during the previous 12-month period. Also, they must not be eligible for FMLA/CFRA.

The law applies to all California employers who have at least 20 employees, including those already covered by FMLA/CFRA who have locations with between 20-49 employees. Employers must continue group health insurance coverage for employees on parental leave, and must provide a guarantee of employment in the same or similar position upon the employee’s return.

Unlike FMLA, the NPLA does not provide leave to recover from the employee’s own serious health condition, or to care for family members with a serious health condition, or for pregnancy disability.

If you are an employer who will be affected by the new law, be sure that you update your form leave letters, Maternity Leave policies, and Employee Handbook to reflect this new benefit.

New Criminal History “Ban the Box” Law Takes Effect January 1, 2018

A new law recently signed by Gov. Jerry Brown will prohibit employers in California from including criminal history inquiries on employment applications before making a conditional offer of employment. AB 1008 applies to all California employers with 5 or more employees and will go into effect January 1. California has had a “ban the box” law for city, county and state employers since 2014. The new law extends the ban to private sector employers. Fifteen local jurisdictions, including San Francisco and Los Angeles, already have such private sector bans in place.

The goal is to give Californians with a prior arrest or conviction a fair chance at finding a job and moving forward.

AB 1008 makes it unlawful for employers to:

Include questions on employment applications about criminal history
Ask about or consider the conviction history of an applicant before the applicant receives a conditional offer of employment; and
Consider, distribute, or disseminate information about arrests that did not result in a conviction.

The bill also requires that, before rejecting an applicant based on criminal history, the employer must first make an “individual assessment” to determine whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job. The employer must consider each of the following:

The nature and gravity of the offense or conduct;
The time that has passed since the offense or conduct and completion of the sentence; and
The nature of the job held or sought.

If the employer makes a preliminary decision not to hire the applicant in part or solely due their criminal history, they must notify the applicant in writing and give them at least 5 business days to respond. If the applicant notifies the employer in a timely manner that they dispute the accuracy of the conviction history, and are taking steps to obtain evidence to prove its inaccuracy, the employer must provide the applicant 5 additional business days to respond. By law, the employer must consider the applicant’s response before making a final decision.

From a business perspective, banning “the box” can expand the pool of potential employees in what is a very competitive market. Individuals with arrest records or convictions for even minor offenses often have difficulty getting that first opportunity to begin turning their life around. A former client of mine who gave someone that opportunity had a very positive experience. Through a program with the EDD, she hired someone who had served time for a minor offense to work in the company call center. The individual was anxious to get some experience, and to be able to support their family. The program had very specific requirements that the employee had to adhere to, e.g., weekly drug testing, and attending meetings with their parole officer. It turned out to be a win-win. The employer got a motivated employee, and the employee got a fresh start.

Remember that in light of the new law, AB 1008, you may need to make changes to your employment application form and hiring procedures. Please contact me if you need help in doing so.

HR Alert: Revised I-9 Form and New Employee Notice Requirement

Here are some recently-implemented requirements you should be aware of.

Revised I-9 Form Now Available

On July 17, the U.S. Citizenship and Immigration Services (USCIS) released a revised version of the Employment Eligibility Verification form, Form I-9. Employers may continue to use the existing form, with a revision date of 11/14/16 through September 17, 2017. As of September 18, employers must use the new form with a revision date of 07/17/17. Existing storage and retention rules still apply.

The revised I-9 form contains some minor changes to wording, as well as changes to Acceptable Documents List C. All changes are documented in the revised Handbook for Employers: Guidance for Completing Form I-9.

New Domestic Violence Employee Notice Required

As of July 1, employers with 25 or more employees are required to inform all employees, in writing, about protections for victims of domestic violence, sexual assault or stalking. The notice is a requirement of California Assembly Bill 2337, which was signed by Governor Jerry Brown last September, and outlines protections under Labor Code Sections 230 and 230.1. The California Labor Commissioner recently published a sample notice. The notice contains information on victims’ rights to accommodation and protections against discrimination and retaliation.

New Minimum Wage and Hiring Rules in Effect

As of July 1, the minimum wage has increased in a number of California cities. If you have employees in any of the following cities, be sure that you have changed their pay rates accordingly. Note that in some cities, the minimum hourly wage is based on the number of employees. Also, if an employee works in (or telecommutes from) a city with a higher minimum wage than the state, the employer must follow both the state wage requirements and the city’s wage requirements for that employee. The current minimum wage in the state of California is $10.50/hour for employers with 26 or more employees, and $10/hour for employers with 25 or fewer employees.

New minimum wages are as follows:

San Jose: $12/hour
Milpitas: $11/hour
San Francisco: $14/hour
San Leandro: $12/hour
Emeryville:
• $15.20/hour for companies with 56 or more employees
• $14/hour for companies with 55 or fewer employees
Los Angeles, Malibu, Pasadena, Santa Monica, and unincorporated areas in Los Angeles County:
• $12/hour for companies with 26 or more employees
• $10.50 for companies with 25 or fewer employees

Effective January 1, 2018, the state-wide minimum wage will increase to $11/hour for employers with 26 or more employees and $10.50/hour for employers with 25 or fewer employees.

Use of Criminal Histories in Hiring Decisions
Also effective July 1, the Fair Employment and Housing Council implemented new rules regarding the use of criminal history in hiring decisions.

The new rules require that employers consider whether their use of criminal histories will have an adverse impact on any protected class. If an applicant or employee claims that the policy or practice of using criminal histories has an adverse impact on a protected class, the employer will have to show that the policy was job-related and consistent with business necessity.

Employers must also be able to show that there wasn’t a less-discriminatory policy or practice that could have achieved the same result. Employer policies must allow for an individual assessment that considers the nature of the offense, how long ago it took place, and how it relates to the position, if at all.

In addition, applicants or employees must be notified if an adverse action will be taken because of their criminal history, and they must be given an opportunity to address any factual inaccuracies. If a record is shown to be inaccurate, it must not be considered.

Please note that the following criminal records should not be considered in California:

• Arrests that did not result in conviction (unless trial is pending)
• Detentions that did not result in conviction
• Sealed records
• Convictions that have been judicially dismissed, including through expungement
• Misdemeanor marijuana convictions more than two years old
• Participation in pre-trial or post-trial diversions programs
• Proceedings in juvenile court

If you have questions about a specific hiring situation, contact your employment counsel.

Bad Behavior is Bad for Business

You only have to glance at the news to get the feeling that workplace bullying and harassment are on the rise. Bill O’Reilly was called out recently for his behavior toward women at Fox News, as Roger Ailes had been accused before him. As of a few days ago, more than 50 companies had pulled their advertising dollars from The O’Reilly Factor.

Clearly, bad behavior is bad for business.

Most of us are familiar with what constitutes harassment. However, I think a reminder is useful.

California law prohibits workplace discrimination and harassment in employment based on:

Ancestry
Age (40 and above)
Color
Disability (physical and mental, including HIV and AIDS)
Genetic information
Gender, gender identity or gender expression
Marital status
Medical condition (genetic characteristics, cancer or a record or history of cancer)
Military or veteran status
National origin
Race
Religion (includes religious dress and grooming practices)
Sex (includes pregnancy, childbirth, breastfeeding and/or related medical conditions)
Sexual orientation

Harassment may refer to derogatory comments, slurs or propositions; epithets; assault; blocking movement; offensive touching; physical interference with normal work or movement; and visual insults, such as derogatory posters or cartoons.

California law also requires that employers with 50 or more employees provide sexual harassment and abusive conduct prevention training for all supervisors. This training should be given when someone is first promoted to a supervisor position, and then every two years thereafter.

Workplace bullying, as defined by the Workplace Bullying Institute, is repeated, health-harming mistreatment of one or more persons (the targets) by one or more perpetrators. It is abusive conduct that is:

Threatening, humiliating or intimidating, or
Work interference that prevents work from getting done, or
Verbal abuse

Workplace situations of harassment or bullying impact not only the victims, but also other employees and, potentially, customers who either witness or experience the abusive behavior. Bullies tend to be equal opportunity perpetrators.

In my next blog, I’ll share a specific example of how bullying nearly lost a company several key clients, and I’ll give you some tips for recognizing and preventing bad behavior in your organization.

New Year to Bring New Wage and Leave Requirements

As we head into the home stretch for 2016, it’s important to know about new employment-related requirements that will go into effect next year. Here’s a summary of those requirements. As always, we will keep you updated about any changes or additions.

New overtime rules delayed
The new overtime rules that were to go into effect on December 1 have been temporarily blocked due to a lawsuit filed by 21 states to block enforcement. The new overtime regulations would have increased the salary required for an employee to be considered exempt to $913 per week, or $47,476 annually. Enforcement will be blocked until a final decision is made in the case or an appellate court overturns it.

The current California minimum annual salary for exempt employees is $41,660. This means that, if the new regulations go forward, California employers with employees who are currently classified as exempt and earn between $41,660 and $47,476 would need to decide whether to reclassify these employees as nonexempt, or increase their salaries to at least $47,476.

Electronic Unemployment Insurance reporting
Starting January 1, 2017, employers with 10 or more employees will be required to submit their unemployment insurance reports to the Employment Development Department electronically. Under the new requirements, employers must also remit contributions for unemployment insurance premiums by electronic funds transfer. The requirement will apply to all employers beginning January 1, 2018.

California minimum wage increase
Effective January 1, 2017 California’s minimum wage will increase to $10.50/hour for employers with 26 or more employees. Earlier this year, Governor Brown signed legislation that will increase California’s minimum wage annually, reaching $15/hour by January 1, 2022. For employers with 26 or more employees the minimum wage will increase per the following schedule:

January 1, 2017 – $10.50/hour
January 1, 2018 – $11/hour
January 1, 2019 – $12/hour
January 1, 2020 – $13/hour
January 1, 2021 – $14/hour
January 1, 2022 – $15/hour

Employers with 25 or fewer employees will be on a schedule one year behind the above schedule, reaching $15/hour on January 1, 2023.

San Francisco Paid Parental Leave
Also effective January 1, a new San Francisco ordinance will require employers with employees in San Francisco to supplement California’s Paid Family Leave (PFL) so that employees receive 100% of their gross weekly wages while on a parental leave of absence. PFL currently provides eligible employees with up to 55% of their regular wages, subject to a maximum weekly benefit of $1,129. Employees may receive these benefits for up to six weeks in a 12-month period. San Francisco’s law will require covered employers to provide additional wage replacement benefits of up to 45% of the employee’s wages, subject to the weekly maximum.

This law goes into effect on January 1, 2017 for employers with 50 or more employees; July 1, 2017 for employers with 35 or more employees; and January 1, 2018 for employers with 20 or more employees.

Paid Sick Leave changes
An amended San Francisco paid sick leave law, which goes into effect January 1, 2017, simplifies the sick leave pay calculation to match that of the California state law. For non-exempt employees, this means paying them for sick leave using either their regular rate of pay, or, a rate calculated by dividing total wages (excluding overtime) by total hours worked in the previous 90 days of employment. Exempt employees should be paid for sick leave at the same rate they are for other leaves.

The amended law will also prohibit an employer from requiring employees to take sick leave in increments of more than one hour.

Los Angeles also recently passed a sick leave ordinance. This new law allows employees working in the City of Los Angeles the ability to accrue and use up to 48 hours of sick leave. This is twice the amount provided by California state law. The ordinance went into effect on July 1 for employers with 26 or more employees, and will go into effect on July 1, 2017 for employers with 25 or fewer employees.

San Diego’s paid sick leave law went into effect on July 11 and provides employees with 40 hours of sick leave per year.

Note that San Francisco, Oakland, San Diego, Emeryville, Santa Monica, and Los Angeles all have sick leave laws that vary slightly from the California law. If you have employees working in those cities, be sure to check with your employment counsel to ensure you are complying with the appropriate requirements.

With all these changes on the horizon, and as we head into year end, this is an excellent time to review your Employee Handbook. Need Assistance? Contact me at michelle@connecttohr.com to get started!

Guest Article – Maximum Individual Mandate Payment for 2016

As we reach year end and start to think about the approaching tax season, it’s important to keep up to date on tax-related items in the Affordable Care Act (ACA). To assist you in that, I’m sharing this article from Patrick Whitaker at Whitaker Financial Services. You can find more information on his website.

The Affordable Care Act’s individual mandate provision requires every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a penalty payment when filing his or her federal income tax return. Recently, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-43, which provides the information needed to determine the maximum penalty that may be due for 2016.

Calculating the Payment
For tax year 2016, individuals will generally pay whichever of the following penalty amount is higher:

2.5% of the individual’s yearly household income above his/her applicable filing threshold, OR
$695 per person for the year ($347.50 per child under age 18)

The maximum penalty is capped at the cost of the national average premium for a bronze-level health plan available through a Health Insurance Marketplace in 2016. According to the IRS, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through a Health Insurance Marketplace in 2016 is:

$223 per individual; and
$1,115 for a family with five or more members

See the Health Care Reform Updates section on our website for additional articles related to the Affordable Care Act.

About the author, Patrick Whitaker

Whitaker Financial Services has been providing professional financial and insurance services for over 25 years. At WFS, it’s our business to help you plan ahead. The most important point we make with clients is this: strategy is everything. We offer business owners an alternative to the impersonal treatment they receive from the large brokerage agencies. The benefits programs you invest in affect multiple facets of your business, from company morale, to employee retention, to administrative efficiency, to your bottom line.

New Ordinances Enhance Family Leave and Paid Sick Time

If you have employees in San Francisco, you should be aware of the new San Francisco Paid Parental Leave law, and amendments to the city’s paid sick leave law, both of which will go into effect next year.

Paid Parental Leave. This ordinance will require employers with employees in San Francisco to supplement California’s Paid Family Leave (PFL) so that employees received 100% of their gross weekly wages while on a parental leave of absence. PFL currently provides eligible employees with up to 55% of their regular wages, subject to a maximum weekly benefit of $1,129. Employees may receive these benefits for up to six weeks in a 12-month period. San Francisco’s law will require covered employers to provide additional wage replacement benefits of up to 45% of the employee’s wages, subject to the weekly maximum.

With the employee’s agreement, an employer may apply up to two weeks of the employee’s accrued vacation to meet their supplemental compensation obligation. If the employee does not agree to this, the new law gives the employer the right to choose not to provide supplemental benefits.

Also, employers must display a poster with information about the supplemental benefits and must maintain records of the supplemental benefits paid to covered employees for at least three years.

Paid Sick Leave. The amended San Francisco paid sick leave law, which goes into effect January 1, 2017, simplifies the sick leave pay calculation to match that of the California state law. For non-exempt employees, this means paying them for sick leave using either their regular rate of pay, or, a rate calculated by dividing total wages (excluding overtime) by total hours worked in the previous 90 days of employment. Exempt employees should be paid for sick leave at the same rate they are for other leaves.

The amended law will also prohibit an employer from requiring employees to take sick leave in increments of more than one hour.

San Diego’s paid sick leave law went into effect on July 11 and provides employees with 40 hours of sick leave per year.

As with all changes in employment law, it’s important to update your Employee Handbook to reflect the latest requirements. Please contact me if you need help making these updates or would like to discuss a handbook review.

Update: Federal and State HR Laws

In my last blog I talked about the change in the minimum salary requirement for exempt employees that goes into effect in December. Here are some other HR-related legal updates that may also affect you.

State Disability Insurance eligibility waiting period. The waiting period for State Disability Insurance eligibility has changed for individuals who file a second disability claim for the same condition or a condition related to the initial claim. SB 667, which went into effect July 1, waives the 7-day waiting period for the second claim if it is filed within 60 days after the initial disability benefit period. The bill also extends to 60 days (from 14 days) the time between claims for the same or related cause or condition to be considered one disability benefit period.

Wage garnishment. SB 501, effective July 1, reduces the prohibited amount of an individual judgment debtor’s weekly disposable earnings that may be garnished based on a withholding order.

Electronic Unemployment Insurance reporting. Starting January 1, 2017, employers with 10 or more employees will be required to electronically submit their unemployment insurance reports to the Employment Development Department. Under the new requirements, employers must also remit contributions for unemployment insurance premiums by electronic funds transfer. The requirement will apply to all employers beginning January 1, 2018.

California minimum wage. SB 3, signed by Governor Brown in April, will increase California’s minimum wage annually, reaching $15/hour by January 1, 2022. For employers with 26 or more employees the minimum wage will increase per the following schedule:
January 1, 2017 – $10.50/hour
January 1, 2018 – $11/hour
January 1, 2019 – $12/hour
January 1, 2020 – $13/hour
January 1, 2021 – $14/hour
January 1, 2022 – $15/hour

Employers with 25 or fewer employees will be on a schedule one year behind the above schedule, reaching $15/hour on January 1, 2023.

In my next blog I’ll talk about changes at the county and city level. It’s important to keep your Employee Handbook up to date to ensure you are in compliance as requirements change. Please contact me if you are interested in a mid-year review of your manual.

New Overtime Rules Go Into Effect December 1

The Department of Labor has announced new federal regulations increasing the minimum salary that must be paid to qualify an employee as exempt from overtime. As of December 1, 2016, an exempt employee must be paid a minimum of $913 per week, or $47,476 annually.

The current California minimum annual salary for exempt employees is $41,660. This means that California employers with employees who are currently classified as exempt and earn between $41,660 and $47,476 will need to decide before December 1 whether to reclassify these employees as nonexempt, or increase their salaries to at least $47,476.

The duties tests for exempt classification have not changed. In California, a position may qualify as exempt if more than 50% of the work is administrative, professional or executive in nature.

In addition to increasing the minimum salary, the new federal regulations allow employers to count non-discretionary bonus compensation and certain other incentive pay for up to 10% of the minimum salary, and provide for automatic adjustments in the salary and total compassion levels for the exemption every three years, starting in 2020.

Misclassification of employees is one of the top three areas where employers are vulnerable to lawsuits. Be sure that you understand the duties tests, and check with your employment attorney if you are unsure how to classify an employee.

As a reminder, in California, employees may be exempt from overtime pay rules if:

They are engaged in work which is primarily intellectual, managerial or creative, AND
They are paid the required minimum salary. As mentioned earlier, this salary will be $47,476 as of December 1, 2016.

Employees who meet these criteria are generally classified in one of the three exempt classifications: Executive, Professional, or Administrative. Unless a job falls into one of these exemptions, an employer must pay overtime. In California, non-exempt, hourly employees are entitled to overtime pay for any hours worked over 8 in a day and over 40 in a week.