New Employment Laws for 2016
There were new developments in California employment law that every business owner needs to know.
Minimum Wage. Most already know that California raised the minimum wage to $10 per hour as of the beginning of the year. However, some local jurisdictions have raised it even higher: Oakland, for example, has raised the minimum wage in the city to $12.55. San Francisco’s minimum wage is currently $12.25, but is going up to $13.00 an hour on July 1st.
More importantly, employers have new incentives to keep up, as the Department of Labor Standard Enforcement (also known as the Labor Commissioner) now has the authority to enforce local minimum wage laws, with often draconian penalties. As there is little room for error with the Labor Commissioner, it is especially important to get it right.
Paid Sick Leave. Last year, mandatory paid sick leave went into effect for most California employers. Last summer, the California Legislature made some changes to the Labor Code that many may have missed. First, the “one hour sick leave for 30 hours worked” has been modified to ensure that an employee gets at least 24 hours of sick leave for 120 days worked – regardless of how many hours worked for that period. If you have part-time worked who work only as little as an hour a day, they could qualify for 24 hours of sick leave in 120 days of employment, even if they worked only 100-719 hours during that time. Confusing? Probably. Check with your payroll provider or us if you have more questions.
School Activities Leave. While only employers with 25 or more employees are required to offer it, many small businesses like to match what larger employers do. Employees of larger organizations are allowed to take protected time off for various school-related activities, including enrolling children, school emergencies, and working with teachers and child care providers. While many small businesses use their flexibility to do this as a matter of course, it is now more necessary to document these absences. This new law also amends current law to allow such leave to be included within the mandatory paid sick leave discussed above.
Equal Work is Now “Equal Skill, Effort, and Responsibility.” Employers are generally aware that California law has required equal pay for equal work between men and women, but the Legislature has now broadened the definition to jobs requiring similar skill, effort and responsibility. The Legislature also dispensed with the limitation that pay inequality is disallowed only within a single establishment; it is now banned throughout the company. Senority and merit systems are still allowed, as are pay systems like commissions, dependent on volume or quality, although employers bear the burden of proof for those.
One reminder for employers: while employers generally recognize the chaos that can arise when employees compare their salaries (everyone’s job is more key than others’ jobs), employers cannot prevent them from doing so (or retaliating if they do so) under the Fair Pay Act.
A Rule of Reasonableness? The Legislature passed, and Gov. Brown signed, “urgency” legislation providing relief from draconian penalties for minor payroll statement violations. Employers can now avoid litigation and correct technical violations that occur when employers fail to provide itemized wage statements that show the full dates being paid, or fail to provide the employer’s legal name and address – but for the last three years. Reason triumphs?! Another reason to use a reputable payroll service.