On November 29, 2017, a California Superior Court judge ruled that employers that require employees to set aside time for a shift and have them call in to determine if they will indeed be working are required to pay employees “reporting time pay,” even if the employee never actually steps foot inside the business for a shift. This ruling serves as a cautionary reminder to employers that California disfavors “on-call shifts,” and employers should expect to pay employees a premium to utilize such shifts.
Several new minimum wage rates are slated to take effect on January 1, 2018 in various cities throughout California, as well as the state as a whole. California employers should begin preparing now to adjust employee wages to ensure compliance with the new rates.
A summary of the new minimum wage rates for nonexempt employees is provided below:
Although the Trump administration rescinded its guidance on worker misclassification earlier this year and appears to have otherwise taken a “softer approach” to misclassification enforcement, California employers should remain diligent in properly classifying their workers and should not allow lax federal enforcement to lead to similarly lax corporate policies. California employers remain subject to strict laws governing worker misclassification. California law presumes that all workers who render services for another are non-exempt employees unless employers prove that they are independent contractors or exempt employees. Cal. Lab. Code § 3357. Employers who willfully misclassify their workers can be subject to steep penalties.
In a big win for California employers, the California Supreme Court ruled on May 8, 2017 that employers are not required to provide employees with a “day of rest” on a “rolling seven-day basis,” but must only ensure that employees receive no less than an average of one day of rest for every seven-day workweek in a calendar month. This means that employers may, from time to time, require that employees work seven consecutive days, as needed, without fear of running afoul of an ambiguous provision of the California Labor Code, which requires that every employee receive one day of rest for each seven days worked.
Since 2009, many large retailers in California have been sued for failing to provide “suitable seating” in accordance with the state’s wage orders. Some of those employers have recently been forced to pay significant settlement awards, providing another cautious reminder to employers of the importance of complying with California’s suitable seating requirements.
Employers who pay employees commissions should evaluate their compensation schemes to ensure compliance with California law in light of the California Court of Appeals’ recent ruling in Vaquero, et al. v. Stoneledge Furniture, LLC. In Vaquero, the court of appeals held that employers who pay employees on a commission basis must pay employees a separate minimum wage for rest periods. Paying employees purely on draw and commission is no longer sufficient, even if the average wage equals, or is in excess of, the statutorily required minimum wage.
California Legislature introduced and passed a law phasing in state-wide minimum wage increases that will ultimately reach $15.00 per hour by 2022 for large employers and by 2023 for small employers. Specifically, for employers with more than 25 employees, the hourly minimum wage will increase according to the following schedule:
California employers are required to provide written wage statements to employees generally identifying the total hours worked during each period. The Labor Code provides an exception to this requirement for those employees who are paid solely on salary and who are exempt from overtime. However, because not all salaried, exempt employees are paid solely on a salary basis (e.g., receiving commissions or stock options), California employers were uncertain whether they were still required to disclose total hours worked for those workers. To address this issue, the legislature amended the Code to expand the exception. According to the revised language, employers no longer need to provide written wage statements disclosing total hours worked for the following employees:
After amending its Equal Pay Act to address gender-related wage differentials effective January 1, 2016, the California legislature enacted nearly identical language to also preclude wage differentials based on race or ethnicity, effective January 1, 2017. Specifically, the bill amends the Labor Code to prohibit employers from paying any of their employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.
As with gender, if there is a wage differential, the employer bears the burden of demonstrating that the wage differential is based on one or more of the following factors:
The California legislature has added a new provision to the Labor Code expanding protections from “unfair immigration-related practices” (originally passed in 2013) beyond the retaliation context and extending protections to any employee or applicant, regardless of whether they have ever made a complaint. The law also specifies that it shall be unlawful for any employer to: