“Well, that was depressing.”
That was the takeaway of one attendee at a presentation yesterday designed to bring employers up to date on changes in employment law.
Attorneys David Poole and Brian Koegle of the law firm of Poole & Shaffery LLP walked attendees through a thicket of county, state and federal regulatory changes and court cases that employers need to know about. The event, held at the Hyatt Regency Valencia, was presented by the Valley Industry Association.
Compliance with the law is much cheaper than litigation, Poole said, and that’s true for companies of all sizes.
“We have a name for people who think of their companies as a family: defendants,” Koegle said.
Of all the issues facing California employers, three stand out, he said.
“The first is wage and hour compliance, when it comes to calculating overtime and meal and rest periods,” he said. “Employers need to make sure they’re paying their employees properly.”
The fact that an employee is on salary does not mean that they’re exempt from overtime rules, Koegle said. “The legislature wants everybody to qualify for overtime,” he said. Employers must take care to verify the status of each employee.
The second big issue is “staying in compliance with all the regulatory changes that have come into play this year, including OSHA and the new I-9 immigration form,” Koegle said. The new form must be submitted electronically, and fines for non-compliance have been increased dramatically.
“The third thing is staying up on your policies and procedures, making sure that someone is looking at your handbook and reviewing your policies on an annual basis to make sure that you’re ahead of the curve, not behind the curve.”
Koegle warned of ambiguously worded regulations that could trip up employers. For example, the California Fair Pay Act, designed to eliminate the gender wage gap, now requires equal pay for “substantially similar work,” without defining what that means.
Another new law with unclear implications requires employers to accommodate an employee who is associated with a disabled person. It grew out of a case involving a father caring for a son on dialysis. While its intentions were good, Koegle said, the law lacks clarity on employers’ rights and responsibilities.
Employers should take note of two legislative changes that took effect January 1, Poole and Koegle said. Assembly Bill 1676 prohibits employers from using employees’ prior salary history alone to justify pay disparity.
Senate Bill 1063 expands fair pay rules that previously applied only to gender to now include race and ethnicity. One catch is that it’s illegal to ask job applicants what their race or ethnicity is.
Employers are allowed to conduct a census of current employees to obtain that information. Salary discrepancies larger than 10 percent could raise questions.
The presenters warned of the implications, particularly on retailers and restaurants, if Assembly Bill 5, currently making its way through the Legislature, becomes law. The Opportunity to Work Act is modeled on a similar ordinance enacted by the City of San Jose that goes into effect next month.
It would require all employers with ten or more employees to offer extra hours to their current part-time workers before hiring new staff, and to document the offers and responses. Proponents say it would help more part-time workers make a living wage. Koegle said compliance would be a nightmare. “This bill would just kill retailers and restaurants,” he said.
Employers should keep an eye on three cases the California Supreme Court is considering. Alvarado v. Dart Container Corp. will clarify whether employers should follow state or federal law in calculating flat-rate bonuses into overtime pay. Koegle expects a decision as early as next month.
The state’s highest court is also looking at Troester v. Starbucks, which will determine if employees are entitled to pay for tasks they perform after clocking out. Troester, a Starbucks employee, wants to be paid for things like shutting down his store’s computer system, locking the doors and taking care of last-minute things other employees might have forgotten, according to court records.
The third case, Mendoza v. Nordstrom, will decide the question of whether a required day of rest is calculated on the basis of a standard workweek or on any rolling seven-day period.
The presentation concluded with a list of recommended best practices. Employers need to perform an annual audit of employment policies and procedures. Employee handbooks must be kept up to date to reflect changes in law.
Employers should maintain written job descriptions for every category of employment and conduct an annual written audit of every exempt employee’s classification, and if possible, buy employment practices liability insurance.