On January 1, 2016, new labor laws in California are set to become effective. Some of them directly impact the employer-employee relationship, and need employers to revise their processes to be compliant with them.
Let us take a look at all these laws and their effects, and also see what the employers will need to prepare for:
On January 1, 2016, California’s minimum wage will increase to $10 per hour from the existing minimum wage of $9 per hour.
The State of California mandates equal pay, placing the burden of proof on the employer while making it legal for colleagues ask each other about their compensation details. Disparities citing education, training, merit, productivity or experience may be considered to be justified. Employers need to allow any discussion of prevailing wage structures even with a three year window for retrospection. They may have to review their pay policies and practices to ensure that pay is related to job role, among other things.
We have talked about AB2074 which protects the right of employees to collect unpaid wages and liquidated damages from unscrupulous employers. The protections afforded by AB2074 are further extended by this law named ‘A Fair Day’s pay Act’ which protects employees from employers who change their names or hide their assets to make it difficult for employees to collect judgments. This bill allows the Labor Commissioner to hold the agent of the employer who acts on his behalf responsible in their personal capacity, for the violations. The commissioner may enforce a judgment against such a person’s property and accounts and may also seek payment from the successor employer, based on vaguely defined criteria to determine such liability of the business for the unpaid wages, as explained below:
Like most laws, this law will not bother any bona fide employer but will curb anyone who wishes to make a fast buck by running a fly-by-night operation and vanishing without a trace.
All of us are aware of why protections are necessary for whistleblowers; but California has advanced a step further to create protections for the relatives of a whistleblower employee who made a protected complaint too. Employers will need to exercise more caution when employing people related to each other and will need to keep them separate at the workplace and also document any adverse action against any of them to avoid further complications.
Under the Labor Code, employers are required to provide specific information on their pay statements provided to its employees; with their wages, such as their gross and net wages, total hours worked and deductions. Till now, PAGA did not provide a cure period with respect to an employer’s failure to include any of this required information on the pay statements of its employees.
The amendment to the Act provides an employer with a limited right to cure a violation of failing to provide its employees with a wage statement containing the inclusive dates of the pay period and the name and address of the legal entity, that is the employer. A violation is considered to be cured once the employer provides a fully compliant, itemized wage statement to each aggrieved employee. Employers will need to be alert to correct any errors, as soon as they are brought to their attention.
Let us also discuss the provisions of California’s sick leave law which came into effect beginning July 1, 2015. Companies will need to have a written policy describing their plans to provide the mandatory benefit. If they plan to set any additional terms such as caps on maximum use, the employer must inform employees of those additional terms. In the absence of a written policy setting out clear terms, the employer will be required to use the statutory mandated accrual rate of one hour of sick pay for every 30 hours worked, enabling a full-time employee to accrue more than 69 hours of paid sick leave per year and be able to carry it over to the next year, and so on.
There is no doubt that California’s employment laws are once again setting the trend for the rest of the country in the protections they provide to workers. Staffing agencies which serve as the employers of record will also have to prepare for their effects and ensure that their contractual agreements with their clients incorporate the changed processes and put in safeguards to meet their effects.
What do you think of these new labor laws in California? Will they burden employers or protect employees more?
Mail (will not be published) (required)
8 − four =
Thanks for Subscribing to DCR Blog.