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AB 673 Will Permit Employee to Keep All Penalties for Late Paid Wages

Assembly Bill No. 673 which amends Section 210 of the Labor Code which permits employees to recover penalties previously available by the California Labor Commissioner.   Currently 75% of the penalty goes to the State.  This change permits the employee to recover the penalties under a civil lawsuit.

AB 673 will afford an employee the choice to either recover statutory penalties under Section 210, or enforce civil penalties under PAGA – Private Attorney General Act, but not both, for the same violation.

Employees will be able to keep all penalties, in the amount of $100 for the first violation and $200 for each subsequent violation, along with 25 % of the amount unlawfully withheld during their employment.

Don’t be confused that this new law that took effect January 1, 2020 is a Job Killer.  It reinforces the importance of due process when an employer terminates the relationship with their employee.  Please read the entire structure and amounts an employer will be fined in order to make the appropriate changes when dealing with personnel issues.

 

AB 9 – SHARE Stop Harassment and Reporting Extension

Why so we need another law about Sexual Harassment?

 

Existing law prohibits any form of harassment based on a protected category, such as race, gender, sexual orientation, age, religion, disability and other categories protected under California law.  Currently, the law requires a person claiming to be aggrieved by alleged workplace harassment to file a verified complaint with the Department of Fair Employment and Housing (DFEH) within one year from the date of occurrence.  AB 9 extends that deadline to 3 years.

The increase in allotted time The AB 9 extension was purportedly designed to protect #MeToo litigants, who may process incidents of sexual harassment or assault more slowly than other forms of discrimination.

Extending the statute of limitations means that a lawsuit could be filed four years after the comment, conduct, or action an employee (or former employee) alleges was harassing or discriminatory. Given the overburdened state of California’s courts—such litigation already takes up to five years to get to trial—now employers face a gap of up to nine years between an employee’s alleged harassment or discrimination and trial.

This change will put employers in a difficult position. The reason that limitations periods for the filing of discrimination complaints were relatively short was to put employers on notice so they could preserve evidence. Now, employers will find themselves having to piece together documents, evidence, and witness statements long after key witnesses have left, memories have faded, and helpful documents (such as emails) are long gone. This could have a devastating effect on employers’ ability to defend the claims against them.

3 Reasons Why You Should Attend More Networking Events

What an amazing article from Forbes which everyone should read if they wonder what the value of Networking can have on their business.  In fact, one study states that networking is vital to the success of 78% of startups.

Our business has grown expeditiously by joining BNI San Diego and the San Diego County Hispanic Chamber of Commerce.  They both have some amazing Social Events that don’t require membership.  However, once you see the value each one brings you will highly consider joining.

 

    1.  Gives you a chance to refine your message. Networking events are a great place to meet a lot of like-minded people at one time, so take advantage of that. If you’re new to the networking game, these events are a great place to hone in on your company’s mission statement and really help you definitively determine what you stand for.On average, you have about 30 seconds to convey who you are, what you do, and what sets you apart. Start with one person at a time, and by the end of the event, you’ll find your message polished and ready for any listening ear.
    2. The connections you make. Even if you don’t get a call or email right away, the amount of first-hand connections you make at networking events is incredibly valuable. You should have a stack of business cards by the end of each event. When you reach out to each new contact, they’ll be able to put your face to your name, and you’re much more likely to get a response.In fact, 85% of professionals say they develop a more meaning relationship after meeting someone in-person. Remember to act quickly, and send an email or LinkedIn request within the first 24-48 hours while your interaction is fresh in someone’s mind. Brownie points if you think to ask someone interesting to coffee—this deepens the connection, and your network.
    3. It forces you to get out there. We tend to be our own worst critics, and in business, that means being your own worst enemy. If you need to build your confidence and shut out the negative voices doubting your new business, a networking event is the perfect place to start. You’ll see tons of new faces, hear a plethora of business ideas, and come away with at least a handful of new contacts, connections, and support. Conquer your fears and put yourself in the driver’s seat! Practice your elevator pitch, which I write about often, and give yourself permission to give the event your full effort and presence.

Does AB 5 affect me hiring Independent Contractors in 2020?

On September 18th, 2019 Assembly Bill 5 (AB 5) into law.  A result of the California Supreme Court’s decision relating to the Dynamex case.  Thus the “ABC test” for determining if a worker may be classified as an independent contractor, instead of an employee.  The historical concept or practices relating to how Employers paid certain works will No Longer Apply.  This will also apply to the requirements of the California Labor Code, the California Unemployment Insurance Code, and, effective on July 1, 2020, the California Workers Compensation Code.  The explanation that I was unaware will not justify possible penalties and fines so please inform yourself by seeking counsel.

Deciding whether a worker is an independent contractor or an employee has never been up to the worker or the business; rather, there has always been a legal test for classifying workers as independent contractors.  Previously, the form of the test depended on the type of claim or worker right at issue like unpaid wages, breaks, unemployment insurance benefits, workers’ compensation insurance benefits, etc.

What is the ABC Test

Under the ABC test, a worker is presumed to be an employee unless the company proves that the worker:

    • (A) Is free from the control and direction of the company in performing work, both practically and in the contractual agreement between the parties; and
    • (B) Performs work that is outside the usual course of the company’s business; and
    • (C) Is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the company.

More simply, to satisfy the ABC test and legally classify a worker as an independent contractor, the company must prove that the worker is free from the company’s control, performs work outside the company’s primary business, and is regularly engaged in the trade the worker is hired for, independent of work for the company.

The TEST introduced two new factors that were never before part of California’s independent contractor analysis.

  • Part (B) – which requires the worker “perform work that is outside the usual course of the hiring entity’s business” – is often the most difficult to satisfy and impacts nearly every industry.
  • Part (C) – which requires the worker to be “customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity” – eliminates most workers who perform side jobs (like those in the gig economy) that are relatively minor compared to their main day-to-day work.

The previous ABC test did not extend to other employer obligations established under the California Labor Code, such as reimbursement of business expenses and the potential recovery of Private Attorney General Act (PAGA) penalties by employees.

AB 5 changes all of this, and goes further.

What AB 5 Do?

Beginning on January 1, 2020, under AB 5, the ABC test will be the test used to determine whether a worker providing services in California is an “employee” for purposes of the California Wage Orders, the Labor Code, and the Unemployment Insurance Code.

This means that workers claiming mis-classification as an independent contractor can and will use the ABC test to make claims that they are employees and are entitled to make claims such as failure to reimburse necessary business expenses (Labor section 2802), failure to provide accurate and complete wage statements (Labor Code section 226), failure to pay unemployment insurance tax, and failure to provide workers compensation insurance.

However, AB 5 does not extend the ABC test to tort claims or claims under the California Government Code, which protects employees against harassment and discrimination.

AB 5 Enforcement

The California Attorney General and certain city attorneys will be empowered to pursue injunctions against businesses suspected of misclassifying workers. This, along with the ability to base PAGA representative action claims on Labor Code violations, will circumvent some employee arbitration and class action waiver agreements when PAGA claims are made.

AB 5 Exemptions

A host of occupations are carved out of the ABC test. For these occupations, the Borello multi-factor test applies when determining whether a worker must be classified as an employee. Subject to certain licensing and other requirements, here is a list of the general exemptions to AB 5:

  • Doctors (physicians, surgeons, dentists, podiatrists, veterinarians, psychologists)
  • Professionals (lawyers, architects, engineers)
  • Professional services (marketing, human resources administrator, travel agents, graphic designers, grant writers, fine artist)
  • Financial services (accountants, securities broker-dealers, investment advisors)
  • Insurance brokers
  • Real estate agents
  • Direct sales (if compensation is based on actual sales and not wholesale purchases or referrals)
  • Builders and contractors
  • Freelance writers and photographers (if contributes no more than 35 submissions to an outlet in a year)
  • Hair stylists and barbers (if licensed and if can set own rates and schedule)
  • , electrologists, and manicurists (if licensed)
  • Tutors (that teach their own curriculum, and that are not public school tutors)
  • Commercial fishermen
  • AAA-affiliated tow truck drivers

All other occupations are covered under AB 5, so the ABC test applies. These include many occupations that often in the past were treated as independent contractors, such as:

  • Health care professionals (occupational therapists, speech therapists, optometrists, nurse practitioners, physician assistants, radiation therapists, licensed professional clinical counselors, marriage and family therapists, licensed clinical social workers, respiratory therapists, audiologists)
  • Rideshare, delivery service workers, and other gig economy workers
  • Truck drivers
  • Janitors & housekeepers
  • Health aides
  • Performers and other entertainment professionals
  • Land surveyors, landscape architects, and geologists
  • Campaign workers
  • Language interpreters
  • Exotic dancers
  • Rabbis and other clergy

Effective Dates and Retroactivity

The issue of AB 5’s retroactivity is not entirely clear. AB 5 states that “specified Labor Code provisions of the bill apply retroactively to existing claims and actions to the maximum extent permitted by law while other provisions apply to work performed on or after January 1, 2020.”

The ABC test applies retroactively “with regard to wage orders of the Industrial Welfare Commission and violations of the Labor Code relating to wage orders” as do all exceptions “to the maximum extent permitted by law.” This may add further confusion, since it is an open question whether the Dynamex decision is retroactive.

Beginning on January 1, 2020, the ABC test will apply for purposes of the Unemployment Insurance Code and all other provisions of the Labor Code not “relating to the wage orders.

What’s On the Horizon

Though the battle over AB 5 is done (for now), the war over how to determine who is an employee and who is an independent contractor is far from settled.

State legislatures and industry and worker advocacy groups are expected to remain active in pushing legislation aimed at either expanding or limiting worker rights across the nation. In California, lobbyists are preparing for a battle during the 2020 legislative session, including a “clean up” bill to address other industries that sought but did not get exemptions under AB 5.

Some major gig economy companies have already announced that they have pledged substantial resources to a potential campaign for a California ballot initiative to exempt the industry from AB 5. Worker advocacy groups are gearing up in other states as well, including New York, Washington, and Oregon for similar legislative efforts.

Gig economy companies in California are already feeling the impact of AB 5, even though it is not effective until 2020. Attorneys representing workers recently filed a wage-hour class action citing the ABC test as the legal standard for determining whether drivers for the company should be classified as employees. The San Diego City Attorney filed a lawsuit seeking to force reclassification of drivers as employees under the ABC test.

Practical AB 5 Advice for Employers

All companies should now step back and examine their California independent contractor relationships through the lens of the new framework that AB 5 has created. Companies must satisfy the Dynamex ABC test (or the Borello multi-factor test if for an exempted occupation) or face increased risk of defending against additional claims from individual workers claiming to be employees, class action attorneys representing workers on a class or collective basis, and city and state authorities.

Companies should monitor how narrowly California courts interpret the ABC test – especially what the “usual course of the hiring entity’s business” means – in assessing the legal risk. This will likely prove the most problematic of the ABC test factors for most businesses that regularly engage independent contractors.

Deciding what to do is only the first step – how to transition workers from independent contractors to employees is just as important to avoid triggering claims for past misclassification.

Where a business decides not to reclassify, revising the company’s existing independent contractor agreements and policies to more clearly satisfy the ABC test is key. Deciding to replace independent contractors with third-party staffing agencies or labor contractors will require selection of agencies or contractors that comply with the law, uphold the obligations of their agreements, and indemnify their clients for violations of the law, since companies are often found jointly liable for wage and hour violations of their contractors and agencies who provide such workers to their businesses.

The time to evaluate and plan for January 1, 2020 is now. And the wisest way to do that is to engage legal counsel to assist with and protect the analysis and communications about it with attorney-client privilege to avoid creating evidence that may be used in a claim down the line.

Time to Upgrade your POS

Business requirements have changed.  The more information that can be collected the more financially profitable the business can become.  Labor laws are becoming stricter with stiffer penalties.  Better record keeping is crucial in avoiding legal compliance issues.  This is a huge hurdle when dealing with wage and labor grievances from employees.  Labor restrictions have become more favorable toward employees.  The employer now has to be more responsible to document any time card transactions that wasn’t controlled by the employees.  Adjustments to the start and end shifts require proper documentation. 

Those employers that use paper forms to track these adjustments increase labor costs and increase error rates.  Eventually the law would side with the employee.  Tracking “Sick Leave”  or getting an employee to approve his “Time Card” can be a daunting task.  Purchasing a time clock or using an “App” will still require you to do manual calculations, incur a monthly service or add additional hours to do manual calculations.  

Handling this paperwork and processing manual shift changes can be time consuming, eating up significant parts of managers’ already busy days.  Time clock functionality integrated into POS systems does not necessarily offer the best security especially when a fellow employee can clock another one using their PIN code.  A biometic clock can actually create a “Cost Savings”.  Trying to piece together the clock-ins and clock-outs of every employee for a pay period can be extremely painful and costly, as employers will generally want to err in the favor of the employee. 

There are so many solutions out there that offer differing levels of advantages. The key to finding the one that fits your business is one that configures and adapts to the way you run your business.  Though this may sound like additional costs there are some that have human support to tailor it to your needs.  Using a Payroll Provider that offers “Cost and Time Efficient” services is the best option.  

New Laws focus on Harassment and Discrimination protections for 2019

California recently enacted AB 2770 which provide provisions that protect Employers and Accusers/Victims of Sexual Harassment from liability by an alleged harasser after a complaint has been filed.

AB 2770 protects employees who report sexual harassment, based on credible evidence and without malice.  This ensures they won’t be liable for injury to the alleged harasser’s reputation.  As such it now protects the communications between the employer and victims/witnesses.  An employer can now reveal on a job reference without fear from a defamation lawsuit.

Take time to investigate what you would do in these cases.  Knowing what to do can save you time and money.

If you have questions reach out to SimpleTime for a “Free” consultation on what steps to take.  Learn to respond quickly and appropriately to protect your employees and company.

Time & Attendance working for you!

SimpleTime is Full Service Payroll Company so you can focus on your business growth. We adapt to any business because we know that not all systems work for every business. We offer a flat fee with no hidden charges for extra reports or information.  There are no Rental Fees for the use of our Time Clocks. Time & Attendance is more that collecting employee hours.  Let us show you how it can become an important part of your businesses success. 

 

Is your Employee Pay Stub in Compliance?

California Employers should know that failing to promptly and accurately pay employees for all hours worked can lead to expensive class-action lawsuits. It's essential to also note that employers that don't list certain information on pay statements can find themselves in hot water.  One of the most recent ones decided and not mainly known is required Sick Leave balances and usage must be listed on the Pay Stub.
Complying with California's wage statement provisions is a lot more complicated than people probably think. At first glance, the rules may seem small and some may consider overlooking them, but there are legitimate policy reasons behind a lot of them.  Justifying ignoring them can create greater issues for any size business.  Thinking that the explanation of “I was not aware” will resolve any litigation will not be acceptable.
The purpose is to provide transparency to workers regarding wage calculations and to give employees enough information to verify that they are being properly paid, according to the state Division of Labor Standards Enforcement.
Regardless of the Payroll Service provider, Operating System or Accountant/Bookkeeper the Employer will be held for 100% compliance.  Failure to comply can lead to significant per-pay-period penalties. Even the slightest mistake or omission could create thousands of dollars in liability.
That's why employers may want to consider personally verifying using this information or consulting an attorney for review.

What Must Be Listed?

California Labor Code Section 226(a) outlines nine specific items that must be included on a pay statement:

  • Gross wages earned.
  • The total hours worked by the employee (unless the employee is exempt from overtime).
  • The number of piece-rate units earned, if applicable.
  • All deductions made from wages.
  • Net wages earned.
  • The pay period beginning and end dates.
  • The employee's name and only the last four digits of his or her Social Security number (or an employee identification number other than a Social Security number).
  • The name and address of the legal entity that is the employer.
  • All applicable hourly rates in effect during the pay period and the corresponding number of hours the employee worked at each hourly rate.

There is also an element that employers will find in the Healthy Workplace Healthy Family Act.  The act entitles most California employees to accrue one hour of paid sick leave for every 30 hours worked, but employers can limit use to 24 hours or three days of accrued leave each year. Employers must show on a pay stub—or a document issued the same day as a paycheck—how many days of sick leave an employee has available.

Wage and Sick Leave Orders

What you need to know about California's Wage and Sick Leave Orders?

Did you know there are (7) expansive Wage and/or Sick Leave Orders in Southern California?  There are 12 in Northern California.  Each one unique from the other and some can take precedent over the California Sick Leave Order of 3 days/24 hours.  There are even Industry specific Wage Orders for Hotels in Los Angeles and Santa Monica.

There are two choices for businesses.

  • An Accrual method that would require you to Roll Over those hours into the next year with a possible cap of 80+ hours
  • A Fixed amount issued each year

Here are some of the Requirements:

  • Employer cannot require a Doctors Note
  • Restrictions on requiring advance notice of an absence
  • You may need to calculate different amounts if your employees part-time in one of the cities that have a different Sick Leave Order
  • Employer must have a method of tracking and providing info to employee (s)
  • Some cities require Posters and Documentation to be completed for all employees
  • Employer can mandate specific amounts be used  for each occurrence but must be in a Policy or Employee Handbook
  • Amounts must be tracked and listed on either their Payroll Check or other document provided on Pay Day
  • Sick Leave is not Paid Out upon Termination or Separation
  • Some PTO - Personal Time Off Policies can be used or modified to comply with the Orders
  • Paid sick leave can be used for the illness or preventative care of an employee or an employee’s family member (defined as a parent, child, spouse, registered domestic partner, grandparent, grandchild, or sibling)
  • Paid sick leave can also be used for employees who are victims of domestic violence, sexual assault, or stalking, as described in California Labor Code Sections 230 and 230.1.
  • There are Penalties for non-compliance

If you have more specific questions send us an email at (ricardo,villa@simpletime.biz) .

SimpleTime's Mission is helping businesses grow.  

The easiest method to ensure you are in compliance is have an Employee Handbook in place.

Ask us about our $150 Employee Handbook offer which expires November 15th.

California Labor Laws on Rest and Meal Breaks

Meal and Rest Break compliance continues to create a great deal of anxiety for California Employers. Understanding the requirements is extremely important but ensuring they are followed can be quite another matter.  ​​​

To comply with these rules, employers must do ​everything possible to communicate the legal requirements of employee break laws to non-exempt workers and provide them opportunities to take meal and rest breaks.  The time for manual record keeping will push companies to find easier ways to record, gather, verify and ensure they are in compliance and avoid future problems.  

Rest Break (10 minutes paid):
Rest Breaks must be offered at the rate of 10 minutes for every four (4) hours worked.  Employers must allow employees (non-exempt) to have an uninterrupted rest period whose total daily work time is at least 3.5 hours.  The best time to provide the Rest Period is around the 2nd and 3rd hour.

If either rest break is not given or is interrupted, you owe the employee one hour of pay, which you must include it in the next paycheck.

Meal  Period (30 minutes - Unpaid):
The first meal period must be provided no later than the end of the employee's fifth (5th) hour of work.  If the employee is scheduled or will not work past the sixth (6th) hour you could use a Waiver which would permit the employee to skip their Meal Period only if they agree to it in writing.  This waiver must allow the employee to rescind his choice at any time.  This cannot be changed from one day to the other.  Documentation is crucial for compliance.

The employee must be:

  • Relieved from all duties or assignments
  • Relinquished control of their duties
  • Permits them a reasonable opportunity to take an uninterrupted, 30 minute break
  • Does not impede or discourage them from doing so

Consult with a Human Resources expert like SimpleTime or your Legal Counsel regarding On-Duty Meal Breaks.

For each workday that you fail to provide an employee a meal period, as required, you will owe the employee one additional hour of pay at the employee's regular rate.

A simple solution is implementing a Time & Attendance service which will create a Time and Cost savings for any business.  Reach out to us to create a savings for your company.

Hope you have found this information helpful.  If you know someone who could use it please forward them this email.  We will be sending helpful emails to help businesses avoid Labor Law issues.  If you have a specific issue please contact us.