Minimum Wage, New Labor Laws, Pay

2017 LABOR LAW CHANGES

The legislature passed many new employment laws or tinkered with old ones.  Below are a three of the most significant changes.

MINIMUM WAGE INCREASE

 In California, the minimum wage will increase to $10.50 per hour on January 1, 2017 for employers who have more than 25 employees.  The people of San Diego passed a ballot proposition in June that increased the minimum wage to $10.50 per hour and will further increase it to $11.50 per hour on January 1, 2017.  Workers get the highest minimum wage rate among federal, state, or local minimum wage laws.

The Federal Minimum Wage will not change for now, but one aspect of it might.  On December 1, 2016, the minimum salary for exempt employees was scheduled to increase to $47,476.00 per year.  That is more than double the old federal minimum salary requirement and is higher than most state minimum salary requirements.  However, a judge in Texas recently ruled that the law would NOT go into effect on December 1.  It might go into effect later; however, the judge may permanently bar the change.  Either way, the judge’s ruling will probably get appealed.

The minimum salary in California will increase to $43,680.00 for exempt employees on January 1, but only for employees who work for employers who employ more than 25 employees.  Why does the state minimum salary distinguish between employers who employ more or less than 25 employees?

The answer is the way in which the minimum wage works in California.  The minimum salary in California is twice the state minimum wage times the number of hours a full- time worker, at 40 hours per week, works in a year.  In other words, the number of hours the state presumes a full-time worker to work in a year is 2080 hours.  Two Thousand Eighty hours times $21 per hour (twice the $10.50 state minimum wage for employers who employ 26 or more employees) equals $43,680.00.  As of January 1, that will be the minimum salary for exempt employees who work for an employer who employs at least 26 employees.  The state minimum wage for all other employees (those who work for an employer who employs fewer than 26 workers) is $10 per hour.  Thus, for employers who employ 25 or fewer employees, the minimum annual salary for exempt workers is $41,600.00 (2 x $10/hour x 2080 hours) or $800.00 per week.

The California minimum wage rate will increase every year through 2023.  The scheduled increases are below:

For employers who employ at least 26 employees:

  1. On January 1, 2017, the minimum wage will increase to $10.50 per hour.
  2. On January 1, 2018, the minimum wage will increase to $11 per hour.
  3. On January 1, 2019, the minimum wage will increase to $12 per hour.
  4. On January 1, 2020, the minimum wage will increase to $13 per hour.
  5. On January 1, 2021, the minimum wage will increase to $14 per hour.
  6. On January 1, 2022, the minimum wage will increase to $15 per hour.

For employers who employ 25 or fewer employees:

  1. On January 1, 2018, the minimum wage will increase to $10.50 per hour.
  2. On January 1, 2019, the minimum wage will increase to $11 per hour.
  3. On January 1, 2020, the minimum wage will increase to $12 per hour.
  4. On January 1, 2021, the minimum wage will increase to $13 per hour.
  5. On January 1, 2022, the minimum wage will increase to $14 per hour.
  6. On January 1, 2023, the minimum wage will increase to $15 per hour.

The minimum yearly salary for exempt employees will increase by twice the minimum wage times 2080 hours.  The governor has the ability to delay implementation of the above minimum wage schedules.

FAIR PAY ACT

In 2015, California amended Labor Code §1197.5 to prevent employers from retaliating against employees who make Fair Pay Act claims.  That law also made it easier for employees to prove unequal gender pay.  On January 1, 2017, the law will now allow employees to make Fair Pay Act claims based on differences in pay between employees of different races and ethnicities as well as gender.  In addition, past salary levels cannot justify lower pay.

CHOICE OF LAW AND FORUM SELECTION CLAUSES

California Labor Code §925 was passed this year and will go into effect on January 1, 2017.  It prevents employment contracts from forcing California workers to bring their claims outside of California when they live and work in California.  It also prevents employers from forcing employees to be governed by the law of another state.  Out of state employers who hire California workers to perform work in California will not be allowed to use handbook provisions or employment contract provisions to force California workers to bring claims out of state and under another state’s laws.  Often, the employment laws of another state favor the employer.  Of course, trying to litigate in a different state significantly burdens most California workers.  In contrast, Labor Code §925 will allow California employees to file claims in California under California law.

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Class Action, Minimum Wage

Managers Are Not Exempt Unless They Make $41,600!

Most employers know that California requires them to pay every employee at least $10 per hour.  Did you realize that an increase in minimum wage requires an increase in salary for exempt managers?  If not, listen up.

Exempt white collar employees must meet certain criteria to be considered exempt.  Probably the most important is the minimum salary level.  Exempt employees must make two times the minimum wage in a theoretical 40-hour work week.  Forty hours per week equals 2080 hours per year (52 weeks x 40 hours).  That means the minimum salary an exempt employee must make is $41,600 (2 x $10 x 2080 hours).  Thus, California requires all managers to make at least $41,600 to be an exempt employee.  Of course, that is also the minimum salary for all other white collar exemptions, unless a particular exemption has a different minimum wage requirement.  For instance, an exempt computer professional must be paid at least $41.85 per hour or at least an $87,185.14 salary per year.  Each year the computer professional wage rates increase according to the yearly percentage increase in the California Consumer Price Index.

I believe that the minimum salary level is the most important criteria to meet for exempt employees because it is the easiest criteria to challenge in a misclassification case.  If a manager is not paid the minimum salary, then that manager simply is not exempt.  If that manager later brings a lawsuit for unpaid overtime, then the employer will lose and will owe back wages, assuming the manager actually worked overtime hours.  Most of the other exemption criteria are not as clearly discernable.

Misclassification cases often create class action liability if enough managers or other exempt employees do not receive the minimum salary.  In both individual claims and class action claims, the prevailing employees are entitled to attorney’s fees.

Employers, I highly recommend that all the managers that you want to classify as exempt make at least $41,600 per year.  Employees, if you are exempt, make sure that you are making the minimum salary.  Local wage laws that have higher minimum wage requirements also increase minimum salaries for exempt employees.  Los Angeles, for instance, will have a minimum wage rate of $10.50 per hour starting on July 1, 2016.  The corresponding minimum salary will be $43,680 (2 x $10.50 x 2080 hours).

I am available to consult with anyone who has a question about the required minimum salary or other exempt employee requirements.  Call me at (858) 292-0792.

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Telecommuting, Work-at-home

Working from Home

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As a society, Americans are finding more opportunities to work from home.  In fact, the work-at-home trend has been growing steadily over the past two decades.  While this trend creates opportunities, it also creates problems for both employees and employers.

Have you seen emails claiming to offer work opportunities that provide thousands of dollars of monthly income in your spare time while working from home?  Many of those emails are scams.  Employees should watch out for offers that make unrealistic claims.  Those offers may simply be trying to get personal information to use in identity theft.  More likely, the email is simply a disguised sales pitch.  Regardless, neither are offers most job hunters welcome.

Some websites try to sift through the at-home work offers to present only the most reliable ones.  One of those websites is: http://www.flexjobs.com/.  Flexjobs makes a top one hundred list of companies who offer the best quality telecommuting jobs.  According to the list, some of the top telecommuting industries are: healthcare, sales, marketing, information technology, and education.

Working from home can test how we apply our employment law regulations.  For instance, can at-home workers be classified as independent contractors, or are they employees?  Generally, employers want to pay workers as independent contractors because employers need not pay for workers’ compensation insurance, withhold taxes, pay overtime, and adhere to break regulations, etc. for independent contractors.  The tests that determine whether a worker is an independent contractor or an employee are fairly complicated and fact intensive.  Please review our blog post to get a better idea of how those tests work: https://backstromandheinrichsblog.wordpress.com/2013/11/13/independent-contractor-or-employee/.

Essentially, an independent contractor controls the manner and method of completing a job.  On the other hand, an employer controls how, when, where, etc. an employee does the work.  For example, an attorney who has his or her own clients works as an independent contractor.  In that case, an attorney can elect to work from home and the client will have no say about that.  In addition, the client does not need to worry about whether the attorney is working overtime hours or is taking meal and rest periods.  In contrast, an hourly worker who works from home sorting through and organizing emails for several managers of a business is probably a non-exempt employee.  In that case, the employer will need to abide by applicable labor laws, such as: break times, minimum wage, overtime premium pay, wage withholding, etc.

Employers, who have work-at-home employees, lose some control over work product because no manager is on site to make sure that the work is getting done.  In those cases, a wise employer will have systems in place to monitor work efficiency.  In our example above, the employer might require the employee to read and organize 30 emails an hour.  Depending on the situation, many other methods of employee monitoring can apply.

Monitoring work schedules and work hours may also be a very important issue.  If an hourly employee works more than 8 hours in a day, the employer must pay overtime in California.  That same California employee will be entitled to at least two rest periods and a meal period during that shift.  If the employee works through those break times, the employer will be liable for additional penalties and wages.  One way of helping to ensure compliance with overtime, rest period, and meal period regulations is to have an online time clock.  Again, without a manager present, ensuring that an employee is actually working the hours that are tallied in the online program may be a challenge.

Working from home is not the norm, but it is becoming increasingly popular.  Commonly, we see good at-home work opportunities, but workers seeking those jobs must be careful of scams.  Likewise, employers need to carefully navigate the world of employment regulations after adding at home workers to its roles.  Employers need to decide whether those workers are independent contractors or employees.  If they are employees, then the employer must put into place systems and policies that will check work efficiency and monitor adherence to employment regulations.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 206
San Diego, CA 92111
(858) 292-0792
(858) 874-8850 (fax)

http://www.backstromandheinrichs.com

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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Minimum Wage

Employers, Don’t Mess with Minimum Wage!

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Why do some employers cut corners with employee wages, reimbursement of costs to employees, and, especially, minimum wage?  In a recent case, one employer appeared to do all three of those things and paid a big price on appeal.  (Vasquez v. Franklin Management Real Estate Fund, Inc., (2013) 222 Cal.App.4th 819.)

Mr. Vasquez worked as a maintenance technician for his employer Franklin.  Franklin required Vasquez to drive an average of thirty miles a day to pick up materials and go to various job locations during Vasquez’s work shift.  Vasquez claimed that Franklin refused to reimburse him for his mileage.  Vasquez only made $10 per hour.  After subtracting the mileage reimbursement from his daily gross pay, Vasquez said that he only made abot $7.94 per hour, less than minimum wage.  Vasquez said that under those circumstances, he had to quit.  In his lawsuit, Vasquez sued for the unreimbursed driving expenses and for wrongful discharge, among other things.

The Court found that Vasquez had alleged a supportable claim for wrongful constructive discharge because the unreimbursed expenses reduce his effective hourly rate below minimum wage.  The Court also said that a simple claim for unreimbursed expenses that did not cause an employee’s wages to dip below minimum wage would normally not provide a foundation for wrongful constructive discharge.  However, since Vasquez could claim that his employer did not pay him minimum wage, the fact that he quit was a wrongful constructive discharge in violation of fundamental public policy, namely, the failure to pay at least minimum wage.

Assuming Vasquez can prove he was not reimbursed for his driving expenses, he would be entitled to get them reimbursed in his lawsuit under Labor Code § 2802.  That code section requires employers to reimburse employees for out of pocket expenses that benefit the employer.  However, according to the Court, the failure to reimburse appears not to be a violation of a public policy that would allow for a wrongful constructive discharge.  Vasquez’s minimum wage claim provided an adequate public policy violation to allow him to quit and claim a wrongful discharge.

Employers should always reimburse employee expenses.  The law requires it.  However, the penalties can be much greater if a failure to reimburse an employee for out of pocket business expenses drives that employee’s wages below minimum wage.  The take home point: DON’T MESS WITH MINIMUM WAGE!

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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Minimum Wage, Uncategorized

E-Radio Interview about the Push to Increase Minimum Wage in California and the Nation

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On January 20, 2014, I gave an interview about the newly passed and newly proposed minimum wage laws in California and throughout the nation.  Please click this link to listen: http://www.successexpressmagazine.com/The-Year-of-the-Minimum-Wage.html.  The link also has the related article I posted with the radio show.  That same article is on this blog too.  Feel free to add comments about the article or the radio show.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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Minimum Wage

2014: “The Year of the Minimum Wage!”

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For the past several months, my blog, emails, Big Blend Magazine articles, radio interviews, Facebook posts, and other modes of communication I use to discuss legal issues have been filled with news about minimum wage.  Of all the hot Employment Law topics, I think minimum wage is the biggest topic now and will remain so throughout 2014.

The big news for Californians is that the state minimum wage will increase from $8 an hour to $9 an hour starting on July 1, 2014.  After that, it will increase another dollar to $10 per hour on January 1, 2016.

Most recently in the news, Los Angeles is poised to pass a minimum wage increase to $15.37 per hour for hotel workers who work in a business zone around the airport (LAX).  (http://www.huffingtonpost.com/2014/01/14/la-highest-minimum-wage-hotel_n_4590136.html)  In fact, the Los Angeles City Council wants to make that minimum wage the law for the entire city.  It argues that the present minimum wage does not provide enough income for a wage earner to cover the expenses of a typical family.  Of course, Los Angeles businesses are lobbying against it saying that such a large minimum wage increase will lead to significant unemployment because the cost to do business will be too great.

Many in the Federal Government have been pushing a federal minimum wage increase too.  Democrats have proposed to increase the national minimum wage to $10.10 per hour.  It is now $7.25 per hour.  (http://www.huffingtonpost.com/2014/01/02/1010-minimum-wage_n_4532723.html) Because of our divided government, the new proposal has very little chance of passing.  If it were to pass, then the federal minimum wage would be greater than the minimum wage in all 50 states.  That means employers in every state would need to pay at least $10.10 an hour.  In contrast, some cities have minimum wages higher than $10.10 per hour.  For instance, San Francisco now has a minimum wage of $10.74 per hour.  Parts of Seattle have a minimum wage of $15.

Thirteen states have recently increased their minimum wage rates.  (http://www.huffingtonpost.com/2014/01/02/state-minimum-wage-raise_n_4530757.html?utm_hp_ref=minimum-wage) At the present time, twenty-one states and Washington D.C. have minimum wage rates that are greater than the federal minimum wage, which is now $7.25 per hour.  The other 29 states have wage rates that either mirror or are less than the federal minimum wage.  Employers in those 29 states must pay at least $7.25 per hour.  The state with highest minimum wage is Washington at $9.32 per hour.

Employers must pay the highest minimum wage that applies to them.  So, employers in San Francisco must pay the $11.74 per hour rate mandated by the city.  If the employer does business just outside of San Francisco, then it must pay the present California minimum wage of $8 per hour.  If the employer moves its business to Wyoming, which has a minimum wage of $5.15 per hour, then it must pay its employees the federal minimum of $7.25 per hour.

Some minimum wage laws allow for certain types of businesses to either be exempt from the minimum wage rate or provide for a lower rate than the standard minimum hourly rate.  Typically, high city rates have exemptions and limitations built into them.

If you want more news about the national push to increase the minimum wage, keep an eye out for articles I post on Facebook (https://www.facebook.com/BackstromandHeinrichs) and for future blog posts here.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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Uncategorized

E-RADIO INTERVIEW ABOUT NEW 2014 EMPLOYMENT LAWS

On December 4, 2013, I gave an interview about the new employment laws of 2014.  Please click this link to listen:  http://www.successexpressmagazine.com/California-Labor-Law.html.

You can also read the accompany article with the bullet points concerning the laws I discussed.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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