January 2007 Newsletter
The Top 10 Things Employers Do to Get Sued
5. Let Your Employees Work Four 10-Hour Days… or Whatever Schedule They Want as Long as They Agree
Wage and hour laws are stronger in California than the Federal requirements. These laws need to be kept in mind as they dictate the number of hours an employee may work in a single work day, and in a single workweek, without overtime pay. Even when an employee agrees in writing, they are generally entitled to file an unpaid wage claim against their employer and receive back overtime with interest.
Let’s look at the basic overtime rules for non-exempt employees in California. When California Law is stronger it must be followed above the Federal requirement when the work is performed in California.
Daily Overtime – Employers must pay time and one-half the employee’s regular hourly rate of pay for all hours worked beyond eight in a single workday & the first eight hours worked on the seventh consecutive day worked in a single workweek. Employers must pay double (“double-time”) the employee’s regular hourly rate of pay for all hours worked beyond 12 in a single workday & every hour worked beyond eight on the seventh consecutive day worked in a single workweek. ** It is a misdemeanor to require a minor to work more than eight hours in any work day regardless of overtime paid & minors should never be allowed to work any hours or days other than those expressed on their “work permit”.
Weekly Overtime – (California has parity with Federal Law) Employers must pay time and one-half the employee’s regular hourly rate for all hours worked in excess of forty “straight time” hours in a single workweek.
Keep in mind that the language is workweek and not pay-period. Clearly defined workweeks in Employee Handbooks and Timesheets are very beneficial and can eliminate any confusion over which day is the 7th day.
There are 2 ways that non-exempt California employees can work more than eight hours in a day without mandatory overtime pay… Make-Up Time & Alternative Workweek Agreements.
Make-up time – This policy can allow a non-exempt employee to request time off for personal reasons and make-up the time on another pre-designated day in the same workweek without the obligation of overtime pay for the hours worked when the time is made up. California has very strict rules about instituting such policies and they must be strictly adhered to. These rules include: a formal written policy that outlines all rules, no solicitation or encouragement from the employer to the employee to request make-up time; employees must submit a dated and signed written request before the time off is taken that designates on which day the time will be made up; the time must be made up within the same workweek on the pre-designated day, and the employee may not work in excess of 11 hours on the day that they have pre-designated to make up the time, and no more than 40 hours in the workweek in which the make-up time is completed.
Again, the language is “workweek” and not “pay-period”. Employers are not required to offer employees the option to use make-up time.
Alternative Work Week Agreements – These agreements permit all employees in a work unit to put in more than eight hours in a day without overtime pay. It does not preclude employees in the agreement to work more than 40 hours in a week without overtime pay as this is a Federal law. The most common alternative workweek schedule is known as a 4/10, which is a four day workweek comprised of 10 hour days. The 9/80 workweek schedule, in which the employee has a two-week schedule of 9 hour days with every other Friday off, has become fairly popular as well. There are complex regulations associated with instituting an alternative work-week agreement such as employee meetings, secret-ballot voting, formal agreements with each individual, and a filing with the state Labor Commissioner. Employees on an alternative workweek schedule can still earn overtime as they are owed time and one-half for all work performed in a workday beyond the schedule established by the alternative workweek agreement. Remember that alternative workweeks apply only to non-exempt employees because exempt employees do not earn overtime and therefore do not need alternative workweeks. Flexible Scheduling may be a better alternative for properly classified exempt employees.
The ProSERVICE Human Resource Department can review your individual situation, help guide you, and create the documents and language that you need, including Timesheets, Handbooks, policies, make-up time requests, alternative workweek agreements, and determinations regarding exempt and non-exempt status including comprehensive job descriptions.
6. Terminate Any Employee That Files a Workers’ Compensation Claim… Of Course, After Waiting for the Employee to Return to Work from Any Leave So That it Does Not Look Bad.This type of action is a recipe for a discrimination or retaliation claim that can be very costly for an employer.
Under California’s Labor Code Section 132(a), employers are prohibited from terminating, threatening, or discriminating against an employee because he has filed a worker’s compensation claim… This statute also protects employees from any employer conduct deemed detrimental to the employee unless it “is necessitated by the realities of doing business”, and it includes in it’s protection not just employees who have already received an award as a result of a claim, but also those employees who have filed or even just intend to file a claim.
If an actual violation of this law is found, the law increases the employee’s benefits by one-half, up to $10,000.00, it requires the payment of costs and expenses up to $250, and it makes the employee entitled to reinstatement and reimbursement for lost wages and expenses.
Employers are not automatically protected from lawsuits once an employee has returned to work for some while after a workers’ compensation injury either. The burden of proof falls on the employer to prove that the negative employment action was indeed legitimate and not retaliatory should he face an employee’s claim that a termination (or other action that could be interpreted as discriminatory) was a result of filing a workers’ compensation claim.
Other Items for this Newsletter:
REMINDER ABOUT THE INCREASE IN MINIMUM WAGE
The ProSERVICE Payroll Department is committed to your compliance. As we announced last month, minimum wage in California has increased to $7.50 an hour on January 1st, 2007. Any employee whose hourly rate was the State’s prior minimum wage at the time of this increase was automatically changed to the new hourly wage rate effective January 1, 2007. There is no need to submit a Status Change form as this increase is not a raise based on merit, service, performance, etc.
Many of our clients experienced the increase in minimum wage in the middle of their pay-period, resulting in two hourly pay rates for the same employee in one pay-period. Please be assured that we increased the hourly rate of affected employees for only those hours worked on or after January 1, 2007, and that all hours worked prior were paid at the prior 2006 rate.
Additionally, as the minimum wage requirement for exempt employees in California is a monthly salary of at least twice the hourly minimum wage. This takes the previous minimum monthly salary requirement for exempt employees from $2,340.00 per month to $2,600.00 per month ($31,200.00 per year). Please remember that salary alone does not determine exempt status and that the ProSERVICE Human Resources Department can assist you in making accurate exempt and non-exempt classifications.
2007 EMPLOYER POSTERS
ProSERVICE has received our shipment of 2007 Employer Posters from our vendor. We have mailed English and Spanish versions (as applicable) to all of our clients. This one poster contains all of California’s required employment notices. Please contact the ProSERVICE Human Resources Department if you believe that your workplace requires other specialized notices due to the industrial nature of your business, or for assistance in completing the fields of required information on your posters.
401(k) NEWS
On October 18, 2006, the Internal Revenue Service released the ‘Information Release 2006-162’, announcing cost-of-living adjustments to certain dollar limits for retirement plans, generally effective January 1, 2007.
There were various changes in limits to a variety of plan types. The most commonly asked about increase is the increase in the limitation on cumulative elective payroll deferrals to a 401(K) from $15,000.00 annually to $15,500.00 annually. The special catch-up available for individuals at least 50 years old in 2006 remains unchanged at $5,000.00 in 2007, which is in addition to the $15,500.00 deferral allowance.
