Employers Should Note Key Developments Under California Law

Overtime, sick leave and local laws are changing

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Companies with employees in California should learn the new state law developments and trends to avoid “getting burned by the California sun,” said Jonathan Siegel, an attorney with Jackson Lewis in Newport Beach, Calif.

This is a difficult year for human resources professionals in California because there are so many changes, including several that take effect in July, Siegel said June 20 during a concurrent session at the Society for Human Resource Management 2016 Annual Conference & Exposition.

The new developments cover overtime pay, pregnancy leave, piece-rate pay, sick leave and more.

Importantly, employers should know how the new federal overtime rules and state and local paid-sick-leave laws will affect their workforce.

“Make sure you really dig into these issues and review them with your counsel so that you have a good idea of what’s going on” in the state, he said.​

Federal Overtime Rules Apply

Changes to the overtime provisions of the Fair Labor Standards Act (FLSA) are on everyone’s radar, Siegel said. For the first time in over 20 years, the threshold salary for exempt employees is higher under the FLSA than under California law.

Effective Dec. 1, 2016, the minimum salary for exemption under the FLSA will be $47,476, and the threshold salary for highly compensated employees will be $134,004.

However, compliance isn’t as simple as turning to the new federal regulations.

California doesn’t adopt the FLSA’s exemption for highly compensated employees, he said, so employers in the state shouldn’t rely on it.

Furthermore, while the FLSA allows employers to use certain incentive compensation to meet the minimum salary threshold, California law does not.

Employers should note that the state’s salary threshold is expected to exceed the FLSA’s once again in 2019.

Gov. Jerry Brown recently signed a law that will gradually increase the state’s minimum salary for the overtime exemption. It is projected to reach $49,920 on Jan. 1, 2019, for many employers.

One thing that’s “flying below the radar is the proliferation of city minimum-wage laws,” Siegel said.

Some cities, including Los Angeles, San Francisco and Santa Monica, have new minimum-wage laws that will take effect July 1.

Employers need to take a look at the city laws and figure out what the new minimum wage is in those locations and how it will apply to their employees.

Doctors’ Notes, Kin Care and More

California employers must have sick-leave policies that are compliant with the state-mandated paid-sick-leave rules under the Healthy Workplaces, Healthy Families Act of 2014 (HWHFA).

“One of the key frustrations about the law is that it doesn’t authorize employers to ask for a doctor’s note” for the 24 hours (or three days) of sick leave provided under the law, Siegel said. “That was a huge change for many employers because they had policies stating that an absence of three or more days requires a doctor’s note.”

Siegel said that if employers offer sick leave beyond what is mandated by the state, their policies should reflect changes to California’s kin care law that took effective Jan. 1.

The kin care law formerly stated that if an employer offers sick leave, an employee may use half the time allotted to care for a child, parent, spouse, domestic partner or child of a domestic partner who is ill.

Employer policies should now state that “employees are allowed to use half of the annual accrual for all the same reasons described” in the HWHFA.

Employers should also keep in mind that there are now many city and local sick-leave laws with various other requirements.

Budget for Changes​

HR professionals should “take this information back to your organization and make sure it’s included in your budget projections so that payroll and finance are catching these changes,” Siegel suggested.

“Why did California make all these changes?” he asked. “Because it’s California.”

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