California Employers Focus on Planning, Policies and Practices in 2014
In 2014, California employers should focus on planning, policies and practices and consider the following legal issues:
Effective July 1, 2014, the California statewide minimum wage will increase to $9.00/hour, with a further increase to $10.00/hour on January 1, 2016. As of July 1, all California employers will need to pay a fixed salary of not less than $37,440/year to exempt employees. Effective immediately, employers with workers in San Francisco and San Jose will continue to pay higher local minimum wages of $10.74/hour in San Francisco and $10.15/hour in San Jose.
In the wake of AB 2103, which took effect January 1, 2013 (eliminating fixed salary arrangements as a substitute for overtime) and two 2013 court decisions, Gonzalez v. Downtown LA Motorsand Quezada v. Con-Way Freight(requiring at least minimum hourly wages be paid for each hour of “non productive” time worked by piece-rate workers), employers who are compensating non-exempt workers by any means other than a strict payment of an hourly-rate for time worked must re-evaluate their pay plans.
After the U.S. Supreme Court decision in U.S. v. Windsor which invalidates portions of DOMA, California employers should review leave of absence and benefit policies to ensure that spouses in same-sex marriages are treated equally. Additionally, 2013 W-2 statements of earnings should correctly reflect that there is no more imputed income on the value of employee-paid benefits for employees’ same sex spouses, and adjust for over-withheld amounts in 2013.
Effective January 1, 2014, the Domestic Worker Bill of Rights regulates the hours of work and provides minimum wage and overtime compensation to domestic workers in private households, including childcare providers, caregivers for the disabled, sick or elderly, housekeepers, maids and house cleaners. Federal regulations will take effect January 1, 2015 and extend FLSA minimum wage and overtime protection to direct care workers employed by home health agencies and live-in domestic workers.
Although the “employer mandate” of the Affordable Care Act that all businesses with over 50 FTE employees provide health insurance for their full-time employees, or pay a monthly penalty, has been delayed until 2015, employers should be planning and taking action to meet this requirement. California employers should be aware that although the ACA requires employers to provide health care coverage for eligible employees, within 90 days of hire, SBX1-2 permits a waiting period of only 60 days for new hires.
“Military and Veteran Status” was added as a protected category under the California Fair Employment and Housing Act, which bars discrimination, harassment and retaliation against employees for membership or perceived membership in a protected category. Employers may, however, inquire about military or veteran status for purposes of giving preferment to veterans as permitted by law.
Various statutes and regulations expand or establish leave of absence rights for reserve peace officers, emergency personnel (such as volunteer firefighters), victims of serious crimes, and victims of stalking, as well as use of FMLA leave by an employee who needs to care for an adult child who is physically or mentally disabled.
In Sanchez v. Swissport, Inc., a California appellate court made clear that an employee who has exhausted her four months of leave provided under pregnancy disability leave laws may still be entitled to additional leave as a reasonable accommodation under the FEHA.
Effective August 13, 2013, the definition of sexual harassment in California was expanded to make clear that an employee can make a claim of a hostile and abusive work environment even if there is no proof that the employee was a target of specific lust or sexual desire – the focus is on the conduct and its impact on the complaining person, and not the intent of the harasser.
An employee who experiences discriminatory harassment (including sexual harassment) can sue both the employer and alleged harasser under the “hate crime” statute without having to exhaust administrative remedies.
“Mixed-motive” cases decided by the U.S. and California Supreme Courts in 2013 emphasize the need for employers to document legitimate non-discriminatory/non-retaliatory reasons for adverse employment decisions such as demotion or termination.