2020 COVID/POST-COVID CALIFORNIA HUMAN RESOURCES

The challenges associated with COVID-19 have significantly complicated the ability for small and medium sized businesses to survive. Add on the looming minimum state wage of $15, mandatory paid sick leave (state and COVID related), and mandatory harassment training extended to include most employers including supervisors and non-supervisors…and businesses are forced to become creative to continue.

Here are some things that every California employer absolutely needs to know about human resources.

MINIMUM WAGE REQUIREMENTS (EXEMPT AND NON-EXEMPT EMPLOYEES)

When the California minimum wage reaches $15 per hour for all employers ($31,200 per year without overtime), not only does it increase the costs for hourly (non-exempt) employees, it also increases the minimum annual compensation for exempt (salaried; not entitled to overtime) employees classified under administrative, executive and professional exemptions. The minimum annual base will increase to $62,400.

·        Paying minimum only, exempt employees will cost (average) $68.6K-71.7K per year (taxes, benefits, sick leave, etc.). The exception being exempt employees under the computer professional classification which tends to hover in the $90K annual minimum.

·        Paying minimum only, non-exempt employees will cost (average/40 hours, no overtime) $34.3K-$35.8K per year (taxes, benefits, sick leave, etc.).

·        Absent local paid sick leave laws, employers must provide no less than 24 hours of paid sick leave per year to all employees working 30 or more days. Assuming no commissions, bonuses, etc. this means that each paid sick leave hour paid will be no less than $15 (non-exempt) and $30 (exempt).

BARE MINIMUM COMPLIANCE REQUIREMENTS

By in large, almost all California employers have multiple mandatory requirements when it comes to documentation, notices, posters, training, compensation, payroll, protected leaves of absence, paid sick leave, and workplace safety.

       I.           Those with non-exempt/hourly employees have additional legal requirements such as tracking time worked and meal periods, ensuring meal and rest periods according to law, overtime pay (over 8 hours in a workday, over 40 hours in a workweek, 7th day worked in workweek).

    II.           Those providing non-discretionary compensation (commissions, bonuses, etc.) are subject to regular rate of pay calculations for non-exempt employees (overtime, paid sick leave) and exempt employees (paid sick leave).

 III.           California expanded its mandatory harassment prevention training to include employers with 5 or more employees (as opposed to the former requirement of 50+) and non-supervisor training. The initial round requires these employers to have their supervisors complete a minimum 2-hour approved course and non-supervisors a minimum 1-hour approved course by January 1, 2021. This means additional costs, scheduling, and tracking to ensure everyone is trained.

 IV.           Employers with 50+ full-time or full-time equivalent employees are subject the Affordable Care Act. This means they must provide minimum essential health insurance to employees at a rate considered affordable (or meeting safe harbor rules). Full time employees are those working an average of 30+ hours weekly.

   V.           California has tightened up on its pay equity laws. Thus, California employers are required to have defined compensation plans for positions to ensure that employees working in the same or similar positions are paid using the same criteria. If an employee or applicant requests the range for their position, employers must provide it.

 VI.           Employers using pre-employment background checks must conduct those checks AFTER an offer is made to the employee. If an employer wishes to reject an employee based upon the results, there is a rigid process that must be followed before rejecting.

VII.           Applications for employment may not request information about an applicant’s criminal or earnings history. This also extends to the interviewing process in which related questions may not be asked by the interviewer.

VIII.           Employers are required to provide employees with specific documents and notices at various time throughout the employment relationship. This include onboarding, leaves of absence, workplace injuries, major changes in the employment (compensation, schedules, roles, employment, etc.), etc. Employers are also required to have current local, state and federal labor laws posted (generally in the form of posters).

 IX.           Depending upon the size of the employer (headcount), there are mandatory protected leaves of absence/times in which employees are protected taking time off. Some apply to all employers and others are tiered (5, 10, 15, 25 and 50 employees). In California, the majority of these leaves are state specific, with a handful being federal. Leaves include such reasons as illness and injury (employee and family members), workplace injuries, pregnancy, disabling conditions, bonding with new child(ren), domestic violence, being a victim of a crim, voting, military, and others. Employers must be knowledgeable of these laws, including when and how, triggered, documentation required, communications, privacy, benefits continuation, return to work and other important factors.

   X.           Having employees requires having workers’ compensation insurance to ensure workplace injuries and illness are covered. This requires establishing occupational centers (sending employees to be seen by a physician), communicating with the workers’ compensation carrier and employee, documentation, and other important factors. This area is time and process sensitive and even when following accordingly, can often result in litigation.

LEGAL REQUIREMENTS TIED TO SPECIFIC EVENTS

There are other employment events that require compliance with local, state and federal laws…although they will vary by employer.

       I.           The CA Employment Development Department (EDD) is an agency most employers are very aware of. When it comes to employment related actions, the most common are tied to unemployment claims, Paid Family Leave claims, and disability insurance claims. All three are programs administered through the EDD and require employer information when an employee/former employee applies for the respective benefits. This requires ensuring that the requested information related to the individual is completed and returned in a timely manner (very often 10 days).

    II.           Employers are often unaware that non-employment related disabling conditions are subject to employment laws and in many situations, require that the employer engages specific legal acts.  California has two sets of laws when it comes to workplace disabilities. The first is the Americans with Disabilities Act (federal) and second is the Fair and Equal Housing Act. The latter being far stricter than the federal laws. By in large, when an employee has a disabling condition that affects their ability to perform the essential functions of their job, the employer must initiate the interactive process and, in most situations, provide reasonable accommodations. Failing to comply in this area can very easily result in catastrophic litigation.

 III.           Unlawful harassment, discrimination and retaliation are three of the most common areas of investigation in the workplace. Failure to conduct, non-qualified personnel conducting, and conflicts of interest when investigating often become exhibit 1 for plaintiff lawyers. These areas are very well known to be highly charged and come with costly litigation. Employers have legal duties when receiving a complaint of these events. Other areas investigations are common include workplace injuries, theft and fraud.

 IV.           Corrective actions, also commonly referred to as disciplinary actions, are pretty common place in the workplace. These actions come in different forms, such as verbal and written actions, demotions, suspensions, probation, and termination. Regardless of the actual action, employers should be careful to ensure that all actions are documented as consistent with their practices, procedures and policies…as well as with laws. It is very easy for employers to act in good faith, but end in costly litigation due to procedural errors.

OTHER HR, COMPLIANCE & EMPLOYMENT LAW RELATED ITEMS

I.                   Employee benefits vary by company, although the Affordable Care Act (ACA) requires employers with 50 or more full time or full time equivalent employees (30+ hours weekly) to provide minimum coverage at an affordable cost to those eligible employees. This includes specific rules tied to who can enroll, when they can enroll, maximum monthly premium costs, and annual reporting. Beyond health insurance, there are others offered such as vision, dental, life, disability, and retirement.

II.                Interestingly, employee handbooks are not required by law. In light of this, this document is one of the most important pieces of information that an employer can have for employees. This, when drafted correctly, should reflect the key policies, procedures and expectations of a company. In essence, a guide to an employee’s success. It can also be a strong defense against litigation. Employee handbooks should provide key information to employees to limit confusion about what, when, why and how.

In closing, there are many more employment related areas and topics that are important and subject to laws. These are some of the most common and also, ones often the center of employment litigation. If you have any questions about these or other related topics, please contact a member of our team today.