Feature
by Margaret J. Grover
Employers need to keep up to date with laws and regulations governing employer-employee legislation. In 2006, the California Legislature, courts and administrative agencies all made changes that affected, or will affect, employers. Make sure that your employment contracts and policies comply with current law. Failure to do so may result in liability or, in some cases, significant penalties.
Minimum Wage Increase
California’s minimum wage will increase to $7.50 per hour, an increase of 75 cents per hour, as of January 1, 2007. A second increase, to $8 per hour, becomes effective on January 1, 2008. For most San Francisco employers, however, this increase will have little impact because the increased statewide minimum wage lags behind the mandatory minimum wage adopted by San Francisco’s ordinance, which increases each year. As of January 1, 2007, the San Francisco minimum wage of $8.82 per hour will be increased to $9.14 per hour.
The statute increasing the state minimum wage also directed the California Department of Industrial Relations to increase the maximum amount of free rent that can be credited toward minimum wage obligations. The increase is to follow the same percentage increase as the minimum wage increase. Although new amounts have not yet been published, the author has calculated the new rent credits to be $423.55 per month for a single employee and $626.55 where both members of a couple are employed. Free rent can be used toward minimum wage obligations in an amount equal to these amounts or two-thirds of the fair rental value of the apartment, whichever is less. Remember, if an employee is required to live in an apartment as a term or condition of employment, he or she can be charged only two-thirds of the fair rental value. Moreover, if the employer charges any rent for the apartment, no rent credit can be used to satisfy the minimum wage obligations.
Overtime Pay
The Legislature amended the law governing when overtime pay must be reported to the employee. Under existing wage law, when an employee works in excess of his or her normal work period, the employer can pay wages for the excess work in the next regularly scheduled payroll. However, employers are obligated to provide an accurate itemized statement showing, among other things, the total hours worked by the employee in each pay period. Thus, the employer who waited until the next pay period to pay overtime wages ran the risk of failing to comply with the requirement to report all time worked in a particular pay period. This discrepancy has been corrected. Under the new law, an employer may list overtime hours worked in the current pay period as corrections on the pay stub for the next regular pay period. However, any corrections included in a subsequently issued pay stub must identify the dates of the pay period to which they refer.
Smoke-Free Workplace Redefined
Employers now have an obligation to assure that there is no smoking in any enclosed area of the workplace, including lobbies, lounges, waiting areas, stairwells, elevators and restrooms. Certain types of employers, such as hotels and casinos, may have designated smoking areas. However, exceptions are narrowly drawn.
To comply with the statute, an employer should post clear and prominent “No Smoking” signs at each entrance to a building or other structure. If the employer has a lawfully designated smoking area, the signs should state: “Smoking is prohibited except in designated areas.” In addition, the employer should ask that any non-employee who is smoking refrain from smoking while in the workplace. Fortunately, the employer is not required to remove the smoker physically from the premises.
Driving with Headsets
After July 1, 2008, it will be illegal to drive a motor vehicle while using a cellular telephone, unless the driver is using a headset or some other hands-free method for listening and talking. A driver may be fined $20 for the first offense and $50 for each subsequent offense.
Employers should assure that employees do not use cellular telephones while driving on business, unless they are using a hands‑free device. An employee who engages in distracted driving, and causes an accident while at work, may expose the employer to significant liability. Any employer with a work force that drives should assure that its policies prohibit distracted driving and restrict use of a cellular telephone while driving, limiting such use to emergency situations and then only in a hands‑free mode. Finally, employers who provide cellular telephones to employees who drive as part of their job should assure that the telephones are equipped with headsets.
Workers’ Compensation Update
The employee’s right to be treated by his or her personal physician for an on-the-job injury has been expanded. There are several conditions to the employee’s right to treatment by a personal physician, including: the employee must notify his or her employer, in writing, before the date of the injury that he or she has a personal physician; the employer provides nonoccupational group health coverage; the physician is the employee’s regular physician and surgeon, and is appropriately licensed; the physician is the employee’s primary care physician and has previously directed the employee’s medical treatment; and the physician agrees to be predesignated.
As of January 1, 2008, the employee may designate a medical group, which provides comprehensive medical services as a “personal physician.” The new change deletes the prior restriction on the maximum percentage of employees who may predesignate.
Child Support Payments
Any employer who knowingly assists someone with unpaid child support obligations to avoid paying those obligations can face significant liabilities. The employer can be held liable for three times the value of the assistance provided, up to the full value of the outstanding child support. The statute provides the following examples of actions an employer might take to assist someone in evading child support obligations: hiring or employing the child support obligor without filing a timely report of new employees with the California New Employee Registry (maintained by the state’s Employment Development Department); retaining the child support obligor as an independent contractor or service provider without filing a timely report of the contractor relationship with the Employment Development Department; and paying wages or other forms of compensation for services rendered by a child support obligor that are not reported to the Employment Development Department as required, including, but not limited to, compensation provided in cash or via barter or trade.
Many small businesses are not aware of the need to report new independent contractor relationships to the Employment Development Department. As a result, this requirement could be a trap for the unwary. In addition, employers of resident managers should check with their attorneys or tax advisors to verify they are properly reporting all compensation provided through rent-free housing. While simple failure to report would not be sufficient to establish liability—as the employer must also know the employee has an unpaid child support obligation—it could certainly be enough to start a very expensive lawsuit or enforcement action.
Retaliation Claims Expand
According to statistics maintained by the Equal Employment Opportunity Commission, over the past few years the number of employment retaliation claims filed each year has steadily increased. During the same time frame, the number of new discrimination and harassment claims declined slightly. In June 2006, the United States Supreme Court provided new standards for determining whether an employee can recover for retaliation.
Burlington Northern and Santa Fe Railway Co. v. White involved a female track laborer, Sheila White. White complained that her supervisor was making derogatory comments about women. The employer conducted an investigation, determined that the supervisor had engaged in inappropriate behavior, required the supervisor to attend training and suspended the supervisor for 10 days. At the same time, however, White’s job duties were changed. She was given duties that fell within the track laborer’s job description, but which were more arduous and dirtier than the duties she had performed before her complaint. Moreover, shortly thereafter, White was suspended without pay for 37 days, ostensibly for insubordination. She filed an internal grievance, which resulted in her reinstatement with full back pay.
In finding that White could recover for retaliation, the Supreme Court stated that Title VII of the Civil Rights Act has an antiretaliation provision that extends beyond workplace-related or employment-related retaliatory acts and harm. The court explained that, to recover for retaliation, the “plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which in this context means it well might have ‘dissuaded a reasonable worker from making or supporting a charge of discrimination.’” However, trivial harms, such as petty slights and the minor annoyances that every employee must face from time to time in the workplace, would not be a sufficient adverse action to establish retaliation.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. Margaret J. Grover is a partner in the San Francisco office of Haight, Brown & Bonesteel, LLP, where she is the lead attorney in the firm’s employment group. She can be reached at mgrover@hbblaw.com. Copyright © 2006 by SF Apartment Magazine. All rights reserved.