We will share more in our Breakfast Briefing, of course, but in the meantime here is a short list of what we think is most urgent:
1. Have you Revised Your Meal and Rest Break Practices to Ensure Meal and Rest Break Premiums Are Paid at the Regular Rate of Pay? In July, the California Supreme Court held that meal and rest break premiums must be paid at the regular rate of pay (not the base hourly rate), taking into account certain additional compensation such as nondiscretionary bonuses and commissions. The decision is retroactive.
Since then, we have been assisting companies in evaluating their meal and rest break and pay practices and pay formulas to ensure their practices are in compliance with this change. Many of our clients have audited past meal and rest break premium payments to understand where there may be risk or liability, and been able to address the issues and take meaningful steps toward protecting themselves going forward. Let us know if you would like help with these issues.
2. Do You Want to Protect Your Company by Mandating Arbitration? As you know, the law on whether California employers can mandate arbitration is in near constant flux. Thanks (sarcasm) to a recent controversial Ninth Circuit decision California employers hoping to rely on mandatory arbitration agreements face a risk that those agreements are unenforceable. Specifically, not only is it a possibility that the law will change and prohibit employers from mandating arbitration going forward, if the case stands the ruling may be retroactive, meaning previously executed mandatory arbitration agreements could be rendered unenforceable. Conceptualy there also could be penalties for employers who mandate arbitration (to be determined).
With the time it takes for appeals to make their way through the court system, it could take years to know whether you safely can mandate arbitration.
As you know, particularly because of the risks of wage and hour cases, we generally recommend implementing arbitration programs. Whether to mandate arbitration or (more conservatively) create a voluntary arbitration program requires an understanding of the risks and benefits under the current and potential legal backdrop. We are happy to help you make that decision.
3. When Did You Last Review Your Handbook? Last year there were some significant legal developments that required handbook changes even for small employers. While this year's legal developments aren't quite as profound, what we have observed is that Company's change their practices and the Handbooks don't always keep up. This is a great time to revisit your expectations and make sure they are shared. Reach out if you want your Handbook reviewed for a clear and protected new year!
4. Do You Have a Compliant Document Retention Policy and Practice? This year the time for retaining personnel records was extended to four (4) years (previously, these records were required to be kept for two (2) years). Where litigation has been filed, these records must be maintained until the applicable statute of limitations has run, or until the conclusion of the litigation, whichever occurs later. Are you aware of this obligation, and your obligations for maintaining other personnel documents? We can help you create a policy and a system!
5. Have You Implemented Compliant COVID-19 Workplace Safety Protocols and Vaccine Mandates and Testing Programs, Where Required? In addition to a vaccine mandate for federal contractors (discussed on our prior Newsletters), OSHA has published a mandatory Emergency Temporary Standard (“ETS”) which may (depending on the outcome of legal challenges) require that employers with 100 or more employees company-wide implement a COVID-19 vaccine requirement or a testing in lieu of vaccination policy. The ETS contains various additional obligations with which companies must comply, including a written program, paid sick leave to receive vaccines and recover from vaccine side effects, and other COVID-19 workplace safety protocols.
In addition, Cal/OSHA has released proposed updated COVID-19 regulations for readoption. The Advisory Board is expected to vote on the proposed updates by the end of 2021, and will be effective January 14, 2022 – April 14, 2022, after which, an anticipated permanent rule will replace the ETS.
The outcome of the pending litigation is uncertain. But if the ETS is upheld, you need to be nimble and prepared to respond. We will help you navigate the potential requirements.
6. Are You Prepared for the Minimum Wage Increase? California state minimum wage will increase to $14 for companies with 25 or fewer employees and to $15 for companies with 26 or more employees, and many counties (including most recently West Hollywood!) have their own minimum wages that exceed the state’s requirements. These minimums impact the salary requirements for exempt employees as well, so be careful!
7. Have You Audited Your Independent Contractor Relationships? The laws on who is an employee and who is an independent contractor continued to shift and evolve in 2021. Getting it wrong can be an expensive proposition. An audit can protect you from liability. Let us know if you would like any help in reviewing your independent contractor relationships.
8. Do You Employ 100 Or More Employees? You are required to submit a pay data report to the Department of Fair Employment and Housing and EEO-1 data to the EEOC on or before March 31, 2021.
9. Do you post job openings online? advertisements that violate the Fair Chance Act. Now’s the time to audit your online postings and remove any prohibitive language that would indicate that the company will not consider anyone with a criminal history. The California Department of Fair Employment and Housing ("DFEH") announced a new affirmative effort to detect and correct violations of California's Fair Chance Act (also referred to as "ban the box"), which prohibits the solicitation of an applicant's criminal history prior to a conditional offer, and which mandates certain employer considerations before rejecting a candidate with a criminal history. The DFEH now is using online technology to identify words and phrases in job advertisements that suggest a violation of the Fair Chance Act. This is a good time to audit your online job postings, along with your applications, offer letters and other pre-employment practices, to ensure you are in compliance with the law.
10. Do You Have a Retirment Program in Place? Depending on your size, you already may be required to offer your employees some form of retirement plan or, if no approved retirement vehicle is offered, must utilize automatic enrollment into the state’s payroll deduction IRA known as “Calsavers.” Effective June 30, 2022, this requirement will apply to employers with 5 or more employees.