Dressing the Part

“My company and our clients are quite conservative so I want my employees to fit into that conservative image. Can I require my female employees to wear dresses or skirts and men to wear suits?”

Your HR Survival Tip

In some fields, like finance and banking, employees always wore very conservative clothing. Men wore black, dark blue or dark gray suits with a white shirt and a tie that didn’t have people staring at it trying to figure out what it said about their personality.  Women wore a dress near their knee or a suit that had a skirt instead of pants.

However, times have changed. I was amazed to discover two things: (1) California passed a law in 1994 giving women the right to wear pants in the workplace and (2) that it took a law. Really?

Today, when a company tries to address the issue of conservative appearance, we’re usually talking about prohibiting visible tattoos or piercings, no cleavage or butt cracks showing, and no see-through clothing. Discrimination rules also have us prohibiting pictures or sayings on T-shirts because they could be viewed as discriminatory by someone. Certain types of jewelry can be a safety issue.

Clothing and appearance in the workplace has become a discrimination issue. You can no longer identify the differences in clothing, jewelry, make-up, or hair based on gender; now you focus on unisex clothing and appearances that may be inappropriate for your company. This avoids not only gender discrimination but also gender identity discrimination.

State your employees must have a conservative appearance and even give examples of what that looks like to you… just leave off the gender language. For example, we feel a conservative appearance includes suits, knee-length dresses, pants that touch your shoes, closed-toe and closed-heel shoes, ties with muted colors and patterns, no visible tattoos, only one small earring in each ear and no other facial jewelry, and no more than two rings. This covered a lot of territory for both genders while never specifying gender.

If your business prospers by providing the appearance your clients want, it’s easiest to hire people who understand this and naturally dress that way. There are a lot of companies out there willing to hire people who don’t fit into a certain look but are great performers at work. You just have to decide how much appearance matters for your company and for the work the employee will be doing.


Is That a Horse in Your Cube?

“I have an employee who wants to bring his miniature horse to work because it’s a support animal for him. What am I supposed to do in this situation?”

Your HR Survival Tip

Call an employment law attorney! While dogs may have been the standard service/assistive animal for years, even a miniature horse can be trained as a service animal. The reason this is a delicate legal issue is because, in addition to the known American Disabilities Act (ADA), there are several agencies and other laws that all have slightly different rules about service animals and those qualifying as assistive animals.

Service animals are specifically trained to provide a service for their owner, such as guide dogs. Assistive and support animals do not need to be trained and are often considered a reasonable accommodation. All a support animal must do is provide emotional, cognitive, or other support to a person with a disability.

While you may have to take your employee’s word his horse is a service animal, you have the ability to ask more questions about assistive animals. You are allowed to ask for documentation from your employee’s health care provider stating the animal is necessary for your employee’s ability to perform the essential functions of the job. You can also request confirmation that the animal:

  1. will be free from offensive odors and will display habits appropriate to the work environment, including the elimination of urine and feces; and
  2. will not engage in behavior that endangers the health or safety of the individual with a disability or others in the workplace.

The definition of disabilities has changed over the past few years and resulted in many more people being eligible for accommodations. Don’t assume your employee doesn’t have a disability or that their horse isn’t an assistive or service animal. You need to treat this as seriously as you would treat any other disability accommodation request… regardless of the type of animal.

The ADA authorizes fines of up to $55,000 for a first violation, plus whatever fines are possible from other laws you might violate if you handle this badly. Don’t horse around… get advice from an employment law attorney.


Qualcomm Settles for $19.5M

Not everyone is taking California’s Fair Pay Act seriously. Perhaps Qualcomm’s case will help convince you that some women are taking it very seriously.

Qualcomm decided to settle a proposed class action discrimination claim before it reached the lawsuit stage. They are paying more than 3,000 female employees $19,500,000, in addition to agreeing to make policy changes.

The complaints began with their female employees working in the technical fields (technology, science, mathematics, and engineering) who were being paid less than their male equivalents. Added to that, females in senior leadership positions accounted for less than 15% of all senior employees. Women felt they received fewer promotions because men were making those decisions.

There was also a reward system that favored employees who arrived early and stayed late at work. This unwritten policy was felt to be a disadvantage to women with children who had to deal with childcare issues.

As you know, CA’s Fair Pay Act states all employees must be paid equally based on job responsibilities, skills, experience, and other objective data. CA’s law extended the practice to more than just a male or female in the same job… you have to compare other positions that have similar requirements in other departments.

Qualcomm’s issue involved the Fair Pay Act but also included other laws protecting discrimination. Yes, this is viewed as another form of discrimination because it affects a protected class.

The Fair Pay Act has only been in place since January 1st but there are other laws that have been around much longer. While you won’t get hit with a $19.5M claim, can you afford to pay $50,000+ for an attorney plus more to settle claims? It’s past time to review your pay policies.

What’s on Your Wall?

The employment-related laws just keep coming and it seems every new or changed law has required notices to post or distribute. California has had auditors visiting companies randomly this year. You can be fined if an employee is asked about posters and can’t tell the auditor where the information can be found.

As a reminder, required posters must be easily available to all employees. If an employee can’t access the room where you have the posters, you have them in the wrong place. If you have field employees, you need to give them their own poster information in the Company vehicle or as part of their own Employee Handbook or as separate documents.

The following isn’t a complete list… I may have forgotten something (it happens!) or there may be special postings required for your specific industry. However, this is a good start.

What should be posted?

  • A current employment law poster. Since it’s possible to get a current poster for under $40, there’s no reason to keep using an old poster year after year. Lately, the laws have been changing sufficiently so you really need a current poster, plus all the mid-year notices. New posters will include the previous mid-year updates so you can clean up your wall at that time. You can always get the poster for your state through a link on my website.
  • You have always needed to post the appropriate Industrial Wage Commission order (in California) but not everyone knows this. The document is about 14 pages long so just print it out, staple it together and stick it on the wall next to your poster.
  • The federal Employee Polygraph Protection Act notice also went into effect 8/1/2016 and requires posting.
  • A new federal minimum wage notice became effective 8/1/2016.
  • The minimum wage notice for your locale must be posted, if your locale has a different wage than the state (like San Diego).
  • Sick leave notices for state and local laws must be posted. A current employment law poster should have California’s sick leave on it but the San Diego notice is new.
  • If you have employees who work inside or outdoors and the thermometer starts going over 80 degrees, you are going to need to add the OSHA Heat Illness poster to your wall.
  • There are a few industries that must post the federal human trafficking notice, such as places serving alcohol, offering massage or bodywork services, and urgent care centers.

What should be distributed to each employee?

  • A separate document about your harassment policy. This became law on 4/1/2016 in California and there is a specific list of what this document must include and when it needs to be translated. Even if you have an Employee Handbook, this separate policy is still legally required.
  • Your sick leave policy must be in writing or you can’t limit how much sick leave employees can take. The policy should also include details that meet the local and state sick leave law regulations.
  • If you have employees who work in San Diego, you must distribute the City of San Diego Earned Sick Leave and Minimum Wage Employee Notification Form. You need a signed copy in each employee’s file by 10/1/2016 to prove it was received.
  • If you have an Employee Handbook, it must be either distributed as a paper or digital copy to each employee. You can keep just an office copy only if it can be easily accessed at any time by all employees. If you have field employees, they need their own copy or you can keep a copy in Company vehicles but must let everyone know where to find it. The office copy won’t work for field employees because it’s not accessible to them at all times.

Although all these posters and notices will never be attractive wall decor, they are legally necessary. Failure to post or distribute required notices could make you subject to fines and penalties… why would you take the risk when it’s so easy to be compliant?


He Touched Me!

“Mary has complained about John to me, saying he has touched her inappropriately and made sexual comments. Mary’s work quality and quantity is much lower than John’s and I was already thinking of letting her go. This seems like a good reason to move ahead with Mary’s termination, right?”

Your HR Survival Tip

STOP! The minute Mary told you about John, Mary was protected from any form of negative employment action. Termination is definitely negative and could be viewed as retaliation for making the complaint, which is illegal.

Do not ignore the complaint or brush it off as a misunderstanding. That’s the path to a lawsuit, even if Mary happens to be someone who makes everything into a really big thing. You have a legal obligation to investigate.

So what does it look like when the EEOC (Equal Employment Opportunity Commission) goes after you for sexual harassment and retaliation? It recently cost Z Foods $1,470,000 and, its predecessor, Zoria Farms $330,000. They are dried food processors in central CA that had two supervisors who were harassing female workers on an on-going basis. The company fired the women who complained and their male coworkers who stepped forward as witnesses for them.

If you get a complaint of any kind, you absolutely need to take it seriously and check it out. In fact, in California, a manager can be individually sued if they knew about harassment and didn’t do anything about it. Managers cannot guarantee confidentiality to an employee when the subject is harassment.

Whatever you do, do not react by changing anything about the complainant’s work situation (or that of their witnesses). If you need to separate the complainant from the accused, move the accused to a different space or put them on suspension while you investigate. Don’t rush into anything but don’t dawdle. Big delays can work against you.

Ideally, you’ll contact an employment law attorney (ask me for a referral!) so the investigation is done properly and any information discovered is protected by attorney-client privilege. You can investigate yourself, but you still need direction on how to do it right and how to document your findings and decision.


San Diego’s Law is in Effect

As you know, voters approved Proposition I in June. This law focuses on a higher minimum wage and more paid sick leave. It only affects your employees while they are working within the city limits, regardless of where your company is based. If your employee spends 2 or more hours within San Diego’s city limits in any week in the year, you will be subject to this law… but only for those employees and only during the time they are within the city limits. There are no exceptions for small businesses.

The real challenge will be for those of you with employees who are in and out of the city and trying to track time versus location. You’ll need to decide if you want to put the time and effort into that administrative nightmare or just plan to meet the law’s standards for all your employees or at least all your field employees.

San Diego Minimum Wage

Minimum wage for employees working within the San Diego city limits is now $10.50 per hour, effective 7/11/2016. In 6 months (on 1/1/2017), this will increase to $11.50 per hour.

San Diego Paid Sick Leave

I contacted the City Council last week and was told they were creating implementation guidelines that would result in the law being closer to California’s sick leave law. The implementation guidelines for the paid sick leave component won’t be finalized for another two weeks. The City Council made changes to the draft on Monday (7/11/2016) and will review it again in two weeks for final approval. However, this didn’t stop them from making it immediately effective.

Yesterday (7/12/2016) I was told by a representative for the City Council that a draft will be available very soon even though they can’t guarantee it won’t be changed when presented for final review. Here are a few highlights of what the draft includes:

  • Amount of paid sick leave: You can limit usage to 40 hours per year.
  • Method of earning paid sick leave: (1) Front-loading the 40 hours or (2) accrual of 1 hour of paid sick leave per 30 hours worked.
  • Accrual cap: 80 Hours … This is huge! The original law had unlimited accrual so this cap will make it much easier to implement and coordinate with other time off
  • Plan design: You don’t need to specifically have a sick leave plan but you will need a paid time off plan that meets the sick leave law’s requirements and protections, regardless of what you call it. This is very much like California’s version.

There are likely to be a few other requirements but this information will allow us to revise policies now so sick leave balances will be accurate. Don’t hesitate to contact us for help!

Wellness is Taxable

“I have added a wellness program that includes a gym membership. Should I just let the employee expense the membership cost or is there another way I should handle this?”

Your HR Survival Tip

Wellness programs are becoming more popular as people have learned the benefits of healthy employees. Wellness ideas can include official programs through the company’s insurance carrier or broker, gym memberships, yoga classes, and more.

The good news is that you may have healthier and more productive employees. The bad news is that IRS (Internal Revenue Service) wants everyone to pay for it. The IRS recently clarified the taxability of various wellness programs.

  • Example 1: This involved a free wellness program that included health screening and other health benefits, plus provided cash rewards or benefits such as a gym membership. The health screening and other health benefits provided through the carrier qualified as a medical expense and exempt from taxation. The cash reward and gym membership, etc. were deemed taxable income to the employee.
  • Example 2: This involved a section 125 cafeteria plan, also known as a medical Flexible Spending Account. If the wellness program or component is eligible under your 125 plan, it should be non-taxable. The employee is paying for the program through the 125 plan so the employer isn’t involved in the payment. If the program is not eligible and the company pays for it, it will be taxable income to the employee.
  • Example 3: You have a 125 plan that will allow the wellness plan’s components so the employee pays for it. Then you choose to reimburse the employee for their cost of the wellness program. The company’s involvement in paying for the wellness program brings it back to taxable income.

In short, only the components of a wellness program that are qualified in the Internal Revenue Code as a medical expense are free from taxation. All other components of a wellness program are considered taxable income to the employee and you’ll need to add the value of those benefits to payroll so you and the employee can pay taxes on that value. IRS Publication 502 explains what they consider a medical expense, if you’re really curious.

I’m definitely not a tax expert so please check with your CPA about the taxability of the wellness programs you offer or would like to offer. Even if it’s taxable, it’s still great that you want to encourage wellness in your company. However, your employees may not be as excited if it costs them money so make sure they know up front what their cost will be to participate.


Is Your Pay Stub Compliant?

“I need to provide a live check to a terminating employee and someone mentioned I need to also provide a pay stub. Does it need anything beside the hours he worked?”

Your HR Survival Tip

As you may know, California is very picky about a lot of employment topics and the employee’s “wage statement” (pay stub) is one of them. Review your wage statements and confirm they include the following (for that pay period):

  • Pay StubDates covered by the pay period (e.g., 7/1/2016-7/15/2016)
  • The legal name and address of the employer
  • The employee’s name
  • The last 4 digits of the employee’s social security number (NOT the full number)
  • Gross earnings
  • A separate line for each type of pay. For example: (line 1) 30 regular hours @ $11.00/hour, (line 2) 8 hours vacation @ $11.00/hour, and (line 3) 2 hours travel pay @ $10.00/hour.
  • If you pay piece-rate, you must provide a separate line for each piece-rate (e.g., 4 piece-rate items @ $20.00/item)
  • If you pay piece-rate, you must also show the pay for non-productive time (rest breaks, etc.)
  • All deductions, including taxes, insurances, etc.
  • Net wages (after all those deductions)
  • The available balance of the employee’s sick leave (but this can be provided on a separate document each pay period)
  • The PTO/vacation available balance (not required but highly recommended)

All of this information must appear on the “face” of the wage statement. You can’t refer to another document somewhere. Failure to provide this wage statement with every check is a $250 fine per employee the first time and $1,000 per employee for subsequent violations. It adds up fast!

It isn’t that hard to be compliant because payroll systems are designed to meet this standard. You are responsible, not the payroll company, for ensuring your wage statements are correct. Take another look to make sure you have everything listed.


When Per Diem is Not “Per Day”

“I’ve been paying a few of my employees per diem pay but now one of them is asking for overtime pay, too. I’ve told them the per diem rate pays for everything that day. Am I wrong?”

Your HR Survival Tip

A daily pay rate is called a per diem rate and is popular in only a few industries. Normally, you would be correct that it pays for all the time that employee works that day.

However, you have to remember that California has something “special”… a daily overtime. This means when an hourly (non-exempt) employee works more than 8 hours in any day, you will owe them overtime for the time over 8 hours. So, yes, your response was wrong. Legally, a per diem employee is an hourly employee and eligible for overtime so your per diem rate can only cover the first 8 hours of work.

Federal law and most, if not all, other states have only a weekly overtime  calculation. This means they merely look at the total hours for the week and pay overtime for the hours over 40. California also has a 40-hour calculation but it’s in addition to the daily overtime. In California, you first calculate the daily overtime, then also pay overtime on the “regular” hours over 40.

Even if you know per diem pay is the standard for your industry, you will still be subject to California’s overtime law. In California, the only person to benefit from per diem pay is the employee because they’ll get the full day’s pay even when they don’t work 8 hours, plus they’ll get overtime pay if they work over 8 hours.

Why bother to use per diem pay in California when an hourly wage is probably less work, less costly, and easier to ensure compliance?


Voters Approved More Pay and Sick Days

“I know the minimum wage is supposed to be increased to $10.50 but I’m confused about the timing because I’m hearing conflicting effective dates. When does it go up?”

Your HR Survival Tip

It’s no surprise you’re confused about the minimum wage because we now, thanks to voters, have different dates and amounts depending on your location and company size.

California approved an increase to the minimum wage earlier this year. However, San Diego voters just approved an additional increase to minimum wage last week that will only affect companies with employees working in the city of San Diego. The voter-approved bill will also increase the amount of paid sick leave. We don’t yet have an effective date for the San Diego increases but expect it in July.

What should your company be providing for minimum wage and paid sick leave?

  • If your company is within San Diego city limits: Minimum wage will increase to $10.50 soon, then to $11.50 on 1/1/2017. Paid sick leave will also be increased to 40 paid sick hours to use each plan year.
  • If your company is outside San Diego city limits and you have 25 or more employees: Minimum wage will increase to $10.50 on 1/1/2017, then $11.00 on 1/1/2018. Paid sick leave is based on the state law that provides <24 paid sick hours to use each plan year.
  • If your company is outside San Diego city limits and you have <25 employees: Small companies were given a one-year delay on the California law. Therefore, minimum wage will not increase to $10.50 until 1/1/2018, then $11.00 on 1/1/2019. However, if at any time you grow to 25 employees, you will immediately be subject the over-25 dates and minimum wages (see above). Paid sick leave is based on the state law that provides <24 paid sick hours to use each plan year.

Even if your company is not located within San Diego city limits, you may be subject to the new San Diego law if you have employees working occasionally within the city limits. You’ll get more details soon. Meanwhile, you may want to consider how you’ll track employees throughout the day if they aren’t just working at your facility.