“I typically provide an Employment Agreement for people I hire. Lately, I’ve been a bit worried about some of the language in it. What should be included?”
Your HR Survival Tip
An Employment Agreement is not legally required and, in most situations, not recommended. The problem is that something you have put in an Agreement may conflict with your Employee Handbook or other policies. In addition, you now have to review all the Agreements each time you create a new one to ensure there’s no discrimination.
You might want or need an Employment Agreement when hiring a C-level employee (CEO, COO, CFO, etc.), for example, because they often negotiate special things, such as retention bonus, relocation, bonus based on company changes, etc. However, there are other documents you should be using for the majority of your employees:
- An offer letter that merely includes the basics: title, start date, salary/wage, at-will language, and a due date for the offer to be accepted.
- The Employee Handbook includes your benefit plans and various policies. Keeping everything in the Handbook or some other manual ensures all employees are being given the same information and benefits. Too often, when a letter provides details about the benefits, it’s wrong and then you have potential discrimination because the employee has it in writing.
- Commission plans are required in California and you should use one if the employee is eligible for a commission. These plans have specific items that must be included and we also like to include quotas, even if the person earns only commissions.
- Bonus plans should also be a separate document so it’s very clear who is eligible and what is needed to earn a bonus.
- Job descriptions change and can be attached to an offer but shouldn’t be built into the offer letter. Positions are tweaked all the time and you don’t want to be locked into that specific description… instead merely refer to it by title so any new version of that job description works.
Don’t get your promises twisted up so you’re held to something you put in an Employment Agreement or offer letter five years ago. Businesses change, benefits change, jobs change… use documents the whole company receives rather than just a few individuals. Also, if the hiring is truly special enough to warrant an Employment Agreement, then it needs to be written or reviewed by an attorney to ensure you are protected.
“I buy a new employment law poster every other year. However, several of my employees work remotely and have never even seen the poster. Am I okay as long as I have it in the office?”
Your HR Survival Tip
You have compliance issues in a couple of ways. The law about the employment law posters states they must be placed in a location employees frequent… and they need to be current or you might as well be hanging wallpaper.
For a very long time you were fine buying a new poster every other year. However, over the past 5 or more years, either the state or federal government has been making changes every year and even mid-year. This year is a perfect example. We have several poster sections that have been added or updated, including:
Once you know you have current posters, you need to solve the problem of remote employees (those who don’t come into the office very often or at all). They must legally still have easy access to the poster information. Fortunately, every section on that wall poster is also available as a PDF file but must be updated every year, just like your wall poster. Here are a few options for you:
- Buy a poster for each employee… fast and somewhat expensive but effective.
- Add all the PDF versions to the back of your Employee Handbook as an Appendix. This will add about 35-40 pages.
- Add all the PDF versions to a small binder you keep on job sites or in company vehicles. Make sure employees have been told where to find them, in writing.
- Create a shared folder online where you keep the PDF versions. Make sure everyone has access to a computer if you use this method.
Ensuring you have the correct posters is an on-going process, including a new wall poster every year. A few payroll companies offer free posters and updates so start there. You can purchase a poster, including free updates for the coming year, for under $50. Don’t forget to add your Industrial Welfare Commission (IWC) poster to your wall and wherever else you’re providing the poster information. When EDD employees are walking around and stopping in at companies, the first thing they ask is “where are your posters?” Make sure your receptionist or person out front is prepared to answer!
“I have a janitorial company and heard about a new law that affects my industry. What do I need to do?”
Your HR Survival Tip
California’s EDD (Employment Development Division) has finally noticed the janitorial industry. This new regulation will change the industry and level the playing field when competing for contracts.
The janitorial industry has, historically, involved numerous independent contractors instead of employees. Some companies have already learned, through EDD audits and subsequent fines, that this isn’t a viable business model. When you add the recent CA Supreme Court ruling on independent contractors to the mix, you have a big problem if you haven’t converted your contractors to employees.
There isn’t really a way to work around this because you must register once you have one (1) janitor/cleaning person working for you plus one other employee… which usually will be you, the business owner. You’ll notice the word “employee” wasn’t used to define the janitor/cleaning person. That’s because they could be (1) an employee, (2) an independent contractor, or (3) a franchisee who is performing the janitor role.
The new regulation states you must register your company with the Labor Commissioner between July 1st and September 30, 2018. You can register online or by mail and must pay a $500 nonrefundable application fee. Your registration is good for one year but must be renewed each year (with a $500 renewal fee) before your registration expires. Online registration and FAQs can be found here.
Beginning on January 1, 2019, the janitorial companies will also be required to provide employees with in-person sexual harassment training every two years. We are still awaiting news of what, in particular, the training must include for this industry.
If you don’t register by October 1st (within 3 months), you may be subject to a civil fine AND anyone who contracts with you for janitorial services may also receive that fine.
For those of you who use janitorial services, start asking for a copy of their registration to ensure you won’t be fined for using an unregistered service. The website for the Labor Commissioner will be listing all janitorial services who have registered so that’s a great place to start your search if you need to switch janitorial/cleaning services.
“I hear people talk about vacation and PTO but aren’t they the same thing?”
Your HR Survival Tip
The confusion between vacation and PTO may be the fact that they both provide paid time off for employees. However, these plans have important differences.
We are all familiar with vacation where we earn paid time off, usually over time. The “official” PTO (Paid Time Off, with caps) bundles vacation, sick leave, and personal time into one program. Both were designed as tools to help with retention and to provide time for employees to relax and avoid burnout. Vacation and PTO plans are optional for companies. So far, the government doesn’t require personal paid time off.
- You have a lot of freedom in designing a vacation plan. Common choices includes the length of the eligibility period, different amounts based on the level of your position or longevity, accrued or dropped in, etc.
- Keep in mind that any unused vacation time earned by the employee must be paid out upon termination. You’ll need a cap to ensure you aren’t paying out months’ worth of unused time. However, legally, there is a minimum cap you need to allow.
- Vacation time, in California, may only be used for vacation time. Employees should not be using vacation time as sick time or you may open the company up to compliance issues. The way the sick leave laws were written reduced the employee’s ability to dip into their vacation time when they ran out of sick leave.
- As mentioned, PTO combines all time off for employees. While this gives employees more flexibility, a PTO plan must also be written to accommodate the requirements of the sick leave laws. This means accrual would start as of date of hire instead of months later.
- Whether they need more time due to their own or a child’s illness or are rarely sick and want more time off for fun, a PTO plan allows employees to better manage their time off.
- PTO gained popularity over the years but lost momentum when the sick leave laws came out. Attorneys were fearful of the sick leave protections and how they would affect PTO. However, things have settled down and PTO plans can be written to still provide employees with options.
Whether you prefer to offer a vacation or PTO plan, or even a plan for unpaid time off, make sure you have a well-written policy. Vacation and PTO time off represents money to the employee and there are specific things you legally can and can’t do with these programs. Let us help you create a plan that will be compliant and work well for your company!
“I have an employee who isn’t doing well but I’m reluctant to fire him because I’d have to pay unemployment. What should I do?”
Your HR Survival Tip
Worrying about whether an employee will collect unemployment is never a good reason to keep a bad employee. That bad employee will bring down morale and productivity in your company.
EDD (CA’s Employment Development Department) keeps track of all your employees and you are legally required to notify EDD each time you hire an employee. Payroll companies will usually do this for you but you want to make sure that’s happening. This is how they know who has been working with you (legally).
Your initial unemployment rate is pre-determined by your industry’s standard for unemployment claims. Whether it goes up or down is based on the quantity and size of claims you have. However, it seems like it’s really hard to lower your rate. The monies paid through your taxes are put into a state pool and they track your company’s share of the pool.
When an employee files a claim, EDD looks back at the employee’s earnings over the last 4 or 5 full quarters to determine the amount of weekly unemployment this employee can earn. If you were not the only employer in those quarters, the amount pulled from your pool would be a percentage. For example, if you were the employer for only one of the four quarters, your pool would pay just 25% of the unemployment paid to the employee.
If an employee asks EDD how to re-open a claim, the employee is told they need only work one day to be eligible. There is no minimum time an employee needs to be working for you to be eligible for unemployment. One day of work can qualify them for unemployment.
California wants to provide unemployment to individuals so they make it pretty easy for ex-employees to file. Lately, it seems the only reasons an employee may not receive unemployment is when they resign or for insubordination (e.g., rude/yelling at a supervisor in front of others… but it’s not insubordination if the employee and supervisor are alone).
When you receive a claim, only respond to the notice if you feel you have a good reason to fight the claim and want the opportunity for a hearing to give your reason. Otherwise, just file the form upon receipt… it does tell you this if you read the form carefully If you are fighting it, act fast. There is a very short deadline and EDD may not accept a late request for a hearing.
If you attend a hearing, bring copies of anything pertinent you’d like to give the judge and add to the file. Also, arrive early and ask to see the file. This will give you the opportunity to see what the employee told EDD. When you are in front of the judge, do not speak until asked a question by the judge or the judge has told you to speak. You will get shut down quickly if you try to respond to anything the employee is saying before the judge gives you permission to talk.
Instead of worrying about unemployment, you might give some thought to the training and supervision given your employee… are you allowing them to go bad? Time spent working with employees to ensure their success may result in fewer unemployment claims.
“I am expecting money from my receivables and an investor. However, right now I’m strapped for cash for payroll. What are my options?”
Your HR Survival Tip
Whenever money is tight, you need to understand your legal obligations and work to satisfy those before going further. Payroll is one of those obligations.
There are a few ways you can reduce your current payroll cost, which is often one of your largest operating costs. However, you cannot legally withhold or delay paychecks. An employee must have their paycheck within 7 or 10 calendar days after the period worked. The difference of 7 versus 10 is based on which payroll cycle you have (i.e., semi-monthly, weekly, etc.). No matter what your employees might say or agree to; you must pay on time.
You also can’t move the pay date. Even if the new date is within the required time frame, another rule is that you need to keep to the promised schedule. If you’ve said the pay date is the 5th and the 20th, then you must stick with that.
Consider just being honest with employees that the company is going through financial issues and you need to make some immediate changes. Options you could implement are below. When considering these options, either have the choice affect everyone or choose the individuals carefully so the chosen few won’t be viewed as discriminatory.
- Cut back on schedules — Reduce employees’ working hours temporarily.
- Cut back on wages — Reduce the amount each employee is paid temporarily. For example, a 10-50% pay cut until you have sufficient funds for payroll. If and when you receive the expected monies, you can opt to catch them up. However, you could keep the pay cut but you need to recognize employees may leave rather than continuing to work at reduced wages.
- Reduce your headcount — A layoff is appropriate if you plan to hire the individuals back. Otherwise, consider a more permanent reduction in force (RIF)… this is better known as downsizing.
The bottom line is, if employees are putting in hours, they must be paid in full and on time. You can’t play with that. The only thing you can do is reduce your payroll to a level that is affordable right now. Don’t wait until you’re facing a payroll with no money. Not only is that bad for morale but you could end up with fines and penalties that could make your financial situation even worse.
“I want to hire a few high school kids for the summer. Do I need to do anything special?”
Your HR Survival Tip
Schools are ending and students are eager to get a summer job. However, when hiring anyone under 18 years of age, you want to be careful of the child labor laws. There are differences for the age of the minor, as well as whether they have graduated.
A minor, for the purpose of California’s child labor laws, is considered to be anyone under 18 who has not yet graduated high school or passed the High School Proficiency Exam. However, federal law doesn’t care about schooling and that law applies to everyone under 18 years of age.
Minors need a Certificate of Age form completed and signed by the employer and parent or legal guardian. This form is also called Statement of Intent to Employ a Minor and Request for a Work Permit. It has a long title but is basically a pretty simple form. This is where you’ll list the hours and days you intend to have the minor work. This form also covers you for the federal law. Even a minor in your own family needs to have this form completed. A work permit is required even when the school is having a winter or summer break.
- The minor obtains the Statement of Intent form from their school or online and completes the “Minor” section.
- The minor requests that the employer and their parent/guardian complete their section of the form, then returns it to the appropriate school authority.
- The school verifies the information and, if the requirements are met, may issue a work permit (“Permit to Employ and Work”).
- Once you have received the work permit, you can add the minor to your payroll and set their schedule.
Minors as young as 12 may qualify for a work permit but the younger they are, the tighter the rules. Even a minor who is 14-15 can only work for 3 hours per day (18 per week) but not during school hours when school is in session. It should be no surprise to learn that minors who are 16-17 years old have the most freedom in their work schedules. For example, a 16-17 year old can work 4 hours on school days or 8 hours on non-school days while school is in session. They can work 8 hours when school isn’t in session. There are very specific schedules for the different ages, including time of day, so make sure you match the schedule to the age of your minor employees.
This is just a general summary so be sure to review the laws that pertain to what you’re trying to do. Don’t forget to notify your workers’ compensation carrier because you are obligated to have coverage for your minors. Since most minors are hired to just do basic work, plan on paying minimum wage. You may be the first employer for your minor so you’ll need to train them on using timecards and taking rest and meal breaks. No pressure, but their time with you could be a life-altering experience. Make it a positive one!
Part 1 of this article covered pregnancy-related leaves to the delivery and medically-related disability period. Part 2 will discuss the options for the employee once the doctor has released her from the medical disability (usually with 8 weeks from the date of birth).
Your HR Survival Tip
Once the medical disability period is over, additional leave is considered baby bonding time off. Baby bonding is time off for either parent to bond with the baby within the first 12 months from the date of birth. All leaves available for baby bonding are unpaid time off and availability and job protection is dependent on the size of the company.
Many people believe Paid Family Leave is a leave to which they are entitled but that’s not true. This is actually a supplemental pay plan that is available ONLY IF the company or a law allows the employee to have baby bonding time off. The employee must qualify for a leave of absence before Paid Family Leave is available.
Leaves in companies with less than 20 employees — The only leave available in companies of this size is a personal leave of absence. The company is not required to offer personal leaves and, if they do, the leave does not include legal protection of the employee’s job.
Leaves in companies with 20-49 employees — The New Parent Leave Act (NPLA) provides either parent up to 12 protected weeks off for baby bonding within the first year. The time off must be in 2-week blocks except on 2 occasions.
Leaves in companies with 50 or more employees — Family Medical Leave Act (FMLA) and California Family Rights Act (CFRA) provide either parent with up to 12 protected weeks off by baby bonding. Leave may be taken intermittently within the first year of birth. The employee’s same or similar job must be provided upon her return to work.
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Companies have a legal obligation to provide a location where the mother may express milk in private. There are many rules regarding the locationÖ it must be a lockable room, it cannot be the restroom, it must contain a refrigerator for the milk, etc. Women are expected to express milk primarily during rest and meal breaks. Employees should give the company as much notice as possible when planning to return to work so the company has time to create a lactation location, if needed.
As mentioned in Part 1, pregnancy leave is very protected in California. Both the employee and the employer have rights. These articles are just a synopsis to provide a basis understanding but you need professional advice when this situation arises. Learn how the law applies specifically to your company so you can handle pregnancies with confidence.
The law and processes about pregnancy leave are often misunderstood and a concern with smaller employers. This is part 1 of 2 articles that will, hopefully, answer many of your questions.
Your HR Survival Tip
A pregnancy is treated the same as any other medical disability and, for that reason, everything is tied to a doctor’s note. In California, this is the most protected leave we have, over time they have closed all the loopholes. You are subject to this law when you have 5 or more employees, counting the owner(s).
Upon hearing an employee is pregnant, the company should provide the employee the following:
- Pregnancy Disability Leave notice
- Pregnancy Disability Leave brochure
- State Disability Insurance brochure
- Paid Family Leave brochure
Doctor’s notes help protect the employee because it keeps the absences under the pregnancy-related disability. Therefore, if the employee misses work due to morning sickness or any other reason remotely tied to a real or perceived pregnancy, a doctor’s note is needed. The doctor should be asking the company to accommodate these absences. You want the doctor’s note even if the employee has ample sick/PTO time available due to the protections. If your employee is coming in late, etc. and blaming it on the pregnancy, tell her she must have a doctor’s note or the time off won’t be protected. This also helps ensure she is getting proper medical care throughout the pregnancy.
When the delivery date is getting close, the employee must have a doctor’s note stating she is unable to work any longer before she stops working. If the employee decides to stop working without that note, it’s could be considered a resignation. The doctor will typically provide a note no more than 2 weeks prior to the expected delivery date unless there are medical reasons for having the employee stop working earlier.
You may think a friendly doctor might write a note just to help the employee stop working much earlier. However, the doctor must provide the state with medical information backing up the time off. Unless it’s true, it’s hard to say it was a medical necessity without putting the doctor at risk from the state.
Once the employee is within approximately 2 weeks of the delivery date, she can apply for SDI (state disability insurance). The state typically pays about 66% of the normal wages for a total of about 8 weeks for a normal delivery. The employee is responsible for filing the claim and the company will receive a form to verify the wage information and dates the employee has provided. At this time, the doctor is also verifying information with the state. Filing and responding online is faster than mailing forms but both work.
Pregnancy Disability Leave can last up to 693 hours (~4 months) for a full-time employee if there are continued medical issues. This leave is only for the actual medical disability, not baby bonding. The law protects the employee’s job… you must give her back the same or similar job. If you hire someone to fill in while she is out, that person will either have to be moved to another position or terminated.
While your employee is on leave, the most common complaint we hear is that you have found she wasn’t as great as you thought for one reason or another. This is often a supervisory issue, not hers. Consider it a wake-up call that you need to do a better job ensuring all your employees are actually doing their work.
The next, and last, article will address the associated leaves and return to work.
“I have a college student who would like to intern with my company. She needs to acquire service learning hours but the school doesn’t have an internship program set up for this. Is it possible to still have her as an unpaid intern?”
Your HR Survival Tip
We have always stated unpaid interns must be associated with an internship program through their school so the student gets credit in exchange for participating in the program. Otherwise, the “intern” needed to be an hourly employee. However, earlier this year the US Department of Labor (DOL) decided to abandon the old test used to determine if someone qualified as an unpaid intern.
The new test isn’t that different except it doesn’t require an accredited school internship program and, instead, focuses on who the primary beneficiary of the internship may be. Bottom line, an unpaid intern should truly benefit from time spent as an intern with you… more than your company does. Here are the points in the new test:
- The internship training should be similar to training received in an education environment.
- The experience is focused on benefitting the intern.
- No regular employees are displaced because you have an intern and the intern is closely supervised by your existing staff.
- The training the intern receives from you doesn’t immediately help your company and may, on occasion, even impede your normal business operations.
- The intern is not entitled or even expecting to receive a job offer at the end of the internship.
- Both the company and the intern fully understand the internship is unpaid time.
As mentioned above, most of this was really part of the old test. However, now the strongest focus will be on ensuring the intern truly benefits from spending time as your intern. Many companies felt they could have interns doing all the grunt work and the intern benefitted just from seeing the activity around them. But that wasn’t and isn’t true. Make sure your internship program provides real training for the intern. You’re giving back by helping students learn more about the jobs that caused them to go for that major and developing more skills to help with their studies.
While the federal rule (DOL) has changed, keep in mind that California’s description in the IWC Orders still require the training to be supervised by a school or disinterested agency. Don’t assume CA will drop that but, so far, it appears CA may be fine following this new test. Talk with an employment law attorney to be sure your plan will work.
Make sure your interns are part of an accredited college internship program or you are providing similar training to advance that intern’s skills and knowledge. This new test is most helpful for those companies that want to help students but haven’t found (or developed) an internship program with the schools. If you can’t commit to the training, hire the intern at minimum wage and you can have them doing whatever you need on the job.