“I have an employee who has used up all his sick time. However, he continues to have a lot of absences but does provide doctor’s each time. What should I be doing?”
Your HR Survival Tip
When you have an employee who is sick a lot, the first thing you want to do is confirm how much sick time they had available and how much they used in the current plan year. The plan year could be calendar year or some other 12-month period you designated when you first created your paid sick leave policy.
You also want to make sure your sick leave policy is compliant. In addition to California’s 3 days, there are about 29 local laws with different amounts of sick leave and they all provide more than the basic state law.
Once you know you are calculating the sick leave correctly and are sure how many sick days/hours the employee has taken, forget the amount that was protected sick leave. We use the word “protected” for a reason… you can’t use this time against the employee for attendance issues.
How much additional time has the employee taken off due to illness after they ran out of sick time? Is that amount sufficient to fire the employee for attendance issues? Or would a termination at this point look like retaliation for the employee’s use of the protected sick leave?
You also need to consider what other protections might be out there for the employee. The list of protected disabilities continues to grow and doesn’t have to be noticeable to you for it to be protected so you want to be sure you’re not dealing with one of them. Smaller companies don’t need to worry about the federal Family Medical Leave Act (FMLA) or CA Family Rights Act (CFRA). However, a work-related illness or injury has certain protections and anything related to a pregnancy is very protected in CA.
You need to sit down with the employee and discuss the issue. Although you don’t really want to know the actual medical issue, you can ask if the employee knows how much more time off may be necessary or is there a way they can work more hours with certain restrictions listed by their doctor. Ideally, the employee is also looking for a way to get back to work on a regular basis as soon as possible. Document the conversation and give some thought to your next steps.
As a rule, you want to be very careful about terminating an employee when absences are medically related. While non-work-related injuries and illnesses have far fewer protections, you want to be sure you’ve looked at everything before making any big decisions. You’re dealing with medical issues on top of the potential loss of a paycheck… sympathy will always be on the side of the ill or injured employee. Now is the time to call a professional to discuss your options.
“I’ve heard hourly wages being called both base wages and regular pay. Is there a difference between them?”
Your HR Survival Tip
Usually there is a difference between base pay and regular pay. California is quite fond of its calculations when it comes to employee pay. Regular pay is frequently used in laws but it doesn’t mean the same as a base wage. Here are a few of the various terms used for different employee pay:
- Base pay — This is the hourly rate of pay for an employee when nothing else has to be considered or calculated.
- Regular rate of pay — While many of you may assume this is an employee’s hourly rate, it’s not. This is a calculated pay rate that is an average for the week based on hours and earnings and is used in most calculations for overtime and even sick pay in some areas.
- Premium pay — This is the term for that one-half bump employees get for overtime pay (as in one and one-half for overtime). You add the premium to their regular rate for the amount paid as overtime. This is often a calculated amount based on total earnings for the period.
- Overtime pay — In California, this is paid for any time worked over 8 hours in a day or over 40 hours in a week. You look first at the daily overtime. The 40 hours calculation is looking at only the first 8 hours in any day since you are already paying for the over-8 time on a daily basis.
- Prevailing wage — If you are a government contractor or sub-contractor, you are usually obligated to pay a higher wage for work hours on those projects. In addition, you are also typically required to pay a certain amount toward the employee’s benefits… even if that is above what your other employees receive.
- Discretionary bonus — This means you are not promising or automatically paying a bonus to employees. Discretionary bonuses are used when the bonus availability is dependent on certain factors, such as the company performing at a certain level, followed by other goals or milestones for employees. The timing and amounts may vary.
- Non-discretionary bonus — Typically, you have this type of bonus if you provide a bonus on a regular basis without much in the way of qualifiers. This bonus becomes part of their expected compensation and shouldn’t be stopped on a whim.
- Flat-rate bonus — This bonus amount doesn’t change based on other factors. For example, you pay an employee $15 extra each weekend day they work or $10 each time a contract is signed, regardless of the value of the contract.
- Commissions — A commission is a percentage of the net or gross amount of a sale. The employee earning the commission must be actively involved in making the sale. In California, you are required to have a written commission plan that clearly spells out the whole plan. If your employee isn’t bringing in the sale, you should call it a bonus instead.
We know these calculations and definitions can drive you crazy. However, you can’t ignore them or they’ll drive you straight to the Labor Commissioner… who will be happy to explain the error of your ways. We know California doesn’t make it easy to be an employer. Ask questions rather than assume you’re compliant. Take time to figure out the best way to do the calculations and document your process so you can duplicate it easily.
We know how much you enjoy hearing about what the California legislature has been considering that would affect your business or employees. The following is a sampling of the bills currently being discussed but have not (yet) passed:
Your HR Survival Tip
- AB2841 — increases the state paid sick leave from 3 to 5 days.
- AB1938 — prohibits inquiries regarding familial status. (Basically, this will be about who an employee can take time off for… and you probably won’t be able to ask the relationship.)
- AB2482 / AB2484 — authorizes scheduling flexibility through increased access to “compensatory time off,” and allow for individual “alternative
workweek schedules.” (I believe this would be a very useful set of laws.)
- AB1976 / SB937 — updates and expands workplace lactation accommodation requirements.
- AB2478 — enables employers to assist employees with student loan repayments. (This may be related to expensing that help instead of showing it as compensation to the employee.)
- AB2069 — amends the FEHA (Fair Employment and Housing Act) to regarding “discrimination” against medicinal marijuana users.
- SB1038 — amends the FEHA to impose individual liability upon employees who engage in post-complaint retaliation. (If an employee can be personally sued for retaliation against an employee who has filed a claim, this may make it easier for companies to get employees to comply.)
Sexual Harassment and Discrimination:
- AB1870 — extends the statute of limitations for pursuing sexual harassment claims to 3 years (rather than the current 1 year).
- AB1876 — requires new record-keeping rules for sexual harassment complaints.
- SB1300 / SB1343 / AB3081 — expands the scope of currently mandated harassment training to additional employers, and for non-supervisory
employees. (This likely will require many more levels of employees to be trained.)
- SB224 — expands current sexual harassment prohibitions to additional business, service and professional relationships. (This one is a bit scary because it takes sexual harassment out of the workplace and adds the risk to other interactions.)
- AB2366 — requires companies to provide time off work for victims of sexual harassment and immediate family members.
- AB2770 — extends immunities from defamation claims related to sexual harassment allegations.
- SB820 / SB1300 / AB3057 — imposes new limits on settlement agreements regarding sexual harassment claims, including prohibitions
regarding confidentiality provisions.
We’re not surprised the legislature has been thinking about sexual harassment because it’s been in the news for several months. However, does that mean we need to have even more laws around this topic… or just more consistent application of the laws we already have? We’ll let you know which of these proposals survive to become law in the months ahead.
“I’m not sure I have enough money available to make payroll next week. Can I pay my employees later, after a client pays a big invoice?”
Your HR Survival Tip
No! Absolutely not! If you don’t think you’ll be able to pay them completely AND on time, have them stop working immediately.
California is very clear and very protective about employees being paid in full and at exactly the same time every pay period. Of course there are laws about this:
- The employee must receive their pay within 7 days of the time worked. For example, if you are paying every 2 weeks, you only have 7 calendar days after that 2-week period ends to get a check in their hand.
- If you are using semi-monthly pay periods (twice per month) of 1-15 and 16-last day, the latest you can pay is the 26th and 10th, respectively. If your semi-monthly pay periods are on another schedule, such as 10-26 and 27-9, you must pay within 7 calendar days.
- You must post your pay day and the rules about it. If the pay day falls on a Saturday, Sunday, or holiday, you may pay the next business day. However, you need to state what your policy is… you can’t fluctuate from month to month. There is a part of every employment law poster to fill in this information. You can only delay a paycheck on holidays listed in the Government Code but this includes the standard holidays.
- If an employee has failed to turn in a timecard, you must pay for the scheduled time and then reconcile it later.
- Overtime from one pay period may be paid in the next pay period but absolutely no later than that. I’d save this for overtime worked that you didn’t know about.
Look at the dates from when the work period ended to the time you must submit your payroll. Don’t make it so tight you don’t have time for the unexpected. If you are late or cannot pay employees for all time worked, you are subject to penalties and fines… and the Labor Commissioner can force payment. But, really,a big concern is that your employees will feel they aren’t important to you if you can’t even get them paid on time.
Plan ahead. Business owners have to watch the money… but employees are watching the business owners.
“I have a few employees who I consider friends. However, I’m noticing they don’t take me as seriously as my other employees do. How do I change this?”
Your HR Survival Tip
We see each other at work almost more than we see our family so it’s no wonder that coworkers become friends. Some of these friendships last much longer than the job itself. However, there is a difference when you are the owner or the manager.
As you mentioned, “friends” often don’t take you as seriously as other employees. This makes it much harder to be a good manager. If you neglect to discipline the friend in the same way you would another employee, two things happen. One, you potentially have a discrimination claim and, two, your management style and policies are altered to accommodate the friendship instead of protecting the company.
If you do treat everyone the same when they don’t do what you say or in accordance with your policy, the friend will be upset because they aren’t getting special treatment due to the friendship. In the end, for the good of your business, you need to let employees-who-are-friends know they will not be treated differently in the workplace and they will be expected to follow all your rules, policies, and direction. The same applies to friends and family you are considering hiring. If they don’t understand this concept, you will either lose the employee or the friend or end up in a big fight.
It’s a tightrope you’re walking. And, as the saying goes, it’s lonely at the top. You do want to be friendly and accessible… and fair. But you may need to discipline, fire, or promote these employees in the future and must be able to fully justify your actions to them and others. Choose your priority… being a good manager/owner or being a good friend. It’s very hard to be both successfully.
“I’m trying to plan ahead and think about how I can prepare to sell my business one day. Are there things I can do now or should I wait until I’m ready to make a move?”
Your HR Survival Tip
It’s really never too early to start prepping your business for the future. Whether you plan to have someone take it over or sell it, the business will have more value if you keep that future in mind. After all, we’re all going to exit our business in some manner. We may not always be able to choose when but we can certainly make it easier for ourselves and others when that time arrives.
I’ve met a few business brokers and they all agree you need to start preparing your business at least 2-5 years in advance. What does this prep look like? Here are just a few examples:
- Document your processes — Stop rolling your eyes and realize this is critical. You can do short videos if writing your processes down is too much. However, anyone taking over the business needs to know what you’re doing to make it successful so they can keep repeating the process.
- Pull yourself out of the picture — If you are holding all the expertise and knowledge that keeps the business going, no one will find value in the business. Can you leave for 2-4 weeks and know the business will continue to operate as well as when you’re there?
- Hire good people — Instead of worrying that someone knows more than you, celebrate your good luck! Having great people work for you only makes you and your business look better. Make sure you’re taking steps to ensure they stick around. This often means you need to create a career path for them, if possible. You don’t want your employees leaving once someone else is at the helm.
- Maintain focus — We’ve all followed that shiny object at some time or another… that big distraction from our goals or plan. Figure out what your business is best at and how you can keep that momentum going. Flitting from one idea to another isn’t going to build a solid business.
- Lock down your customers — Most businesses rely on customers continuing to buy your product or service. What are you doing to ensure your customers will continue to use your business… regardless of who’s running it?
It doesn’t really matter if you want to eventually sell your business to a stranger or turn it over to family, the process is similar. If selling, you’ll have a much better chance of getting the best price if they can see what it will take to run the business. If turning the business over to family, they’ll thank you for providing a solid operation. Let us know if you would like an introduction to a business broker and explore what you can do to build value in your business.
“If I have someone come to work one day just for a 30-minute meeting, do I have to pay them for the whole day? Also, what if they come to work but I don’t need them at all that day?”
Your HR Survival Tip
These are actually two different topics but they both fall under short days so we’ll cover both scenarios.
When you schedule an employee to come to work for less than a normal day, you only have to pay them for the scheduled time. You could schedule an all-hands meeting on Saturday that only lasts 30 minutes and you’d only be required to pay for that 30 minutes. Although, let’s be honest, your employees would probably stage a mutiny if you made them attend a short meeting on one of their days off! Be considerate and try to squeeze those short meetings into the regular workweek.
The other scenario happens much more often. You have 4 employees scheduled to work all day Thursday. However, Thursday morning arrives and you realize there isn’t enough work for all of them so you decide to tell Sam to go back home. You will owe Sam “reporting time pay.”
Reporting time pay means you are paying for one-half of their scheduled hours… but no more than 4 hours and no less than 2 hours. So, if Sam was:
- Scheduled for 8 hours, you’d pay for 4 hours (one-half of the scheduled amount).
- Scheduled for 2 hours, you’d pay for 2 hours (the minimum amount of reporting time pay).
- Scheduled for 6 hours, you’d pay for 3 hours (one-half of the scheduled amount).
- Scheduled for 10 hours, you’d pay for 4 hours (no more than 4 hours is due with reporting time pay).
Both your employees and your budget would appreciate better scheduling so you don’t have more employees showing up than is needed for the available work. Check your workload and the schedule… call employees (pre-bedtime ideally) to let them know you won’t need them tomorrow. They won’t have to get up early and you won’t have to pay them reporting time pay.
“I’ve heard you mention a calculation that is needed when I’m paying my employees. What is it for?”
Your HR Survival Tip
California has several calculations to determine the correct pay for employees. Which calculation is used depends upon the situation. We have:
- Regular Pay — When regular pay is mentioned, it’s not always the same as an employee’s base wage. This is a calculation of their total wages for the day divided by the total hours. If you paid an employee different hourly wages that day ($12 /hr for one type of work and $14 /hr for other work), then you must do the calculation to determine the correct overtime premium paid if they worked overtime or to know what to pay for sick time.
- Split Shift Pay — If you have an employee taking more than an hour for the meal period, you might have split shift pay. This happens when you want them to take a longer meal break because you need them to work later. This is a calculation that may or may not cost you more money, depending upon their hourly wage. Basically, you owe them 1 hour of pay at minimum wage for the split shift. However, if they are paid more than minimum wage throughout the rest of the day, you can apply that over-minimum amount to the split shift pay.
- Overtime Pay — If you provide bonuses to hourly employees, you may need to add that bonus into your overtime calculation. Plus, if the employee is paid based on piece rate, the overtime calculation is different than for non-piece rates.
- Sick Leave Pay — Look closely at the sick leave law(s) that affect your employees. The law may require you to perform a calculation to know what to pay your employee for sick hours. This is one area where the language does vary by location.
There are other calculations but these are the most common. Make sure you are paying your employees properly. Your employees may not know about these calculations but the Labor Commissioner and attorneys certainly do and this could pop up if any other claim is filed.
GrubHub is a company who provides connections between restaurants and delivery drivers classified as independent contractors. GrubHub had a driver, Lawson, who filed a lawsuit claiming he should have been an employee. You might wonder why the classification is such a big deal.
Your HR Survival Tip
If a worker is classified as an independent contractor, there are several wage and hour law perks they didn’t get, such as meal breaks, paid rest breaks, overtime pay, or paid sick leave. If the company was wrong about the classification, the company now has to pay the worker for all those lost benefits over the past 4 years. The company is also responsible for the worker’s payroll taxes, fines, penalties, and attorney fees. Overall, misclassifications can be very expensive.
The GrubHub case was heard in 2017 and GrubHub won. The court provided numerous examples of why that decision was reached. Would the court say the same about your independent contractors? Here are the points made:
- GrubHub exercised little control over the details of Lawson’s work.
- Lawson wasn’t required to have any particular training or orientation.
- GrubHub didn’t conduct performance evaluations.
- Lawson could decide not to work, right up to the moment the time slot he had signed up for was scheduled to begin.
- GrubHub didn’t control when or how Lawson delivered the restaurant orders he chose to accept.
- Lawson decided when and if he wanted to work and for how long (complete control of his schedule).
- GrubHub didn’t control Lawson’s appearance while he made deliveries.
Previous cases have used a 1989 court case as the litmus test for determining whether or not a worker was misclassified. However, a more recent court case referred to the definition of employees found in your Wage Orders, which makes it much easier for the worker to claim he’s an employee. We are currently waiting to hear the opinion of the California Supreme Court on whether that test can be used. If the answer is yes, we’ll all want to review our independent contractors to determine if they should now be employees.
Nearly every company has or will be challenged with determining whether a worker qualifies as an independent contractor. It’s not a decision to be made lightly or just because it’s expedient. Ideally, you should be able to hand over a client or project and say “here’s the scope of work and the deadline.” Then you back off until it’s time to see if the deadline is met and the scope of work completed. Is your relationship with your independent contractor close to this?
“One of my employees got mad and pushed another employee. I believe the one who got pushed was deliberately trying to make the other employee mad. What should I do about this?”
Your HR Survival Tip
Although there is more conversation about violence in the workplace, it doesn’t seem to be stopping it. In fact, we’ve heard about more employees verbally and physically attacking one another than ever before.
There are a few things you can do to prevent this and ways to handle the situation if prevention doesn’t work. The first is recognizing that you, as the business owner or a manager, absolutely must take action. You need to make sure this type of behavior is not condoned or allowed.
There are a variety of possible disciplinary actions you can and should consider, including unpaid suspension, termination, a write-up, anger management classes, harassment classes, probation, etc. How you handle the situation depends greatly on what exactly happened. Make sure you have witnesses write up what they saw and heard.
Here are a few fictional examples and what we might recommend (depending on the details):
- Sam and John are yelling at each other in front of others — Write them both up for unprofessional behavior and maybe consider a day’s unpaid suspension for the one who started it. Also find out what caused it and consider how to avoid this in the future.
- A supervisor gets mad at a direct report and punches him — Termination of the supervisor because, in that position, he now poses too big of risk to the company. Maybe write up the direct report, depending on what happened before the punch.
- A lead has told a newer employee to work rather than watch others. Later the employee threatens the lead. — Terminate the employee. This wasn’t a heat of the moment response; he waited and then made the threat.
- Sam is verbally abusing John and eventually makes John mad enough that he takes a punch at Sam. — Terminate John for violence and write up Sam for potentially harassing behavior. Possibly even put Sam on probation if this is a common behavior for him.
The point is that, once emotions start escalating, someone needs to be smart enough to walk away before things get out of hand. Screaming at each other doesn’t solve anything… and rarely even makes them feel better. You just can’t have someone in your workplace that believes a punch is okay.
Once emotions have cooled, then both parties can discuss the problem and find a solution. If the conflict is about work, everyone needs to recognize a solution must be found and work toward that end without hot tempers. If the conflict is due to a personal issue, tell them to resolve it outside of work. Make sure your employees understand what professional behavior looks like and give them ways to calmly resolve any issues. Also make sure they know there will be consequences, and potentially severe consequences, for unprofessional behavior.