COVID Confusion

As you know, HR Jungle is a human resources consulting firm… not a safety or risk management company. We, too, struggle to read all the latest COVID news and try to understand it. Unfortunately, the information continues to change nearly weekly so everyone needs to keep checking on the latest regulations. Here are the resources we use most frequently:

State and Federal Resources

Cal/OSHA (California Occupational Safety and Health Administration) regulations are the only thing that matters when it comes to what California companies must do regarding COVID. Cal/OSHA overrides all federal agencies regarding how California companies deal with COVID. Review Cal/OSHA guidelines at https://www.dir.ca.gov/dosh/coronavirus/ and their helpful FAQs at https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/Guidance-on-Isolation-and-Quarantine-for-COVID-19-Contact-Tracing.aspx.

California’s Governor Newsom can and has issued executive orders that can override Cal/OSHA regulations or add a special requirement, such as the current indoor mask mandate. All executive orders are listed at https://www.gov.ca.gov/category/executive-orders/.

Recently Cal/OSHA agreed to follow most of the CPHD (California Dept. of Public Health) rules for COVID. This site also has a chart showing quarantine periods, etc. that you need to know at https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/Guidance-on-Isolation-and-Quarantine-for-COVID-19-Contact-Tracing.aspx.

CDC (Centers for Disease Control) has been the primary federal site for many people but, in California, Cal/OSHA takes priority so don’t rely on the CDC for information on what to do in California. However, the CDC has provided a great deal of information throughout the pandemic at https://www.cdc.gov/coronavirus/2019-ncov/index.html.

OSHA (Federal Occupational and Safety and Health Administration) initiates many of the workplace safety regulations but they only have authority in states where there is no state version of this agency. Cal/OSHA is California’s version of this agency and will usually take the OSHA regulations and fine-tune them for California. Federal OSHA’s site is https://www.osha.gov/.

Other Resources

Fisher & Phillips LLP is an employment law firm that has provided a multitude of newsletters and webinars throughout the pandemic. Their explanations have helped us better understand the requirements for employers. They also sell a complete COVID Packet, including a written plan, all the other documents needed, and a step-by-step guide for handling COVID cases in your workplace. View their information at https://www.fisherphillips.com/services/emerging-issues/covid_19-resource-center/index.html?tab=overview.

Ogletree Deakins Nash Smoak & Stewart PC is another employment law firm providing helpful information on COVID at https://ogletree.com/coronavirus-covid-19-resource-center/.

New Year Checklist

After having the holidays off, it’s time to make sure you are ready for the new year. We have provided a short checklist to help out:

  • Increased minimum wage — California’s minimum wage for hourly employees increased to $15/hour in companies of 26 or more employees and $14/hour in companies of 25 or fewer employees. Remember to check for local ordinances, such as the City of San Diego’s that requires $15/hour in companies of all sizes.

  • Increased minimum salary — When the minimum wage goes up, so does the minimum salary. Salaries have increased to $62,400/year in companies of 26 or more employees and $58,240/year in companies of 25 or few employees. Local ordinances do not affect the salary because it’s based on the state minimum wage.

  • Review your exempt (salaried) employees to confirm their responsibilities and duties still qualify for a Federal exemption. Otherwise, they need to be converted to non-exempt (hourly).

  • Review your pay stubs to ensure they are still accurate and complete. Payroll systems have unexpected quirks just like any other software. Make sure both your company name and address are still correct.

  • Send out the holiday schedule for 2022 with the specific days you’ll be closed and who will be paid or unpaid on those dates. Your Employee Handbook may cite the holidays normally observed but you still want to provide a memo to employees showing the actual dates for 2022 and who, if anyone, is paid on those days. Even if you close for a holiday, you’re not legally required to offer holiday pay.

  • Review paid sick leave in payroll to ensure the balances reset to the front-loaded amount or the accrued amount was carried over. If you are using the calendar year as your plan year, now is the time to make sure your payroll processor handled the year-end changes properly.

  • Review your Employee Handbook to ensure any legal updates or policy changes have been made and your policies match your practices. What you do (practice) carries more weight than what is written (policy) but you really want them to match to avoid problems.

It pays to take time now, at the beginning of a new year, to ensure any legal changes have been properly handled. It’s also a great time to review your policies and other documents for any needed changes. Get a great start to your year knowing everything is as it should be.

It’s Back!

Federal vaccination mandates have been bounced around the courts but one just bounced back into our laps. A federal appeals court has reversed a previous block and the mandate for companies of 100 or more employees to require vaccinations or weekly testing is, once again, active. The new deadline is Monday, January 10, 2022.

We know many companies who originally thought they might be subject to the OSHA mandate have continued their efforts to track vaccination status among their employees. Here are additional items to consider:

Deadline: Although the deadline is 1/10/2022, Federal OSHA has said it will accept reasonable, good faith efforts to follow the regulations. However, we are still waiting for Cal/OSHA’s regs to come out and they may have a slightly different deadline. The deadline represents when you must institute weekly testing or when your employees must be fully vaccinated or have an approved medical or religious accommodation request.

Other vaccination rules or laws: It is assumed Federal OSHA will preempt any state law against vaccinations. However, in a state like California that follows Cal/OSHA rather than Federal OSHA, the state version will rule. Of course, any state version of OSHA is required to adopt regulations that are at least as strong as Federal OSHA so don’t expect any loopholes there.

Federal contractors: At this time, Federal contractors are still in a holding pattern but will likely be required to comply with this mandate until, or in addition to, the Federal contractors mandate.

Petitions and appeals are flying around so don’t expect this to be the last word. We are in another one of those wait-and-see periods related to COVID. Prepare for the mandates but sit on accommodation requests until we get more information. As a side note, don’t forget that all Californians are required to wear a mask when inside businesses or public venues until 1/16/2022. This was a one-month mandate by Governor Newsom to slow down the positive cases.

One Drink Too Many

“What’s the worst that can happen if I serve alcohol at our company holiday party but offer cab service to and from each employee’s home?”

Your HR Survival Tip

We have usually advised clients to at least use designated drivers or cab service when providing alcohol at company parties to minimize the risks. However, that doesn’t mean you are risk-free.

Years ago there was a case (Purton v. Marriott International, Inc. (2013) 218 Cal. App. 4th 499) that made us offer a warning instead of advice because there is no risk-free way for a company to serve alcohol. Marriott held a company party for employees. They planned to control the drinking by allotting each employee only 2 drink tokens and then only serving wine and beer. However, it’s hard to plan for every possibility.

One of the employees (we’ll call him Sam) had a couple of drinks prior to the party and brought a flask with him and, sometime during the evening, a bartender refilled the flask. Sam became drunk but he successfully drove himself and a coworker to Sam’s house that night. A little while later, Sam left his house to drive his coworker home. While driving to his coworker’s house Sam hit another car, killing that driver. The driver’s parents filed a wrongful death case against the Marriott. The court decided Marriott’s responsibility ended when Sam originally arrived home safely. But the Court of Appeals reversed that decision, stating Sam became intoxicated during the scope of his employment (i.e., company-sponsored party) and that made the accident the Marriott’s responsibility.

There is a legal thing known as “social host” that, essentially, makes the host providing the alcohol responsible for any subsequent actions. The appeals court said since the party was intended to enhance morale and improve employee relations for the Marriott, the party was within the scope of Sam’s employment.

The issues in this case really came down to the fact that the timing of the accident mattered much less than the act that caused the injury, which was the company-sponsored party. Although we all dislike the thought of having to give up a few drinks while socializing with coworkers, the risks continue to rise so you may need to make some hard decisions or keep your fingers crossed that no one drinks too much.

Pay Now or Pay Later

“I have an employee who is always late with his timecard. Is it okay to pay him on the next pay period?”

Your HR Survival Tip

California has laws in place to ensure your employees are paid fully and on time. In addition, the state holds your company fully responsible, regardless of what your employee does or doesn’t do.

No or Late Timecard — The state believes you, as the employer, should know when your employee was scheduled to work and, therefore, should know how many hours to pay the employee for that pay period… even if the employee doesn’t submit a timecard or submits it late. You are legally obligated to pay the employee on the established payday for the true or scheduled time worked.

Incorrect Timecard Hours — If the hours are wrong, you are still obligated to pay for the hours submitted (or scheduled, if there is no timecard) on or before your official pay date. Only overtime hours that were submitted late (and that the company didn’t know about) may be paid on the next pay date.

Pay Dates — California has no leniency for late payment of wages. You must pay employees on a date you have noted on your employment law posters, Employee Handbook, or other documentation. This date must be within the legal boundaries. Although there are some exceptions, you must pay employees within seven days after a work period is complete. For example, if you pay every two weeks (biweekly) and the work period ends on a Friday, you must pay employees for those work hours within seven days (on or before the following Friday).

Holidays and Pay Dates — You are allowed to choose to pay employees the workday before or workday after a holiday when the official pay date falls on a holiday… as long as it is still within the seven days allowed. This, too, is published and not changed randomly.

Final Pay — When an employee is leaving your company for any reason, they must receive their final paycheck on or before that final day. If the employee departs without 72 hours’ notice, you get only 72 hours (3 calendar days) to get them the final paycheck. Direct deposit will usually be later than this so know how to create a live, manual check through your payroll system.

California shows no mercy if you’re not paying employees in accordance with the laws. A missed or late payday has a penalty of $100 per employee the first time. Subsequent penalties include $200 per employee, plus 25% of the late payroll. In addition, the Labor Commissioner can issue a stop-work order against the company, levies against your company bank accounts, and liens on real and personal property. Anyone acting on behalf of the company, such as an owner, officer, or director, can be held personally liable. Yes, the state is really serious about this so don’t treat those pay dates as movable targets.

Update Their Pay

January 1st should just be called New Pay Day because that’s when we must update wages and salaries every year. December is the perfect time to review the exempt and non-exempt status of your employees to ensure you have correct classifications. It is also the time of year to review any independent contractors to ensure they still meet the legal standards for contractors in California. The following wages and salaries are effective on 1/1/2022:

Minimum Wage

Minimum wage is a mandatory hourly rate of pay for hourly (non-exempt) employees. Throughout California, you must pay $15.00 per hour if you have 26 or more employees in 2022. It’s only $14.00 per hour if you have 25 or fewer employees. However, 2022 will be the last year there is a difference in minimum wage based on the number of employees in your company.

California considers it wage theft if you are not paying employees minimum wage for all hours worked, overtime pay for any work over 8 hours in a day or 40 in a week, or premium pay when appropriate based on CA law. New laws have imposed higher penalties for wage theft, and this is one of California’s hot buttons. In addition, if your hourly employees are required to pay for anything themselves to work for you, do the calculation of earnings minus expenses to be sure the net amount is still more than minimum wage. The courts have been harsh on companies paying less than minimum wage due to the employee paying for business expenses.

Minimum Salary

A salary is a flat amount paid each pay period to exempt employees, regardless of the number of hours worked. In accordance with Federal law, exempt employees must pass two tests to be eligible for this status: a salary test and a duties test. The minimum salary amount is always a calculation of two times state minimum wage times 2,080. For 2022 in California, this will be $15.00 X 2 = $30.00 X 2080 = $62,400/year for companies of 26 or more employees. It’s $58,240/year for companies with 25 or fewer employees.

The minimum salary cannot be prorated to a lower number based on part-time work even though the minimum is based on full-time hours (2,080). If the work isn’t worth the minimum to your company, convert the employee to non-exempt hourly. If you pay exactly the minimum, the employee cannot ever have an unpaid day off or they will drop below the minimum and automatically become hourly… the full amount must be paid every pay period. This is just the salary test portion of determining if the employee meets the exempt qualifications per Federal law.

Exempt Software Professionals

This is a special category only available in California and was first created after the dot.com bubble burst years ago. There is not only a special salary but also special requirements to be eligible for this exemption. The salary changes every year and seems to have nothing to do with the regular minimum salary. In 2022, the minimum will be $104,149.81/year but also allow hourly pay of $50.00/hour. This special position is also eligible for overtime pay. The bigger challenge for this exemption is the duties test. The person in the position must be at a level of skill and expertise necessary to work independently and without close supervision and is often creative. Regardless of the amount you pay, look into the details of the types of computer professionals allowed to use this exemption.

Misclassifications

In closing, we want to remind you of the problems with “guessing” wrong when classifying employees. When, not if, you’re caught misclassifying someone as exempt instead of hourly or a contractor instead of an employee, EDD (CA’s Employment Development Department) will audit you going back three to four years. They won’t look at just this one case; they will review and analyze all monies paid to individuals and the work they did in their role. If you are found to have misclassified anyone, you will be responsible for any state payroll taxes due to CA, and any unpaid overtime and premium payments due to the employee… plus fines and penalties. Once EDD is finished, they automatically turn you over to IRS (Federal Internal Revenue Service) for similar treatment. It’s just not worth it to be wrong… instead, be conservative when classifying workers.

Upcoming Legal Changes

Just as the holidays are on the horizon, our good mood drops because we know the legislature has new surprises for us. This is just a quick heads up about what’s coming.

  • AB1033 adds parents-in-law to the list of family members under CFRA (CA Family Rights Act). This means employees can also take the protected time off to care for a parent-in-law. This same law also expands the mediation program the state offers for companies of 5-19 employees. Since they expected small companies to have trouble with this protected leave, they are now requiring employees to go through mediation before filing a lawsuit.

  • SB606 allows Cal/OSHA (the state’s version of the Federal Occupational Health and Safety Act) to issue more citations. Now a violation of certain safety rules can be enterprise-wide (multiple worksites) and carries a higher penalty. In addition, if an employee is exposed to that safety violation, the penalties can be on a per-employee basis.

  • AB1003 considers it grand theft if a company is found guilty of intentional theft of wages, benefits, or compensation over a certain amount in a 12-month period and it may result in a misdemeanor or felony. The amounts are over $950 for one employee or $2,350 for more than one. We see a lot of charges of wage theft in California so this is something to audit periodically.

  • SB572 allows the Labor Commissioner to create a lien on real property as an alternative to a judgment lien.

  • SB331 continues to limit confidentiality clauses in severance and settlement agreements. If you are reusing old agreements, now is the time to have them reviewed by an attorney to ensure they are valid. This law also expands acts of harassment and discrimination of any protected characteristic, not just those based on sex.

  • AB701 targets warehouse distribution centers, including electronic shopping and mail-order houses. Each non-exempt (hourly) employee must receive a written job description, including any quotas, time periods, etc., and what may happen if the employee fails to meet the quota. The employee can request their 90-day work speed performance and prevents the employer from taking adverse actions against the employee within 90 days of that request.

  • SB62 targets garment manufacturers and those they may work with for manufacturing. They will all be responsible for any wage violations of employees in that supply chain. This law also prohibits piece-rate pay for this industry except when there is a union.

It’s obvious the big hot button is wage theft. This is when an employee is not receiving at least minimum wage and it’s often because the employer makes the employee pay for certain things that take their earnings below the minimum. It shouldn’t cost your employees anything to work for you. If they must pay for something, it’s critical you have done the calculations and absolutely know they are still earning above minimum wage.

Managing After the Fact

“I currently have an employee on a leave of absence who is due back in three weeks. We don’t want her back. While she’s been gone, we have found so much that she didn’t do well or even do at all. Is it okay to tell her we don’t want her back?”

Your HR Survival Tip

All too often we hear from companies that an employee on leave isn’t welcome back. Nearly every time we have to say it’s not the company’s choice, it’s a legal requirement. The question companies should really be asking is why the employee’s return to work is a problem.

A common situation: Sally has been employed for two years by the company. She is legally eligible for a CFRA (CA Family Rights Act) leave of absence of up to 12 weeks off that includes job protection. About one month into the leave, we get a call from the employer. They have discovered Sally hasn’t been doing her work in a timely manner; the quality of her work turns out to be below the level expected; they even found a few things in her desk that don’t appear to have been done at all but were due months ago; and it turns out the workplace actually feels friendlier without her around. They don’t want her back due to her work performance and attitude. How can they terminate her?

Unless you already had several writeups or a performance improvement plan in place before Sally left on her leave, you’re stuck. The law is very clear that, once her leave is over, you must return her to the same or similar position. In fact, you can’t just immediately write her up and plan to terminate her upon her return because it will usually be viewed as possible retaliation for her taking the leave. Sally is in a legally protected bubble. She needs to return to work and then you can, over time, work on her performance.

Do you understand Sally isn’t even the real problem? The real problem is Sally’s supervisor who didn’t have checks and balances in place to notice Sally’s performance was below par long before she went on leave. No matter how long someone works for you, you need to make sure the work is still being done on time and at the expected level. People sometimes slow down or get a bit lax with their work and it’s up to the supervisor to ensure this isn’t happening… or is being corrected when noticed. Assuming an employee is doing everything perfectly at all is a bad management technique for a supervisor. Why wasn’t that supervisor meeting weekly with Sally to see what she was working on, whether there were problems, and to provide feedback? If the work was important, why weren’t the problems discovered before someone went digging through Sally’s desk?

Supervisors need to actually supervise their people. As soon as problems with someone’s work are discovered, it’s time to start making corrections. It becomes a very frustrating problem when the discovery only happens because that employee is on a leave. Most leaves of absence will protect the employee and tie your hands. Instead of focusing just on Sally, start looking at how well your supervisors are doing their own job because Sally’s supervisor should take as much responsibility as Sally. Don’t assume getting rid of Sally will actually fix your problem. Sally’s leave merely brought attention to the bigger problem.

Order Your Employment Law Posters!

If you haven’t already ordered your posters, do it now because the new year is coming fast!

Click on the image to the right to order.

You’ll be taken to our favorite site for ordering employment law posters. The reason is… they offer both the poster and update service for less than most places charge just for the poster.

  • All-In-One State and Federal Labor Law Poster is fully laminated and attorney-approved.
  • Continued compliance throughout the year with the 1-Year E-Update Service that provides updated postings via email with every mandatory federal and state change.
  • They have a $25,000 ‘We-Pay-The-Fine’ guarantee that protects your business against costly fines and imposed penalties.

Only $29.99 for the poster and updates!

California recently passed a law that allows you to provide the poster information electronically. However, they were also very clear that electronic copies do not replace the required wall poster in whatever qualifies as your primary business office. 

Where Did They Go Wrong?

California’s Labor Commissioner’s Office is tasked with ensuring employees receive all monies legally due them by their employers. Since this is a state agency, most of the money collected goes to the employees and a much smaller amount to the state. We’ve provided a few cases and tips below:

  • JPI Construction LLC — [San Diego] Cited $1.7 million for allegedly failing to pay overtime to hundreds of employees. They only paid employees for 40 hours per week even though the employees consistently worked more hours. TIP: This sounds like they paid a per diem wage (flat amount for the day) but failed to recognize that, in California, the per diem can only be used for the first 8 hours in a day, then overtime is due.

  • New Vision Drywall Inc (DBA Performance Drywall) — [San Diego] Assessed $50,000 in civil penalties and paid $860,608 in back wages and liquidated damages for failing to pay overtime wages. The company owed 568 employees overtime, some of which worked up to 58 hours per week. TIP: They were reported by a non-profit labor management organization, probably in response to conversations with employees. Employees will often talk to people outside your organization when they feel they are not treated fairly.

  • Adat Shalom Board & Care Inc — [Los Angeles] Owes over $8.5 million to 148 caregivers who were paid a flat monthly amount ($1500-$1800), without overtime or meal period premium pay even though they often worked 24 hours a day, six days a week. TIP: The Industrial Welfare Commission Orders (IWCs) for this industry specify how much money can be claimed for room and board. Beyond that, a company must pay employees fairly for the 24-hour care they are offering. Even using alternate workweeks, overtime must be factored in when the work continues beyond 11 hours or 40 hours in a week.

  • Perfect Point Corp (DBA South Coast Gymnastics) — [Irvine] Cited $1.3 million for failing to pay 28 employees overtime (resulting in minimum wage violations), lacking appropriate meal and rest periods, and paystub violations. TIP: The audits conducted typically go back three years to determine how widespread the wage theft may be. In the past few years, we have seen more paystub violations because the paystub did not include all the information legally required.

  • Z & Y Restaurant — [San Francisco] Reached a $1.6 million settlement for 22 employees regarding unpaid minimum wages, overtime, split shift premiums, and tips. In addition, legal violations regarding record keeping and paid sick leave were discovered. TIP: Split shifts occur when the employer requires the employee to leave and return to work later with more than an hour gap in the work. There is a possible split shift premium due that needs to be calculated and paid each time it happens.

When cited for not paying wages in full, you’re paying more than just what was owed to the employees. The amount owed to the employees, plus interest, is called liquidated damages. The agency does the math to determine the hourly wage paid by taking total wages divided by total hours worked. If overtime isn’t paid, the employee may have been earning less than minimum wage so that is another violation. Pay is due on a very specific schedule and, if you pay late, waiting time penalties kick in. Waiting time penalties are calculated by taking the rate of the employee’s daily wages multiplied by the number of days the payment is late (up to 30 days). Civil penalties are amounts paid directly to the state for failing to follow the law.

California is a state that is very protective of employees. Some companies purposely underpay employees. Other companies just don’t understand what is legally due to employees. However, ignorance of the law will never be a good defense. California has more laws around pay than other states so it is worth your time to ensure you are paying employees correctly and to understand all the little things requiring calculations that may impact that employee’s pay.