Minimum Wage Increase

 

Effective January 1, 2016, California's minimum wage increases to $10.00 per hour from the previous $9.00 per hour. Check your local city ordinance for higher minimum wage rates.  For example, San Francisco's current minimum wage rate is $12.25 per hour and will increase to $13.00 per hour on July 1, 2016.

 

Creation of Labor Commissioner Judgment Enforcement Powers (SB 588)

 

The Labor Commissioner's campaign against wage theft scores a major win to expand the powers of the Labor Commissioner.  Not only can the Labor Commissioner investigate and render an award in favor of the employee, the Labor Commissioner can now act as the levying officer to lien and levy against an employer's assets.   For example, the Labor Commissioner can now place a lien on the employer's property or levy on the business' bank accounts and/or accounts receivable. 

 

Any successor or new business of the liable employer that is "similar in operation and ownership" to that employer is also liable for the unpaid wages.  SB 588 deems that new business as the "same employer" for purposes of liability if (1) the employees of the successor employer are engaged in "substantially the same work in substantially the same working conditions under substantially the same supervisors," or (2) the new entity has "substantially the same production process or operations, produces substantially the same products or offers substantially the same services, and has substantially the same body of customers."  The new law also provides another avenue to hold individual owners of the employing entity, regardless of corporate structure, personally liable because those owners act "on behalf of" the employer.  As a result, an individual owner's personal assets, including real property and bank accounts - are fair game.

 

Further, the new law prohibits an employer from continuing to conduct business in this state after failing to satisfy a wage judgment.  The Labor Commissioner may require that employer post a bond in order to continue to do business in the state after failing to pay an award.  The bond amount ranges from $50,000 to $150,000 depending on the amount of wages found owing.  Employers who continue to not pay the judgment and fail to post the required bond can have their business license revoked by the Labor Commissioner.  Continued failures, permit the Labor Commissioner to lien real property.  In all, the new law makes the Labor Commissioner both the "Judge" and the "Executioner."

• Rest and recovery period pay calculated at an average hourly rate that is determined by dividing the employee's total compensation for the workweek (not including compensation for rest and recovery periods and overtime premiums) by the total hours worked during the workweek (not including rest and recovery periods).

• Nonproductive time pay at a rate that is no less than the applicable minimum wage. "Other nonproductive time" is defined as "time under the employer's control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis."  The amount of "other nonproductive time" is determined either by actual records or by the employer's "reasonable estimate" of time engaged in nonproductive activities.  If these employees are paid an hourly rate for all hours worked in addition to piece-rate wages, then those employees would not need to be paid amounts in addition to that hourly rate for the other nonproductive time.

Amendments to California's Equal Pay Act (SB 358)

 

SB 358 amends Labor Code section 1197.5, which currently prohibits an employer from paying an e

mployee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work. The amended law replaces "same establishment for equal work" to "substantially similar work," which is determined by a combination of skill, effort, and responsibility, while considering whether the work is being performed under similar working conditions.

 

Further, employers must be able to affirmatively demonstrate that: (i) any wage differential is based on a seniority system, a merit system, quantity or quality of production, or any bona fide factor other than sex; (ii) that these factors are reasonably applied; and (iii) these factors account for the entire wage differential.  The differential must be consistent with a "business necessity," such as differences in education, training or experience specific to the subject position.  However, a bona fide business necessity "may still be impermissible where it is shown that there is an alternative practice that would accomplish the business purpose equally well with a lesser discriminatory impact."   

In addition, SB 358 provides anti-retaliation protections by prohibiting an employer from discharging, discriminating or retaliating against an employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this new law.  The law explicitly prohibits retaliation or discrimination against employees who disclose, discuss, or inquire about their own or their co-workers' wages for the purpose of enforcing their rights under the Equal Pay Act. 

   

Retaliation Protections for Family Members (AB 1509)

 

Under this new law, employers are prohibited from retaliating against an employee because he or she is a family member of another employee who has engaged in or was perceived to have engaged in protected whistle-blowing activities.   Specifically, AB 1509 amends the following Labor Code sections to include family members as part of the protected class: (1) Labor Code section 98.6 (wage and hour complaints made to the Labor Commissioner); (2) Labor Code section 1102.5 (internal and external complaints made about legal violations); and (3) Labor Code section 6310 (complaints made about unsafe working conditions).  This bill's objective was to protect lower-income earners who frequently have family members working for the same employer. An "employer" also means a person acting on the employer's behalf such as a contractor/subcontractor or a client-employer of a staffing agency. 

 

New Protected Classes Added To Unruh Civil Rights Act (SB 600)

 

Concisely, this new law adds protections under Unruh Civil Rights Act by prohibiting discrimination by business establishments based on citizenship, primary language, or immigration status.