California Employers: Test Yourself – Are You Ready for 2014?

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If you have employees in California, you are, no doubt, aware that California laws are constantly changing and have a tendency to sneak up on even the best companies. To help prepare you for the year ahead, here are five important questions employers should ask themselves to test whether they are ready for the key changes in 2014:

1.      Do You Need to Give Your Exempt Employees a Raise?

On October 18, 2013, the California Department of Industrial Relations (DIR) announced that the minimum compensation required to qualify for the state’s computer-professional overtime exemption in 2014 will increase by 1.2 percent from the 2013 rate. Beginning January 1, 2014, employers will have to pay their computer professionals at least $84,130.53 a year ($7,010.88 monthly) to qualify for the exemption, up from the 2013 rate of $83,132.93. Don’t forget that, as always, in addition to the compensation requirement, your computer professionals must also perform the duties set forth in Labor Code section 515.5.

In the same vein, on July 1, 2014, minimum wage in California will increase from $8.00 to $9.00 per hour, and further increase to $10.00 per hour on January 1, 2016. This raise impacts the minimum salary threshold to qualify as exempt from California’s minimum wage and overtime requirements under the “white collar” exemptions. To qualify as exempt under these exemptions, employees must be paid at least double minimum wage. Accordingly, on July 1, 2014, to qualify for a “white collar” exemption, an employee must earn an annual salary of at least $37,440, and beginning January 1, 2016, an annual salary of at least $41,600. For more on the minimum wage increase, see our previous blog post here.

A new law also clarifies that if an employer pays less than minimum wage, the employee can recover civil penalties in addition to liquidated damages. Labor Code section 1194.2 currently allows a court and the Labor Commissioner, in an action for payment of less than minimum wage, to award liquidated damages in an amount equal to the underpaid wages. AB 442, effective January 1, 2014, clarifies that the civil penalties available under Labor Code section 1197.1 are in addition to any awarded liquidated damages under Labor Code section 1194.2.

2.      What Are Your Policies and Procedures for Protecting Whistleblowers?

Labor Code section 1102.5 currently prohibits an employer from making, adopting or enforcing any rule, regulation, or policy preventing an employee from disclosing information to a governmental or law enforcement agency, and prohibits retaliation against employees who make any such external reports, if the employee has reasonable cause to believe such information discloses a violation of state or federal law. Effective January 1, 2014, the scope of section 1102.5 will be expanded in at least two important ways. First, under the new law, employers are prohibited from retaliating against employees because the employer believes that the employee disclosed or may disclose information to a governmental or law enforcement agency or internally to a person with authority over the employee or to another employee who has the authority to investigate, discover, or correct the violation, if the employee has reasonable cause to believe such information constitutes a violation of law. Second, the law prohibits an employer from retaliating against an employee for disclosing or refusing to participate in an activity that would result in a violation of or noncompliance with a local rule or regulation in addition to a federal or state statute, rule or regulation.

3.      How Are You Treating the Military Service Members and Veterans in Your Ranks?

Effective January 1, 2014, the categories of persons protected from employment discrimination under California’s Fair Employment and Housing Act (FEHA) will expand to include “military and veteran status.” This is defined to include active members or veterans of the U.S. Armed Forces, U.S. Armed Forces Reserve, the U.S. National Guard and the California National Guard. Although existing federal law prohibits discrimination against certain military veterans, SB 556 expands the protections to a broader swath of employees.

4.      How are You Treating Suspected Undocumented Workers?

Effective January 1, 2014, employers are prohibited from engaging in, or directing another person to engage in, an “unfair immigration-related practice” against an employee in retaliation for exercising a legal right. An “unfair immigration-related practice” includes, among other things: (i) requesting more or different documents than required under federal immigration laws, (ii) using the federal E-Verify system to check an employee’s work authorization status at a time or in a manner not required under federal law, (iii) threatening to file a false police report, or (iv) threatening to contact, or contacting, immigration authorities.

The new law, Labor Code section 1019, creates a rebuttable presumption that any adverse action taken within 90 days of an employee exercising a right protected under the Labor Code is retaliation. The law authorizes a civil action for equitable relief and damages or penalties for an “unfair immigration-related practice.” Additionally, a court is authorized to order the suspension of certain business licenses held by the employer if a violation is found.

Also effective January 1, 2014 is new Labor Code section 1024.6, which prohibits an employer from discharging or discriminating, retaliating, or taking any adverse action against an employee who updates or attempts to update his/her “personal information,” thereby protecting employees who are undocumented at the time of hire but later receive, for example, work permits and/or social security cards.

Lastly, the new law makes it unlawful for an employer to retaliate against an employee who has complained to the employer that the employee is owed unpaid wages, creating a civil penalty of $10,000 per violation, and clarifies that employees need not exhaust administrative remedies through the Labor Commissioner in order to bring any of the above claims.

5.      Are You Providing Adequate Accommodations and/or Time Off to Victims of Domestic Violence, Sexual
Assault, Stalking and Other Employee Crime Victims?

The Labor Code currently prohibits an employer from discharging, discriminating, or retaliating against an employee who is a victim of domestic violence or sexual assault for taking time off from work to seek medical attention, attend court proceedings, or other related activities. SB 400, effective January 1, 2014, extends these protections to victims of “stalking” (as defined in the Penal and Civil codes). The law further requires employers to provide reasonable accommodations to employees who are victims of domestic violence, sexual assault, or stalking. SB 400’s requirements mirror the reasonable accommodation requirements and procedures under California’s disability discrimination laws; employers are required to engage in a good faith interactive process with the employee to determine reasonable accommodations which do not constitute an “undue hardship” on the employer. Reasonable accommodations may include such things as job transfer or reassignment, modified schedule, changed telephone number or work station, lock installation and the implementation of safety procedures, among other things.

Similarly, SB 288, also effective January 1, 2014, allows an expanded list of employee crime victims to take time off of work to appear in court in connection with offenses such as vehicular manslaughter while intoxicated, felony child abuse, felony physical elder abuse, assault resulting in the death of a child under eight years of age, solicitation for murder, hit-and-run causing death or injury, or a serious felony (as defined in the Penal Code). “Victim” is defined broadly to include any person who “suffers direct or threatened physical, psychological or financial harm as a result of the commission or attempted commission of a crime or delinquent act.” The term “victim” also includes the employee’s spouse, parent, child, sibling, or guardian, meaning that if an employee’s spouse, parent, child, sibling or guardian is a victim of a crime or delinquent act, the employee must be allowed leave, as well. If an employee provides certification of a court-related absence within a reasonable period of time following the absence, the employer is prohibited from taking any action against the employee as a result of an unscheduled absence. Employers are also prohibited from discharging or discriminating or retaliating against an employee for taking time off in connection with one of the listed court proceedings.