2016 LEGISLATIVE UPDATE: WAGE AND HOUR
January 4, 2016 by Peter McEntee, Susan Garea, Christopher Hammer, Dalisai Nisperos, Stephanie Platenkamp and Sarah Kanter
This legislative session Governor Brown again signed into law several new labor and employment statutes. Many of the new laws this year expand enforcement tools and strengthen existing protections for employees in areas including leave and disability rights, pay equity, wage and hour protections, and prevailing wage and public works. In this series of seven articles, we have summarized the new state laws by category.
AB 621 – Incentive for Employers to Re-Classify Drayage Drivers as Employees
This bill supported by the Teamsters, concerns drivers working at California ports providing drayage services. The bill encourages employers who currently misclassify their drayage drivers as independent contractors to re-classify them as employees. This law establishes an amnesty program for employers who enter into an agreement with the Labor Commissioner prior to January 1, 2017, and agree to pay all wages, benefits, and taxes owed as a result of past misclassifications. In exchange, the employer is relieved of all liability for statutory or civil penalties associated with its prior misclassification of its drivers as independent contractors. However, amnesty is only available to motor carriers that are not already facing a civil lawsuit over the misclassification of drivers.
SB 588 – Wage Theft
This important new law gives the Labor Commissioner additional tools to collect wages owed pursuant to final judgments against an employer. Currently, only about 17% of employees who win on wage claims are able to collect any payment from their employers, and for those who do, they most often collect far less than what they are owed. To address this problem, this bill now gives the Labor Commissioner the ability to obtain a lien on an employer’s real estate or a levy on its bank accounts as part of its enforcement mechanism. The Labor Commissioner will now be empowered to issue personal citations against business owners. In addition, if an operation is shuttered and reopens with a similar operation or ownership then the liability from the previous claims will follow to the re-opened business. Finally, this new law allows the Labor Commissioner to require a business with an outstanding unpaid judgment against it to purchase a wage bond of $150,000 to continue to do business in the state and authorizes civil penalties for wage theft violations.
AB 970 – Labor Commissioner Enforcement
The failure of state and federal minimum wages to keep pace with inflation or to provide a level of income sufficient to provide a living wage has rightfully led to public outcry. In recent years, several California cities have addressed this concern by adopting local minimum wage ordinances with higher rates than the California minimum. Under current law, the Labor Commissioner cannot issue citations for violation of a local minimum wage. This bill changes that and authorizes the Labor Commissioner to issue a citation against an employer for violating local minimum wage laws. This law also authorizes the Labor Commissioner to issue citations against an employer for failing to reimburse employees for employment related expenses.
AB 1506 – Employer Right to Cure Paystub Violations
Assembly Bill 1506 gives employers the right to cure certain violations for missing information on paystubs before employees can sue under the Labor Code’s Private Attorney General Act (“PAGA”). Under PAGA, employees can seek penalties of $100 or $200 each time an employer fails to include required information on a paystub, like applicable rates of pay or the last four digits of the employee’s social security number. Now employers have a right to cure the violation within 33 days of getting notice by showing that the employee has been given fully compliant paystubs. If the employer does not cure the violation, employees may proceed with the PAGA lawsuit. This bill is intended to balance the needs for employees to obtain clear wage information on their paystubs while providing employers relief from lawsuits over technical violations if those violations are corrected.
AB 1513 – Stronger Labor Code Rights for Piece Rate Employees
Piece rate employees won a victory last legislative session with Assembly Bill 1513, another bill supported by labor. Piece rate employees are paid a fixed piece rate for each unit produced or action performed. Such employees often face not receiving the minimum wage for certain hours worked, or any compensation for non-productive time required at work. Current piece-rate rules also discourage rate workers from taking rest periods since the rest period is non-productive thus resulting in lower piece-rate earnings. The new law requires that piece rate workers be paid separately for time to take rest and recovery periods, and for “other nonproductive time.” Employers must also now provide pay stubs that state total hours and gross wages paid for non-productive time and for rest and recovery periods. The purpose of this law is to ensure that all employees receive at least minimum wage for all hours worked, and that piece rate employees do not lose income when they take the rest periods to which they are entitled.
SB 327 – Health Care Meal Periods
The Industrial Welfare Commission’s (“IWC”) wage orders allow employees in the health care industry who work shifts in excess of eight total hours in a workday to waive voluntarily their right to one of their two meal periods. In Gerard v. Orange Coast Memorial Medical Center 234 Cal.App.4th 285 (Feb. 10, 2015) the Court of Appeal held that the IWC exceeded its authority by allowing for this meal period waiver. This bill provides that the meal period waiver provisions in the IWC’s existing wage orders were valid and enforceable on and after October 1, 2000, and continue to be valid and enforceable.
SB 501 – Wage Garnishment Restrictions
This bill, beginning July 1, 2016, reduces the maximum amount of disposable earning that may be subject to wage garnishment to the lesser of 25 percent of the individual’s disposable earning for that week or 50 percent of the amount that the individual’s disposable earnings for that week exceed 40 times the state minimum hourly wage. The bill also provides that if the employee works in a location with a higher local minimum wage than the state minimum wage, then the local minimum wage will be applied. This new law is intended to protect low-wage working families subject to wage garnishment.
The material on this website is provided by Beeson, Tayer & Bodine for informational purposes only and does not constitute legal advice. Readers should consult with their own legal counsel before acting on any of the information presented. Some of the articles are updated periodically, and are marked with the date of the last update. Again, readers should consult with their own legal counsel for the most current information and to obtain professional advice before acting on any of the information presented.
