Pub. 2 2014 Issue 3

Winter 2014 15 $12.00 per hour. That rate will increase to $13.50 per hour in July 2014, then $15.00 per hour in January 2016. • One requirement for California’s “white collar” overtime ex- emptions (executive, administrative, or professional) to apply is that the employee receive a monthly salary that is no less than two times the California minimum wage for full-time employment (40 hours per week). The current minimum monthly salary is $2,774. The minimum salary will increase to $3,120 in July 2014 and $3,467 in January 2016. • The increase of the minimum wage will also impact the meal and lodging credits against the minimum wage permitted by the Industrial Welfare Commission Wage Orders. As the minimum wage increases, these credits are adjusted. • Employers are required to provide and maintain certain hand tools required for employees to perform their jobs. Employ- ees who furnish their own hand tools must receive at least twice the minimum wage (currently $16.00 per hour, but increasing to $18.00, then $20.00, per hour). Employers need to be vigilant in determining whether local laws require higher minimum wage protections. Several municipalities have also increased their minimum wage effective January 1, 2014. For example, San Francisco will increase their minimum wage from $10.55 per hour to $10.74 per hour. In San Jose, the minimum wage will increase from $10.00 per hour to $10.15 per hour. Employers also need to review their compensation plans and practices and take action to conform to the new minimum wage laws, including amending pay plans and increasing minimum wage thresh- olds when paying draws against commissions. Expanded Damages For Violations Of The MinimumWage Law The legislature has also expanded remedies against employers for violating minimum wage laws. To remedy minimum wage violations, the previous law allowed an employee to initiate a civil action or ad- ministrative hearing before the Division of Labor Standards Enforce- ment to recover liquidated damages “in an amount equal to the wages unlawfully unpaid and interest thereon.”The penalty and restitution provisions of the law now give the Labor Commission authority to recover liquidated damages as well as the civil penalty assessed and unpaid minimum wages. Failure To Provide “Recovery Periods” Existing law requires an employer to pay an employee one ad- ditional hour of pay at the employee’s regular rate as a sanction or penalty on any day when an employer requires an employee to work through a meal or rest period that otherwise must be provided. This premium payment is treated as a “wage,” although its effect is to penal- ize violations of the meal-rest period laws. Those penalties are now applicable to “recovery periods.” Under this regulation, enforceable by the Division of Occupational Safety and Health, employees working outdoors in temperatures exceeding 85 degrees Fahrenheit are entitled to cool-down periods of at least five minutes in a shaded area, as needed by the employee to avoid overheating. Recovery Of Employers’ Attorneys’ Fees Limited Currently, reasonable attorneys’ fees and costs are required to be awarded to the prevailing party in any action for the “nonpayment of wages” (other than actions for unpaid overtime or minimum wage), irrespective of whether the prevailing party is an employer or an employee. An amendment to the Labor Code will permit a prevailing employer to recover such fees and costs only if the court finds that the employee brought the action in bad faith. Criminal Sanctions For Failing To Remit Withholdings California law has a variety of Labor Code statutes that criminalize violations of its wage and hour laws. Existing law makes it a crime for an employer to fail to make payments to health and welfare funds, pension funds, or various benefit plans pursuant to an agreement between the parties. Existing law further provides that the crime be punished as a felony if the amount unpaid exceeds $500, and as a misdemeanor for all other violations. Continuing down that path, a recent amendment makes it a felony (if unpaid amount exceeds $500) or a misdemeanor (if unpaid amount is $500 or less) for an employer to fail to remit withholdings from an employee’s wages that were made pursuant to state, local or federal law. Liens For UnpaidWages Upon a California Labor Commissioner’s order becoming final, the Labor Commissioner is authorized to record a certificate of lien in any county in which the employer’s property may be located. This measure no doubt should make it easier for the Labor Commissioner to collect from employers any wages, interest, penalties, and liquidated damag- es associated with a claim. Overtime To Personal Attendants Regarding employers who provide residential care, the law previ- ously provided a complete overtime exemption for personal atten- dants. Now personal attendants must be paid one and one-half times their regular rate of pay for all hours worked in excess of nine hours in any workday or 45 hours in a workweek. Personal attendants include any persons employed by a private householder or by any third-party employer recognized in the healthcare industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision. The U.S. Labor Department has also announced significant changes to the “companionship” exemption under the federal Fair Labor Stan- dards Act that will take effect January 1, 2015, including the require- ment that third-party employers of domestic caregivers pay these employees overtime compensation for all hours worked beyond 40 in a workweek. Other Requirements Or Penalties For Specialized Industries Certain employers also need to be aware of the following changes: 1) a civil penalty for any garment manufacturer who fails to display the name, address, and garment manufacturing registration number at the front entrance of the business; 2) an increased bond requirement for the employer’s nonpayment of wages from $15,000 to $150,000, unless the employer has a collective bargaining agreement in place that meets specified criteria; 3) liability of a farm labor contractor for any wages or penalties owed by a predecessor farm labor contractor, if the successor meets specified criteria; 4) an extended prevailing-wage requirement to private refinery construction projects; and 5) a require- ment that employers use skilled workers who have graduated from a state-approved apprenticeship program for work which poses a risk to public health and safety. If the above seems overwhelming, help is available! Just contact your reg- ular Fisher & Phillips attorney with questions regarding any of the above. For more information contact either of the authors: JSkousen@laborlawyers.com, HThornton@laborlawyers.com or call 949.851.2424.