Sunday, January 5, 2014

TEN NEW CALIFORNIA WAGE AND HOUR LAWS FOR 2014 THAT AFFECT EMPLOYERS DOING BUSINESS IN CALIFORNIA



1.         MINIMUM WAGE IN CALIFORNIA TO INCREASE TO $9.00 AND $10.00 OVER TWO-YEAR PERIOD  
Effective July 1, 2014, the minimum wage for all industries will be nine dollars ($9) per hour, and on and after January 1, 2016, the minimum wage for all industries increases to $10 per hour.  (Cal. Lab. Code, § 1182.12)

2.         “DOMESTIC EMPLOYEES” ENTITLED TO OVERTIME

Effective January 1, 2014, “domestic employees” are entitled to payment of overtime at the rate of one and one-half (1 ½) times the employee’s hourly wage for work over nine (9) hours per workday or over 45 hours per workweek.  (Cal. Lab. Code, § 1450, et seq.) 

“Domestic work” means services related to the care of persons in private households.  Domestic work occupations include childcare providers, caregivers of people with disabilities, sick, convalescing, or elderly persons, house cleaners, housekeepers, maids, and other household occupations.  Domestic work does not include care of persons in facilities providing board or lodging in addition to medical, nursing, convalescent, aged, or child care, including, but not limited to, residential care facilities for the elderly.

“Domestic work employee” means an individual who performs domestic work and includes live-in domestic work employees and personal attendants. Domestic work employee does not include any person who is the parent, grandparent, spouse, sibling, child, or legally adopted child of the domestic work employer or any person under the age of 18 who is employed as a babysitter for a minor child in the domestic employee’s home or as a casual baby sitter for a minor child in the domestic employer’s home.

“Domestic work employer” means a person, including corporate officers or executives, who directly or indirectly, or through an agent or any other person, including through the services of a third-party employer, temporary service, or staffing agency or similar entity, employs or exercises control over the wages, hours, or working conditions of a domestic work employee.  Domestic work employer does not include certain employment agencies, persons identified as exempt by statute, and licensed health care facilities.

3.         “LIQUIDATED DAMAGES ” AGAINST EMPLOYERS FOR FAILURE TO PAY MINIMUM WAGES    

Former law subjected an employer who paid less than the minimum wage to pay a civil penalty and restitution of wages to the employee.  California Labor Code section 1194.2, effective January 1, 2014, expands the payment and restitution provision to also subject the employer to payment of liquidated damages in an amount equal to the wages unlawfully unpaid for actions brought under Labor Code §§ 98, 1193.6, 1194, or 1197.1.  The new law expressly provides that liquidated damages are not authorized for failure to pay overtime compensation. 

4.         WAGE EXEMPTION FOR EMPLOYERS OF MINORS UNDER ARTISTIC EMPLOYMENT CONTRACTS 

Former law required employers of minors employed under artistic employment contracts (including actors, dancers, musicians, comedians, singers, stunt-persons, voice-over artists, or sports players) to set aside 15% of the minor’s gross earnings in trust for the benefit of the minor. 
  
Effective, January 1, 2014, employers of minors are exempted from setting aside 15% of the minor’s gross earnings in trust for minors providing services as extras, background performers, or in similar capacities.  (Cal. Fam. Code, §§ 6750(b)(3), 6752.)  

5.         GARMENT MANUFACTURERS SUBJECT TO CIVIL PENALTIES

California Labor Code section 2676.55, effective January 1, 2014, subjects garment manufacturers who fail to display their name, address, and garment manufacturing registration number on the front entrance of the business to a civil penalty of $100 for each calendar day the business violates this law and $200 for each calendar day for any subsequent violation.

6.         CREATION OF LIEN ON EMPLOYER’S PROPERTY FOR LABOR COMMISSIONER FINAL ORDERS

California Labor Code section 98.2,subdivision (g), amended and effective January 1, 2014, provides for creation of lien upon an order of the Labor Commissioner becoming final.  The lien may be recorded in any California county in which an employer’s property may be located. The lien continues on the employer’s real property until satisfied or released, or for 10 years if not satisfied or released. 

7.         CAR WASH EMPLOYERS BOND INCREASED TO $150,000

California Labor Code section 2055, effective January 1, 2014, requires employers of car washers to obtain a surety bond issued by a surety company admitted to do business in California for not less than $150,000.  The employer is required to file a copy of the bond with the commissioner. 

The previous amount of the surety bond had been $15,000.

8.         ONE-HOUR ADDITIONAL PAY IF EMPLOYER REQUIRES EMPLOYEE TO WORK DURING “COOLDOWN” RECOVERY PERIOD

Former law prohibited an employer from requiring an employee to work during any meal or rest period mandated California Wage Orders and established a penalty of one hour of the employee’s regular rate of pay for each violation.

Cal. Labor Code section 226.7, effective January 1, 2014, expands the no-work- during-meal-or-rest-period rule to include “recovery periods.”  Recovery period is defined as a “cooldown” period afforded an employee to prevent heat illness.    

The law now prohibits an employer from requiring an employee to work during any meal or rest or recovery period.  Violation of the law subjects the employer to a penalty of one hour additional pay at the employee’s regular rate.

9.         ATTORNEY’S FEES AND COSTS AWARDABLE TO EMPLOYER ONLY IF EMPLOYEE WAGE CLAIM IS FILED IN “BAD FAITH”

Former law required a court in any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, to award reasonable attorney’s fees and costs to the prevailing party if any party to the action requested attorney’s fees and costs upon the initiation of the action.

California Labor Code section 218.5, amended and effective January 1, 2014, now provides that if the prevailing party is not the employee, an award of attorney’s fees and costs shall be awarded only upon a finding by the court that the employee brought the court action in bad faith.

10.       EMPLOYER’S FAILURE TO REMIT PAYROLL TAXES OR OTHER WITHHOLDINGS PUNISHABLE AS FELONY OR MISDEMEANOR 

The former law made it a crime for an employer to fail to make agreed-upon payments to health and welfare funds, pension funds, or various benefit plans, with violations punishable as a felony if the amount unpaid exceeded $500 and as a misdemeanor if the amount was less than $500.

California Labor Code section 227, amended and effective January 1, 2014, has been expanded to include failure to remit withheld payroll taxes:  If an employer withholds wages pursuant to any state, local, or federal law, and willfully or with fraudulent intent fails to remit the withholdings to the proper agency, the violation is punishable as a felony if the amount is more than $500 and misdemeanor if less than $500.  

NOTE:  This Alert is designed to provide a summary of new laws for 2014 regulating wages and hours for employees, employers, and businesses doing business in California.  It does not include all new laws or set forth new laws in their entirety; nor does it provide potential defenses to enforcement or offer solutions to individual problems.  Employees and employers with specific questions should consult legal counsel.

Kenneth J. Sargoy, Esq. provides assistance and representation in connection with employment matters.  Questions involving these new wage and hour laws as well as other employment issues may be directed to Mr. Sargoy, telephone toll free (855) 235-1488 or (310) 472-7113, or to his email at ken@sargoylaw.com.  THIS EMPLOYMENT ALERT IS CLASSIFIED AS A NEWSLETTER AND CONSTITUTES ADVERTISING MATERIAL UNDER APPLICABLE RULES OF PROFESSIONAL CONDUCT.