CAHSAH 2016 Annual Conference & Home Care Expo. Reduce Risk of Liability for Commonly Challenged Compensation Practices

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1 Reduce Risk of Liability for Commonly Challenged Compensation Practices Angelo Spinola JoAnna Brooks Littler Mendelson, PC 1

2 Legal Notice The materials and opinions presented by the speakers at this presentation represent the speakers views, are for educational and informational purposes only, are not intended to be legal advice and should not be used for legal guidance or to resolve specific legal problems. In all cases, legal advice applicable to your organization s own specific circumstances should be sought. We strongly encourage you to consult legal counsel of your choice on specific matters involving employment law, and important personnel policies and practices prior to adoption or implementation. California Wage & Hour Law 2

3 Wage Theft Protection Act Are You In Compliance? The Wage Theft Protection Act went into effect on January 1, The act requires that all employers provide each employee with a written notice containing specified information at the time of hire. The notice must be in the language the employer normally uses to communicate employment-related information to the employee. *Many CA employers are not in compliance CAHSAH 50th Anniversary Annual Conference 3

4 Wage Theft Protection Act Requires employers to provide to each newly hired nonexempt employee in California a written notice stating: Name and address of the employer at the time of hiring Payday information Employee's rate(s) of pay Basis for the pay (hour, shift, day, week, salary, etc.) Any allowances claimed as part of the employee's wages Paid sick leave information Changes must be either documented in a new notice or on a paycheck *We recommend a new Wage Theft Protection Act Notice for each change. CAHSAH 50th Anniversary Annual Conference Wage Statement Compliance 4

5 Why Should We Care About Wage Statement Compliance? Oct. 2014: California state judge approved $15 million class action settlement against Verizon for inaccurate wage statements June 2015: California federal judge approved $8.75 million class action settlement against Manpower Inc. for failing to include the pay period start date on statements Why Plaintiffs Lawyers Care About Wage Statement Compliance Wage statement violations virtually certain to result in class action or PAGA (California Private Attorney General Act) claims asserted on behalf of all damaged employees Remedies include attorneys fees for plaintiffs lawyers 5

6 Wage Statement Requirements The name and address of the legal entity that is the employer; The name of the employee and the last four digits of his or her Social Security number (or employee identification number); Gross wages earned; Total hours worked; All deductions; Net wages earned; The inclusive dates of the period for which the employee is paid; and All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee. Piece-rate employees must receive information on the number of piece-rate units applicable to the pay period. CAHSAH 50th Anniversary Annual Conference Impact of New Paid Sick Leave Law Healthy Workplace Healthy Family Act of 2014 Labor Code 246(h): Must include amount of paid sick leave (or PTO) available on either the employee s wage statement or in a separate notice If unlimited PSL or PTO, employer may state unlimited on statement or notice Penalties for violation of this subdivision in lieu of penalties for violation of 226 6

7 Classification of Workers Domestic Workers vs. Personal Attendants Who are Domestic Workers? Domestic workers include caregivers, childcare providers or attendants to people with disabilities or seniors, housecleaners, cooks, gardeners or other household workers Who are Personal Attendants? Caregivers, childcare providers or attendants to people with disabilities or seniors who supervise, feed, or dress a child or a person who needs supervision to due to advanced age or physical or mental disability Must spend 80% or more time performing personal attendant duties Cannot spend more than 20% of time on non-caretaking duties such as housekeeping or gardening 7

8 Minimum Wage Rights for Domestic Workers All Domestic Workers in CA have the right to the state minimum wage. July $9.00/hour January $10.00/hour Overtime Rights for Personal Attendants Personal attendants were originally excluded from overtime protection but in September 2013, the Governor signed into law the Domestic Work Bill of Rights, AB 241. Overtime must be paid as follows: 1.5 x regular rate for work over 9 hours in a day 1.5 x regular rate for work over 45 hours in a week Certain exemptions may apply 8

9 What About Other Home Healthcare Workers? Domestic Workers (other than Personal Attendants) CNAs RNs 1.5 x regular rate for work over 8 hours in a day 1.5 x regular rate for work over 40 hours in a week 1.5 x for the first eight hours on the seventh consecutive day of work in a workweek Double-time for work in excess of 12 hours in a work day and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek CAHSAH 50th Anniversary Annual Conference What About Other Home Healthcare Workers? Physical therapists, occupational therapists and speech/language pathologists Possibly exempt from overtime Learned Professional Exemption Advanced Degree/Skill Minimum Salary $41,600 Must Spend more than 50% of time performing exempt duties involving independent discretion and judgment Otherwise, non-exempt rules for overtime should be applied CAHSAH 50th Anniversary Annual Conference 9

10 Interplay Between Federal and State Law State vs. Federal Requirements California requirements vary from federal requirements Overtime obligations Compensability of Sleep Time (Mendiola) Meal/Rest Periods The law most favorable to the employee must be applied to ensure compliance with state and federal law 10

11 Fair Labor Standards Act Requires payment of the minimum wage for all hours worked and overtime at 1 ½ times an employee s regular rate for hours worked over 40 in a week Since it was passed in 1938, Section 13(a)(1) of the FLSA has exempted certain white collar employees The Secretary of Labor has broad authority to define and delimit the exemptions LITIGATION UPDATE: HOME CARE ASSOCIATION OF AMERICA V. WEIL 11

12 What The Law Says Section 13(a)(15) of the FLSA provides an exemption from the minimum wage and overtime requirements for: any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves. Created in 1974, when Congress extended FLSA coverage to other domestic service workers Congress granted the Secretary of Labor authority to define the terms in the exemption, and DOL exercised that authority in 1975 by issuing the regulations at 29 C.F.R. Part 552 Section 13(b)(21) of the FLSA provides an exemption only from the overtime requirements for: any employee who is employed in domestic service in a household and who resides in such household. Third-Party Employment Section (a) and (c) of the regulations used to provide that the companionship and live in exemptions are available for employees who are employed by an employer or agency other than the family or household using their services. The New Rule revises Section to deny the exemption to third-party employers. 12

13 PROPOSED CHANGES TO THE WHITE COLLAR EXEMPTIONS 29 C.F.R. Part 541 DOL has defined the white collar (or EAP ) exemptions in regulations at 29 C.F.R. Part 541 Executive Administrative Learned Professional Creative Professional Computer Outside Sales 13

14 Minimum Salary Level Set the minimum salary at the 40th percentile of weekly earnings for full-time non-hourly paid employees Currently, $921/week or $47,892/year Expected to increase to $970/week or $50,400/year by the time a Final Rule is issued in