- INCREASE IN MINIMUM WAGE
As you probably know, California’s minimum wage was increased to $7.50 per hour effective January 1, 2007, and will be increased to $8.00 per hour as of January 1, 2008.
Keep in mind that the minimum wage increase also results in an increase in the baseline salary an employee must earn to maintain his or her “exempt” status. Under the Executive, Professional and Administrative classifications, an employee must earn an equivalent of at least twice the minimum wage, which equates to an annual salary of $31,200 in 2007 and $33,280 starting in 2008, in order for such employee to be an “exempt” employee.
Inside salespersons designated as exempt are required to earn 1 1/2 times the minimum wage which equates to a salary of $23,400 for 2007 and the sum of $24,960 starting in 2008.
What You Should Do
• Be sure salaries to exempt employees in 2007 satisfy the increased baseline salaries required to maintain their exempt status.
• Remember that the new minimum wage will require an update of your minimum wage poster and wage orders. When they become available, the minimum wage poster and wage orders can be obtained at www.dir.ca.gov/wp.asp.
- EMPLOYER OBLIGATIONS TO DOMESTIC PARTNERS
Much has been written in the last few years regarding the rights of domestic partners and the California Legislature has now weighed in on the subject. It is critical for employers to recognize their obligations to employees who have domestic partners.
California's Domestic Partnership Rights and Responsibilities Act provides domestic partners with many of the same rights and privileges provided to spouses under California law. The Act is codified in California Family Code §297.5(a). It states that registered domestic partners have the same rights and responsibilities under statutory and case law as provided to spouses. As a result, domestic partners are entitled to the benefits of the California Family Rights Act ("CFRA"). An employee may use a 12 week leave entitlement under the CFRA to care for a domestic partner, just as an employee might care for a spouse.
The domestic partner laws also impact an employer’s obligation to provide insurance benefits. An employer which offers insurance for an employee's spouse must also offer coverage for an employee's domestic partner on the same terms and conditions. It does not matter whether the employer is out-of-state. A California employee working for an out-of-state employer is entitled to the protection of California law.
What You Should Do
Review your employment practices and procedures to determine whether employees with spouses are entitled to greater benefits than employees with domestic partners. The review process should also include a review of your Employee Handbook. If there are differences between the rights afforded between the two groups, you should consult with counsel as to whether the distinction creates a liability risk.
- EMPLOYEE DRIVERS AND CELL PHONE USAGE
The Governor has signed legislation which will require motorists to use hands-free devices for cell phones while driving. While the law does not go into effect until July 2008, its passage suggests potential employer liability if an employee is driving and using a cell phone for a business purpose which is a contributory cause to an auto accident. While there is no California case specifically on point, a court in the state of Virginia held that cell phone use by an employee may subject the employer to liability for a fatal auto accident allegedly caused by an employee who was driving and became distracted while using a cell phone for a business call.
What You Should Do
The most cautious approach is to prohibit the use of a cell phone for a business call while driving, although such a rule may be unrealistic. Do not establish a rule which will not be enforced.
A more realistic approach may be to consider implementing a company policy that requires an employee to utilize a hands-free cell phone device if driving a car in the course and scope of employment (regardless of whether the call is personal or business related) and for all business related calls, even if the employee is not driving a vehicle for a business related reason. The implementation of such a policy should be included in your Employee Handbook. If you require employees to use a hands-free device such as an earpiece, you must pay for the cost of the device.
Leonard Brazil provides advice and guidance to employers to minimize and avoid employment liability in such areas as wage and hour laws, discrimination, harassment and other claims of wrongful termination, and to operate within the boundaries of employment laws in a common sense and practical manner. For more information regarding the Firm’s employment practice, go to www.clarktrev.com
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