Employer Bulletin
January 2008 – Volume 6, Number 1

Know Which New Employment Laws Affect You in 2008

Congress and the California Legislature have not enacted any ground breaking employment laws for 2008, but it is important to be aware of changes which have occurred. The following is a summary of the new legislation:

A. WAGE AND HOUR
1. Minimum Wage Increase: California's minimum wage increased from $7.50 to $8.00 an hour. The change also resulted in an increase in the minimum salary requirement for those classified as exempt under the administrative and executive exemptions in California. Ensure that your required poster lists the accurate minimum wage.

2. Computer Professional Exemption: Labor Code Section 515.5 has been amended to decrease the minimum hourly rate for employees classified under the Computer Professional Exemption. The hourly rate has been reduced from $49.77 to $36.00 per hour. To qualify for the exemption, the computer professional must meet the strict "duties" test specified in the statute and be paid at the required rate for all hours of work.

3. Pharmacist Alternative Workweek Schedule: Pharmacists who work in the mercantile industry under Wage Order No. 7 are now allowed to adopt an alternative workweek schedule similar to that permitted by Wage Order No. 4. Under Labor Code Section 1186.5, pharmacists will be permitted to adopt an alternative workweek schedule without the restrictions of two consecutive days off as required by Wage Order No. 7.

B. EMPLOYEE LEAVE
1. Military Spouse/Domestic Partner Leave: Military and Veterans Code Section 395.10 requires employers with 25 or more employees to provide each employee with up to 10 days of unpaid leave when his or her spouse or registered domestic partner is on leave from military duty. To qualify, an employee must work an average of at least 20 hours per week and have a spouse or registered domestic partner in the United States Armed Forces, Army Reserve, or the National Guard in active duty in an area of military conflict.

The employee must give his or her employer at least two business days' notice of the requested leave and provide written documentation to certify that the spouse or domestic partner is on deployment leave. The law does not specify whether employers can exercise discretion in scheduling an employee's leave. Therefore, employers should err on the side of caution and provide flexibility to those requesting the leave.

2. San Francisco Paid Sick Leave: Last year, San Francisco implemented its own sick leave regulations. This year, San Francisco enacted the Health Security Ordinance which requires, among other things, employers to provide sick leave to each employee who performs work in San Francisco, including all temporary and part-time employees. However, the ordinance has been challenged in court. If you have employees working in San Francisco, contact legal counsel to discuss your obligations under the ordinance.

C. DOCUMENT REQUIREMENTS
1. Limited Disclosure of Social Security Number on Itemized Wage Statement: Labor Code Section 226 has been amended to require employers to use no more than the last four digits of an employee's social security number on a wage itemization statement. Alternatively, the itemized wage statement may list the employee's identification number.

2. Required Notice to Employees Regarding Earned Income Tax Credit: Newly enacted Revenue and Taxation Code Sections 19850-19854 require employers with employees covered under the California Unemployment Insurance Code to provide such employees with notice of their possible eligibility to take advantage of the Federal Earned Income Tax Credit. In other words, the notice is to be sent to those employees for whom an employer pays California unemployment taxes on their wages. The notice is to be either hand-delivered or mailed within one week of the date the annual wage summary (IRS Form W-2) is sent to employees. Since multi-state employers are required to only pay unemployment taxes in one state, the statutory definition should preclude sending notices to employees who are "based," for unemployment insurance tax purposes, in other states. However, an employee who is on the California payroll for any part of the year, apparently must be sent the notice even if the employee has relocated outside the state at the time the notice is to be sent.

The notice must read as follows:
"Based on your annual earnings, you may be eligible to receive the earned income tax credit from the federal government. The earned income tax credit is a refundable federal income tax credit for low income working individuals and families. The earned income tax credit has no effect on certain welfare benefits. In most cases, earned income tax credit payments will not be used to determine eligibility for medicaid, supplemental security income, food stamps, low income housing or most temporary assistance for needy family payments. Even if you do not owe federal taxes, you must file a tax return to receive the earned income tax credit. Be sure to fill out the earned income tax credit form in the federal income tax return booklet. For information regarding your eligibility to receive the earned income tax credit, including information on how to obtain the IRS notice 797 or form W-5, or any other necessary forms and instructions, call the IRS by calling 1-800-829-3676 or through its website at www.irs.gov."

WHAT YOU SHOULD DO:

  1. Check whether you are paying California unemployment taxes for employees.
  2. As to such employees, identify when their W-2 forms are scheduled to be sent.
  3. Prepare the California statutory notice.
  4. Identify the method for conveying the notice: hand delivery or U.S. Mail.
  5. Schedule the providing of the statutory notice to occur at the same time as the distribution of the W-2 forms.
  6. Establish an automated system to provide the required statutory notice for future years.

3. New Form I-9: The U.S. Citizenship Immigration Services announced employers must implement and use a new form I-9 no later than December 26, 2007. The new form reduces the number of documents employees can use to establish their identity and eligibility for work. The revised form I-9 is mandatory for all new hires and all employee re-verifications. The requirement is not retroactive, meaning employers are not obligated to use the revised materials for current employees with properly completed forms. The new forms are available to download at www.uscis.gov/files/form/i-9.pdf.

4. New EEOC-1 Form: The Equal Employment Opportunity Commission requires all private employers with at least 100 employees, or employers who are federal contractors with at least 50 employees and contracts of at least $50,000 to file an annual electronic EEO-1 report, due by September 30 of each year. New requirements to the EEO-1 form became effective in September 2007 and revised categories of race and ethnicity, as well as new levels of job categories based on responsibility. Employers should have implemented the new EEO-1 form for their September 30, 2007 report, but they are not required to resurvey current employees using the new criteria until submission of their September 30, 2008, EEO-1 report.

D. MISCELLANEOUS
1. Sexual Harassment Prevention Training for Supervisors: Remember that Sexual Harassment Training and Education regulations (California Code of Regulations Section 72880.0) require employers with at least 50 employees to provide two hours of interactive anti-harassment training to all supervisors once every two years.

2. Health Care and Whistleblower Protection: Assembly Bill 632 prohibits a health facility from discriminating or retaliating against any patient, employee, a member of the facility's medical staff, or any other healthcare worker of the facility because that person has (i) presented a grievance, complaint or report to an entity or agency responsible for accrediting or evaluating the facility or to any other governmental agency; or (ii) has initiated, participated or cooperated in an investigation or administrative proceeding related to the quality of care, services or conditions at the facility.

 

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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