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April 2017

Both the City of San Diego and the State of California “Clarify” Their Sick Leave FAQs

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As we recently reported regarding the City of Los Angeles, both the City of San Diego and the California Department of Labor Standards Enforcement (“DLSE”) have updated their “Frequently Asked Questions” (“FAQs”) related to the respective local and state sick leave requirements. Below are some of the more salient points from each.

 

San Diego Earned Sick Leave

Similar to the City of Los Angeles’ recent changes, the City of San Diego updated its FAQs related to the City’s earned sick leave ordinance as applied to employees who are “salaried” and not “entitled to payment of minimum wage” by stating that they are not entitled to earned sick leave under the ordinance. Presumably, such employees may include those who are exempt “white collar” employees.

Regardless of coverage under the San Diego ordinance, employers still must comply with state law, which mandates provision of sick leave to nearly all employees.

California State Paid Sick Leave

The DLSE issued additional FAQs regarding the state law.  Specifically, these updated FAQs address questions regarding “grandfathered” paid time off policies (or PTO plans in effect prior to January 1, 2015), rates of pay, and the impact of state law on employer attendance policies.

  • Grandfathered Plans

The FAQs elaborate on how a “grandfathered” PTO plan will comply with state law. These further criteria include:

(1)  the existing policy or plan makes an amount of paid leave available that could be used for at least as many paid sick days as required under state law; and

(2)  that satisfies one of the following criteria: (a) the time off may be used under the same or more favorable conditions as specified under state law; or (b) that the plan contains more favorable conditions to employees than required under state law (e.g., provides more sick days or a more favorable accrual rate, etc.).

Please note these criteria are in addition to other accrual requirements set forth in the statute and earlier FAQs.

  • Rate of Pay

 The FAQs confirm that the state law does not impact how employers must compensate employees under existing PTO plans for time that is taken off for purposes other than paid sick leave, e.g., vacation, etc.

  • Attendance Policies

The FAQs address the impact of state paid sick leave on employer attendance policies. According to the FAQs, if an employee has accrued or available sick leave, an employer’s attendance policy cannot assign an “occurrence” or apply “points” for an absence covered under state law.

Moreover, if an employee does not have any accrued or available paid sick leave and if the employee has an unscheduled absence for a reason covered under state law and which otherwise violates the employer’s attendance policy, state law does not prohibit the employer from giving the employee an “occurrence” for such absence.  Importantly, the FAQs provide that state law, “does not ‘protect’ all time off taken by an employee for illness or related purposes; it ‘protects’ only an employee’s accrued and available paid sick leave as specified in the statute.

Clients should review their policies and practices and if you should have any questions, please contact your HR Specialist at 925-556-4404.

Employers Should Review Form I-9 for SSN Glitch

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Employers that downloaded Form I-9, Employment Eligibility Verification, between November 14 and November 17, 2016, are advised to immediately review any of the forms they used to ensure their employees’ Social Security numbers (SSNs) appear correctly in Section 1. US Citizenship and Immigration Services (USCIS) has discovered a “glitch” that occurred when the revised Form I-9 was first published on November 14, 2016.

When employees completed and printed Section 1 of the affected form using a computer, numbers entered in the SSN field were automatically changed. For example, if an employee entered the number 123-45-6789 in the SSN field, the number would appear as 123-34-6789 when the form printed.

Employers using any I-9s that contain this error are advised to download and save a new Form I-9. These employers should also tell affected employees to draw a line through the transposed SSN in Section 1 of their printed forms, enter the correct SSN, and then initial and date the change. These employers should also include a written explanation with the affected I-9s about why the correction was made in case there is a future audit.

USCIS notes that it immediately repaired and reposted the form on November 17, 2016, so any forms printed out after that date would not have been affected.

The importance of correctly completing Form I-9 cannot be understated. Employers and employees are required to complete the form to both verify the identity of their employees and confirm that the employees are authorized to work in the US. Employers are prohibited from knowingly hiring or continuing to employ an unauthorized individual and can be subject to monetary and/or criminal penalties for hiring or continuing to employ an unauthorized individual.

California Seeks to Raise Minimum Salary for White Collar Exemptions

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The minimum salary to qualify for a “white collar” overtime exemption in California has been higher than that required under federal law for many years.  Because California’s exempt salary threshold is tied to the state minimum wage (an exempt employee generally must earn a salary of at least two times the state minimum wage), it goes up as California’s minimum wage goes up.  The current minimum salary for exempt executive, administrative, or professional status in California is $43,680 per year.  However, as employers know, last year the federal Department of Labor enacted regulations increasing the minimum salary to qualify for exempt status under the federal Fair Labor Standards Act (“FLSA”) to $47,476 per year.  California employers would have had to comply with the higher salary threshold under the FLSA, except that the regulations were blocked by a Texas court late last year.  The Texas court’s ruling is now on appeal, but most believe that the overtime regulations will not be reinstated — at least in current form — under the Trump administration.

California is now seeking to accomplish what the Obama administration could not accomplish at the federal level, by proposing to raise the minimum annual salary to qualify for exempt status in California to $47,472.  AB 1565 (Thurmond) is a spot bill that was amended on Tuesday to propose the salary hike.  Under the bill, the minimum salary for exempt executive, administrative, or professional workers would be $47,472 or twice the state minimum wage, whichever is greater. As California’s minimum wage continues to rise, a salary of twice the state minimum wage eventually will be a number greater than $47,472. Until that time, $47,472 would be the minimum salary for exempt status in California.

This is brand new proposed legislation, and it remains to be seen whether it will pass.  We will keep you posted of developments on this issue. If you should have any questions, please contact your Stratton Agency HR Specialist at 925-556-4404.