As of January 1, 2000, there are significant labor law changes that effect those Employers who are subject to one of the following five Industrial Welfare Commission ("IWC") Wage Orders: 1 (Manufacturing), 4 (Occupations which now includes On-Site Construction), 5 (Public
Housekeeping), 7 (Mercantile) and 9 (Transportation). Effective 1/1/98, the daily overtime (after 8 hours/day) was eliminated for nonexempt employees covered by these wage orders. However, as of 1/1/2000, daily overtime is reinstated through an Assembly Bill (AB 60) signed by Governor Gray Davis. This bill is now known and cited as the "Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999." In addition, there are other labor related Assembly Bills and numerous amendments to the Labor Code. The pendulum of Labor Law protections has swung again, placing further requirements on the Employer and providing further protections for the Employee. Below, we highlight the most significant changes you should be aware of and examine what you may need to do to be in compliance.
Overtime/Premium Pay--As of 1/1/00 AB60 requires overtime pay (one and a half times the regular hourly rate) for all hours worked after eight in a day or forty in a workweek. Double time will be required after twelve hours in a day and after eight hours on a seventh day. In addition, if an employee works seven consecutive days in a workweek, the employee is entitled
to overtime pay on the seventh day, even if the total number of hours for the week is forty or less. It does not apply to an employee simply working on the seventh day of the employer's designated workweek. Setting your workweek is very important. An employee can work seven days in a row without premium pay if any of those days are part of different workweeks. A workday is any 24 consecutive hours and a work week is any 7 consecutive workdays that the Employer selects. However, a strict interpretation requires that the workweek be fixed and regularly re-occurring.
Compensation Time--A new code section provides for an employee to makeup work time missed
at the employee's written request, i.e. doctor's appointment. It
provides that an employee can work up to 11 hours a day to makeup time
lost but only if worked in the same workweek not the same pay period.
The makeup hours can be worked before or after the time off taken as
long as they are in the same workweek. For example, the employee wants
to take four hours off on Friday, the employee can work three extra
hours on Tuesday and an extra hour on Thursday. Makeup time is at
regular rate which differs from Comp. Time which is at the rate of time
and a half. However, the advantage of Comp Time is that it not
restricted to the same workweek. L.C.§ 204.3.
Meal Periods--A new labor code section states the meal period requirement of
providing an employee at least a 30 minute meal period after 5 hours of
work if the total work day is more than 6 hours and a second meal period
after 10 hours unless the employee works less than 12 hours. However,
the second meal period may be waived by mutual consent by employer and
employee but only if the first meal period was not waived. L.C. §512.
New Claim--A new subsection to Labor Code §96 provides that the Labor Commissioner
may accept “(k) Claims for loss of wages as a result of demotion,
suspension, or discharge for employment for lawful conduct occurring
during non-working hours away from the employer's premises.” This new
section will be subject to interpretation as to what kind of claims it
will include but it could include such things as smoking, moonlighting
and fraternization between co-workers – off duty of course.
Construction Industry--Although in the past On-Site construction was considered not to be covered by any IWC Wage Order, it is now the Labor Commissioner’s position that On-Site Construction is subject to AB60 and Wage Order 4 is the applicable Wage Order. Warning: it is unlawful to lower an employee's hourly rate of pay (even if above minimum wage) in order to comply with the new overtime
Exempt Employees--The test for the executive, administrative and professional employee exemption has changed. There is now a salary test. In addition to performing exempt work more than 50% of his/her time, the employee's monthly salary must be at least twice the minimum wage, which currently is $5.75 per hour, multiplied by 40 hours. Nurses and pharmacists are no longer exempt employees. L.C. §515. In addition, an employee paid by in-kind services, commission or piece rate may not be covered. However, further definitions and/or clarification for the exempt employee classification is anticipated.
Work Schedules--Review your employee work schedules. Are any of your non-exempt
employees working 40 hours per week but more than 8 hours in a day? If
so, you are required to pay overtime premiums effective 1/1/2000,
however, if that is too costly, consider revising the employee schedules
or propose an alternative work schedule, such as four (10) hour days.
The employer can propose an alternative work schedule that is 40 hours a
week but has certain days that are in excess of eight, up to ten hours
in a day, whereby overtime pay would not be paid for those hours in
excess of eight. To be in compliance, the employer must allow the
employees to vote by secret ballot election and there must be acceptance
by 2/3 of the work unit effected. After the election, the employees
must acknowledge acceptance, in writing, of the new workweek schedule
and a copy of the election results must be reported to the Division of
Labor Statistics and Research within 30 days. L.C. §511. In addition,
the employer is required to make a reasonable effort to accommodate any
employees unable to work the new schedule, however, if more than
one-third of the employees are not working the alternative work schedule
it will become invalid. New employees should be informed of the
alternative work schedule and asked to sign an acknowledgment.
Sick Leave--Ever wonder whether an employee can take a sick day when it is their
child that is sick and not the employee? AB 109 requires that an
employer allow an employee to use up to one-half his/her yearly sick
leave to attend to an illness of a child, parent, or spouse. L.C. §223.
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