Episode 167: Compliance Tips for 2023

Welcome to the Workplace, a podcast by Cal Chamber. I'm Matthew Roberts, the Labor Law helpline manager and Employment Law Council with the California Chamber of Commerce. Happy New Year, listeners. Hopefully all of us got a chance to enjoy the holidays and wind down the year successfully with our businesses and organizations. As many of us know, those responsible for administration and management of our employer policies are going into a busy season of sorts of this is because all the new employment laws from 2022 took effect on January 1st. And of course the state legislature here in California last year definitely gave us all work to do to get compliant in 2023. So to discuss the top issues all employers should address immediately here in the new year, we welcome back Cal Chambers, Vice President of Employment Law, overseeing content training and advice, Bianca Saad. Welcome back to the show, Bianca.

Thanks for having me, Matt. Excited to join you.

Awesome. Well, I hope you had a good holiday season.

Yes, indeed.

Excellent. Well, I want to start with wage and hour issues since we often hear the most from our members on this topic. So Bianca, let's start with a softball to get us warmed up. Minimum wage here in California, where do we stand in 2023?

All right, so as of January 1st of this year, the state minimum wage is 15.

This is for all employers regardless of size, which is actually a bit of a change from what we've seen with the initial phase in schedule. And that was due to the increase in inflation, which with inflation exceeding 7%, that triggered this increase that is now universal for all employers.

Excellent. So something we always talk about here with the minimum wage is that it's not just our non exempt hourly employees that this affects, but it also affects some of our exempt employees, right, Bianca?

That's right. So for our exempt employees, or commonly known as the white collar exemption employees, the administrative executive professional labeled exemptions, there's two tests. So we have to have the duties test we're looking at what are they doing? Does that meet the proper classification as well as how much money they are making. So the salary basis to that test. Now the salary basis test does require that those employees earn a minimum of two times the state minimum wage. So with this increase in minimum wage, that's obviously increasing that minimum salary for our exempt employees, which this year happens to be $64,480 per year at the minimum.

Excellent. That's something that we always have to talk about on the helpline as well is, you know, just calling somebody a salaried employee is never enough. As you said, there is that two part job dut Tests. But this salary issue is what trips employers up quite frequently because they forget it is two times a statewide minimum wage. And so they get the minimum wage and the hourly rates updated, and sometimes they forget. And the way the labor commissioner views these exemptions is on a workweek by work week basis. So if we don't get these salaries updated immediately, we lose the exemption for every workweek we don't have it. So definitely need to get that audited and make sure that we're compliant there. Now, something that we talk about on occasion here on the podcast, which always gives me fit because I don't understand it nearly as well as you do our local ordinances. So Bianca, we still have local ordinance minimum wages here in the state, right?

Oh, yes, absolutely. We have, gosh, there's probably around 40 total. And a little bit more than half of those are on a January 1st increase schedule. So a number, I think in the high 20s somewhere, localities just had their minimum wages increase, of course, much higher than in most cases, much higher than the state rate. And then the remaining bunch of local minimum wage ordinances do increase on a July schedule. So there are some localities that will change mid year, but yes. So for employers that have any employees working anywhere, that's a number of Bay Area localities. Burlingame, Cupertino, Oakland, Palo Alto. I'm just calling out a few of these. Again, much higher rates than the state minimum wage. So we need to make sure that we're paying attention to where our employees working, because that would include our remote employees. If they're working at least two hours in any work week from that locality, then they would need to be paid that locality's minimum wage.

Excellent. I think that's a key point too, because like, you and I are headquartered here in Sacramento, Bianca. But if the chamber had any remote workers, say, in Cupertino, like you mentioned, it doesn't matter that we're headquartered here in Sacramento. That employee is covered by Cupertino, right?

That's exactly right.

Excellent. Okay, well, moving off minimum wage, a new law, SB 1162, went into effect on January 1st. Of course, we've talked about this bill a lot on the podcast over the last year. But let's run down again what SB 1162 requires employers to do. Now, there are two components. There's pay scale, publication and disclosure, and then there is pay data reporting. So, Bianca, let's start with the pay scale portion. What does that entail for employers?

All right, so under this portion, all employers need to provide the hourly or salary wage scales. To employees for their current position. Now, this is upon request of the employee. All employers also need to provide this scale to the applicant for the position upon request. Now, under the law, an hourly or salary wage scale is going to be whatever the employer would reasonably pay for the position. Now, this is obviously broad, somewhat ambiguous as far as how wide that scale needs to be.

Okay, so what's really important, I thought, from that aspect is, you know, employees can just now come to us and say, hey, what's the pay scale for my job? And we have to respond to that. A lot of questions that we've been seeing that we don't have answers for at the moment, but hopefully we'll get guidance on is, you know, what form do those requests need to take? What's our timeframe for response? How do we respond? So a lot of questions to think through and possibly work with your legal counsel. Now, employees also can't just ask for any position, right, Bianca? It's their current position.

That's exactly right.

Okay. Now, in addition to your current employees, there's some aspect here of the wage scales that we have to cover when you've got job postings, right?

Yes. So this is going to impact employers with 15 or more employees. They are also going to need to publish the hourly salary wage scales in their job recruitment postings. And this is true whether the employer is the one that's making the job posting themselves, or even if they are hiring a third party to post that recruitment copy, they still are responsible for having that hourly or salary wage scale in the posting. And then lastly, there is also a record keeping update that requires employers to keep records of the job titles and the wage histories for each employee during their employment, plus three years after the end of employment.

Okay, excellent. So that's the pay wage scale and the pay scale publication that we're talking about. Now, there's Another aspect of SB 1162, which is the pay data reporting, and there were some updates made to this law. Now, current law, of course, already required Employers with 100 or more employees nationwide to submit pay data reports on their California establishments and employees who remotely report to a California establishment. So on top of that, what else has changed with the pay data reporting?

Okay, well, this requirement still is only going to fall on Those employers with 100 or more employees. But employers that are covered now have some additional reporting requirements. They're going to need to report on the median and the mean pay within each job category for each combination of race, ethnicity, and sex. Another change that we saw is that the report used to be due March 31st of each year, and that has been pushed back now to the second Wednesday of each May. Lastly, if your organization uses at least 100 workers from labor contractors like staffing agencies, then you need to include those workers in your reports. So the California Civil Rights Department maintains a very helpful resources page. They have FAQs and user guides all about how to create and submit the reports. And for those who may not be used to hearing that name, the California Civil Rights Department is formerly known as the Department of Fair Employment and Housing or the dfeh.

Excellent. All right, Bianca, let's move off of wage an hour and go to my personal favorite topic, leaves of absence. Now, it wouldn't be a new year without some sort of change to California's leaves of absence laws. And of course, this year is no exception. So let's start with the newest leave, bereavement leave. What do employers have to provide in the area of bereavement leave?

Okay, so the first thing to know about bereavement leave, it's going to apply to employers with five or more employees. They are going to need to provide up to five days of bereavement time to eligible employees. So an eligible employee is those who have a qualifying family member pass away, and they must have been employed for at least 30 calendar days by the employer at the time that they are going to take the leave.

So in there is that qualifying family member. And I think that's something that we're kind of used to if we administer leaves of absence qualifying family members for things like paid sick leave, military leave and cfra, California Family Rights act, and FMLA leave. What's a qualifying family member for these purposes?

Yeah, So a qualifying family member will be a spouse, a child, a parent, sibling, grandparent, grandchild, domestic partner, or a parent in law, as those terms are defined by the Fair Employment and Housing Act. So again, yes, this is, you know, very should be very familiar sounding to some of our other leaves. Now this means, for example, a child that would include a biological, adopted or foster child, a stepchild, a legal ward, a child of a domestic partner, or a person for whom the employee stands in loco parentis.

Okay. So quite a few family members for which this might apply for our employees. Now oftentimes, of course, with our leaves of absence, employers want or will require documentation. Is there any kind of documentation requirement or the ability for an employer to ask for documentation to substantiate the leave?

Yes, employers do have the ability to request documentation, and that documentation must be provided within 30 days of the commencement of the leave. Some examples that are included in the statute as far as what would be appropriate documentation could be things like a death certificate, a published obituary, verification of death, burial or memorial services from a funeral home or a mortuary.

Excellent. So then it comes down to what if I have my own policy? Right. Because something that we had talked about during the course of this bill winding its way through the legislature is that we don't know if there's a need for this because a lot of employers already offer bereavement leave to their employees. So, Bianca, if I'm an employer with my own bereavement leave policy, how does that play with this new law?

Yeah, that's a great question. So the employers who already have a bereavement leave policy, they're really just going to need to look at what is their current policy and does it meet the minimum requirements of this current bereavement leave policy as of January 1st. So, for example, let's say an employer who as of 2022, they provided three days of bereavement leave, just again, not because they were required to, because in 2022 they weren't required to, but now we're in 2023, that employer is going to need to adjust their bereavement leave policy to say, add a minimum of two days to meet that five day minimum requirement.

Okay, so you bring up a great issue there, Bianca, which is, does this leave have to be paid? Because some employers will pay for it, some employers won't. But what does the statute say to this?

Yes, the statute states that the leave can be unpaid. So there is not a requirement for employers to pay for bereavement leave. However, employees can take vacation, pto, sick leave or some other paid time off that they have to to get paid during that time.

Now, can an employer require them to use that time, the vacation, the sick leave time?

That's going to be up to the employee.

Excellent. Okay. And then lastly, you know, we're used to things like the three days of paid sick leave or the 12 weeks in a 12 month period for FMLA or CFRA. Is there an annual limit for bereavement leave or how this works for each of the five days?

Yeah. So the five days is going to be per qualifying family member that passes away. There isn't any annual limit. So for example, where an employer can say you can only use bereavement leave on three occasions for a total of 15 days, there isn't any sort of cap like that. So we're really just focusing on, is it a qualifying family member that's passed away? If so, the employee is entitled to the leave. If They've met that 30 day minimum service requirement, they're going to be entitled to the five days per family member.

Excellent. And just to kind of put a bow on the bereavement leave here, the statute does say that those five days for each qualifying event have to be taken within 90 days of the qualifying event, in this case, the passage of the family member. And once those 90 days are passed, then the employee is no longer entitled to it. So we just talked about qualifying family members for bereavement leave, Bianca. And a person that list did not include is someone called a designated person. However, this year, the California Family Rights act, which is California version of the FMLA and California's mandatory paid sick leave law, added a designated person to the list of people for whom an employee may take leave under each law. So, Bianca, what in the world is a designated person?

All right, well, it's going to depend on which law we're talking about. So for the CFRA or the California Family Rights act, it means any individual related by blood or whose association with the employee is the equivalent of a family relationship. So with the CFRA, where an employee can take up to 12 weeks of leave to care for a family member, an employee is now able to take up to 12 weeks to care for a designated person.

Now, how does that contrast with the paid sick leave law?

Yep. So under paid sick leave, a designated person is something completely different, which is just a person identified by the employee at the time the employee requests the leave.

So does this then mean, Bianca, that I can just go to my employer and just say, hey, I'm going to take time off for my neighbor for paid sick leave, and then I'm going to take time off for my auntie under CFRA and then continue to change that person every time I want to take leave. Or are there limits to how we can designate a person for these leaves?

Yes, there are limits. So an employer can limit the designated person to the same individual for each leave year under each particular law. So for in. For sifra, for example, that year is going to depend on how that employer calculates that 12 month period under their policy for sick leave. It would be the 12 month measurement that's going to be dictated by their sick leave policy for whenever their, maybe their lump sum, for example, is refreshed, whether that's on a calendar year basis or anniversary year.

All right, so of Course, all these changes mean updated paperwork. The first place we go is to our employee handbooks. Bianca, let's just touch on a couple issues with handbooks, since this is the perfect time for employers to revise theirs if they have one. So what do we have to say about handbooks here?

All right. Well, first and foremost, we know handbooks are not required by law, but they are a best practice. Though handbooks aren't required, we know there are certain policies that are required, such as having a harassment discrimination retaliation prevention policy, or, for example, example, a lactation accommodation policy. These are all going to be required whether or not you have a handbook. So, of course, having a handbook makes a nice central location where you can have all of your policies.

Okay, so we just talked about bereavement leave, and we also just talked about this designated person issue with these two leaves. Are these things that we should add to our handbook if we have such policies or even if we don't like a bereavement policy, if we don't have a bereavement policy, should we put one in place?

Yes, it's a great idea to have a bereavement leave policy in your handbook. Again, we know that they're now required. Having policies for required leaves of absence is a great way to demonstrate your compliance and also to commit, or excuse me, to communicate to your employees what your practices are around that policy. For example, for an employer who maybe wants to provide more than the minimum five days of bereavement, or maybe they want to have some portion of that be paid, the policy is a great place to communicate those things to the employee.

Now, what about other policies like vacation, holiday rest and meal breaks, electronic resources, these kinds of policies that aren't required? Are these things that employers should look at here in the new year as well?

Yes, definitely. Again, all centering around compliance. And especially when we're talking about things like meal and rest breaks, making sure that employees are aware of what your policies and practices are around, that this also comes in handy when we are looking at performance and disciplinary issues, if we need to point employees back to remind them and say, hey, what's review this policy again, having them sign off on it, again, having something concrete that you can point to for employees maybe who are not, you know, who may be having some challenges around their performance or attendance, things like that.

Excellent. And so when they're updating their policies, do you have any kind of resources, tools, or recommendations as it goes to updating those?

Yeah. So actually, Cal Chambers, employee handbook creator, is a Great place to start if you don't have a whole lot of time. It makes it very simple based on filling out a wizard and answering questions about the number of employees and dropping in the types of policies that you have, what's recommended, what's considered mandatory, again, based on these various requirements, such as bereavement leave, which is now required under California law. But whether you're using a software program like the employee handbook creator or something else, you always want to make sure that you are having that handbook reviewed by legal counsel. That's a really important step that you want to make sure you get that reviewed before you're distributing it to your employees.

Okay. And lastly, it wouldn't be a new year without new posters, right? Bianca, there are 18 employment posters that all employers must post, and actually about half of them got updated for this new year here in 2023. With regards to posters, there are several government agencies responsible for the posters, such as the Civil Rights Department, formerly known as the Fair Employment and Housing Department, the Department of Industrial Relations, which handles a lot of our wage and hour and workers comp stuff, and then the U.S. department of Labor. So employers could always go to each agency to collect all the required posters. Or as Bianca said, for convenience, you can utilize Cal Chambers all in one poster. That combines them all into a single she, giant sheep, but a single one at least, so you don't have to go hunt them down. But a question we often get about this because we're having to update our posters for the new year, is what do we do about those remote workers and these new posters? Bianca?

Yes, that is a famous question that is asked at every single one of our seminars, what to do with the remote workers. So if we have employees that are working 100% remotely, we need to make sure that we are getting all of these notices to them, whether it's in the form of an all in one poster or you're sending each of those notices separately. But we need to make sure that we're getting those physical posters to them so that they can be posted in the workplace, which in the case of a fully remote employee, is going to be their home. Now, it's a little bit different. If you have somebody maybe on a hybrid schedule who's coming into the office or into the work site a few days a week, then you're covered if you've got those notices up in that main location, such as a break room or employee lounge. But for those employees who are only at home, we need to make sure we get those physical posters to them.

Well Bianca, it is always great having you on the show to share compliance tips, so thank you for joining us today.

Thanks so much for having me, Matt.

And thank you listeners for joining this discussion on the workplace. Happy 2023. Please comment, share and subscribe to Cal Chamber's podcast by visiting calchamber.com.

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