A Rundown of Key Hiring and Contracting Laws to Remember in 2015
California enacted more than 300 new laws in September 2014, many of which impact employer hiring and contracting practices. California employers should remain diligent in reacting to these laws while employees in California should remain apprised of new or expanded rights as a result of new legislation. Below are some of the key changes in hiring and contracting laws taking effect this year.
Laws Related to Hiring
Existing law requires the Department of Motor Vehicles (DMV) to issue an original driver's license to a person who is unable to submit satisfactory proof that the applicant's presence in the United States is authorized under federal law if he or she meets all other qualifications for licensure and provides satisfactory proof to the department of his or her identity and California residency. In September of last year, California passed Assembly Bill 1660 (AB 1660) which provides new protections in the employment context for individuals possessing such driver's licenses. Some of the provisions of AB 1660 include:
• Prohibiting an employer from discriminating against an individual because he or she holds or presents a driver's license issued under Vehicle Code section 12801.9;
• Prohibiting an employer from requiring a person to present a driver's license, unless possessing a driver's license is required by the employer and the employer's requirement is otherwise permitted by law.
• Establishing that driver's license information obtained by an employer is private and confidential, exempt from disclosure under the California Public Records Act, and shall not be disclosed except to establish identity and authorization to drive.
• Prohibiting using a license issued pursuant to Vehicle Code section 12801.9 to consider an individual's citizenship or immigration status, or as a basis for an investigation, arrest, citation or defense.
Laws Related to Contracting
There are a number of new precautions for employers to consider when using staffing agencies or other labor contractors because, effective January 1, 2015, Labor Code section 2810.3 imposes liability on contracting employers for certain violations suffered by such workers.
Working Off the Clock
Employers should ensure that no employees, including contingent workers, work off the clock. Employees are supposed to be paid for pre-shift and post-shift activities if they are an integral and indispensable part of the principal activities for which the workers are employed. For purposes of California wage and hour laws and working off the clock rules, the term “principal activities” is considered to include any work of consequence performed for an employer no matter when the work is performed. Time spent waiting for work is compensable time for which employees are entitled to be paid if the waiting time is spent primarily for the benefit of the employer and the business.
Even if an employee works off the clock, their employer may try to argue that the time worked is de minimis, meaning too little for compensation. However, since the general rule is that employees must be compensated for all of the time they work, it is difficult for employers to prove that the time worked off the clock is de minimis.
An employee must be paid 1 1/2 times his or her regular base rate of pay for hours worked beyond 8 hours in a day or 40 hours in a workweek (whichever is more beneficial to the employee). The California Department of Labor Enforcement (DLSE) sets out specific rules to follow when calculating the regular base rate of pay. Since commissions are wages, an employer must pay overtime on all commissions and must include commissions in calculating the regular base rate of pay unless the commissions are specifically excluded by law from inclusion in regular rate calculations.
Many employers fail to include commissions and other additional money an employee earns in calculating the employee's regular base rate of pay for overtime purposes. This is frequently a problem for inside sales representatives who receive commissions on their sales or sales representatives that are classified as independent contractors. In determining the overtime rate under California law, the regular base rate must be calculated by taking all of an employee's regular wages (hourly pay, salary, bonuses, commissions, etc.) earned in a given week and dividing it by 40. The overtime rate is then multiplied by 1.5.
Employers often take the employee's hourly rate without including the wages earned from commissions, and multiply the hourly rate by 1.5 and use that as the overtime rate. If the employer correctly calculates the base rate by including all of the employee's wages, including the commissions earned, it can make a considerable difference in the amount of money an employee receives in overtime pay.
Experienced California Employment Lawyers
To further discuss the latest in employment law, or any of the new laws above, feel free to contact leading California employment lawyers at Kingsley & Kingsley. Call toll-free at (888) 500-8469 or click here to contact us.