California enacted more than 300 new employment laws in September 2014, many of which impact employer practices regarding wages, leave and rest breaks. Below are some of the key changes in wage payment, sick leave and rest break laws taking effect in 2015.
Prevailing Wage & Public Works Projects
Highway improvements, new government buildings and related California construction projects are most often paid for using public funds. California workers who provide labor for these California public works projects that exceed $1,000 in cost are entitled to receive wages at the prevailing wage.
The prevailing wage rate for any publicly funded construction project is based on the basic hourly rate that a majority of workers who are engaged in similar work within the nearest labor market area are currently receiving. Workers on federal construction and service contracts should be paid at least $10.10 per hour, the new minimum wage for federal contracts.
In addition to being aware of prevailing wages, employers should inform contractors any time a project receives a public subsidy, is publicly funded, or is otherwise classified as a public works project, thereby triggering the requirement that the contractor pay prevailing wages to workers.
Effective January 1, 2015, contractors are authorized by new Labor Code section 1784 to bring an action to recover any increased costs from the party it directly contracts with (e.g., the difference between the wages actually paid to an employee and the prevailing wage for the project) as a result of any decision to classify the project as a public work.
On July 1, 2104, California' minimum wage increased from $8 per hour to $9 per hour. As of January 1, 2016, it will be raised one more dollar to $10 per hour. Current law also requires employers to give notice to their employees seven days prior to the effective date via a pay notice or other written notice. Note: California's minimum wage law also affects exempt employees.
California employers should monitor local minimum wage ordinances. Employers in northern California's greater Bay Area saw four cities establish or increase their local minimum wage to an amount above the state rate, which is already higher than the federal minimum wage. For example, San Francisco increased their minimum wage to $11.05 per hour on January 1, 2015 and it will increase to $12.25 per hour in May 2015.
An employer who fails to pay the new minimum wage will be required to pay liquidated damages to the employees in addition to the existing penalties.
Mandatory Sick Leave & Posting Requirements
Effective July 1, 2015, the Healthy Workplaces, Healthy Families Act of 2014 (AB 1522) requires that, with limited exception, employers with employees who work in California must provide paid sick time to current and new employees. Employers should be aware that although accrual of paid sick leave goes into effect on July 1, 2015, notice and posting requirements go into effect on January 1, 2015.
Employers should also review their current vacation, paid time off, and sick leave policies and make necessary updates in anticipation of the new paid sick leave law that goes into effect on July 1, 2015. While notice requirements of Labor Code section 2810.5 do not apply to exempt employees, employers will need to convey their sick leave policies to all employees through links to updated policies or an email message.
Effective this year, California employers should clarify that recovery periods, like rest breaks, are treated as hours worked, and employees must be compensated for this time. Employers should ensure that time records include time spent during both recovery periods and rest breaks as hours worked and that employees are properly paid for this time.
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.