the California Employer's report - November 2016
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A Message From Kim...
With the Presidential Election nearly
behind us, it’s time to turn our attention to California’s new
employment laws effective January 1, 2017.
Getting Ready for 2017
With the Presidential Election nearly behind us, it’s time to turn our attention to California’s new employment laws effective January 1, 2017. Amazingly enough, Governor Brown signed 898 of the 1,059 bills presented to him this year.
We are providing you with information on the 2017 Employment and Labor Laws that will have the most impact on your business, one month earlier this year. Join us in December at an Employer Forum near you or stay in your office and join us via webinar.
In addition to registering for one of our Employer Forums, I hope you have started working on updated commission agreements for your sales team—I know I have. Since January 1, 2013, employers who pay commission to any employees performing work in California must have a written commission agreement with each employee.
As a refresher, commission agreements must:
• include a method for calculating and paying the commissions;
• be signed by the employee; and
• be documented with an employee acknowledgment form (receipt of the agreement).
Here are some tips for commission agreements
1. Keep them short and sweet. The longer and more confusing the agreement, the harder it will be to enforce.
2. Determine whether you want an expiration date. In the case of an agreement that expires but the employee continues to work under it, the agreement terms will remain in effect until a new agreement is put in place or employment is terminated.
3. In addition to providing the employee a signed copy of the agreement, which is required by law, maintain a copy of the commission agreements and acknowledgments of receipt in employees’ personnel files so they may be inspected or copied if requested at a later date.
4. Consider attaching a job description.
5. Include the following information if applicable:
a. Employee’s name, title and the date the agreement was signed
b. Name of a company representative and the date the agreement was signed
c. Base Salary
d. Quotas and commission rate calculation: Clearly explain when a commission is
earned and give examples, such as “commission is earned by an employee when the
company has received payment for the product(s) sold”.
e. Timing of commission payout: Give examples so that the employee can calculate
the commission for each sale.
f. Impact of returns (if applicable)—once a commission is earned, it is income and
belongs to the employee so you can’t take it back.
g. Recoverable Draw: How will advances on commissions be handled?
h. Impact of termination on commissions—clearly define when the commission is
earned, when the employee is paid and when final pay for commissions must occur.
If you haven’t ever written a commission agreement, have no fear, we are here to help! We’ve got a terrific Commission Agreement Fact Sheet and Questionnaire to help get you started or we can lighten your load and prepare an agreement for you.
New I-9 Form this Month
The newest version of the Form I-9
will be made available by Nov. 22, 2016, U.S. Citizenship and
Immigration Services (USCIS) announced.
The newest version of the Form I-9 will be made available by Nov. 22, 2016, U.S. Citizenship and Immigration Services (USCIS) announced.
Employers may continue using the current version of Form I-9 with a revision date of 03/08/2013 until Jan. 21, 2017. After Jan. 21, all previous versions of the Form I-9 will be invalid.
Changes to the Form I-9
The new form is designed to reduce technical errors commonly made by employers including:
• The form will validate the correct number of digits for a Social Security number or an expiration date on an identity document.
• Embedded instructions to assist in completing each field.
• The requirement that workers provide only other last names used in Section 1, rather than all other names used. This is to avoid possible discrimination issues and to protect the privacy of transgender and other individuals who have changed their first names.
• The removal of the requirement that immigrants authorized to work provide both their Form I-94 number and foreign passport information in Section 1.
• A new “Citizenship/Immigration Status” field at the top of section 2.
• A quick-response matrix barcode, or QR code, that generates once the form is printed that can be used to streamline enforcement audits.
• Separate instructions from the form. Employers are still required to present the instructions to the employee completing the form, however.
Employers filling out the new form I-9 using Adobe Reader will still need to print the form, obtain handwritten signatures, store in a safe place, monitor re-verifications and updates with a calendaring system, and retype information into E-Verify as require
Trainer’s Tips—Making the Best of a Bad Situation
As businesses change at the speed of
light, companies need to make difficult decisions to cut costs or take a
As businesses change at the speed of light, companies need to make difficult decisions to cut costs or take a new strategy. Sometimes these business changes result in a layoff of some employees or closing a facility altogether.
The news of a layoff or company closure can be devastating to impacted employees who have worked hard and will lose their jobs through no fault of their own, but it doesn’t have to be. To soften the blow, many companies offer “Outplacement Services” as part of a severance package. Outplacement services provide career resources & counseling by trained specialists who assist employees in navigating career transitions.
Some companies, like Verdesian Life Sciences, really go above and beyond to meet the challenge of supporting their soon to be laid off employees. Verdesian Life Sciences determined early this year that they were going to close one of their manufacturing plants due to a redundancy after an acquisition. The parent company, located in North Carolina, wanted to make this transition as easy as possible for their loyal and talented staff. They contacted CEA and worked with our Training & Workforce Development team to develop a customized job transition training program and started it months before the actual layoff occurred!
My team and I have never worked with a more positive group of soon to be unemployed employees. Plant manager, Bill Nebe kept the morale high as the core team closed the existing plant. Verdesian’s goal was to have many of their employees hired before they actually closed their doors. The benefit to Verdesian is a well-coordinated transition from one location to another and the knowledge that the company did all it could to see that its employees were hired and felt valued.
Verdesian made the best of what was a difficult situation, and a company with a heart will always be successful. Way to go, Verdesian! You have set the bar high, and we hope other businesses take notice.
Director Training & Development
New OSHA Rule Delayed Until December 1
OSHA delayed the enforcement of a new
rule which went into effect on August 10, 2016 until Nov. 1, 2016, in
order to provide employers with more time to comply. Guess what?
OSHA delayed the enforcement of a new rule which went into effect on August 10, 2016 until Nov. 1, 2016, in order to provide employers with more time to comply. Guess what? It’s been delayed a second time until December 1st!
Under OSHA 81 Fed. Reg. 29624, employers are required to inform workers of their right to report work-related injuries and illnesses without fear of retaliation. Specifically, this new rule:
• Prohibits mandatory post-accident drug testing. OSHA claims these tests discriminate against employees and make them less likely to report injuries and illnesses.
• Prohibits employers from retaliating against employees who report an injury or illness.
• Requires employers to inform employees about this new anti-retaliation rule by posting an OSHA workplace poster or in writing with a signed acknowledgment form.
• Requires certain employers to electronically submit injury and illness data, already recorded on their on-site OSHA Injury and Illness forms. Establishments with 20-249 employees in certain high-risk industries must submit information from their 2016 Form 300A by July 1, 2017, and their 2017 Form 300A by July 1, 2018. Establishments with 250 or more employees in industries covered by the record-keeping regulation must submit information from their 2016 Form 300A by July 1, 2017.
Call CEA to assist you with your handbook language and/or help you create a policy.
For more information click Here
Poster link Here
It’s Beginning to Look a Lot Like…Lawsuits
Holiday parties are an excellent
opportunity for employees to socialize outside of the office, and to
reward employees for their service,
Holiday parties are an excellent opportunity for employees to socialize outside of the office, and to reward employees for their service, they can also give rise to employer liability. Before planning your next holiday soirée, review the potential pitfalls and solutions below so that your event can be full of cheer, rather than unpleasant lawsuits.
Serving Alcohol at Company Functions
While having alcohol available may make typical water cooler conversations less awkward, it can lead to liability for employers in the form of vicarious liability, sexual harassment, social host liability, and other potential issues.
Even though refraining from serving alcohol altogether is the safest option, in the event that your company plans to serve alcohol at you next function, keep the following tips in mind:
• Never, ever serve alcohol to minors (in the event minors are invited to the event, require proper ID and issue wristbands to adults 21+);
• Ensure that there are sufficient non-alcoholic beverages and food to accompany the alcohol—intoxication can be exacerbated when guests drink on an empty stomach;
• Issue drink tickets to limit guests’ alcohol consumption;
• Host a “cash-bar,” at which employees must buy their own drinks.
• Discourage employees from drinking excessively and immediately stop serving guests who are overly intoxicated;
• Hold the party at an off-site location, such as a restaurant with a liquor license and professional bartenders;
• Arrange transportation home for employees, or provide credit/pre-paid rides from taxi companies or rideshare companies.
• Hold the party at an earlier time in the day; and
• Limit the duration of the party to reduce the amount of time employees spend consuming alcoholic beverages.
Sexual Harassment Liability
While some employees may be using the excuse of a holiday party and “liquid courage” to make their feelings known to their crush, or simply lose their manners, under the Fair Employment and Housing Act (FEHA), employers are responsible for providing a workplace free of harassment. Employers must take all reasonable steps to prevent discrimination and harassment from occurring, even if the incident occurs off-site at a company-sanctioned event.
Employers should take care to avoid risky holiday customs such as hanging mistletoe, which can encourage physical contact.
As always, employers should take every employee harassment complaint seriously, and investigate and respond in a timely manner.
Sensitivity to Religious and Non-Religious Beliefs
Employers should be aware of potential religious discrimination issues that may arise in the context of a holiday party. Although the EEOC and courts consider certain decorations to be secular in nature (such as wreaths, Santa, and Christmas trees), employers should make every effort to avoid objects, theme parties, or activities with religious symbolism. The best practice is to make a holiday party as inclusive as possible.
If an employee objects to a particular practice or custom on religious grounds, an employer must offer a reasonable accommodation to the employee. A good solution for this is to ensure the holiday party is voluntary, not mandatory, and that employees do not feel pressured or expected to attend.
With the holidays approaching, company parties can be an excellent way to say “thank you” and boost morale among the office. Rather than being discouraged by potential liability, take the time to plan ahead so that employees can enjoy a fun and safe event.
—Jennifer A. Grady, Esq.
Founder, The Grady Firm, PC,
What do I Say About an Ex-Employee?
When an employee leaves your company,
it’s a good idea to decide what you plan to say if other employers call
you for a reference.
When an employee leaves your company, it’s a good idea to decide what you plan to say if other employers call you for a reference. If the employee left on good terms, it’s pretty easy, either you and your former employee can agree upon a statement to explain the departure or you can simply tell the prospective employer positive things about the employee. If the employee left under bad circumstances or was fired, however, you face a more difficult task.
Why are employers nervous about giving information on former employees? The California Labor Code makes it a misdemeanor for an employer to make a misrepresentation that prevents a former employee from obtaining employment. Under such circumstances, former employees can sue their ex-employer and recover three times the amount of any actual damages. Employers can be sued if they make a statement which is false or act with reckless disregard for the impact their words have upon the prospective employer.
The good news: California employers are protected by statements based on credible evidence and made without malice. California law specifically states that this protection extends to statements about job performance, qualifications, and eligibility for rehire. Civil Code Section 47(c) protects employers who respond to the question, “Is this person eligible for rehire?” The section states: “This subdivision authorizes a current or former employer, or the employer’s agent, to answer whether or not the employer would rehire a current or former employee.”
Caution on not giving enough information: If you choose to give a reference, you need to know that California case law can find you liable for not providing enough information about an employee. For example, if you give a glowing recommendation about work performance for someone you fired for inappropriate behavior, like sexual misconduct, and don’t mention the misconduct, you could be held liable for not telling the whole story. If the new employer hires your ex-employee and is later involved in a lawsuit, you could be named in that lawsuit.
What about Letters of Recommendation? While many employers think they must give an employee a letter of recommendation, this is definitely not the case. If a good employee leaves your employment under amiable circumstances it is fine to write a letter of recommendation for them, but do not write a letter of false flattery for someone you would not rehire. The California Supreme Court held that an employer writing a letter of recommendation owes the person who receives the letter of recommendation, “a duty not to misrepresent the facts in describing the qualifications and character of a former employee, if making these misrepresentations would present a substantial foreseeable risk of physical injury to the third person.” Id. At 591.
Tips for Creating a Reference Check Policy
Here are some tips to include in your policy to reduce your liability:
• Be consistent. Decide who in your company will be responsible for references. All employees need to direct reference inquiries to that person. Keep a record of all requests for a reference and every response, in case of later trouble. Consider adopting a policy of only providing references in writing, so you have proof of exactly what was said.
• Keep it short and sweet. Adopt a policy of giving out only dates of employment, job title, final salary and information on whether the employee is eligible for rehire. There is quite a bit of influence behind the answer of whether you’d rehire an employee and it allows you to convey valuable information to a potential new employer. Example: I would definitely rehire Kim, she was a tremendous asset to our company. Or, I definitely would not consider Kim eligible for rehire with our company.
• Just the facts. If you still want to share more information, limit your comments to accurate, easily documented information. Example: Kim received three promotions in her time with this company. Or, Kim received several written warnings regarding attendance issues, before her employment with our company was ended.
• Don’t let your emotions get the best of you. If you are still angry about a situation with an ex-employee, don’t allow your emotions to spill over into the reference. Giving your “opinion” about a former employee could open you up to a lawsuit for defamation of character and slander. It is safer and more accurate to say, “Kim failed to follow company policy”, as opposed to “Kim was a horrible employee and she is incompetent.”
• Be truthful. Truth is a defense to almost any claim. However, if there were serious problems with a former employee, you may find yourself in legal trouble if you fail to warn the new employer and these serious problems resurface in the employee’s next job.
• Insist on written releases from employees. This may be difficult, but is probably the best defense. You can require former employees to sign a release—signed authorization that releases their former employer from liability for providing documents to a prospective employer.
Let us help you develop a policy for reference checks that reduces your liability and works for you!
President & CEO
Are Cell Phone & Wellness Reimbursements Taxable?
Q. We currently reimburse employees for their cell phone bills. We do
this on an expense report which means the money is not being taxed. Are
we doing this correctly?
Q. We currently reimburse employees for their cell phone bills. We do this on an expense report which means the money is not being taxed. Are we doing this correctly?
A. Yes. The IRS has stated that when employers give money to employees as reimbursement for business use of a personal cell phone, that money is not taxable. https://www.irs.gov/uac/irs-issues-guidance-on-tax-treatment-of-cell-phones-provides-small-business-recordkeeping-relief
Q. In regards to the wellness plan reimbursements, if our company wants to reimburse employees for their gym membership as part of our well plan program should the employee be taxed?
A. No. Coverage by an employer-provided wellness program that provides medical care as defined under section 213(d) is generally excluded from an employee’s gross income under section 106(a), and any section 213(d) medical care provided by the program is excluded from the employee’s gross income under section 105(b). https://www.irs.gov/pub/irs-wd/201622031.pdf
CEA’s 79th Annual Meeting Notice for Members
On December 8, 2016, CEA will hold their 79th Annual Meeting in Accordance with our Bylaws.
On December 8, 2016, CEA will hold their 79th Annual Meeting in Accordance with our Bylaws. This meeting will be held for the purpose of electing and installing the Board of Directors for the ensuing term year. Elections of directors and officers will occur at the meeting. The meeting will take place from Noon to 3pm at the CEA corporate office located at: 1451 River Park Drive, Suite 116, Sacramento, CA 95815.