Do I Have To Pay My Employees in California If They Want to Vote?

Simple answer is it depends.

California Elections Code section 14001 requires employers to post a notice to employees advising them that if necessary, they can take up to two (2) hours of paid time off to vote in a statewide election, if they do not have sufficient time to vote outside of working hours.

Polls are generally open from 7:00 a.m. to 8:00 p.m. If an employee requests paid time off to vote, the employer should inquire as to why it is that the employee is unable to vote outside of working hours. For example, if an employee works from 8 to 5, and lives 30 minutes from the worksite, and there is a polling location near the employee’s residence, the employee should have sufficient time to vote. However, if the employee works longer hours, or works at a remote location, the employee may need paid time off, depending on the particular circumstances.

A sample of this notice, as well as a notice to employers regarding time off for voting is available at the links noted below as a PDF download or, you may call the Elections Division at (916) 657-2166 to order posters of the notices.

Employers must post this/these employee notice(s) 10 days before a statewide election. A statewide election is an election held throughout the state. The employee notice must be posted either in the workplace or where it can be seen by employees as they enter or exit their place of work.

Employees can be given as much time as they need in order to vote, but only a maximum of two (2) hours is paid. Employers may require employees to give advance notice that they will need additional time off for voting. Employers may require time off to be taken only at the beginning or end of the employee’s shift.

The notices to employees and employers regarding employee time off for voting is available as a PDF download by clicking on one of the following links:

 

Implementing A Compliant “Hourly Rate Based” Compensation System In California

In a recent California appellate court decision, the court upheld a trial court’s judgment in favor of Certified Tire and Service Centers (“Certified Tire”), finding the company’s “hourly rate based” compensation system for its tire technicians complied with California’s wage and hour laws.

We wanted to take this time to explain how Certified Tire’s “hourly rate based” compensation system works and how you can use a compensation system such as this for your company’. Although we will not go into all of the details surrounding the case, you can CLICK HERE to read about the interesting decision.

Our analysis begins with how Certified Tire paid their technicians, based on our understanding of the case, which is detailed below:

  • All technicians were paid the required minimum wage.
  • All technicians were paid for their rest periods and all work that was performed.
  • Technicians that performed certain types of work that the company wanted them to perform for customers, received “production dollars.”
  • Technicians earned a “tech rate” between 28%-34% of these productions dollars based on achieving certification and/or testing to reach certain levels of proficiently in the company.
  • These production dollars were then calculated using a formula:
    • (Production Dollars (in pay period) * 95% * tech rate %) / # of hours (in pay period)
    • This calculation formula became regular rate of pay and there were NO LIMITS on how high the regular pay could be.  The employee would get the higher of the minimum wage or the new rate that was calculated for all the hours worked including overtime in that pay period.

So using the above formula, let’s look at an example of how this unique compensation system works:

  • Joe Smith is a technician earning the basic minimum wage of $15.00.
  • Joe Smith’s certifications and qualifications within the company earn him a “tech rate” of 30%.
  • The current pay period consists of two (2) 40 hour work weeks.  Therefore the current pay period has 80 hours.
  • Joe Smith worked 88 hours for that pay period (80 hours regular and 8 overtime).
  • Joe Smith earned $10,000 “Production Dollars”.
  • Using the formula by certified tires, the regular rate was:
    • (10,000 * 95% * 30%) / 80 = $35.62.
    • Based on this calculation we would use this new regular rate of $35.62 instead of his minimum wage of $15.
  • Therefore his new gross pay before taxes for this pay period would be $35.62*80 + 35.62*1.5*8 = $3,277.04.
  • If he was at $15.00, he would have only earned $15.00*80 + 15.00*1.5*8 = $1,380.00.

This hourly based compensation system is an example of how companies can encourage workers to perform certain tasks that they might avoid in the course of their job in order to get a better rate of pay without having to do commission based or bonus based systems.

For any questions about implementing polices and how YourVirtualHR, Inc. can help,  please give us a call at Toll Free 1-562-888-0126 or email sales@yourvirtualhr.com for more information.

What is California’s “Premium Pay”?

Many California employers do not understand their legal obligation to pay “premium pay.” An employer’s failure to understand the obligation to pay “premium pay” when owed to an employee, can result in costly litigation pursuant to California’s Private Attorney General Act (“PAGA”).  California Labor Code section 226.7 provides that:  “(a) No employer shall require an employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commission. (b) If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided.”

So what exactly is “premium pay”? In general, “premium pay” is extra pay, at an employee’s regular rate of pay, that is owed to an hourly (non-exempt) employee when the employee fails to take a rest or meal period by the required time, due to action by the employer.

Examples of what could trigger “premium pay” include, but are not limited to:

    1. Employer asks employee to perform work which interrupts the 30 minute meal period.
    2. Employer asks employee to take a delayed meal period, specifically to delay the meal period so it is taken 2 hours past the 5th hour of an employee’s shift;
    3. Employee clocks back in before the 30 minute meal period is up because her supervisor asked her to report back to work.
    4. Supervisor asks employee to skip a rest break as Company operations are too busy and the employee is needed at her work station.

The penalty for the above examples in which the employee did not take the meal or rest break as required is “premium pay.” The payment of “premium pay” is as follows:

    One extra hour of pay at the employee’s regular rate for either a missed meal period or missed break; the maximum penalty is two premium pays for each work day. These hours are not used in the calculation of overtime or double time nor will these hours be considered hours worked.

YourVirtualHR can assist with any questions that employers may have on this important topic. Just give us a call!

An Approach To Thinking About Discretionary vs Non-Discretionary Pay In California

A common question that we are often asked as the holiday season approaches is how must employers treat holiday bonuses, and are such bonuses subject to overtime calculations.  The key questions to determine is whether or not the bonus is a non-discretionary versus discretionary bonus.

While California does not have a definite answer as to  what is or is not non-discretionary , YourvirtualHR has come up with a simple concept to consider: is the bonus payment considered “earned” or not, meaning did the employee have to somehow qualify in order to get the bonus. Applying this concept should help employers determine whether or not a bonus is discretionary, and thus subject to overtime calculations.

Here are some questions for employers to consider:

  1. Do employees have to qualify for the bonus, i.e. earning/qualifying for the bonus is based on factors such as service years or performance. (If the answer is yes, then it is possible the bonus is non-discretionary;
  2. Is there a written bonus formula that is provided to employees, which includes the specifics of how they will earn the bonus? If yes, consider some examples and additional questions below in determining whether or not a bonus is “earned”:
    1. A policy that states that every year in December and an employee will receive a $100 bonus and/or receive a bonus that is paid at a certain time, could be considered earned and non-discretionary;
    1. A policy that states “Because our employees are valuable part of the company, from time to time, the company may evaluate and possibly grant a discretionary bonus or provide other perks or events to employees, amounts, details, and timing of payments are determined and/or paid at the sole and absolute direction of the employer” can probably be considered discretionary because there are no qualifications as to how the bonus is earned;
    1. A company decides that in December 2018, in order to show appreciation for everyone’s hard work, and a bonus will be paid in the amount of “x” for all employees. This could be considered discretionary.  Then in December 2019, the company decides that another amount “x” will be paid around the same time, as the company had a profitable year.  In December 2020, the company does not do as well and so offers a company luncheon to thank everyone but no bonus.  This is probably a discretionary bonus.
    1. Do all employees receive the same bonus regardless of performance or length of service, position, etc., or do employees have to qualify for the bonus? For example, do employees have to pass a probationary period, not be written up, be in good standing, or perform according to a certain standard? If there are qualification requirements, then the bonus could be considered a non-discretionary bonus because the employee has to “earn/qualify” in order to receive the bonus;
    1. Is the amount of bonus significant. For example,  $100.00 versus one month at the employee’s regular pay.  If it is significant, it could be considered a non-discretionary bonus.  (However, this is a very gray area. We have not not encountered any issues with the amount of payment, but rather the consistency and fairness of the payment in question).

Before you create a discretionary bonus policy, at least consider these factors and always consult with your employment law attorney to make sure you are in compliance with California’s overtime laws as they apply to discretionary bonuses.

For any questions about implementing an polices and how YourVirtualHR, Inc. can help,  please give us a call at Toll Free 1-562-888-0126 or email sales@yourvirtualhr.com for more information.

9th Circuit Revives Landmark Tipping Lawsuit

The U.S. Court of Appeals for the Ninth Circuit has revived a lawsuit, Alec Marsh v. J. Alexander’s LLC, filed by a group of servers and bartenders that could have major consequences for the restaurant industry in some states under federal law. The lawsuit addresses whether a subminimum wage can be used for non-tipped work, otherwise known as a “tip-credit”.  Under federal law, and in some states, employers are allowed to credit tips toward the employee’s minimum wage. California law does not permit tip-credits, and thus all restaurant employees in the state must be paid at least minimum wage even if they receive tips.

The lawsuit was filed by a server, Alex Marsh, who alleged his employer unfairly paid a tip-credit wage for tasks unrelated to serving, like maintaining the soft drink dispenser and cleaning toilets. Thirteen other servers and bartenders joined in the lawsuit alleging similar complaints at franchised units of Denny’s, IHOP, P.F. Chang’s China Bistro, Arriba Mexican Grill and an AMC Theatre.

Alexander’s had won a dismissal of the case at the district court level. But the Ninth Circuit reversed that decision, thereby validating the plaintiffs’ complaints and agreeing with a similar argument in the Eighth Circuit. At issue in the lawsuit is the Department of Labor’s guidance that prohibits restaurant employers from using a subminimum wage if workers spend more than 20 percent of their time on non-tipped work, commonly known as the “80/20 rule.”

Marsh argued that he spent more than 20 percent of his time on non-tipped work, but the Phoenix-area J. Alexander’s where he worked paid him the tip-credit wage. For any questions about the law on tipping, please give us a call at Toll Free 1-562-888-0126 or email sales@yourvirtualhr.com for more information.

For more information about Alec Marsh v. J. Alexander’s LLC, as reported in Nation’s Restaurant News, on September 20, 2018, click here.

Minimum Wage Resource

Employers must ensure that employee minimum wages comply with applicable FEDERAL, STATE OR LOCAL ORDINANCES. Of course, whichever law/local ordinance provides the greatest benefit to the employee will apply. We found a site that employers and their payroll administrators might find helpful in complying with these federal and state laws, and local ordinances.

Minimum Wage Tracker – Economic Policy Institute