EMPLOYMENT LAW UPDATE: PREPARE FOR 2017

NEW FEDERAL SALARY REQUIREMENTS

Although this change is not unique to California, please bear in mind the Federal changes made to “white collar” exemptions, known as the “Final Rule”, which takes effect on December 1, 2016. The Department of Labor (DOL) issued changes that substantially increase the minimum salary requirement for the executive, administrative, and professional employee exemptions, under the Fair Labor Standards Act (FLSA). New minimum will be $913 per week (or $47,476/yr.

FAIR PAY ACT CHANGES (Effective January 1, 2017)

Under the Fair Pay Act, which went into effect on January 1, 2016, existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. The Fair Pay Act provides for exceptions such as, the wage differential is based upon one or more of the following factors: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity or quality of production; (d) a bona fide factor other than sex, such as education, training, or experience.

  • SB 1063 expands the Fair Pay Act beyond gender wage inequality to include employees’ race or ethnicity. 
  • AB 1676 amends the Fair Pay Act to provide that prior salary cannot, by itself, justify any disparity in compensation. The law is intended to “help ensure that both employers and workers are able to negotiate and set salaries based on the requirements, expectations, and qualifications of the person and the job in question, rather than on an individual’s prior earnings, which may reflect widespread, long-standing, gender-based wage disparities in the labor market.”

WAGE STATEMENT CHANGES (Effective January 1, 2017)

AB 2535 amends California Labor Code Section 226, which specifies information to be included on an employee’s itemized wage statement (pay stub). Currently the requirement does not apply to certain salaried, exempt employees. The amendment clarifies that employers are not required to display total hours worked during the pay period for exempt employees who are paid by means other than salary, including outside salespersons and computer professionals.  Employers must continue to include the total hours worked by non-exempt employees in the itemized wage statements for each pay period.

PRIVATE RETIREMENT SAVINGS PLANS (Effective TBD)

Though the program is not officially up and running, we want you to be aware: SB 1234 approves the California Secure Choice Retirement Savings Program (SCRSP), which is a state-run retirement plan for private sector workers.  Specific prerequisites must be met before the SCRSP can be implemented.

Under the legislation, employers with five or more employees that do not offer specified retirement plans must put a payroll arrangement into place so that employees may contribute a portion of their salary or wages to a retirement saving program in the SCRSP. Employers retain the right at all times to set up and offer their own qualified retirement plan.

Reprinted with permission: Don Dressler – www.calworksafety.com