It is that time of year again – new employment laws for 2012 are here. Here is a highlight of the new laws and things that employers should start doing to comply. If you have questions regarding compliance, we are here to help. Contact Brenda Gilchrist at 707-526-0877 x11 if you have any questions regarding compliance with the new laws.
1. Give Employees Required EITC Notice with W2; verify that your payroll company is handling this properly for you.
2. Credit Checks; if you are running credit checks on applicants/new hires, be careful when and how you use credit checks. Don’t run credit checks on applicants and/or candidates unless you meet the legal requirements and it is applicable to the job requirements.
3. Group Health Coverage in place for up to 4 months of Pregnancy Disability Leave (PDL applies to employers with 5 or more employees); SB 299 requires all employers with five or more employees to continue to maintain and pay for health coverage under a group health plan for an eligible female employee who takes Pregnancy Disability Leave (PDL) up to a maximum of four months in a 12-month period. The benefits are at the same level and under the same conditions as if the employee had continued working during the leave period.
4. Willful Misclassification of Independent Contractors; Do you have any 1099′s/Indepedent Contractors? If so, the state has increased the penalties for employers that willfully misclassify an employee as a 1099. It is important employers understand their risk if they engage 1099′s. SB 459 provides new penalties between $5,000 to $25,000 for the “willful misclassification” of independent contractors. Willful misclassification is defined as: “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.”
5. Notice of Pay Details; if you hire employees, make sure you document their terms of employment in an offer letter. The state now requires that certain terms of employment are provided to employees in writing. If you haven’t been providing employees with offer letters, you can create “terms of employment” for existing employees and “offer letters” for new hires. If there is any change to the terms, employers must notify the employee, in writing, within seven calendar days of the changes, unless such changes are elsewhere reflected on a timely wage statement, such as a payroll stub. Although the new law only applies to nonexempt employees, we suggest you document offer letters for all new hires.
AB 469 requires employers to provide nonexempt employees, at the time of hire, a notice that specifies:
• The rate of pay and the basis, whether hourly, salary, piece commission or otherwise, including any overtime rate
• Allowances, if any, claimed as part of the minimum wage, including meal and lodging allowances
• The regular pay day designated by the employer as required under the Labor Code
• The name of the employer, including any “doing business as” names
• The physical address of the employer’s main office or principal place of business and any mailing address, if different
• The telephone number of the employer
• The name, address and telephone number of the employer’s workers’ compensation carrier
6. Written Commission Agreement; AB 1396 requires employers who have commission pay arrangements to put those agreements into a signed written contract. The written contract must set forth the method by which the commissions will be computed and paid. If the contract expires but the parties keep working under the expired contract, the contract terms are presumed to remain in effect unless superseded by a new contract or the employment relationship is terminated. The bill is effective January 1, 2013. Employers have the entirety of 2012 to bring their commission agreements into compliance.
7. Organ and Bone Marrow Donor Leave; SB 272 clarifies the implementation of California’s organ and bone marrow donor leave law (Labor Code sections 1508-1512). Existing law provides up to 30 days of leave in a one-year period for organ donation and up to five days of leave in a one-year period for bone marrow donation.
The new legislation clarifies that the days of leave are business days, not calendar days, and that the one-year period is measured from the date the employee’s leave begins. Existing law states that employers can require use of sick and vacation leave. The new legislation clarifies that employers can require the use of a specified number of earned but unused days for paid time off (PTO).
8. Genetic Information; SB 559 amends the Fair Employment and Housing Act (FEHA) to state that employers are prohibited from discriminating against employees on the basis of genetic information.
9. Gender Expression; AB 887 amends the Fair Employment and Housing Act to further define “gender” to include both gender identity and “gender expression” and to make clear that discrimination on either basis is prohibited. Current law only uses the term gender identity. AB 887 also amends Government Code section 12949 relating to dress codes to include that an employee must be allowed to dress consistently with both the employee’s gender identity and gender expression.
10. NLRB Notice; As of April 30, 2012, most employers are required to post the Notification of Employee Rights. This posting describes employees’ rights to organize a union (in detail). However, note that an employer will not be fined for failing to post the notice.
Short List of Things to do:
- Call your payroll company regarding the required EITC notices
- Don’t run credit checks on applicants/candidates, unless you are in compliance with the rules.
- If you have 5 or more employee, make sure you maintain health insurance for up to 4 months for the disability portion of the leave covered under Pregnancy Disability Leaves (PDL). If you have over 50 employees, you will have to comply with FMLA/CFRA and coordinate the leave laws.
- Conduct a 1099/Independent Contractor Audit to ensure you are properly classifying employees
- Offer Letters and Commission Agreements; make sure you provide new hires with offer letters and provide written commission agreements to employees that are paid commissions.
- Just be aware of 7, 8 and 9 above and educate managers and staff of overall discrimination laws and company policy.
- Chose whether or not you want to post the NLRB poster. Remember – there are no penalties if you don’t post it.
About the author: Brenda Gilchrist is the Principal/CoFounder of the HR Matrix, llc. Brenda and her team provide outsourced HR support, including onsite and virtual support, including HR audits, advice and consultation, handbooks, policies, employment programs, compensation design, performance management, payroll/HR systems, training and development and recruitment. Contact Brenda Gilchrist to discuss your HR needs at 707-526-0877 x11