News, Articles & Updates

CA SUPREME COURT HOLDS THAT ON-CALL REST BREAKS ARE NOT PERMISSIBLE

On December 22, 2016, the California Supreme Court held in the case of Augustus v. ABM Security Services, Inc. that employers in California cannot require employees to remain “on-call” during rest breaks, even though employees are paid during this time. The Court reasoned that because rest breaks are only 10 minutes in length, employees often must remain on-site or nearby during their rest break.  This constraint, together with an employer’s obligation that employees remain “on-call” and responsive during their rest breaks, undermines the underlying purpose of employee rest breaks: affording employees ten minutes of freedom to use as they choose.

The Court’s decision applies to employers in all industries and can potentially subject them to heavy penalties for failing to provide rest breaks free of interruptions. Should you have any questions regarding the decision or its implications for your workplace, please feel free to contact your Mitzel Group employment attorney.

RATES FOR SAN FRANCISCO EMPLOYEE HEALTH CARE PROGRAM TO INCREASE ON JAN. 1, 2017

Effective January 1, 2017, employers subject to the San Francisco Health Care Security Ordinance (HSCO) must increase the hourly rates they pay to help provide health insurance to covered employees.  Per a 2014 amendment to the HSCO, the lock-step increase in hourly rates for 2017 is as follows:

# OF COVERED EMPLOYEES              CURRENT RATE            RATE EFFECTIVE 1/1/2017
20-99                                                                      $1.68                                           $1.76

100 OR MORE                                                      $2.53                                           $2.64

Covered employees are defined as those who have been employed for more than 90 days and who regularly work at least 8 hours per week in San Francisco.

Together with the rate increase, the San Francisco Office of Labor Standards Enforcement has released an updated 2017 HCSO Notice, which employers must post in a visible location at their workplace.

Employers who are – or may become – subject to the HSCO are encouraged to speak to their Mitzel Group attorney for additional information.

IMPORTANT CHANGE AFFECTS EMPLOYEES PREVIOUSLY EXEMPT FROM WORKERS’ COMPENSATION

A new change in California workers’ compensation law now requires all previously exempt employees  – including officers, directors, and working partners of a business –  to submit insurance waivers to their insurance carriers in order to remain exempt from workers’ compensation insurance requirements. Previously, these employees were automatically exempt from coverage, requiring no affirmative action on their part.

To remain exempt from the new rules, which become effective January 1, 2017, employees must submit insurance waivers to their insurance carriers before December 31, 2016. The new law specifically defines qualifying exempt employees as owners or directors owning 15% or more of a corporation’s stock, general partners of a partnership, and managing members of an LLC.

Employers should receive waiver forms from their workers’ compensation insurance carriers. Employers may direct additional questions regarding these changes to employment attorneys at the Mitzel Group.

U.S. DEPARTMENT OF LABOR APPEALS PRELIMINARY INJUNCTION ISSUED BY FEDERAL COURT

On December 1, 2016, the U.S. Department of Labor (DOL) filed an appeal to the U.S. Court of Appeals for the Fifth Circuit seeking that the preliminary injunction issued by a lower-level federal Texas court on November 22, 2016 be overturned. As noted in a previous posting, the preliminary injunction temporarily blocked new overtime pay regulations from taking effect on December 1, 2016.

By itself, the DOL’s appeal does not affect the preliminary injunction, which will remain in place until the appeal is heard by the Fifth Circuit. At this time, however, the Fifth Circuit is not expected to take action on the appeal until after the Trump Administration takes office in January 2017. The Trump Administration may decide not to pursue the appeal, and the injunction would thus remain in place, leaving the new regulations in limbo.

Employers are encouraged to check back often and consult with Mitzel Group employment attorneys regarding developments in this case and how such developments may affect their businesses.

FEDERAL COURT BLOCKS DEPARTMENT OF LABOR’S NEW OVERTIME PAY REGULATIONS

On November 22, 2016, the United States District Court for the Eastern District of Texas issued a nationwide preliminary injunction temporarily preventing the Department of Labor’s new overtime pay regulations from taking effect. The new regulations, which had been scheduled to take effect on December 1, 2016, re-defined which employees are exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). The new regulations would have raised the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $913 per week ($47,476 annually), drastically expanding the pool of employees eligible for overtime pay.

For the present time, while the injunction is in effect, employers may continue to classify and treat their exempt employees as before – even if they make less than $913 per week. However, employers should remain mindful that the injunction is temporary; employers should remain ready to comply with the new regulations if the Court’s decision is reversed on appeal.

The Mitzel Group will continue to provide updates on this matter and encourages employers to check back often. As always, please contact our office at info@mitzelgroup.com with any questions or concerns.