Here is the latest issue of “This & That” Tuesday. I hope you find it to be informative and useful.

 

Announcements

You can always check out my website for upcoming speaking engagements that are guaranteed to be of value to business owners or for a list of topics that I can speak on at Chambers, Clubs, Business Associations, etc. More details about the events, topics and Human Resources 4U, in general, can be found on my website.

Upcoming Talks

July 9, City of Industry “HR4U 101 Full-day Workshop" Click here for more information.

 

July 17, West Covina "Critical Human Resources Issues for Business Owners" Click here for more information.

 

August 6, Sierra Madre, “The Big Seven Employment Trouble Spots” Click here for more information.

 

 

This is a SPECIAL EDITION of my newsletter and it is devoted entirely to the new minimum wage in California.

 

The Potential Impact of the New Minimum Wage on Your Organization

As a business owner, you might say to yourself that all my employees  earn  more than the minimum wage ($9.00 hour, effective 7/1/14) so this new law has no effect on my business. But you could be wrong, possible very wrong. Here are some potential problem areas for employers.

 

Exempt Employees

The minimum wage required to meet the Exempt Employee is tied to the basic minimum wage. This exemption requires that employees earn at least 2 times the minimum wage. Therefore your exempt employees must now be paid a minimum of $37,440 per year (up from $33,280 per year).

 

Collective Bargaining Unit Employees

Under Labor Code § 512 and 514, employees covered by a collective bargaining agreement are exempt from meal period and overtime requirements so long as certain conditions are met  One of those conditions is compensation at a rate at least 30% more than the state minimum wage. Therefore, an increase in California’s minimum wage  means that employers must review and possibly  increase the rates paid to employees covered by a CBA  to ensure that the exemption still applies.

 

The Inside Sales Exemption

Under this commissioned employee exemption, employees are exempt from overtime if their earnings exceed 1.5x the minimum wage and more than half of their earnings come from commissions. Therefore, if the minimum wage increases, so must this base level of compensation for this exemption. Note: the Inside Sales Exemption only applies to wage orders 4 & 7. Do you know which wage order applies to your organization?

 

Tools and Equipment

Under CA law, employers are not required to reimburse employees for certain tools and equipment, so long as the employees earn at least 2x the state minimum wage  In order to avoid needing to reimburse these employees for their tool and equipment expenses, employers should ensure that these employees earn at least $18 per hour by July 1, 2014.

 

Meals and Lodging

Under the CA Wage Orders, certain amounts may be set off as a credit against the minimum wage for meals and lodging provided to employees.  These amounts are tied to the minimum wage, and will thus increase accordingly. Employers should review all policies regarding meal and lodging credits.

 

Workers’ Compensation

WC premiums are based, in part, on wages; therefore as wages increase so will your premiums. This is independent of your actual claims records.

 

Minimum Wage Penalties

California law authorizes the Labor Commissioner to  investigate and enforce statutes and regulations. The Labor Commissioner is also authorized to recover  liquidated damages for an employee who brings a complaint alleging payment of less than the minimum  wage.  This legislation amends Labor Code Section 1194.2,  which authorizes employees to recover liquidated damages in an amount equal to the wages unlawfully unpaid and interest on those wages.

 

Minimum Wage Trends

Both within California and throughout the U.S. we are starting to see some trends. Within California, San Francisco already has a minimum wage of $10.55 that is indexed to inflation, San Jose is proposing to increase its minimum wage to $10 per hour in 2014 and Richmond is aiming for $12.30 per hour by 2017. We are also seeing moves in Los Angeles and elsewhere to increase the minimum wage for certain types of employees such as hotel and food service workers. And finally, on the Federal level we are seeing a move to increase the minimum wage to $10.10 per hour.

 

Employee Relation Issues

Besides all the legal aspects of the minimum wage increase you should think through what these changes might mean for the rest of your employees. If you are increasing the the pay of either your minimum wage employees or any of your exempt employees, you may want to increase other similarly-situated employees’ pay, as well. This is ultimately a business decision but whatever you do, it will have an employee relations impact on your employees.

 

Factoids

• The best colors to wear on job interview are blue or black, the worst color is orange.

 

Stress:

• The adult average on a 10 point “stress” scale is 5.1
• 62% of employees report high levels of stress
• 34% lose one or more hours per day in productivity due to stress
• 31% miss 3 to 6 days a year because of stress

 

Quotes

“We know not through our intellect but through our experience.”

~Merluau-Ponty~