2008 was a relatively active year in terms of important legislative changes for California employers. The following is a synopsis of the more notable changes that were enacted or modified for 2009.
Text-Based Communication While Driving Prohibited
Effective January 1, 2009, text-based communication while driving is prohibited. Employers should update existing policies.
Temporary Employees Must Be Paid Weekly
Labor Code section 201.3 requires that temporary employees be paid on a weekly, rather than on bi-weekly, basis. With certain exclusions, Section 201.3 defines a “temporary services employer” as “an employing unit that contracts with clients or customers to supply workers to perform services for clients or customers” and who negotiates with its clients and customers on such matters as time and place where the services will be provided, type of work, working conditions, and quality and price of the services. The “temporary services employer” also determines the assignments of workers, retains the authority to assign a worker to another client or customer when the worker is deemed unacceptable to the client or customer, assigns workers to perform services for clients or customers, sets the rate of pay for workers, pays workers from its own account, and retains the right to hire and fire the workers.
The following new rules apply to temporary service employers:
• With certain exceptions, temporary workers must be paid weekly with the wages for the current week’s work due on the payday of the following week.
• If a temporary employee is assigned to work “day to day” from a pool of workers, the employee’s wages must be paid at the end of each day.
• Strike replacements must be paid at the end of each workday.
• Unless otherwise stated, temporary services employees who are fired or quit must be paid pursuant to Labor Code §§ 201 and 202.
Overtime Exemption For Physicians Paid On An Hourly Basis
A licensed physician or surgeon who is primarily engaged in performing duties for which licensure is required is exempt from overtime if he/she is paid at least the minimum hourly rate set annually by the state. Effective January 1, 2009, the minimum hourly rate is $69.13. This exemption does not apply to employees in medical internships or resident programs, physician employees covered by collective bargaining agreements or veterinarians.
Monthly or Annual Salaries for Exempt Computer Professionals
California Labor Code § 515.5 has been amended to allow an employer to pay a computer professional who is exempt from overtime a monthly or annual salary. The salary required for the exemption is $79,050 annually or $6,587.50 monthly.
Earned Income Tax Credit
You must provide notification to all employees that they maybe eligible for the federal earned income tax credit (EITC) within one week before or after, or at the same time, you provide a Form W-2 or a Form 1099 to any employee.
Department Of Homeland Security: Supplemental Final “No-Match Letter” Rule
On October 23, 2008, the Department of Homeland Security (“DHS”) issued its supplemental final rule for employers who receive a “no-match” letter from the Social Security Administration or a Notice of Suspect Documents letter from the DHS. The final rule will become effective upon the lifting of an injunction put in place during a legal challenge to the original 2007 version. This will likely take place in early 2009.
The supplemental final rule requires employers to:
• Verify within 30 days that the mismatch was not the result of a record-keeping error on the employer’s part. If it is, then correct and communicate the corrected information to the SSA.
• If the mismatch cannot be resolved as a record keeping error, then the employer must notify the employee within 5 business days and request that the employee confirm the accuracy of the employment records within 90 days of receiving the no-match letter.
• At the end of the 90 day period, if the mismatch has not been resolved the employer will have 3 days to complete a new I-9 form with the employee. The questionable Social Security Number may not be used when completing this new form.
The supplemental final rule provides a safe harbor to employers that follow its procedures. If an employer does nothing to resolve the mismatch or does not act in good faith, then the employer may be liable for employing an unauthorized worker, leading to civil or criminal penalties.
Amendments To The ADA
The ADA Amendments Act of 2008 (“ADAAA”) goes into effect on January 1, 2009. The effect of the ADAAA on California employers is minimal, as California employers were already required to comply with the Fair Employment and Housing Act which is even more favorable to employees than the ADAAA. However, employers in should still be aware of the ADAAA and its potential effect on their out-of-state operations.
The ADAAA expands the definition of disability, in several ways, including:
• Requiring the courts to determine whether an impairment substantially limits a major life activity without taking into account mitigating measures such as hearing aids, prosthetics or insulin.
• Expanding the definition of “major life activities” to include caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing lifting, bending, speaking, breathing, learning, reading concentrating, thinking, communicating, working and the operation of a major bodily function, such as the immune system, normal cell growth and digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine and reproductive functions.
• Removing the “substantially limits” requirement, meaning that individuals are not required to establish that their impairment limits or is perceived to limit a major life activity to be “regarded as being disabled.” However, reasonable accommodations need not be provided to an individual who is only “regarded as” having an impairment.
• Providing that an impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active.
Revised Form I-9 for Employers
The U.S. Citizenship and Immigration Services has revised the list of documents that will be acceptable for Form I-9, Employment Eligibility Verification. The new rule does the following:
• Requires that all documents presented during the verification process be unexpired;
• Eliminates List A identity and employment authorization documentation Forms I-688, I-688A (Temporary Resident Card and outdated Employment Authorization Cards);
• Adds foreign passports containing certain machine-readable immigrant visas to List A; and
• Adds to List A valid passports for citizens of the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI), along with Form I-94 or Form I-94A.
The revised Form I-9 is available at www.uscis.gov. Paper copies of the Form I-9 can be ordered by calling 1-800-870-3676. Employers are required to use the revised form for all new hires.
Family and Medical Leave Act
The Department of Labor has made changes to the Family and Medical Leave Act that will take effect on January 16, 2009:
Military Family Leave
• Employees who are family members of covered service members may take up to 26 work weeks of leave in a single 12-month period to care for a covered service member with a serious illness or injury incurred in the line of duty while on active duty.
• Families of National Guard and Reserve personnel on active duty may take 12 weeks of FMLA job-protected leave to manage their affairs based on “any qualifying exigency,” including short notice deployment, military events and related activities, childcare and school activities, financial and legal arrangements, counseling, rest and recuperation, post deployment activities, and additional activities where the employer and employee agree to the leave.
• Twelve months of employment need not be consecutive for purpose of determining whether an employee has been employed by an employer for at least 12 months. An employer need not count a break-in-service of seven years or more, with two exceptions:
1. An employee’s fulfillment of his/her military obligations; and
2. A period of approved absences or unpaid leave, such as for education or child-rearing purposes, where a written agreement or collective bargaining agreement exists concerning the employer’s intent to rehire the employee.
• Time spent fulfilling an employee’s military service obligations now count toward the employee’s 1,250 hour and 12-month requirements for compliance with the Uniformed Services Employment and Reemployment Rights Act.
• An employee who is not eligible for FMLA protection at the beginning of his/her leave may begin FMLA once he/she has met the eligibility requirements.
• Light duty does not count against an employee’s FMLA entitlement. The employee’s right to restoration is suspended during the period of time the employee performs light duty or until the end of the applicable 12-month FMLA leave year.
Waiver of Rights
• An employee may voluntarily settle or release FMLA claims without approval from a court or the DOL.
Serious Health Condition
• An employee who is incapacitated for more than three consecutive full calendar days must show that he/she is receiving continuing treatment from a health care provider in order to satisfy the definition of “serious health condition.” The employee must visit a health care provider two times within 30 days of the first day of incapacity unless extenuating circumstances exist. The employee must also see a health care provider within seven days of the first day of incapacity and, for a chronic serious health condition, must visit a health care provider at least twice a year.
Perfect Attendance Award
• An employer may deny “perfect attendance” awards to an employee who does not have a perfect attendance because of FMLA leave as long as the employer treats an employee taking a non-FMLA leave in the same manner.
Employer Notice Requirements
• An employer is required to provide employees with a general notice about the FMLA, a notice of eligibility and of rights and responsibilities, and a designation notice.
• An employee must follow an employer’s normal and customary call-in procedures for FMLA notification, absent unusual circumstances.
Substitution of Paid Leave
• An employee electing to use any type of paid leave concurrently with FMLA leave must follow the same terms and conditions of the employer’s policy that apply to other employees for the use of such leave.
Computing FMLA Leave During a Holiday Week
• Whether an employee is charged FMLA leave for a holiday depends on whether the employee needs to take FMLA leave for a full or partial work week. An employee taking a full week of FMLA leave during a week containing a holiday will have the holiday counted against his/her FMLA allotment. An employee taking less than a full week of FMLA leave during a week containing a holiday will not have the holiday counted against his/her FMLA allotment unless the employee was otherwise scheduled and expected to work the holiday.
• The Health Insurance Portability and Accountability Act applies to communications between an employer and an employee’s health care provider. The employer’s representative may contact the health care provider, but that representative must be a health care provider, a human resources professional, a leave administrator, or a management official and cannot be the employee’s direct supervisor. Further, an employer may not ask the health care provider for information beyond what is required by the certification form.
• An employer may request a medical certification for each leave year for medical conditions that last longer than one year.
The new regulations and the DOL’s commentary are available at http://www.dol.gov/esa/whd/fmla/finalrule.htm.
New W-4 Form (Employee’s Withholding Allowance Certificate)
The Internal Revenue Service has provided a new 2009 Federal W-4 Form. An employer is required to use the new W-4 Form for all employees. An employee who previously provided a W-4 Form claiming exemption from federal income tax withholding must file a new 2009 W-4 Form by February 16, 2009 in order to continue the exemption. If the employee does not give an employer a new W-4 Form, an employer should withhold as if the employee is single, with zero withholding allowances.