If you haven’t already, it’s time to review your wage strategy for the next few years. Wages in California used to be a lot simpler. There was just one minimum hourly rate and one minimum salaried rate. These days there are many more complexities.
If your employee qualifies as a salaried exempt employee under the administrative, professional, or managerial exemptions, you must pay them at least the minimum salary. That wage is tied to twice the minimum wage multiplied by 2,080 hours per year. For employers with 25 or fewer employees, it is $45,760 in 2019. For employers with greater than 25 employees, the rate is $49,920. This minimum salary still applies even if the person works part-time hours. It cannot be prorated.
There are also two different minimum hourly rates in 2019. The minimum wage for employers with 25 or fewer employees is $11 an hour and $12 per hour for employers with over 25 employees. In addition to these two different levels of California minimum wage requirements, there are 23 cities or local ordinances within California (including the City of San Diego) that have adopted their own minimum wage. There are very few exceptions to the minimum wage rules.
If you have any sales people who are under the inside sales exemption you also need to review their compensation as well. Inside sales people can be exempt from overtime if their earnings paid in each pay period exceed 1 ½ times the minimum wage and more than half the employee's compensation represents commissions. Be careful with this exemption, it is very narrow and different from the other white collar exemptions.
As minimum wage increases, it leads to wage compression. This occurs as new workers are hired at nearly the same rate as workers with more skills, experience, or seniority. Or you hire a lower level employee at a rate closer to that of a high-level employee, such as a manager. Unless there is a plan in place to account for this problem, it can lower morale and lead to decreased productivity and increased turnover.
There are other considerations going forward. As minimum wage continues to rise, wage compression continues to put pressure on all middle level jobs. In addition to the increase in wages, consider the other rises in costs that are tied to wages, such as payroll taxes, workers comp insurance, vacation and sick pay costs and other similar expenses. An important part of your wage strategy should be to review pricing for products or services. Since wages typically make up a large percentage of a business’s expenses, determine if and when you will have to adjust the pricing of your products. Should you do it in one change that takes into account all the wage increases through 2023? Or will you make a few gradual increases as wages rise? Another consideration is that your suppliers and vendors may also be raising their prices to you as they contend with the same issues. Many restaurants have taken the strategy of adding a surcharge to food. This allows them to keep the published menu price the same, while identifying this increase as directly tied to the increase in the minimum wage (and often sick time requirements). Higher level jobs are also impacted. Since the minimum salary for exempt workers is tied to California’s minimum wage, by 2023 that salary will rise from current levels ($43,680 for smaller employers to $45,760 for those with 26 or more) to a whopping $62,400. Now is the perfect time to consider your wage strategy for the next few years.
We know…. You’re a small company with a lot of responsibilities and expenses. There is no way you could offer Paid Time Off to your staff. But what if you could offer PTO to your employees at the same time you reduce unplanned absences and increased your benefit offerings in the eyes of your employees? Many savvy California employers are considering offering PTO instead of sick leave. Before making this decision, make sure you understand the advantages and disadvantages to each approach and determine which plan is best for your business.
Did you know that since 2015 nearly all businesses in the state of California are required to provide paid sick leave (PSL) to employees? In addition to the California requirements, over 20 cities and local ordinances (including the city of San Diego) have their own sick requirements which often provide a greater benefit than the California plan. Therefore, if you have employees scattered across California you may have to understand, provide and administer several different sick leave policies. The sick leave requirement allows companies to meet the sick requirements through their own sick or PTO plan as long as that plan meets all the requirements of California’s Paid Sick Leave. A few of those requirements include posting and notification requirements, properly calculating and accruing or granting the leave, and other components of implementation.
Sick calls are particularly challenging in a small businesses with limited staff. As California employees have gotten used to seeing sick leave on their paystubs (a requirement of the PSL law), employers have started to notice a disturbing trend - The frequency of sick calls has increased! Sick leave is use it or lose it and employees realize if they don’t take it they won’t be able to bank the time for future sick needs or be cashed out upon termination. This tends to reward poor employees (those willing to call in sick when they are not sick) and does nothing to reward those who would never call in sick unless they were truly ill.
Why consider offering PTO instead of sick? Employees tend to prefer Paid Time Off and see it as a benefit offering vs. a statutory mandated requirement. PTO provides employees with one bank for vacation, sick or personal time and allows them to use it as appropriate for their circumstances. Employees enjoy the flexibility in how the time is spent and prefer not having to call in “sick” when they are not. For employees that are never sick, they can use the time for vacation or personal usage. For those employers who had typically offered sick, vacation and personal time, it allows them the convenience of managing only 1 leave bank. Also, for most employers it tends to reduce the amount of unexpected sick calls since employees can request PTO ahead of time instead of feigning illness. One important drawback to PTO is that it must be paid out at termination, unlike paid sick leave. Also, you must allow the maximum PTO bank to be 1.5X the employees’ annual accrual rate.
Offering PTO in lieu of sick is not for every business. If you do elect to offer PTO consider if the accrual method (when employees earn a small chunk of PTO each payroll instead of being granted the full amount when they become eligible) or grant method (providing the full amount by the required date) makes more sense for your business. It’s also important to cap the maximum PTO employees can have in their bank to limit your liability when an employee terminates employment. No matter which method you choose make sure you a strong payroll partner to help you track and accrue the leave as well as a written company policy in place that is clearly communicated to your employees. There are many requirements and nuances to the sick leave and PTO requirements so be sure to get help from a professional before you implement a new policy. Check out our cheat sheet at http://www.northcountyhr.com/resources.html to see more of the advantages and disadvantages of each type of plan.
You spend a considerable amount of time trying to find just the right candidate for the job. You filter through applications and resumes, conduct interviews, and way pros and cons. You’ve offered the job contingent on passing the background check. Just when you think you’re ready to hire the perfect candidate, a red flag goes up upon receiving the background check results. What do you do now? Legally there are steps you must take if you are considering rescinding the job offer due to a criminal conviction. Background checks, including criminal convictions, are regulated by the FCRA (Federal Credit Reporting Act). The intent of the FCRA is to provide and fair and accurate summary of this data for consumers and applicants.
Let’s say you discover a criminal conviction. Before you decide to deny an applicant, you must determine how that conviction affects the job, known as an “individualized assessment”. The intent of the individualized assessment is to determine if the conviction has a direct and adverse relationship with the specific job duties that justifies the employer denying employment. What is the nature and gravity of the offense? How long ago did it happen? Was it job-related or would it impact the specific job you are offering the candidate? For example, it may not make sense to decline a candidate with a felony DUI conviction if their role in the company doesn’t include any driving activities. However, you could easily justify denying a candidate with an embezzlement conviction for a job as your CFO. This is also the time to engage with the applicant to hear their side of the story. There may have been extenuating circumstances or a narrative of personal growth and rehabilitation since the conviction.
After this consideration, if you still feel the conviction may be a deal-breaker, the next step is the notice requirement. There are two parts. The first notice, the pre-adverse action notice, is a letter stating that the background check results are being reviewed and a decision is pending. Include a copy of the report and a “summary of your rights under the fair credit reporting agency act”, informing them that they have an opportunity to respond and the deadline. Keep copies of everything. Then wait at least five business days for a response. This gives the applicant a chance to explain or dispute the findings. You must consider any response before making a final decision. If they notify you within those five days that they are collecting evidence or working on their response, you must give them five additional days.
So, now it’s been five days since the first notice letter was sent. Either there has been no response, or you have received an explanation from the applicant arguing his case. You considered all the available information and have decided that you still want to rescind the job offer. Now you must send the second notice, the Adverse Action Notice. This must specifically express denial of employment and that it was due (or partially due) to the results of the background check. You should also include the contact information for the vendor that performed the background check on your behalf. Include procedures for challenging the decision or requesting reconsideration and notice of the right to file a complaint with the California Department of Fair Employment and Housing. Keep copies of everything.
It would be a shame to lose a prospective applicant due to an unfortunate blemish on a background check. We would all love to be the giver of second chances, but sometimes it isn’t a sensible decision for your business. By making sure you follow the Fair Credit and Report Act, you can protect yourself from legal action and know that you’ve done the right thing.
In the age of the #metoo movement, sexual harassment training has never been more important. There are a variety of reasons why hiring an external trainer is a better choice than conducting the training in-house. Your internal Human Resources team may not be an expert in this area. It’s critical that the most up to date information is presented. When professional development training comes from the outside, it shows a commitment to the topic, so people are more likely to pay attention and attend the training. Most importantly, who has the time? Developing engaging content and materials is time-consuming. Why not hire an expert so you can focus on other Human Resources priorities?
Chances are good that your Human Resources team does not have a lot of experience dealing with sexual harassment. They may have never investigated a claim or had to assist a victim or deal with an aggressor. Trainers are required to have at least 2 years of experience in training, investigating, and advising. The federal and state laws are constantly changing, such as the new 2018 requirement to cover gender issues and sexual orientation. How can you be sure your team is up to date on the latest topics? Popping in a video is not enough. Training is required to be interactive and should include features such as role playing, reviewing industry-specific scenarios and include a question and answer segment.
All companies in California with 50 or more employees must provide at least 2 hours of training to all supervisors within 6 months of hire and every 2 years after. These are very busy people for whom attending a mandatory 2-hour training can be difficult. A professional trainer with practical experience, interesting anecdotes, and well-made training materials is more likely to present the topic in a meaningful way that engages the trainees. You want them to feel that the training was beneficial to them, and not a waste of company time.
Busy Human Resource personnel are rarely idle. Managing benefits packages, compliance reports, hiring and firing, counseling, and all the other requirements of the job leave little time to develop engaging content and materials. A professional trainer will ensure the content is customized for your business, meets the California training requirements and is delivered in a timely manner. Your trainer can customize your training to include specific topics related to professional behavior in the workplace such as discrimination, bullying, respect in the workplace and other company-specific behaviors you want to include.
Providing accurate, engaging, and up to date sexual harassment training is mandatory and necessary. Consider hiring a professional to conduct your next sexual harassment training. In this climate, it’s too important to skimp in this area. Replace #metoo with #nothere at your company.
How can I offer alcohol at our holiday office party and make sure it doesn’t get out of hand?
Hosting a holiday party for your staff is a nice way to reward them for their hard work during the year. If you are considering offering alcohol at the party, here are some tips you may want to consider.
Preparation starts before the party. When you provide the details, mention that alcohol will be served and ask people to drink responsibly. Encourage them to select a designated driver. Provide options for those who may overindulge. You might want to consider offering to reimburse for an Uber (both directions) for any employees who wish to take one home. Or if a hotel is nearby, see if you can obtain a discounted group rate in advance for those who wish to stay
With a large group, you can’t keep an eye on everyone. It is essential that you enlist help. Talk with the bartender / waitstaff at the beginning of the party. They should stop serving anyone who is visibly intoxicated. Also, ask them to inform you of anyone who is cut off. Request that the managers monitor those at their table throughout the evening. You might also assign a greeter as guests start to leave. If someone is intoxicated, they can intervene and help find a safe ride home.
Any of these ideas can help ensure that you and your employees will have a safe, enjoyable, and memorable holiday gathering.
What is the purpose of the I9 form? The I9 verifies that an employee is legally eligible to work in the United States. The intent of the I9 is to establish 1) identity and 2) eligibility to work in the United States. Employers may NOT hire employees that are not eligible to work in the United States. Employers must complete an I9 for all employees upon hire.
When do I complete it?
Understanding acceptable documents
The best way to explain a resume gap? It depends on the reason for the gap. Always be honest, but of course put that gap in the best possible light.
Laura Henderson is a Human Resources professional with over 20 years experience working with a variety of businesses.