Keeping up with California’s minimum wages is almost a full time job. We have over 40 minimum wage rates to keep track of as California Employers! But TPPS is here to help keep you on track. Here’s the latest as of July 1, 2022.
Executive Order on Use of Project Labor Agreements for Federal Construction Projects
On February 4, 2022, President Biden signed an executive order affecting federal contractors involved in “large-scale construction contracts.” The Executive Order on Use of Project Labor Agreements For Federal Construction Projects requires that project labor agreements (PLA) be in place before being awarded a contract by the federal government that are estimated at $35 million or more.
Though effective immediately, implementation and enforcement cannot begin until the Federal Acquisition Regulatory Council proposes regulations. The Regulatory Council has until June 4, 2022, to provide such regulation. Further, the Director of the Office of Management and Budget must also issue related guidance surrounding the new PLA requirements.
Distinctively, the Order does not require that construction companies unionize or already be in a union. Instead, it only binds federal construction contractors’ employees to the terms of a PLA. As many federal contractors are aware, there are four key provisions a PLA must include to be valid:
1. Guarantees against strikes, lockouts, and similar actions.
2. Mutually binding procedures for resolving labor disputes.
3. Mechanisms to promote labor-management cooperation on “matters of mutual interest and concern, including productivity, quality of work, safety, and health;”
4. Terms that fully conform to federal law, regulations, and other executive orders.
The Order will not be enforced on projects controlled by state and/or local governments, even if such projects receive federal funding. The PLA requirement for large-scale construction projects also has three limited exemption scenarios. The EO will not apply if it would:
1. Substantially reduce potential bidders for a project,
2. Otherwise, be inconsistent with federal law, or
3. Result in inefficiencies, such as short-term projects, simple projects without complexity, projects involving one craft or trade, or projects of a particularly specialized nature.
More updates on the specific regulations created by this EO are expected mid-year. Keep an eye on our updates for more in the coming months!
If you need support, just ask us!
As of December 17th, OSHA’s Emergency Temporary Standard regarding vaccination requirements for employees has been “un-paused” by the courts. That means employers with 100 or more employees will be required to mandate their staff get a COVID-19 vaccine or have unvaccinated employees undergo weekly testing to detect infection.
Dates to Note
OSHA states that it will begin enforcing workplace vaccination adherence on January 10th, 2022; almost a month later than it was originally anticipated to start. Though the agency is allowing this extra time for employers to catch up, they do state that the grace period only applies to those employers “exercising reasonable, good-faith efforts to come in compliance with the standard.”. In essence, those employers that ignore the OSHA rules set forth in this ETS may still see enforcement actions (i.e. citations).
In a similar vein, OSHA stated that enforcement measures on the COVID-19 testing requirements for unvaccinated employees will start on February 9th, 2022, with the same language regarding that extra time being granted to employers acting in good-faith.
What This Means for Employers
Although there are many cases currently in litigation that challenge the ETS in whole or in part, business leaders should assume that they need to jump on the compliance bandwagon for the rules of this ETS. Though there are never any guarantees in politics or litigation, it is very possible that the OSHA mandate is once again paused or altogether changed.
On January 7th, 2022 the Supreme Court is expected to review the enforceability of the ETS via court hearing. That means that by the ETS’s January 10th deadline for vaccination compliance, the whole thing could be thrown out, still in review, or fully accepted. All we can do is put good-faith effort into following and complying with the laws as they surface, morph, get buried in court, and then surface again.
In the meantime, following are some details to help you prepare.
“Large Employers” meaning those with 100 or more employees (regardless of full time or part time status) must comply with the ETS.
Employers must count ALL employees working in the US regardless of state, location, division, work from home status, etc. If someone works for you in an employment relationship within the US, they get counted in the tally.
The total does NOT include contractors, staffers from an agency, subcontractors, or other individuals working at your site not employed by you (e.g., a construction contractor with sub-contractors working on their jobsite).
In situations with affiliated business (e.g., FEINs with common ownership, management, etc.) or Joint Employment where Health and Safety is managed at a centralized location, the total of all employees of these separate entities should be combined to assess if the business has 100 or more employees. Because this can get very situation specific, you may want to consult with legal counsel.
If you are not yet at 100 employees, but close, pay attention because as soon as you hire that 100th employee this will apply to you. Also, if you have 100 employees today, but drop below 100 employees in say February 2022, you WILL STILL be required to comply with this ETS.
In summary, the ETS requires Large Employers to create a Mandatory Vaccination Policy OR test employees weekly and require them to wear masks.
There are some very limited exemptions which include employees who are completely isolated from other staff, clients, vendors, the general public, etc. and workplaces that are exclusively outdoors. If you believe an exemption may apply to you, we suggest you seek legal counsel for validation.
All Large Employers must comply by January 10th for the vaccination portion of the ETS, and February 9th for the regular testing portion.
The ETS is set for SIX MONTHS. But, as we have learned throughout COVID, this is likely to change. The ETS is also being actively challenged, so there is a chance it will change form in some way, BUT we won’t know what those challenges will yield until AFTER we must begin complying. So, let’s move forward assuming this is the law for six months.
Now how in the world do we do this? Here are 6 steps to compliance:
1. Create a Policy by January 10th:
- Large Employers may choose to create a policy that requires mandatory vaccination WITHOUT the option to test, OR to create a policy that allows testing when an employee is not vaccinated.
- When Large Employers elect to allow testing in lieu of vaccination, they have until February 9th to begin the testing.
- OSHA has given us some templates here.
2. Collect vaccination status from all employees by January 10th:
a. Employers can collect documentation any of the following ways:
- Take copy of vaccination card, public health record showing vaccination given, or certification from the employee’s medical provider.
- Allow employee to provide an affidavit attesting they have been vaccinated. It is advised that employers should use this option only when the employee absolutely cannot provide evidence outlined above. An employer with “too many” self-attestations likely may trigger OSHA to dig further in the event of an OSHA inquiry. Also, to note – it is a criminal offense for any individual to use a fake vaccination record.
b. Create a log to track these records by employee.
3. Be prepared to produce documentation upon request:
- Employees have the right to receive a copy of their vaccination card/proof within 4 hours of asking their employer.
- Employees also have the right to receive information on the number of workers in the workforce and the number who are vaccinated (just aggregate data). Employers must not release information to other employees on an individual’s status.
4. Determine Who Pays for What:
- Federal OSHA says that employers do NOT have to pay for COVID vaccinations nor COVID testing for employees who chose testing over vaccination. However, state, local, or union requirements may dictate otherwise. Know what applies to your business.
- Understand that the ETS requires that employers give employees up to four hours of paid time to receive the vaccine. It also requires that employers allow employees to use their paid sick leave to recover from the vaccination when necessary.
- Again, State-OSHA programs, union agreements, and even your own policies, may require that you provide compensation to employees greater than what the ETS mandates.
5. Define your Interactive Process:
a. Inevitably, you will receive an employee who requests an accommodation for religious or medical reasons. As employers are required to do under many laws that existed long before COVID (e.g., the ADA, Title VII), an employer must engage in the interactive process when an employee or applicant for employment requests an accommodation.
b. This is a hard concept for many as there is no one-size-fits-all approach to the interactive process, nor a checklist everyone can follow. But there are essentials to the Interactive Process:
- It’s called Interactive for a Reason – we must dance with the employee. This is a two-way dialog. Be cautious about making determinations about an accommodation request too quickly, and without having dialog with the employee outside of their initial request for an accommodation. Go into each conversation assuming there is something you don’t know.
- Collect the employee’s request and applicable documentation.
- For religious accommodation requests, we suggest you create a form that employees can complete to formally submit their request. Our friends at Fisher-Phillips have a free resource anyone can access which includes sample forms.
- For medial accommodations, employees should submit documentation from their medical provider.
- Review the options. This may include specific accommodations suggested by the employee but does not limit you to only review their requests. The employer may also come up with accommodation options to be discussed during the process.
- Don’t be too quick to reach a decision.
- Be sure you can fully articulate your final decision, and you have business reasons behind it. Set aside personal feelings and keep them out of your decision making.
- Seek guidance from HR Pros such as TPPS, and your employment counsel.
6. Stay flexible & alert:
This all can change, and we have yet to hear from many state-run OSHA programs, such as Cal-OSHA. It is almost certain there will be modifications in the weeks to come.
Aside from the obvious, we are trying hard to keep all our workplaces safe and healthy, and OSHA has some pretty hefty fines for non-compliance. Penalties start at just over $13k for an “other than serious” or “serious” violation, and they start at $136k for a “willful” violation. Penalties are PER violation. So, wait and see, is not advisable as an OSHA violation is sure to yield a 6-figure per employee penalty.
This is just a summary, and we are sure to learn more in the days to come. TPPS will continue to keep you informed of changes and new developments as we learn more. If you need support, just ask us!
Here we go again. Tis the season for minimum wage increases. California has 30 different minimum wages, as well as two categories for employers for the state-wide minimum wage. Also, often overlooked, the California exempt salary minimum is tied to the State’s minimum wage – that is Exempt employees must be paid two times the State’s minimum wage. For employers with up to 25 employees that is $58,240 per year, and for employers with 26 or more employees the minimum is $62,400 per year.
Attention! Important information regarding 2022 W-2 Filings and updates on filing requirements:
Taxpayer First Act:
· 2022:By midnight on January 31, 2022, Employers that send 100 or more W-2’s must send them electronically in 2022 (pending final regulations from the IRS).
· 2023: By midnight on January 31, 2023, electronic W-2’s will be required for Employers sending 10 or more.
· Additional information and options on free filing can be found at the Taxpayer First Act page
· Additional provisions, IRS modernizations, and electronic filing of return information can be found HERE
2021 Tax Year wage reports must be filed with the Social Security Administration (SSA) by February 1, 2022.
The SSA now provides a new way to upload W-2 files if they meet SSA specifications for electronic filing W-2 (EFW2)
· If software creates an EFW2 format, employers are encouraged to consider Wage File Uploads rather than keying in individual W-2s
· To learn more about Wage file Uploads, click HERE
o Benefits of Wage File Uploads:
§ Files can be uploaded to process for FREE
§ Saves time and reduces potential errors
§ Register for Business Services Online
· How it Works:
o SSA will process employer files in real-time and provide results of either Success or Reject immediately following upload
o Rejected files will be provided the errors on the upload screen
o Wage File Identifier (WFID) will not be delivered until the errors have been fixed, the file resubmitted, and accepted
· Additional Information:
Organizations with less than 100 W-2s? There are FREE services for you too! W-2 Online is available for smaller businesses!
· Looks just like paper W-2 but it is on the SSA website
· Ability to key up to 50 W-2s per report
· Ability to generate multiple reports
· W-2C is also available online
· Checklist for W-2/W-2C Online Filingis provided
· Register for Business Services Online
Reporting Deferred Payroll Taxes
If payroll taxes were deferred for your employees in 2020 and collected in 2021, a W-2C will need to be sent to correct Tax year 2020 Social Security Taxes. Helpful information can be found in the links below:
· Remember that 2021 Tax Year wage reports must be file with the Social Security Administration (SSA) by February 1, 2022.
Truncated Social Security Numbers (SSNs)
· SSNs may be truncated on W-2s, except on Copy A
· Any W-2s with truncated SSNs on Copy A will not be accepted
· Copy A requires that all nine (9) digits of the SSN are visible
· IRS instructions on Truncated Taxpayer Identification Numbers can be found HERE
Verification of SSNs
· Verification of employee’s reported name and SSN can be confirmed at the Verify SSN page
· Employer Correction Request Notices (EDCOR) were discontinued in 2021 and will no longer be mailed
Need more Assistance? Visit the SSA Employer Page for videos, tutorials and other useful tips, links, and information.
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Nearly eighteen months later and the largest topic of discussion is still COVID-19 and the pandemic that has uprooted life as we know it. The summer brought promise, with vaccination numbers rising and positivity rates and masks mandates lowering. We started to gather again. We went out to eat, visited family we hadn’t seen in a year and actually saw people’s faces. However, the Delta variant quickly entered the scene, has spread like a California wildfire, and fueled outbreaks worldwide.
The Centers for Disease Control and Prevention (CDC) states that the variant is as contagious as chickenpox and is strongly recommending that all individuals, regardless of vaccination status, remain masked while indoors. Many local jurisdictions have re-implemented mask mandates and legislation has been passed at both a federal and state level requiring vaccines for certain industries. Several large companies have entered the conversations mandating vaccinations or required testing for workers.
Companies that have been operating on a remote or hybrid basis may have been in the full swing of bringing employees back to the office. Workers may have already been back in and are now requesting to remain remote based on increased numbers. The specifics of return-to-work plans are unique to the companies and the parts of the country in which they are located, but one thing that is the same for nearly all of us is that we are back to trying to find our footing. We are juggling the current and revised rules and regulations and trying to determine how we accommodate our teams, keep them safe, and follow guidelines, all while maintaining efficiency and profitability.
Suddenly, our picture of a “return to normal” has shifted, very quickly, again. So how is this impacting our workplace?
Depending on where you are located, masks may be recommended or required. Several California counties (representing nearly half the state’s population) have gone back to requiring masks indoors. Employers in these jurisdictions are required to mandate masks regardless of vaccination status. Some employers (outside of these areas) are, in a move of caution, implementing the same requirements.
Right now it is not only critical to be up to date on local regulation but to know your population.
· Are your teams fully vaccinated?
· Are they comfortable being back in the workplace mask free?
This answer will vary based on each organization and it is important to communicate with your teams. We suggest you take a survey on how your employees feel about masks and their level of comfort with in-office work. A proactive approach can help maintain culture. You are letting your employees know that they are valued, and their concerns are considered when making decisions.
We have seen an increase in big-name employers (Amazon, Facebook, Disney, Walmart) taking the stance that vaccinations will be a requirement of employment. Other industries and sectors are required to be vaccinated or submit to weekly testing (federal workers). Most recently, California announced that effective August 13, 2021, all school teachers, and school workers are required to be vaccinated or submit to weekly testing no later than October 15, 2021. New York City has rolled out the “Key to the NYC Pass” program that will take effect September 13, 2021, and requires patrons provide proof of fully vaccinated status before being allowed entry to specified facilities (indoor restaurants, entertainment venues and gyms).
Where does this leave other employers?
The Equal Employment Opportunity Commission (EEOC) has stated that it is within the employer’s right to mandate vaccination. However, before we roll out a vaccination policy, there are serious things to consider…
· Why are you making this a requirement of employment?
o Is it based on a health and safety concern in the workplace?
o Are you a high-risk industry?
o Are you located in a high-transmission area?
o Are your employees requesting a vaccination policy?
· Do you have a unionized workforce?
o What is in your collective bargaining agreements (CBAs)?
· How will you address accommodations?
o Accommodations for medical disabilities under the Americans with Disabilities Act (ADA) or sincerely held religious beliefs or practices under Title VII of the Civil Rights Act will have to be considered.
· What will your employee population do?
o Are they vaccinated?
o Are they planning to be vaccinated?
o If not, will you terminate?
o How will you address the loss of employment during a challenging time to find and retain employees?
· How will you track and record this information?
o Will you use a self-attestation form or require a copy of the vaccine card?
o Where will this information be securely and confidentially stored?
Sitting down with leadership and tackling these questions will help you form a plan that is best suited to your organization. There is no one size fits all solution.
Return to work plan:
Again, this will vary based on your industry and the type of organization you are operating. Some employers do not have the option of remote work, making it all the more important to address masking and vaccination head on. Others have the capability to consider a continuation of remote work.
Here is where some of us may need to dig deep and reevaluate our thoughts on working from home. Prior to the pandemic most employers did not have remote work options or policies. We felt that certain jobs could only be completed in the office. And while that may be true in certain instances, we have all been forced to acknowledge that this is not a hard and fast rule. Research shows that working hours have increased (exponentially in many cases) due to working at home (and being essentially locked in).
I get that we are all eager to return to “live and in person” but it may not be the best option for everyone. Talk to your teams, evaluate your business, and make the best decision for your organization. Culture may be just as heavily impacted by being in the office as it seems to be by not being in the office.
Regardless of your stance, the Delta variant likely provided a shake-up to your plans, and it is okay to ease back to a plan of action. We are all figuring this out as we go. There is no rush to declare the future because it may change again. It is important that we are adaptive while being honest. It is okay to let employees know that things are a work in progress. We can all appreciate that these are challenging times and none of us have all the answers.
Build a target roadmap and get employee buy-in. Have open dialogue about target dates based on the information we currently have but with the caveat that it may change.
One thing that cannot be up for discussion are our policies if we create them. This is not to say that they cannot change, but more that if we require or mandate masks or vaccinations these must be applied consistently (pending any required accommodations). This means, if we require something across the board, we cannot make exceptions for so and so in department B, because that is just “who they are”, or require that some employees, but not all, adhere to a required policy or procedure.
If tracking updates, regulations, mandates and procedures seems like it has become a full-time job, that is because it has. Know that you have available support at TPPS. We are here to assist and guide you through these challenging times.
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I think that it is safe to say that most managers dread the annual reminder email, “Performance evaluations are due.” But why are these so abhorred? For many people, evaluations are daunting, a task that has to be marked off the list that is time consuming and (if not done with intention) holds little to no weight. Where is their ROI? Managers spend time going through an exercise to be met with one of the following: (1) an employee that does not care; (2) an employee that is defensive, or everyone’s favorite; (3) an employee that is only expecting more money.
Many employees dread this time just as much as the manager conducting the evaluation.
“Why do I have to sit through this?”
“This isn’t constructive or positive, and it focuses on what I lack with no solution.”
”Am I getting more money?”
So, with everyone unhappy and going into this process with trepidation, why are we still forcing these?
That is the exact question that we as leaders need to answer.
Let’s find the “why” behind evaluations and create a philosophy that fits our organization and drives us toward our strategic goals and objectives. That is the game plan after all. We are all trying to determine how we get from point A to point B with the right people, in the right place, for the right price, and advance our mission. Without an evaluation of what we are doing and how we are doing it, we will not have a clear understanding of how we can improve as a whole.
It’s challenging to measure performance on a path that is not defined. How do we get there if we do not know where we are going? This is why a performance evaluation philosophy cannot be “canned” or mass produced because we are all heading in unique directions. What works for me, may not work for you. In simpler terms, we have to start at the beginning. We must know as an organization, what our mission, vision, and values are, and use these as the foundation to build our strategic plans and then build our performance evaluations around how we accomplish these goals. Evaluations have the ability to be either helpful (growth and goal setting) or harmful (evaluations that are performed to “check a box”), so they should be thoughtful, focused, true to the work being assessed, and strategic. We can create a paradigm shift within our culture and develop a philosophy and new approach to restructure our evaluations so that they align with, and contribute to, our organizational goals.
When developing an organization’s performance evaluation philosophy and structure, there are specific items that can be identified to assist in building a program that best fits the objectives of the organization:
· Establish what will be measured. Determine if these evaluations will be used to measure essential job performance, tracking against key objectives and goals, impact on organization’s culture or other objectives identified that are related to the job description and the organization’s mission.
· Identify how often performance will be evaluated. There has been a shift in recent years for more frequent and consistent reviews, often referred to as CFRs (Conversation, Feedback and Recognition). The thought is that more frequent assessment and feedback provides the opportunity for a more focused target and ideal result while establishing a consistent level of accountability. Again, this decision will need to be made with the organization’s culture in mind.
· Create strategic alignment. Performance evaluations should always be tied to essential job functions, but should also incorporate the organization’s mission, vision and values and become a strategic component for accomplishing your “why.”
· Focus on Enhancement. Performance evaluations are a pain point in many organizations. They can be time consuming and, if they lack direction and are not used to identify objectives and key results, they can run the risk of losing impact and become an exercise in futility. We all want employees that perform well in their position, but we should also strive to develop employees that enhance our culture.
· Provide Transparency. Evaluations can be a time of transparency and can be used to bring employees into the fold. Ensuring that employees understand what is being evaluated, why it is being tracked the way it is, and how their specific role contributes to the overall success of the organization, creates buy in. This can also be a time to discuss career paths and compensation structures.
A thoughtful and developed evaluation process can also serve the following organizational functions:
· Guide HR decisions. Evaluations should assist in making determinations for promotions, terminations, performance improvement plans, revisions to job descriptions, new positions that may need to be created, and forecast future employment needs. With that said, we also should not wait for annual reviews to take action to correct behavior, talk to employees about performance (good and bad), implement performance improvement plans, etc.
· Reward and motivate employees. This one can be challenging as we do not believe that each evaluation has to be accompanied by a pay increase. That said, we believe compensation should be based on performance, making evaluations an integral part of compensation decisions. Evaluations can also provide intrinsic rewards by way of positive reinforcement and recognition.
· Promote personal development. As individuals we need feedback so that we can improve. Accurate and timely evaluations can facilitate learning and eagerness for growth and improvement.
· Identify training needs. A well-designed evaluation can identify gaps where an individual may require additional training. It should also aid in establishing the abilities and skills needed for each job and setting the performance levels and qualifications may tie into job description updates.
· Create career paths. Employees want to know where they are headed and what upward mobility is available. Intentional evaluations assist in the development of career paths. This can also aid in creating compensation structures or salary ranges if the organization does not already have something in place.
Now it is time to roll up our sleeves and get strategic. This will look different for each organization, but there are a few launchpad items that can assist us in implementing change.
· Decouple evaluation and compensation. Employees have the expectation that a performance evaluation equals more money in the bank, because oftentimes we place them so close together. We have unintentionally blurred the lines. Change it. There is no rule that states when evaluations have to occur. If salaries are reviewed in Q4 for increases in Q1, move evaluations to Q2. Provide feedback in the second quarter so that when the fourth quarter comes around, we have some tangible evidence and data to analyze, and we make business and cash-flow based decisions that are not under the scrutiny of expectation.
· Increase the cadence. This will be determined by the size of your organization, your capacity, and your culture. If you are a large operation and annual evaluations make the most sense, test informal check ins that occur bi-annually. If you are smaller and have the bandwidth, hold quarterly evaluations. Again, there is nothing governing when these have to take place. If there is an issue with performance standards, do not wait until an evaluation to address it. A performance evaluation should never be the first time an employee is hearing improvement is needed.
· Get interactive. Evaluations can be used to learn more about employee needs and ‘asks’ from the organization. Our goal is not only to hire great people but to retain them. Turnover is costly and losing great people can dramatically impact our bottom line. Use evaluations as a time to check the pulse of your employee population, ask questions on how the company can improve. Making this interactive can provide us with valuable information and targets on how we keep our innovators.
· Review your system. How are you evaluating? Is there a classification procedure ranging from outstanding to poor on key identified items? Ranking, rating or graphic rating scales, paired comparison, forced choice… the list goes on. Knowing what will be completed honestly and effectively is key. Just because something was done in the past doesn’t make it right for the future, it is okay to switch it up and change.
· Focus on your mission. Ask: how are our employees positively contributing to our mission? Your mission should be the foundation of what you do each day, and this includes performance evaluations. Making this the focal point to build your evaluation on provides the solid foundation needed to create meaningful interactions and evaluations.
Reaching a destination without a map is a more challenging task than arriving at a desired location with clear directions. It doesn’t mean we can’t arrive; it just may take us longer and potentially lead us down roads better left untraveled. Let’s shake things up and revamp our process so that evaluations become a tool, rather than a task, and a marker on our roadmap to success.
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In March of 2021, the U.S. House of Representatives passed the Protecting the Right to Organize Act of 2021 (PRO Act). The PRO Act is said to represent the most dramatic rewrite of federal labor laws in decades and poses significant changes and consequences for both non-union and union employees. The Bill is currently in the Senate for consideration and if passed, will strengthen the ability of unions to form and collectively bargain.
The PRO Act brings its fair share of political controversy and, it appears to many, that organized labor has arrived and is unpacking its bags for a long-term stay.
During his presidential campaign, Biden promised to be, “the strongest labor president you have ever had” and that, “you can be sure you’ll be hearing that word, ‘union’, plenty of times when I’m in the White House.”
Marty Walsh, former union president and Boston Mayor, was sworn in as the Secretary of Labor in March of 2021 and is the first former union official to hold office in nearly 50 years.
In April of 2021, President Biden formed a task force dedicated to strengthening workers’ ability to organize.
Biden has also nominated two former union lawyers to the National Labor Relations Board (NLRB) and effective August 28, 2021, the Democrats will have the majority in the NLRB with a strong union hold. The NLRB is an independent federal agency responsible for enforcing the provisions of the National Labor Relations Act (NLRA). The NLRA guarantees the right of most private sector employees to organize, engage in concerted efforts to improve their wages and working conditions, make determinations on whether to have unions as their bargaining representatives, engage in collective bargaining, and/or refrain from any of these activities.
So, the PRO Act is on the table, and we see a strong push for union footing. But what does this mean for employers?
The PRO Act encompasses more than 50 significant changes to current law and aims to overhaul the NLRA for the first time in 70 years. Here are some of the most notable changes:
· Effectively overturn state “right to work laws.” Currently there are 27 states that have legislation in place that prohibits employers and unions from entering into “fair share” agreements, in which employees are required to pay “fair share fees” to unions that represent their interests. In right to work states, employees cannot be required to pay union dues. Under the PRO Act, employers and unions could enter agreements and employees could be required to pay unions dues in unionized workplaces even if they are not members of the union.
· Codify the ABC Test. For us Californian’s this is nothing new, however this would be implemented country wide. Under the ABC Test, a worker is presumed to be an employee unless the employer can show that all three of the outlined conditions are satisfied. This means that many more workers would potentially become employees.
· Limit the ability of employers to contest union elections. The PRO Act would allow coercive tactics for unions that have long been held as unlawful.
· Implement steep fines for employer retaliation against organization. The PRO Act has a provision that employers would face fees ranging from $50,000.00-$100,000.00 for firing an employee that is trying to organize a workplace.
· Employers would be prohibited from holding mandatory “captive audience” meetings. Listing these as “meetings of fear”, the PRO Act would eliminate the ability of employers to hold meetings that employees are required to attend in order to dissuade union action.
· Increase the time in which union-employer contracts come together. The PRO Act provides a timeline for the collective bargaining process and, in the event that an agreement cannot be reached, requires timely mediation and a tripartite arbitration panel.
· Require reclassification of employees. The PRO Act restricts the definition of “supervisor” and prevents employers from treating many frontline leaders as members of their management team. This means that many more employees would be subject to NLRA coverage and potential union representation. It also limits these individuals’ rights to exercise Section 8 free speech rights under the NLRA and communicate about unionization.
· Require changes in business structure. Under the PRO Act the NLRA would amend the joint-employer definition as one who “codetermines or shares control over the employee’s essential terms and conditions of employment.” This has the potential to impact staffing agencies with contingent workers, as well as franchise brands among others.
· Provide employees with the right to use employer’s electronic systems for non-business reasons. The PRO Act would permit employees to use employer’s communication systems and technology to organize or engage in other protected concerted activity.
· Eliminates mandatory arbitration agreements. Employers that have arbitration agreements signed upon hire to prevent an employee’s right to participate in a collective or class action lawsuit will need to make changes. The PRO Act prevents employers from entering these agreements with employees.
· Union organizers would have access to employee contact information. The PRO Act will require employers to provide a voter list to the labor organization seeking to represent employees. This would include employees home addresses, work locations, shifts, job classification and, if available, cell phone and personal email addresses.
Remember that this is the “highlight reel” of the PRO Act provisions and the potential changes to how we are currently operating could be drastic. With the Democrats solidifying their majority in the NLRB an aggressive pro-union agenda is expected that may impact both union and non-union employers. So buckle your seat belts, we are in for more change.
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California Supreme Court Rules that Meal & Rest Period Premiums are Required to be Paid at Regular Rate of Pay
On July 15, 2021, in Ferra v. Loews Hollywood Hotel, LLC., the California Supreme Court has issued a ruling that may largely impact California employers. The Court held that employers are required to calculate premium pay (a.k.a. meal penalties) for missed/late meal and rest periods based on the employee’s “regular rate of pay” and that the term “regular rate of compensation” under Labor Code section 226.7 (applicable to premium payments) has the same meaning as “regular rate of pay” under section 510 (applicable to overtime).
California requires that when an employee works overtime (more than eight hours in a day or 40 hours in a week) that the rate is calculated based on the employee’s “regular rate of pay.”
What exactly does “regular rate of pay” entail?
Regular rate of pay includes hourly compensation as well as any additional non-discretionary payments (e.g. bonus or commission), shift differentials and/or any variable rates of pay. It is worth noting that this includes non-discretionary payments and bonuses that are issued on any basis -outside of the normal pay period. This means that these amounts are required to be included (even retroactively) into the total compensation used for calculating regular rate at the time the overtime or premium pay is earned/required.
The ruling, after examining the history of the terms “pay” and “compensation” under California and federal law, determined that the terms are used interchangeably and will apply regular rate of pay/compensation to premium pay for meal and rest breaks premiums/penalties. The decision will apply both prospectively and retroactively.
What are the Meal & Rest Requirements?
- Non-exempt employees working more than five (5) hours in a day are entitled to an unpaid, off-duty, thirty (30) minute meal break. This is required to be taken no later than the end of the fifth hour.
*Employees working no more than six (6) hours may waive this meal period, and the employer should obtain a written waiver.
- Non-exempt employees working more than ten (10) hours in a day must be provided with an additional thirty (30) minute meal period.
* Employees may waive the second meal period if:
-They are working less than twelve (12) hours; and
-They did not waive the first meal period.
- Non-exempt employees are entitled to a rest period of at least ten (10) minutes for every four (4) hours or substantial fraction thereof, that the employee will work. These rest breaks must be counted as time worked and are required to be paid.
What does this mean?
Anytime an employee that is entitled to a meal or rest period is unable to take that break, a premium payment is owed. Employees are entitled to one hour of premium pay (a.k.a. penalty) for missed/late meal and rest break. This payment is now required to be calculated and paid at the employee’s regular rate of pay/compensation.
- TPPS strongly recommends all employers review and update payroll policies and procedures related to the premium payment for missed meal and rest periods. This includes updating payroll system calculations – MOST PAYROLL SYSTEMS DO NOT AUTOMATICALLY CALCULATE THE REGULAR RATE.
- Additionally, employers should run an audit of all meal and rest periods and their payment calculation each pay period to ensure that these are calculated and paid correctly.
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