2011 New Employment Laws in California
With the New Year come new employment laws that may impact your business.
Workers’ Compensation Notice Requirements (Already in effect)
In 2010 workers’ compensation posting and notice requirements were amended. If you use a Managed Professional Network (MPN) to provide treatment for workers’ compensation claims, you must display the required poster plus additional information about the MPN. The workers’ compensation pamphlet must also include information about the MPN’s. In addition, the Employee Claim Form was revised. You can download the new form on our Resources Page. All employers must have an updated 2011 poster and provide updated pamphlets to all employees.
Workers’ Compensation Stop Orders (Effective 1/1/11)
This new law authorizes the registrar of contractors to issue a stop order to any contractor who has failed to secure workers’ compensation insurance for his/her employees. The employer must pay the employees affected by the work stoppage for up to 10 days while the employer seeks to obtain workers’ compensation insurance. Failure to observe the stop order is punishable by a misdemeanor (up to 60 days in county jail) and/or a fine of up to $10,000.
Organ and Bone Marrow Donor Leave (Effective1/1/11)
Employers with 15 or more employees must now provide paid leaves of absence to those employees who choose to donate organs or bone marrow. Organ donors must be granted a 30 day leave of absence within a one-year period. Bone marrow donors must be granted a leave of absence of up to 5 days within a one-year period. An employer can require an employee to use up to 5 days of sick or vacation time for bone marrow donation and up to two weeks of sick or vacation time for organ donation. If the employee has no accrued paid time off, the employer must pay for the leave. The employer must maintain the employee’s health insurance during the leave and must return the employee to the same or equivalent position at the end of the leave. Covered employers should be sure to add this policy to their handbook.
Exemption to Meal Breaks (Effective 1/1/11)
Under this new law, construction workers, commercial drivers, specified security officers and employees of electrical and gas corporations or local publicly owned electric utilities are exempt from the California meal break requirement if those employees are covered by a valid collective bargaining agreement that contains specified meal term provisions.
GINA Regulations Finalized (Effective1/10/11)
The Equal Employment Opportunity Commission has finalized the regulations setting forth the Genetic Information Nondiscrimination Act of 2008 (GINA). GINA prohibits the use of genetic information in decisions about health insurance and employment, and restricts the disclosure of genetic information. GINA applies to private employers with 15 or more employees. Covered employees should add genetic characteristics to their list of protected classes in their policies on non-discrimination and harassment.
Investigating Serious SafetyViolations (Effective 1/1/11)
The California Labor Code has been revised and establishes new procedures and standards for an investigation of a serious safety violation and creates a rebuttable presumption as to when a serious safety violation has been committed by an employer. The prior law stated that a serious violation was “deemed to exist if there was a probability that death or serious injury could result from a violation.” The new law creates a “rebuttable presumption that a serious violation exists if Cal/OSHA demonstrates that there is a realistic possibility that death or serious physical harm could result from the actual hazard created by the violation."
Wage Claim Appeal by Employer – Bond Requirement (Already in effect)
An employer who files an unpaid wage claim appeal must file a bond with the court in the amount of the judgment awarded in the administrative hearing. The employer must also provide written notice to the other parties and the Labor Commissioner of the posting of the bond.
Employers should make sure that they have current posters and pamphlets reflecting the new changes. All handbooks should be updated to reflect the changes in the law.
New Heat Illness Standards
The Office of Administrative Law approved revised heat illness standards set to go into effect on November 4, 2010. These standards apply to the following industries:
- Agriculture
- Construction
- Landscaping
- Oil and gas extraction
When the temperature exceeds 95° Fahrenheit there are more stringent procedures, including some of the following:
- Ensure effective communication by voice, observation or electronic means between employees at the work site and supervisors.
- Observe employees for alertness and signs or symptoms of heat illness.
- Remind employees throughout the work shift to drink adequate amounts of water.
- Closely supervise new employees for the first 14 days.
New Focus on Misclassification of Independent Contractors
The U.S. Department of Labor (DOL) was given $117 billion in the most recent federal budget, $25 million of which was specifically set aside to support an initiative focused on combating the misclassification of employees. The Department of Labor has stated that it will use these funds to assist State and Federal agencies in enforcing the proper designation of workers as employees versus independent contractors. The DOL has hired additional investigators as a part of this initiative, who will focus on the enforcement of these provisions. In addition, grants are being awarded to states to allow them to increase their enforcement of the classification of workers.
When a worker is designated as an independent contractor, the worker is not protected by federal and state employment laws, including overtime provisions. The worker is also not entitled to other benefits such as paid time off (vacation, sick), health and/or dental insurance , workers’ compensation coverage, any retirement plan or other benefit provided by the employer. Furthermore, the employer does not contribute to unemployment, Medicare, state disability or social security. State and federal agencies want to ensure that workers are properly classified not only for the protection of the workers, but to ensure that proper contributions are being made to the government programs.
In California, the Employment Development Department (EDD) is the agency that enforces the designation of independent contractors. All independent contractors must be reported to EDD, along with all new employees. The EDD audits employers and companies who file 1099 forms for independent contractors, and has increased its focus on the misclassification of workers in the last couple of years as well. There can be significant liability awarded for the misclassification of workers, including payment of retroactive benefits and penalties. California employers need to carefully analyze their workforce and determine the proper classification of their workers. The classification of the worker as an independent contractor must be made pursuant to the federal and California standards. For more information on classifying your workers, please contact KAMhr.
President Obama signs the HIRE Act
On March 18, 2010, President Obama signed into the law the Hiring Incentives to Restore Employment (HIRE) Act. This Act provides tax incentives for businesses to hire new employees. Employers who hire workers who have been out of work for more than 60 days between the period of February 3, 2010 and December 31, 2010 willbe eligible for an exemption on their Social Security payroll taxes for those employees. In order to qualify for the exemption, the newly-hired employees must be on the employer’s books from March 19, 2010 through December 31, 2010. The employer will be able to reduce their Old Age, Survivors and Disability Insurance (OASDI) portion of the Federal Insurance Contribution Act taxes by 6.2. In addition, the Act also allows employers to take an income tax credit of up to $1000 for every new employee who is employed for 52 weeks. For more information on this tax exemption and tax credit click here: HIRE Act: Questions and Answers for Employers.
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