Crucial New California Employment Laws for 2021

State and Local Minimum Wage Increases

Statewide, the California minimum wage is at least $14 per hour. Employers with 25 or fewer workers (“small businesses”) must pay at least $13 per hour. Certain cities and/or counties have their own minimum wage laws and the higher wage governs. In Los Angeles city and county, for example, minimum wage is $15 per hour; small businesses pay $14.25 until July 1st, when they, too, must pay $15.00. Bear in mind the state minimum wage impacts the salary threshold for exempt status.

Pay Data Reporting Deadline March 31st

The March 31st deadline for employers with 100 or more employees to meet their pay data reporting obligation under SB 973 is coming fast. These employers will be required on an annual basis to submit information on their employees’ pay data by gender, race and ethnicity to the state’s Department of Fair Employment and Housing (DFEH).

New Law Expands Potential Responsibility For Wage-Hour Judgments

Many businesses fail to appreciate the enormous power the California Labor Commissioner wields to swiftly correct workers’ injustices, real or perceived, while, in some cases bringing a business literally to its knees. It would take a longer writing to describe the anatomy of a wage-hour claim. Suffice it to stay that, the actual claim, taken together with statutory “liquidated” damages, myriad penalties, interest (and attorney’s fees), can turn an innocent mistake into an enormous, if not devastating, financial headache for employers.

Since 2018, business owners, and even employees, can be held personally responsible for unpaid wages. Now, Assembly Bill (AB) 3075, effective January 1, 2021, makes it even easier for workers to enforce judgments for unpaid wages by making certain “successor” businesses responsible for their predecessor’s unpaid wage and hour judgments. The law prevents employers from evading unpaid wage and hour judgments by discontinuing one business, only to form a new business that is substantially similar to the old one. It adds Section 200.3 to the Labor Code and provides that a “successor” to a judgment debtor will be liable for any “wages, damages, and penalties owed to any of the judgment debtor’s former workforce pursuant to a final judgment, after the time to appeal therefrom has expired and for which no appeal therefrom is pending.”

Section 200.3 defines a “successor” to include those that use the same facilities or workforce to offer substantially the same services as the debtor; has substantially the same owners or managers; employs a managing agent who directly controlled the wages, hours, or working conditions of the debtor’s workforce of the judgment debtor; and, operates a business in the same industry as the judgment debtor and the business has an owner, partner, officer, or director who is an immediate family member of any owner, partner, officer, or director of the judgment debtor.

Reminder: Employers with 5+ Employees Required to Provide CFRA Leave

Remember that employers with just five (5) or more employees are now required to provide up to 12 weeks of unpaid job-protected leave for eligible employees to care for themselves and a wide variety of family members. (Previously, only employers with 50+ employees were covered by CFRA.)

What Employers Should Do Now

  • Ensure you are paying your employees at least the correct minimum wage, which may depend on the city and/or county of your business.
  • Remember that state minimum wage increases also impact the threshold salary requirement for employee exempt status. We can assist with this calculation.
  • Employers new to the California Family Rights Act (CFRA) should ensure their policies and handbook reflect employees’ rights under the Act, and that their HR Department is prepared. We can update your handbook and assist your HR Department.
  • Employers with 100+ employees should begin compiling their pay data as required under Gov’t. Code 12999 for reporting on or before March 31st. We can walk you through this process.

The Law Offices of Alex Craigie helps employers throughout California prevent, address and resolve employment disputes in a logical and cost-effective manner. Reach us at (323) 652-9451, (805) 845-1752 or at [email protected].

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