February 5, 2015

The Times They Are-a-Changin' for California Employers in 2015

By Mark Solone - Senior Manager, Tax & Business Services

The Times They Are-a-Changin' for California Employers in 2015 Tax & Business

California lawmakers certainly heeded the call of Bob Dylan’s anthem with over 900 new laws, most to take effect January 1, 2015 and others not until July1, 2015.

Governor Jerry Brown signed measures on breast-feeding, immigration, guns, plastic bags, the Confederate flag and digital currency. Digital currencies, including Bitcoin, are now legal for transactions in California.

Many of the significant new laws will affect private employers’ daily operations including policies and procedures for doing businesses in the Golden State.

Some of the noteworthy new laws include:

Wage and Hour
California’s $9 hourly minimum wage is due to increase to $10 on January 1, 2016. However, employers in San Francisco, San Jose, Berkeley and Oakland, as well as, employers who provide services or construction work on public works projects for government or public entities must pay the prevailing wage, which is significantly higher than the minimum wage. It is important to monitor these requirements if you are doing business in those jurisdictions.

Leaves of Absence
Paid sick days are mandatory effective July 1, 2015 for any employee who worked in California at least 30 days at an accrual rate of one hour for every 30 hours worked. The employer is allowed to limit paid sick leave to 24 hours or three days in each year of employment and also put a cap on total accrual of 48 hours or six days. Unused paid sick days would be carried over year to year unless the employer accrues the 24 hours of paid sick days to employee at beginning of a year. No payout is required at termination of employment. The law requires detailed recordkeeping and notice requirements as well as penalties for noncompliance.

Increased Liability for Employers That Contract for Labor
This law will hold companies accountable for wage-and-hour violations when using staffing agencies or other labor contractors to supply workers. While this law contains specific definitions and exclusions, the “client employer” can now be held legally responsible and liable for a labor contractor’s failure to pay its workers properly or fails to provide workers’ compensation coverage for those employees. Existing labor services engagements should be evaluated to reduce risk of non-compliant contractors.

Harassment Prevention Training
Employers that are subject to the mandatory sexual harassment prevention training requirement for supervisors must include a component on the prevention of “abusive conduct” as specifically defined by the new law. The law requires training on prevention of abusive conduct and does not mean that an employee can sue for abusive conduct in the workplace unless the conduct becomes discrimination or harassment against a protected class.

Discrimination, Harassment and Retaliation Protections
A few new laws expand employee protections for 2015. Unpaid interns and volunteers are added to the list of individuals protected from harassment under the Fair Employment and Housing Act. Undocumented persons are able to apply for California driver’s licenses beginning January 1, 2015 and discrimination involving immigration issues are strictly prohibited as are retaliation. The law also clarifies that the $10,000 penalty against an employer who discriminates or retaliates against an employee who complains of Labor Code violations will be awarded to the employee who “suffered the violation.”

Please contact your Marcum State and local tax professional with any questions or further explanation related to the changes in California.

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