Employer's Report: Employers Report Post

Posted by Giuliana Gabriel, J.D., HR Compliance Director on July 1, 2024

Tags: Employers Report

At CEA, our focus is on providing employers peace of mind with Human Resource compliance solutions. However, we also want to alert members to a new regulatory law which impacts how California businesses can advertise goods and services. This is a watershed rule with a broad impact for many businesses.

On July 1, 2024, the new “Hidden Fees” or “Junk Fees” law (SB 478) will take effect. Put simply by California’s enforcement agency, “the price a Californian sees should be the price they pay.” This law is aimed at businesses like short-term rentals and ticket vendors, to name a couple, but it has broad application to many other businesses.

As an example, have you ever booked a short-term rental advertised at a low price, only to get to the end of the payment process to realize that with cleaning fees and surcharges it’s way more expensive than advertised? This is the type of situation the new law is trying to curb.

This law amends the California Consumers Legal Remedies Act (CLRA). The California Attorney General’s Office published FAQs to help employers comply, which we have summarized below. It’s worth noting that there are similar initiatives happening on a federal level.

What Does This Law Prohibit?

The law prohibits advertising a price that is less than the actual price that a consumer will have to pay for a good or service. This means that businesses are prohibited from advertising, displaying, or offering a price for a good or service that does not include all mandatory fees and charges accounted for in the total price listed.

Are There Any Exceptions?

Exceptions include government imposed taxes and reasonable shipping costs. All other fees must be calculated into the total price displayed or advertised to the consumer. Fees for optional services or features do not need to be included in the advertised price.

Additionally, at the last minute, the legislature passed SB 1524, which creates a carve out from the law for restaurants, bars, and food service providers. However, given other laws in this area, it is still recommended for these businesses to consult legal counsel regarding appropriate steps forward.

What Businesses Are Covered?

This law applies to the sale or lease of most goods and services that are for a consumer’s personal use. Examples include event tickets, short-term rentals, hotels, delivery applications, etc.

The law does NOT apply to the purchase or lease of goods or services for commercial use, or to certain other specified transactions and industries that are already subject to other laws governing pricing.

What About Additional Fees or Percentage-Based Fees?

Under this law, a business is not permitted to advertise one price and separately state that an additional fee or percentage fee will apply. The price listed or advertised must be the full price the consumer is required to pay, accounting for all fees and surcharges.

However, fees that are contingent on certain later conduct by a consumer, such as a fee for returning rented equipment after the deadline (e.g., “late fee”), or charges for smoking in a non-smoking hotel room, are not mandatory and do not need to be included in the advertised price.

Can Businesses Break Down the Total Price Further?

Yes, so long as the business advertises the total price, it may separately note or break down fees and charges so a consumer understands what the fees are allocated towards.

Can a Business Offer Discounts?

Yes! This law does not impact a business’s ability to offer discounts. A business that offers discounts or otherwise charges a customer a price that is less than the advertised price has not violated this law. The law just prohibits advertising a price that is less than what the customer will have to pay for a good or service.

Posted by Giuliana Gabriel, J.D., HR Compliance Director on July 1, 2024

Tags: Employers Report

You may have blinked and realized that half of 2024 is already behind us. However, July 1 is an important date this year, as it marks many new compliance deadlines for California employers. This includes the brand new Workplace Violence Prevention Plan requirements, a new ban on hidden fees, and also local minimum wage increases.

Several jurisdictions throughout the state have implemented mid-year minimum wage increases, beyond the State’s required rate ($16/hour), which was last updated on January 1, 2024.

Do You Know Where Your Remote Workers Reside?

When determining if a local minimum wage applies to your business, remember to consider your non-exempt (hourly) remote and hybrid workers who may be living/working in a geographic location different from your main office location or headquarters. Local minimum wage ordinances are based on where your worker is physically working. Also, any hourly employees who are sent to visit a client or do any work in a city or county with a higher minimum wage, may be entitled to a higher pay rate during those working hours if they are there for 2 hours or more.

Mid Year Wage Increases Taking Effect on July 1 Include:

Northern California	Southern California
Alameda: $17.00	Los Angeles City: $17.28
Berkeley: $18.67	Los Angeles County (unincorporated areas): $17.27
Emeryville: $19.36	Malibu: $17.27
Fremont: $17.70	Pasadena: $17.50
Milpitas: $17.70	Santa Monica: $17.27
San Francisco (city): $18.67	West Hollywood Hotels: $19.61

Don’t forget that when a wage increase comes into effect, employers must ensure that wage statements are updated and issue non-exempt employees a revised Wage Theft Protection Act Notice (under Labor Code section 2810.5). This notice should reflect the new rate of pay and overtime rates, and must be issued within seven calendar days after the time of the changes. Local government websites also provide required minimum wage postings.

For a list of all current local minimum wages in effect, CEA members may refer to our Local Minimum Wage Fact Sheet on our HR forms page.

Posted by Giuliana Gabriel, J.D., HR Compliance Director on July 1, 2024

Tags: Employers Report

It’s getting Hot in HR this summer. As many California employers scramble to comply with the new Workplace Violence Prevention Plan requirements, another required safety plan is on the horizon: the Indoor Heat Illness Prevention Plan.

On June 20, 2024, Cal/OSHA’s Standard Board adopted a new regulation (8 C.C.R. section 3396), creating a mandatory heat illness prevention standard for indoor places of employment that exceed 82 degrees Fahrenheit. While outdoor places of employment have already been required to maintain heat illness plans for years, what does this mean for California employers?

Who Does the Indoor Heat Illness Standard Apply To?

The standard covers all indoor work areas where it gets hot, which to Cal/OSHA means the temperature equals or exceeds 82 degrees Fahrenheit when employees are present. This regulation is aimed at places that can get warm, like warehouses, restaurant kitchens, and manufacturing plants. Indoor work spaces with functioning air conditioning, like an average office, will not need to worry about this if the temperature never exceeds 82 degrees when employees are present.

There is an exception for teleworking employees that are at a location not under control of the employer (e.g., a remote employee working from home). Additionally, requirements do not apply to emergency operations directly involved in the protection of life or property. Another exception applies to incidental heat exposures that last less than 15 minutes in any 60-minute period.

When Will the New Requirements Go Into Effect?

To officially go into effect, the regulation must first be approved by the Office of Administrative Law (OAL). OAL has 30 working days to approve or disapprove a regulation. Cal/OSHA requested that OAL fast track the process so the regulation could go into effect as early as August 2024; however, it could also be as late as October 2024. We’ll keep you updated!

What Are the New Requirements?

Essential requirements include:

• Water: Providing access to portable drinking water that is fresh, pure, suitably cool, and free of charge.
• Cool-Down Areas: Providing at least one cool-down area on site, as well as allowing and encouraging employees to take cool-down breaks as needed, which must be at least 5 minutes in duration.
• Emergency Response Procedures: Ensuring effective communication methods for emergencies and processes to respond to signs/symptoms of heat illness.
• Acclimatization: Under certain circumstances, supervisors need to observe employees within their first 14 days of assignment, and all employees during a heat wave.
• Higher Heat Requirements: When the temperature or heat index exceeds 87 degrees Fahrenheit OR when the temperature exceeds 82 degrees and employees wear restrictive clothing that prevents heat removal or when working in high radiant heat areas, employers have additional requirements, such as keeping accurate temperature and heat index records, implementing controls, and monitoring environmental risk factors for heat illness.

Note: Heat index takes into account other factors, such as humidity. Employers need to purchase tools that measure heat index (not just temperature) to comply.

What Else Will Employers Need To Do?

Covered employers will be required to create a written Heat Illness Prevention Plan (HIPP). If you already have one for outdoor conditions, include these indoor requirements. The HIPP must contain procedures to comply with the requirements above, as well as procedures for taking heat measurements and recordkeeping in certain circumstances.

Covered employers must also train their staff on heat illness prevention and treatment, and the employer’s HIPP. For supervisors, employers must provide additional training on monitoring and responding to weather reports indicating excessive heat.

For some good news-Cal/OSHA already has a number of resources to help employers comply, including a Model Plan, FAQs, and a Fact Sheet for Employers. These resources can be accessed on Cal/OSHA’s website. CEA members may call us with questions at 800.399.5331 or email us at CEAinfo@employers.org.

Posted by Mari Bradford, HR Director on July 1, 2024

Tags: Employers Report

For many people, summer means exciting outdoor activities and fun with friends and family; for others, summer can be a difficult time to manage all of their responsibilities. There are usually high expectations of fun in the sun, but the summer months can also leave many feeling burnt out or overwhelmed. With school out during the summer, many working parents face additional pressures as they juggle their work and home responsibilities. Add these factors up, and it is evident why managing and supporting your mental health and your employee’s mental health in the summer can be difficult.

Share These Tips to Support Everyone’s Mental Health and Wellbeing This Summer:

• Use vacation time. Vacations give us something to look forward to, naturally releasing dopamine to fight summertime blues. Vacations don’t have to be expensive or last several days. A quick getaway, road trip or staycation can help boost your mood and recharge your mind. Be sure to read our article on best practices and requirements for vacation and PTO use in California in this month’s newsletter.
• Plan your day. By having a plan and when needed, a backup plan, you can feel more in control of the day and be ready for unexpected summertime business interruptions like the weather or customer demand changes.
• Get outside and stay physically active. The good thing about summer is it is often easier to get outside and soak in vitamin D. Spending time in nature can help improve your mood by reducing stress, combating anxiety and depression, and enhancing cognitive function. Remind your employees about your rest and meal break policy and audit your timecards to ensure employees are getting the breaks they are entitled to take.
• Be realistic. It is important to control-and potentially lower-your expectations and be realistic about what you will be able to do during the summer. Business needs can shift rapidly during the summer months, so being flexible is key. It’s OK to readjust your outlook, embrace downtime, and schedule time for self-care, vacation, or “me time.”

Taking care of yourself, and encouraging your employees to take care of themselves, can help everyone have a more enjoyable summer season.

Posted by California Employers Association on July 1, 2024

Tags: Employers Report

On June 5, 2024, the U.S. Equal Employment Opportunity Commission (EEOC) announced that it had entered the Failure to File phase for EEO-1 reporting, as described in the agency’s recently updated EEO-1 Reporting Instruction Booklet. The EEOC offers a fact sheet regarding the failure to file deadline.

This announcement means that if an employer failed to submit a required 2023 EEO-1 Report by the “Published Due Date” of June 4, 2024, the EEOC will send it a Notice of Failure to File letter requesting that it complete the submission as soon as possible but no later than July 9, 2024.

After this date, which is deemed the Failure to File deadline, no additional 2023 EEO-1 Component 1 Reports will be accepted, and employers that remain out of compliance with EEO-1 reporting requirements may expect to face EEOC lawsuits in federal District Court to compel them to file. In fact, the EEOC recently filed lawsuits against 15 employers for failing to submit their mandatory workforce demographic reports.

EEO-1 Background

The EEO-1 Report is a federally mandated survey that collects workforce data categorized by race, ethnicity, sex and job category. Under Title VII of the Civil Rights Act, certain employers must usually submit EEO-1 Reports by March 31 each year. For 2023 EEO-1 Reports, however, the EEOC had extended the portal’s opening date until April 30, 2024.

Covered Employers

The following entities are subject to EEO-1 reporting:

• A private employer that has 100 or more employees (with limited exceptions for schools and other organizations)
• A private employer with between 15 and 99 employees if it is part of a group of employers that legally constitutes a single enterprise that employs a total of 100 or more employees
• A federal contractor that has 50 or more employees; is either a prime contractor or first-tier subcontractor; and has a contract, subcontract or purchase order amounting to $50,000 or more

Although the EEOC sends notification letters to employers it knows to be subject to EEO-1 requirements, all covered employers are responsible for obtaining and submitting the necessary information prior to the appropriate deadline.

Employers filing EEO-1 Reports for the first time must register to receive login information, a password and further instructions for filing from the EEOC.

Posted by Giuliana Gabriel, J.D., HR Compliance Director on July 1, 2024

Tags: Employers Report

Employees in the healthcare industry have been waiting for minimum wage increases, which were originally due to take effect in June. Then, the Legislature pushed that deadline to July 1 to align with the State’s budget. Now, they’ve been delayed yet again.

The health care minimum wage raises may now take effect as of October 15, 2024, but that is only if California’s revenues are at least 3% higher than what officials have estimated for the period of July through September. Otherwise, the raises will get pushed to January 1, 2025.

For additional details on the law, keep reading:

Who Does This Law Impact?

SB 525 applies to virtually every medical employer, except:

• hospitals under the State Department of State Hospitals
• tribal clinics exempt from licensure
• outpatient settings operated by tribal organizations

Some examples of covered businesses include facilities or work sites part of an integrated health care facility system, licensed general acute care hospitals, special hospitals, clinics, physician groups and many more!

(Note that most dental offices would not be included, unless they fall under one of the covered groups, such as an integrated health care system.)

A variety of employees working for covered employers qualify, including nurses, doctors, technicians, janitors, housekeeping staff, groundskeepers, guards, clerical workers, billers, and more. There are limited exceptions for outside salespeople, and certain public sector employees and medical transportation service workers.

Does the Law Impact Salaried Exempt Employees?

Actually, yes! To remain classified as exempt, covered health care employees must earn a monthly salary of 1.5 times the applicable healthcare minimum wage, or 2 times California’s minimum wage, whichever is greater. This means that covered employers must continue to recalculate the minimum exempt salaries as the health care and California’s minimum wages continue to increase.

Initial Deadlines: To Be Determined

Type of Employer	Deadlines
Large Employers & Integrated Health Care Systems To determine if you qualify, refer here.	October 15, 2024 OR January 1, 2025: $23/hour
Hospitals To determine if you qualify, refer here.	October 15, 2024 OR January 1, 2025: $18/hour
Clinics	October 15, 2024 OR January 1, 2025: $21/hour
All Other Health Care Facilities	October 15, 2024 OR January 1, 2025: $21/hour

NOTE: Covered health care employers who are county-owned, affiliated, or operated are not required to comply until 2025.

What Do We Do Next?

• On the effective date, update your payroll system.
• Notify your non-exempt (hourly) employees within seven calendar days of the change (or earlier). Employers may do this by updating the Wage Theft Form and retaining a copy for the employee’s personnel file.
• Ensure your wage statements reflect the correct pay rates, including overtime rates.
• If the change impacts your pay scales, including for job postings, be sure to update those as well.
• Consider any personnel restructuring and/or shift adjustments as needed.
• For questions regarding waivers, it is advised to consult legal counsel.

Wage-and-Hour Compliance on the Mind?

CEA members can consult with our HR advisors by calling 800.399.5331!

Posted by Kim Gusman, President & CEO on July 1, 2024

Tags: Employers Report

What are the dog days of summer? The Almanac explains that the Dog Days of Summer, which generally occur between July and August in the Northern Hemisphere, are when heat and humidity are at their highest. According to Greek mythology this was a time of year that would drive dogs and men mad! This period of sweltering weather coincides with the year’s heliacal (meaning “at sunrise”) rising of Sirius, the Dog Star. Sirius is the brightest star in the sky, not including our own Sun. Today, however, this phrase is more often associated with hot days where everyone, including the dogs, just want to lay around to beat the heat.

With so many new laws taking effect on July 1 including Workplace Violence Prevention Plans, EEO-1 Reporting, and Minimum Wage increases, this is a tough month for businesses in California. So our team wanted to have a little fun with this common phrase and bring a smile to your face with photos of their furry friends during these Dog Days of Summer.

Purrfect Pets of CEA In honor of the Dog Days of Summer and All American Pet Photo Day on July 11, we are showcasing our beloved pets and the things about them that have stolen our hearts! ALEKZANDER KING DOGE NUŃEZ Laborador Retriever MORE BUDDY Rescue GSD/Husky MORE BUFFY Hmmm….Vampire Slayer? MORE ETHEL Husky/Malamute/German Shepherd Mix MORE GIDGET Laboradoodle MORE HUNTER Golden Retriever MORE JACK Labradoodle MORE JOJO Blue Russian MORE KEIKO Rescue Chorkie MORE LUKE Chihuahua/Pomeranian/Luck Dragon MORE MABEL Rescue GSD/Husky MORE MARLA HOOCH English Mastiff/Black Lab MORE MILO Black Lab Mix MORE MOLLY Rescue Poodle Mutt MORE MR. MAGOO Husky, Australian Cattle Dog, Lab Mix MORE OSCAR Ragdoll MORE PRINCE Siamese Mix MORE PRINCESS LEIA MARION JONES Treeing Coon Hound and a little mix of Mutt MORE RICO Maltipoo MORE TITUS THE LEGEND Pittie Mystery Mix MORE WILSON Puggle (Pug/Beagle) MORE WINSTON French Bulldog MORE Panel only seen by widget owner Edit widget Views 0% Extend Limit Share Tell your customers about
new website functionality!

Posted by [Add the Author Here] on June 1, 2024

Tags: Employers Report

What you didn’t know about….
Anthony Reyes, MHRM, Chief Administrative Officer, Chapa-De Indian Health recently joined CEA’s Board of Directors; and Evan Wise, Member Services Manager for CEA. Anthony Reyes, MHRM, Chief Administrative Officer, Chapa-De Indian Health

1. What was your first job?

I was a paper boy! I was fortunate to have the route in my neighborhood to deliver newspapers for the local paper to my neighbors. I did that for a few years starting when I was 12 and I’ve been working ever since!

2. What’s your toughest challenge doing your job?

I constantly need to remind myself and my team that we can do anything, we just can’t do everything. I work with a talented team of people who I believe could truly save the world. One of the most challenging things is balancing all the work to ensure our teams don’t burn out and are able to continue providing healthcare to vulnerable populations for the long term. It’s a marathon not a sprint.

3. What advice would you give to someone who is just starting their career?

Work hard and play hard. Advancing your career and reaching your goals is such an accomplishment, just don’t forget to take the time off you need to enjoy your life, spend time with friends and family and recharge so that you can be your best self at work.

4. What was your favorite class in college?

My favorite class while obtaining my Bachelors degree at UC Davis was Organizational Communication. Dr. Virginia Hamilton was an engaging lecturer and was an inspiration for me to continue my education after graduation.

While getting my Masters degree at the University of Hawaii at Manoa, my favorite class was Advanced Organizational Behavior. I liked that I could apply what I was learning immediately on the job.

5. What’s one thing on your bucket list?

I’d love to take a 3 month sabbatical in Spain. I studied abroad in Barcelona during college and it was a transformational experience for me. I’d love to do that again!

 

Evan Wise, Member Services Manager, CEA

1. What’s the best piece of advice you’ve been given?

When having an issue with a friend, my dad told me “You have to love someone for who they are. Not who you want them to be.” It really changed how I look at my relationships and the expectations I put on the people in my life. It was very freeing.

2. What advice would you give to someone who is just starting their career?

Soak everything up, be curious, and try everything you can. Even if it doesn’t work out, then you know what doesn’t work for you. I think that’s just as important to know as knowing what does work.

3. What’s something that most people don’t know about you?

I play 7 musical instruments: clarinet, bass clarinet, contra alto clarinet, contrabass clarinet, bassoon, tenor sax, and piano.

4. What was your favorite class in college?

Because my degree is in Deaf Studies/Sign Language, I feel like the obvious choice would be my sign language classes. But I loved all of my language classes. I also took Spanish and French. Those were the classes that we were encouraged to interact with and get to know our classmates.

5. What one thing on your bucket list?

To travel outside of the US. I went to Canada when I was 16 for a school band trip, but haven’t been anywhere else outside of the United States.

Posted by Jessica Rivera MBA, PHR, SHRM-CP, Training & Coaching Director on June 1, 2024

Tags: Employers Report

According to SHRM’s Global Workplace Culture Report 2023, 96% of employees are less likely to dread going to work when they’re in a positive culture, and 78% are less likely to look for another job within 6 months. Stay interviews are part of a healthy, transparent and positive work culture.

What are Stay Interviews?

Stay interviews are individual dynamic discussions between managers and their employees and are designed to learn what keeps employees engaged and loyal at work. These meetings are more casual yet, structured to foster an open conversation that can reveal insights on how an employee feels about their job and the company. Unlike exit interviews, which are conducted after the employee has already made the decision to leave, stay discussions occur with current employees and are guided by their direct managers. This allows an employee’s manager to address concerns and enhance satisfaction before it leads to a resignation.

Leaders can elevate their talent retention strategy with impactful stay interviews. Unlike traditional tools, stay interview questions allow for employees to reflect about their jobs and what both motivates and demotivates them.

Implementing a stay interview program helps to gain a strong understanding of employees’ motivations, job satisfaction, and their connection to their company’s culture. This proactive approach not only identifies reasons for staying, it also provides a comprehensive view of employees’ engagement and overall experience. This conveys to your employees that you recognize and appreciate their loyalty and you care about more than just their performance. Additionally, it expresses that you are open to making changes that would increase their satisfaction at work.

Equally, they can uncover warning signs that an employee needs more support or guidance which helps leaders build more productive and trust-based relationships with their employees.

Sample questions a manager can ask an employee about why they stay:

1. What is your favorite part about working here?
2. What motivates you to work here?
3. What do you like most about your role?

Sample questions a manger can ask an employee about potential motivations for leaving:

1. What demotivates you when working?
2. Can you describe a bad day you recently had at work?
3. What aspects of your day make your work life harder?

When, the Chief Executive Group surveyed U.S. CEOs in January of 2024 about their top priorities for 2024, 60% said retaining and engaging employees was their top priority. A powerful retention strategy to keep your talented employees is to conduct stay interviews with them.

CEA members can access our Stay Interview Tool Kit with forms and questions to help you with the information needed to conduct stay interviews with your team. Are you ready to transform your approach to employee retention? Embrace the power of stay interviews and unlock the potential of your workforce. Call us today at 800.399.5331!

Posted by Giuliana Gabriel, J.D., HR Compliance Director on June 1, 2024

Tags: Employers Report

Many employees in the healthcare industry have been looking forward to (and employers have been bracing for) minimum wage increases, which were due to take effect in June. However, at the eleventh hour, the Legislature passed SB 828, granting employers an additional month-until July 1, 2024 to comply. All future increases will also occur on July 1, rather than June 1.

Keep reading for some important details!

Which Employers and Employees are Covered?

This new law applies to virtually every medical employer, except hospitals under the State Department of State Hospitals, tribal clinics exempt from licensure, and outpatient settings operated by tribal organizations. Some examples include facilities or work sites part of an integrated health care facility system, licensed general acute care hospitals, special hospitals, clinics, physician groups and many more! (Note that most dental offices would not be included, unless they fall under one of the covered groups, such as an integrated health care system.)

Moreover, not just nurses and doctors would be entitled to the minimum wage increases. A variety of employees working for covered employers would qualify, including technicians, janitors, housekeeping staff, groundskeepers, guards, clerical workers, billers, and more. There are limited exceptions for outside salespeople, and certain public sector employees and medical transportation service workers.

Does the Law Impact Exempt Employees?

Actually, yes! To remain classified as exempt, covered health care employees must earn a monthly salary of 1.5 times the applicable healthcare minimum wage, or 2 times California’s minimum wage, whichever is greater. This means that covered employers must continue to recalculate the minimum exempt salaries as the health care and California’s minimum wages continue to increase.

What are the Deadlines?

Type of Employer	Deadlines
Large Employers & Integrated Health Care Systems To determine if you qualify, refer here.	July 1, 2024: $23/hour July 1, 2025: $24/hour July 1, 2026*: $25/hour *Until otherwise adjusted
Hospitals To determine if you qualify, refer here.	July 1, 2024: $18/hour, with 3.5% increases annually July 1, 2033*: $25/hour *Until otherwise adjusted
Clinics	July 1, 2024: $21/hour July 1, 2026: $22/hour July 1, 2027*: $25/hour *Until otherwise adjusted
All Other Health Care Facilities	July 1, 2024: $21/hour July 1, 2026: $23/hour July 1, 2028*: $25/hour *Until otherwise adjusted

Covered health care employers who are county-owned, affiliated, or operated are not required to comply until 2025.

What Do We Do Next?

• Upon the effective date, update your payroll system.
• Notify your non-exempt employees within seven calendar days of the change (or earlier). Employers may do this by updating the Wage Theft Form and retaining a copy for the employee’s personnel file.
• Ensure your wage statements reflect the correct pay rates, including overtime rates.
• If the change impacts your pay scales, including for job postings, be sure to update those as well.
• Consider any personnel restructuring and/or shift adjustments as needed.
• For questions regarding waivers, it is advised to consult legal counsel.

Wage and hour compliance on the mind? CEA members can consult with our HR advisors by calling 800.399.5331!

Posted by Giuliana Gabriel, J.D., HR Compliance Director on June 1, 2024

Tags: Employers Report

For California employers, it is recommended to frequently audit your wage and hour practices to avoid claims. This includes assessing timekeeping practices, meal and rest issues, premium pay, reimbursement practices, and wage statement information. One critical component is ensuring you are paying the regular rate of pay (rather than just the base hourly rate) when required.

Let’s review when the regular rate of pay is triggered in California with this short pop quiz:

Question: In which situations must the regular rate of pay be used?

• Overtime
• Meal/Rest Premium Pay
• Paid Sick Leave (including a combined PTO policy)
• Reporting Time Pay
• All of the Above

Answer:  You guessed it-the answer is all of the above. This means that anytime additional non-discretionary earnings occur, beyond the base rate (e.g., commissions, shift differentials, non-discretionary bonuses, etc.), these earnings must be factored into the regular rate of pay in your payroll system.

Do not assume your payroll company has this handled, especially if they are not based in California. It is essential to follow up and confirm the math is correct.

Why is this so critical? In the world of wage and hour, the penalties for not paying an employee properly and timely stack up quickly. In addition to the unpaid dollar amount, the employer will also be on the hook for:

• A wage statement penalty of up to $50 per employee per pay period
• Waiting time penalties of up to 30 days for a deficient final paycheck
• 10% interest
• Plus potential PAGA penalties up to $100 per employee per pay period

Want more information on this topic?

CEA members may download our Regular Rate of Pay Fact Sheet for more information and see a variety of calculation examples on our HR Forms page.