HR Headliner: June 2018
“You Can’t Always Get What You Want”
Here at Sierra HR Partners, our Consultants are frequently asked about creative scheduling requests from employees that on the surface, may appear to benefit both the employer and the employee. For example, an employee may wish to do extra work over the weekend with those hours added to a vacation bank rather than included in the normal paycheck. Or, an employee may request to work four 10-hour shifts and forego overtime so she can have three-day weekends*. These deviations from California wage and hour law may seem innocent, particularly because they are often at the request of a well-meaning employee. No harm, no foul… right?
[We work in California, so you’re probably guessing the answer to that question already!]
A recent California Supreme Court decision regarding independent contractors cited an interesting statement from the U.S. Supreme Court that sheds light on this topic:
The Court reasoned that if exceptions to wage and hour law were allowed for employees who were willing to work “voluntarily,” employers might be able to coerce them to testify that the arrangement was acceptable and waive their legal protections. This could have a negative impact on competing businesses who were trying to abide by state and federal regulations.
This means that an employee’s seemingly generous offer to complete a project “off the clock” could result in significant penalties for the business in the future. If the employee happens to be terminated or otherwise becomes disenchanted with the employer, a legal claim for unpaid wages could not be defended by showing that it was voluntary. Even the employee’s signed request would not remove an employer’s legal obligations to abide by state and federal wage and hour rules.
Any earned wages that are not paid to the employee at the time of termination could result in penalties of one day’s wages for each day payment is not made, up to a maximum of 30 days. This is in addition to any actual payment that may be owed for regular or overtime hours.
The Department of Industrial Relations puts it this way: “Assessment of the waiting time penalty does not require that the employer intended the action or anything blameworthy, but rather that the employer knows what he is doing, that the action occurred and is within the employer’s control, and that the employer fails to perform a required act.”
Remember that you are free to change work schedules and duties for your employees as appropriate for your business. Extra hours to complete a project, or a schedule that exceeds eight hours in a workday is perfectly acceptable… so long as you always pay in accordance with the law.
*This type of schedule is permissible only by following specific steps to establish a valid Alternative Workweek Schedule and filing the information with the Department of Industrial Relations.
2018 Planning Retreat
It’s Sierra HR Partner’s ambition to continue to grow and develop our services, so that we can be at the top of our industry and deliver the best to our clients.
To work towards these goals, Sierra HR Partners closed our office on Thursday, May 17, for our 2018 planning retreat.
We spent our morning planning new goals and strategizing about ways to improve upon existing services, and how to roll-out new ones.
In the afternoon we took a break for lunch and a team building activity.
Here are some of the photographs from our retreat:
Did you know?
Sierra HR Partners is offering an upcoming workshop on Multi-Generation Workforces!
You can register online through EventBrite, or e-mail Kayla Thomas for more information.
May 2018 HR Bulletin: Will Your Independent Contractors Pass the ABC Test?
May 2018 HR Bulletin
Will Your Independent Contractors Pass the ABC Test?
On April 30, 2018, the California Supreme Court issued an opinion that could have significant impact on a business’s ability to hire workers as “independent contractors.” The case, Dynamex Operations West, Inc. v. Superior Court of Los Angeles, tackled the question of whether a nationwide delivery company had misclassified delivery drivers as independent contractors, unlawfully avoiding responsibility for overtime and other wage and hour protections.
In its decision, the Supreme Court adopted a more structured process than the multi factor approach used in the past, referred to as the “ABC test” for distinguishing employees from independent contractors.
The ABC test begins with the presumption that all workers are employees and are covered by the protections of the Fair Labor Standards Act and applicable IWC Wage Order(s). A person may be classified as an independent contractor only if ALL of the following conditions are met:
A) Is the worker free from the control and direction of the company in connection with the performance of the work, both in contract and in fact? Even a very minimal amount of control over the work product may be sufficient to fail this part of the test. In a 2007 Vermont case, a clothing manufacturer failed to establish that independent knitters were free from the company’s control even though they worked from home, on their own machines, and at days/hours of their own choosing. (Fleece on Earth v. Dep’t of Emple. & Training)
B) Does the worker perform work that is outside the usual course of the hiring entity’s business? As examples, the Court contrasted a retail store hiring a plumber or electrician with a bakery hiring a decorator to work on custom-designed cakes. When the work being performed is comparable to that of employees, and the individual would normally be viewed by others as working in the hiring entity’s business, the relationship will likely fail this part of the test.
C) Is the worker customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed? In other words, does the person actually have his/her own business with associated licensing, advertising, etc. or is he/she simply an individual who agreed to forego the typical employer/employee relationship? The fact that a business does not prohibit a worker from engaging in such activities is not enough. For example, in a 1998 Virginia case, a construction company failed to prove that siding installers were independent contractors partially because “no evidence was presented that the installers had business cards, business licenses, business phones, or business locations.” (Brothers Const. Co. v. Virginia Empl. Comm’n)
Keeping in mind that all three factors of the ABC test must be satisfied in order to correctly classify a worker as an independent contractor, the somewhat-vague Part A regarding company control may not need to be analyzed at all. In its decision, the Supreme Court stated, “a court is free to consider the separate parts of the ABC standard in whatever order it chooses…. In many cases it may be easier and clearer for a court to determine whether or not Part B or Part C of the ABC standard has been satisfied than for a court to resolve questions regarding the nature or degree of a worker’s freedom from the hiring entity’s control.” This means that even if your business makes a concerted effort to be hands-off regarding how or when a worker gets the job done, if the person is performing work that is not distinctly different from your business, or if the worker has not established his/her own independent trade or occupation, the classification of independent contractor may be found unlawful.
If your company currently utilizes independent contractors, we encourage you to carefully examine the types of projects and assignments these workers are given. Would their work be perceived as being “in the usual course” of your business? Also consider whether each person is operating a truly independent trade or business, with the license and company structure to show for it. If you are not confident that these working relationships would pass the ABC test, you may wish to seek legal guidance to assess risk and determine next steps.
Have you ever been interested in attending one of our Harassment Prevention or Leadership seminars?
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Are you an experienced HR Generalist seeking new challenges in a professional and exciting team environment? Sierra HR Partners is currently searching for a service-oriented self-starter who can partner with clients from a wide range of industries and help manage their human resource needs. The successful candidate’s role may include: employee relations, leave management, compensation and compliance research, recruitment efforts, preparation of organizational training, the creation of compliant employee handbooks and other special projects.
We provide competitive salary, excellent benefit package, and an unparalleled opportunity for growth. Qualified candidates will have a minimum of five years’ experience in a professional HR capacity, the ability to communicate effectively both verbally and in writing with clients and colleagues; a focus on quality and maintaining confidentiality in daily operations; a high level of professionalism and sound judgment; minimum of a Bachelor’s Degree in Human Resources; PHR , CA-PHR or SPHR certified; knowledge of business operations; and a strong desire to succeed. If this is you, we’d love to talk!
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