Exempt Classification Mix & Match: New Considerations in Federal and State Rules

HR Bulletin

Exempt Classification Mix & Match: New Considerations in Federal and State Rules

Just when you thought being an employer in California couldn’t get any trickier, the updated federal rule for exempt employees is about to throw you for a loop. Effective December 1, 2016, the minimum salary for an Executive, Administrative or Professional employee will be $47,476 per year for the person to meet the salary test of an exempt employee under the Fair Labor Standards Act (FLSA).

exempt classification

Through the year 2019, this creates one of the rare circumstances when federal law is more generous than that of California. But the comparison of federal vs. state doesn’t end there! You probably know that when laws conflict, an employer must implement the option that is most generous to the employee. Below are additional differences in federal and California overtime rules that you’ll need to consider:

• The federal salary test may be higher, but California’s duties tests for Executive, Administrative and Professional exemptions will still be more protective of employees. (You may refer to the DLSE Glossary  for helpful definitions of these exemptions.) Employees will need to meet each applicable test to be correctly classified as exempt.

• The FLSA does not require a salary test for employees classified as Inside Commissioned Sales, Computer Professionals, and Licensed Teachers, Lawyers, and Doctors. However, California requires these employees to meet both a salary and duties test to be exempt. (In this case, you would follow California salary requirements, not federal.)

• The federal law allows nondiscretionary bonuses and commissions to be included when calculating total salary, but California law does not.

• Federal law provides an exemption for “highly compensated employees” based on a minimal duties test, but California law does not.

• California’s minimum wage will increase annually between 2017 and 2023, with a one-year delay for employers of 25 or fewer employees. When it reaches $15 per hour, the minimum salary for an exempt employee will be $62,400 annually. Due to the difference in timing for smaller employers, in 2019, your employee count will determine whether you’ll need to follow the federal or state salary threshold.

• The Department of Labor will adjust the federal minimum salary every three years beginning in 2020, so California employers will need to keep a close eye on both the state and federal rules to know which is higher.

This back-and-forth can certainly feel daunting, but you can manage your employee classifications by looking at requirements one step at a time.

1. Identify all employees in your organization who are currently paid on a salary basis.

2. Carefully review each employee’s responsibilities to be sure they meet the applicable duties test imposed by California law, remembering that the employee must spend more than 50% of his/her time on exempt-level duties in order to meet exempt requirements. Regardless of salary, if the job does not meet this high standard, the employee should not be considered exempt.

3. Identify any salaried employee whose pay is less than $913 per week ($47,476 annually.) You will need to decide whether to increase the salary or reclassify the person as non-exempt.

4. Any employee who will be reclassified as non-exempt should be trained in proper time-keeping practices, including prohibitions on working “off the clock,” and the importance of taking rest and meal periods.

5. Make a plan to repeat these steps each year with an eye on the changes in both state and federal rules.

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Politics At Work: Don’t Let the Election Season Disrupt Your Workplace!

HR Bulletin

Politics At Work: Don’t Let the Election Season Disrupt Your Workplace!

The 2016 Presidential election has been interesting, to say the least. It’s hard to find someone who doesn’t hold passionate views for, or against, either of the main candidates. And as much as we strive for a harmonious workplace, political discussions are bound to come up as we move closer to Election Day.politics

There are numerous reasons to avoid heated political debate in the workplace including decreased productivity and negative morale. Even if the conversation stays calm, it can be hard to switch gears and focus on work after expending mental energy defending your views. Even worse, these discussions could create risk for claims of discrimination or hostile work environment. Protected characteristics including gender, religious beliefs, race, and age could easily become topics of discussion and a harsh remark may sow the seeds of a legal complaint.

But before you print out that memo banning all political dialogue, it’s important to remember the National Labor Relations Board’s views on concerted activity. Employees, whether unionized or not, have broad rights to discuss the terms and conditions of employment. To the extent that their support for, or opposition to, a candidate relates to job-related topics, prohibiting political speech could be viewed as a violation of their rights. For example, campaign issues like the minimum wage, pay equity, health insurance, and immigration could generate protection under the NLRA.

In addition, California Labor Code section 1101 prohibits company policies that would prevent employees from “engaging or participating in politics” or attempt to “control or direct the political activities” of employees. These rules generally apply to activities outside the workplace, but could be loosely interpreted to cover in-office speech, as well.

So how can you maintain control of your workplace without infringing on employees’ rights? You already have policies in place that can help, and this may be a great time to revisit them. Use your Employee Handbook to remind your staff that:

• Employees are expected to treat each other with respect and courtesy at all times.

• Personal conversations should not disrupt the efficient production of work.

• Solicitations (including political postings) are not permitted during work hours.

• Negative comments about protected personal characteristics will not be tolerated.

• Employees may not make social media posts that give the impression the company supports any political cause or candidate.

• Employees may be permitted paid time off to vote if the work schedule prevents them from voting, or unpaid time off to serve as an election official.


If you do encounter an employee whose political fervor is in violation of your policies, a verbal or written warning may be in order. Be sure to restrict the disciplinary action to job-related behaviors, rather than the employee’s personal views.

And thankfully, November 8th is just a few short weeks away. Regardless of which candidate wins, your employees will soon settle back into normal routines and conversations…for the next four years, at least.

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Did you Know: AB 1066


AB 1066

AB 1066

This month, Governor Brown signed AB 1066, which significantly changes overtime payment rules for agriculture companies. Wage Order 14, which applies to agricultural occupations, currently provides for overtime after ten hours of work in a workday. The new law will affect employers of 25 or more employees beginning in 2019, gradually reducing the daily overtime threshold to eight hours by 2022. Smaller employers would experience similar incremental changes beginning in 2022.

Additionally, the Department of Homeland Security has announced that a revised Form I-9 will be available by November 2016. Employers may continue using the current version with a revision date of 03/08/2013 until Jan. 21, 2017. After that date, all previous versions of Form I-9 will be invalid.

Employers of 20 or more employees within a 75-mile radius will want to watch for developments in the pending New Parent Leave Act, which would require up to six weeks of unpaid leave for new parents to bond with a child within one year of the child’s birth, adoption, or foster care placement. (This is in addition to any Pregnancy Disability Leave needed by a new mother.) Employers would also be required to maintain group health insurance for the duration of the leave. If passed, the law would become effective on January 1, 2018.



Hire Smart With Background Investigations

HR Bulletin

Hire Smart with Background Investigations 

In July, The Business Journal reported the indictment of a local Human Resources Manager on charges of embezzling more than $1 million from her employer. More recently, another Fresno business discovered that a member of Senior Management had been convicted of embezzlement and theft from a previous employer – the charges coming to light when she was unable to report to work after being arrested on a related warrant. (When applying for the job, this person falsified her résumé to hide the time period and former employer involved.)

In addition to the financial impact of these key employees’ actions, their employers were no doubt left with feelings of anger, betrayal, and dismay as to how they could have hired someone with such dubious ethics. The fact is, job candidates can edit a résumé and craft interview responses to put forth a trustworthy impression, but studies have shown that:

• 75% of applications contain misleading information

• 44% of applicants lie about their work history

• 41% of applicants lie about their education

• 9% of applicants have a criminal history

An essential step in hiring the best people, from entry-level staff to top executives, is conducting a thorough, job-related background investigation including criminal records and employment history. It may also be important to verify educational background if the position requires a college degree. Other types of searches include civil filings, credit history, and professional license verification. Savvy hiring managers should compare information on the applicant’s authorization forms to the documents provided during the onboarding process – candidates may try to avoid detection by giving a false birth date or driver’s license number for the background investigation.

background investigations

Whether you’re pressed for time in filling a position or simply want to believe the best about a candidate, a background check may seem inconsequential. But when adding a new employee to your team, particularly one in a key management role, it’s one of the smartest business decisions you can make.

However, do your homework when selecting a background check provider and ensure that they do not simply rely on database searches. One screening company studied federal corrections databases and found a “41% error rate.” That’s because many screeners don’t bother to check original court records to verify the status of cases. These screening companies often rely only on bulk databases that aren’t properly updated.

Sierra HR Partners can provide complete, legally-compliant background investigation services to help you hire with confidence.  Please contact us or visit our background investigations page for details.

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High Cost of Keeping that Bad Apple


High Cost of Keeping that Bad Apple 

bad apple

It has been said that a company’s culture is shaped by the worst behavior the leader is willing to tolerate (Gruenter and Whitaker). With this in mind, how are you as leaders shaping your workplace culture? Often, managers focus on pay, benefits and other tangibles to help drive the desired culture. While these pieces are important, it’s the daily interactions between employees, management and customers that define your culture. And, remember the lowest level of performance left unaddressed, becomes the highest level you can enforce with others.

Even the strongest leaders can struggle with managing a low performing or destructive employee. It’s human nature to believe that bad employees can get better over time. However; this is not always the case and it’s best to pull these bad apples from your bunch sooner than later.

As HR business partners, you have heard our consultants and attorneys say that bad employees never get better. We say that because it’s true, and we understand how weak employees can hurt your business and/or expose you to potential legal claims. Our consultants are available to guide and train you on effectively managing performance and behavior that aligns with your mission, vision and values.

Did you know?

The Department of Labor published two updated notices effective 8/1, informing employees of their rights under the Fair Labor Standards Act (FLSA) and Employee Polygraph Protection Act (EPPA)?

Federal Minimum Wage Poster changes:

* Misclassifying employees as independent contractors

* Nursing mothers’ rights

* DOL enforcement

Federal Employee Polygraph Protection Act Poster changes:

* Penalty amount

* Updated DOL contact information

Our consultants are available to advise you on which state and federal posters should be prominent in your workplace.

EEO-1 Reporting

If you employ 100+ employees or are a federal contractor, your EEO-1 Report is due to the EEOC by September 30th. You may click here for additional information on submission requirements.

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