News & Updates

Increased Wage Costs on the Horizon

Most California employers know that on January 1, 2016 the state minimum wage will increase from $9.00 to $10.00 an hour. And for many employers in the City of Los Angeles, the minimum wage will go up to $10.50 an hour on July 1, 2016 (this increase is delayed for a year for employers with fewer than 25 employees and for non-profit employers). The City minimum wage will then go up every July 1 until 2020 when it will reach $15.00 an hour. From then on, there will be annual cost of living increases.

What some employers may not yet be aware of is that the County of Los Angeles is in the process of adopting its own minimum wage ordinance that will mirror that of the City. This will affect employers in municipalities ranging from San Fernando to Vernon, Beverly Hills to Culver City, and Bell Gardens to Santa Monica.

And these aren't the only increases in wage costs that employers face.

In late June, President Obama proposed a change in the federal regulations that determine which employees are exempt from overtime. If adopted into law (and these regulations do not require Congressional action or approval), the regulations would more than double the salary that an employee must be paid in order to be considered exempt from overtime pay. Early estimates are that the new salary requirement of $970 per week, or $50,440 a year, would make 15 million people eligible for overtime. The President's plan also calls for annual increases in the exemption amount.

It should be noted that just because an employee receives a salary in excess of the new floor, they will still not be exempted from receiving overtime unless their duties meet the standards of federal law.

It should also be noted that the President's proposal isn't law yet. There is a complicated administrative process that must first be completed, but this is one of President Obama's top priorities before the end of his second term.

Although California has its own overtime law, the President's plan would still impact California employers. Federal law only provides for overtime if a non-exempt employee works more than 40 hours in a week. California law also provides for overtime if a non-exempt employee works for more than 8 hours in a day. So if an employee who is exempt under California law, but non-exempt under federal law because the employee makes a salary of $40,000 a year, were to work 8 hours a day, Monday through Friday, and then work 4 more hours on Saturday (a total of 44 hours for the week), under the proposed federal law the employee would be entitled to overtime for the Saturday work, although no overtime would be due under California law.

If President Obama's plan does become law, the correct calculation of overtime is going to get even more complicated than it already is. For assistance or advice, contact any of the attorneys in the WKS Labor and Employment Law Department.

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New NLRB Timeline for Union Representation Elections

Effective April 14, 2015 the National Labor Relations Board ("NLRB") implemented new procedures for the conduct of union representation elections. These procedures significantly reduce the time between a union's filing of a petition for an election and the actual vote of employees.

Prior to the implementation of the new rules, the NLRB's target was to hold all elections within a median of 42 days after a union filed a petition, and to hold 90% of elections in no more than 56 days. But the goal of the NLRB's new procedures is that all elections be conducted on the "earliest date practicable." In a case already handled by WKS under the NLRB's new rules, the Office and Professional Employees International Union filed an election petition on May 20 and the employee vote was held just two weeks later, on June 4.

As part of the expedited election procedures, many issues that were previously resolved before employees voted will now be held for determination until after the election. For example, if there are questions about who is actually eligible to vote, the issue won't be addressed until after the election is held, unless the dispute affects more than 20% of the voting unit. So employees may vote without knowing the size or composition of the bargaining unit. And a significant number of employees may not know whether they are "in" or "out" of the unit. How this might affect employees' voting decisions or whether they will even vote at all remains to be seen.

The NLRB's new procedures also require that an employer disclose employees' personal email addresses and telephone numbers to the union. Employers previously only had to provide the union with employee addresses.

The new NLRB rules are the result of a long term effort by organized labor for shorter election times and other changes to election procedures. Union organizers can now work behind the scenes for many weeks, or even months, before filing a petition for an election. And an employer may not even know that anything is going on. With less time from the filing of an election petition until the holding of an election, an employer has less time to provide communicate with employees, which unions believe will result in more successful organizing activity.

Because of the anticipation that the NLRB's new election procedures will result in increased unionization efforts, WKS recommends that employers seriously consider proactively communicating with employees about union issues, rather than waiting until receipt of an election petition and the very short period before the election itself.

For further information, contact any of the attorneys in the WKS Labor and Employment Law Department.

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We Don't Have A Union So …

In Southern California well under 10 percent of non-governmental employers are unionized. But the decisions of the National Labor Relations Board ("NLRB") can still have a significant impact on all employers because Section 7 of the National Labor Relations Act ("NLRA") gives all employees not only the right to form, join and assist unions, but the right "to engage in other concerted activities …." The right to engage in concerted activities applies equally to both unionized and non-unionized employees, and recent decisions of the NLRB have significantly expanded the scope of employee actions that may be considered to be "concerted activity."

For example in Pier Sixty LLC, the floor supervisor in a restaurant yelled at a server in front of guests. During the employee's next break, the employee used his cellphone to make a Facebook posting referring to the supervisor as "a NASTY MOTHER [expletive]," also writing "[expletive] his mother and his entire [expletive] family." The NLRB held that the termination for posting vulgar and obscene Facebook comments about a supervisor violated the Act.

In dissent, Board Member Johnson wrote that the employee's vulgar statement went beyond what should be protected by the Act and that "it serves no discernible purpose for the Board to stretch beyond reason to protect beyond-the-pale behavior that happens to overlap with protected activity." But Member Johnson's seemingly common sense approach failed to carry the day.

A similar departure from good sense can be seen in the Board's decision in Grand Canyon Education. In this case, following an acrimonious meeting between a supervisor and an employee, the employee received a Performance Improvement Plan ("PIP") for insubordination from an HR Manager. The PIP included a requirement that it not be discussed with other employees. During the meeting, the employee mentioned that a few other employees thought that the supervisor was a bad manager. The HR Manager asked for the names of these employees and the employee provided this information. The NLRB not only held that the "do not discuss" rule violated the Act, but also that the request for employee names was a violation because it "unlawfully sought specific information about the protected activities of other employees."

Board Member Miscimarra, dissenting, reasoned that because the employee first volunteered that other employees had issues with the supervisor, the HR Manager's request for their names was "logical under the circumstances."

The results in these two cases, which are anything but obvious, are a reminder that even non-union employers have to be wary of the provisions of the National Labor Relations Act. For further information, contact any of the attorneys in the WKS Labor and Employment Law Department.