1. Compliance Update –Wage & Hour 2016

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3. Speakers
Toni ShibayamaPaul Fleck

4. Cerritos • Fresno • Irvine • Pasadena • Pleasanton • Riverside • Sacramento • San Diego
September 23, 2016
Prepared by:
Paul S. Fleck, Senior Partner
Are you Prepared for the DOL
Fair Labor Standard’s Act
Exempt Status Changes?

5. 5
Agenda
• FLSA Basics
• Overtime Exemptions
• Meal/Rest Periods
• Fair-Pay Act
• Job Descriptions

6. 6
Wage & Hour
• Fair Labor Standards Act
• Overtime and minimum wage
requirements under federal, California,
and local laws

7. 7
Fair Labor Standards Act
• Federal law
• Minimum Wage
- $7.25 per hour
• Overtime
- One-and-one-half times regular rate of pay over 40 in
workweek.
• Exempt/Non-Exempt Employees
- Exempt employees do not receive overtime pay (are
exempt from federal overtime) where minimum salary level
and duties tests are satisfied
- Non-exempt employees (hourly or salaried) must be paid
overtime

8. 8
California Law
• Minimum Wage
• The California minimum wage is
currently $10.00 per
hour
• Increases to $10.50 – 1/1/2017
• Also impacts exempt
employees

9. 9
California Law
• Overtime
- Daily - over eight (8) in a workday,
- 40 in the workweek, and
- First eight (8) hours on 7th
consecutive day of work in a
workweek

10. 10
California Law
• Double-time
- All hours over 12 in a workday, and
-Over 8 on 7th consecutive
day of work in the workweek
• Exempt/Non-Exempt Employees
-Higher minimum salary level
than FLSA
-Duties test more narrow

11. Municipal Minimum Wage Laws
• Location, location, location…
– Oakland — Long Beach
– San Diego — Mountain View
– San Francisco — Pasadena
– Berkeley — Richmond
– Los Angeles — San Jose
– El Centro — Santa Clara
– Emeryville — Santa Monica
– Sunnyvale
11

12. 12
Exemptions

13. 13
Exempt vs. Non-Exempt Classification
• Certain employees can be
classified as exempt from
overtime
• Three Tests for Exemption
1. Duties – “primarily” exempt work
2. Salary Level – minimum salary
threshold
3. Salary Basis – paid on salary basis

14. 14
White Collar Exemptions
• Administrative
– Office/non-manual
• Executive
– Management; Customarily/regularly directs
two or more employees; Authority to hire/fire
• Professional (learned, creative)
– Advanced knowledge work
– Job performance requires invention,
imagination, etc.
• Outside Sales
• Certain computer employees

15. 15
Salary Basis
•California: A monthly salary that is not less than two (2) times
the state minimum wage for full-time employment.
– Full time employment is defined as 40 hours per week
– Currently $41,600 annually as of January 1, 2016
– Increases to $43,680 annually as of January 1, 2017
•Federal: Currently not less than $455 per week ($23,660
annually)
•Increases to $913 per week ($47,476 annually) on
December 1, 2016

16. 16
“White Collar Exemptions”
• California law and the FLSA provide an exemption from
overtime pay for following employees:
– Executive
– Administrative
– Professional
– Outside sales employees
• Paid on a salary basis
• Meet minimum salary threshold

17. 17
Executive Exemption
• Duties and responsibilities involve the management of the
enterprise or of a customarily recognized department or
subdivision;
• Customarily and regularly directs the work of two or more other
employees;
• Authority to hire or fire other employees or whose suggestions
and recommendations as to hiring, firing, advancement,
promotion or other change of status of other employees are
given particular weight; and
• Primarily engaged in exempt duties.

18. 18
Administrative Exemption
• Duties and responsibilities involve the performance of office
or non-manual work directly related to management
policies or general business operations of the employer or
the employer’s customers;
• Exercises discretion and independent judgment with
respect to “matters of significance”;
• Regularly and directly assists a proprietor, or a bona fide
executive or administrative exempt employee or performs
under only general supervision work along specialized or
technical lines requiring special training, experience or
knowledge or executes under only general supervision
special assignments and tasks; and
• Primarily engaged in exempt duties.

19. 19
Professional Exemption
• Licensed or certified by the State of California and
is primarily engaged in the practice of one of the
following:
– Law, medicine, dentistry, optometry, architecture,
engineering, teaching, or accounting
• Primarily engaged in an occupation commonly
recognized as a learned or artistic profession
requiring imagination, invention, or consistent
exercise of discretion and judgment;
• Advanced degree acquired by prolonged
intellectual instruction

20. 20
Outside Sales Employees
• Primary duty must be making sales, or obtaining
orders or contracts for which consideration will be
paid by the client or customer
• Employee must be customarily and regularly
engaged away from employer’s place of business
• Promotional Work – main subject of litigation
– Whether it is exempt depends on whether it: (1) relates to sales
made, or to be made, by someone else; or (2) is incidental to and in
conjunction with an employee’s own outside sales

21. 21
Determine the Exemption
Job titles alone do
not determine.
Employer bears
the burden of
proof.
Corning Glass Works v.
Brennan (1974)
417 U.S. 188
Exemption
requirements are
narrowly
construed and
limited.
Nordquist v. McGraw-Hill
Broadcasting Co. (1995)
32 Cal.App.4th
555
DOL- FLSA Overtime Security Advisor
(Web-based evaluation tool)

22. 22
Meal & Rest Periods

23. 23
Meal Periods
Requirements
• Employers must “provide” a 30-minute
unpaid meal period to each non-exempt
employee, if shift is 5 or more hours
• Employers do not have to ensure
employees take meal period
• Meal periods must be recorded
• Meal periods must begin before the end
of fifth hour of work in order to avoid
penalty

24. 24
Meal Periods
Tips to
Reduce Risk
• Maintain legally compliant written
policies / agreement
• Implement– Provide an unpaid, duty-
free, of at least 30 minutes meal period
• Implement policy – Require employees
to comply with meal period policy
• Implement policy – Require employees
to acknowledge, in writing, they have
not deviated from the meal period policy
• Or pay additional hour

25. 25
Rest Periods
Requirements
• Must authorize and permit non-exempt
employees at least one paid, duty-free,
uninterrupted rest period of at least 10
minutes for every 4 hours of work or
“major fraction thereof”
• Do not have to ensure employees take
the break
• May require employees to remain on-
site
• When practicable, rest period should fall
in the middle of the work period

26. 26
Rest Periods
Tips to
Reduce Risk
• Maintain legally compliant written
policies
• Implement policy – Require employees
to take rest periods as required by
policy or promptly report missed rest
period
• Implement policy – Require employees
to acknowledge, in writing, they have
not deviated from the rest period policy

27. 27
•Fair Pay Act
•EEOC Employer Data

28. California Fair Pay Act
• In 2015, SB 358 was enacted to address the gender wage gap
in California and expanded equal pay protections under existing
law. SB 358 modified Labor Code § 1197.5.
Impact:
• Ensure equal employment opportunity and anti-discrimination
policies expressly prohibit wage discrimination.
• Refrain from prohibiting or discouraging employees from
discussing their wages or the wages of other employees.
• Audit pay practices for pay differentials.
• Document guidelines and requirements for salaries and
bonuses.
• Train managers to comply with federal and state equal pay laws.
28

29. California Fair Pay Act Continued
• Introduced February 16, 2016, SB1063 amends
Labor Code § 1197.5 to include race and ethnicity.
– Enrolled and awaiting Governor's signature
Impact:
• Should the governor sign the bill, employers should
add race & ethnicity when reviewing pay rates in
their workplace.
29

30. EEOC Proposes Requesting Equal Pay
Data From Employers
• On January 29, 2016, the EEOC unveiled plans to require
employers with 100 or more employees to report pay data
in an effort to uncover potential pay discrimination.
Impact:
• If finalized, employers will face an additional administrative
burden in compiling this annual report.
• Data may be used to bring actions for alleged pay
discrimination.
• Be prepared to provide detailed explanations for pay
discrepancies.
30

31. 31
Developing and Writing
Effective Job Description's

32. What is a Job Description?
A Job Description typically consists of the following
components:
•A description of where the position falls within the company’s
organization chart.
•Essential job functions;
•Knowledge and critical skills;
•Physical demands;
•Environmental factors; and
•Any explanatory Information that may be necessary to clarify
job duties or responsibilities.

33. Should an Employer use Job Descriptions?
 Relevant Rules and Regulations
 What applies: federal/state safety & health laws, collective
bargaining
 Size and Type of Organization and Industry
 Hiring Practices
 Screening tool, convey job expectations
 Current Employees
 Job analysis
 Identify essential and marginal job functions

34. Legal Issues - ADA
• The Americans with Disabilities Act ~ does not
require an employer to develop or maintain job
descriptions
• Essential Job Functions
• Position exists to perform the function
• Limited number of employees available to
perform function
• Highly specialized
• EEOC evidence (e.g., employer’s judgment,
terms of collective bargaining agreement,
work experience…)
• Other relevant factors

35. Legal Issues – Workers’ Comp
• Workers’ Compensation ~ can assist employers
in providing modified work for employees out on
workers’ comp leaves
• Part-time or Modified work
• Incentives (Employers of 50 plus employees)
• 15% reduction in permanent disability payments
if: modified job pays at least 85% of previous
wages and lasts at least 12 months.
• 15% increase if no modified job offered

36. Legal Issues – Wage & Hour
• Wage and Hour
• Executive primary duties
• Administrative primary duties
• Professional primary duties

37. 37
Formulating a Job Description
STEP
ONE

38. Formulating a Job Description
STEP 1:
Complete a Job Analysis
• Purpose;
• Job Setting;
• Workstation; and
• Activities.

39. 39
Formulating a Job Description
STEP
TWO

40. Formulating a Job Description
STEP 2:
Record the Basics
• Job Title, Duties and Responsibilities;
• Job Functions, Essential and
Marginal Duties; and
• Special Working Conditions, etc.

41. Formulating a Job Description
Overall Purpose: Coordinates day-to-day
human resources functions requiring general
knowledge of federal and state employment laws
and regulations

42. Formulating a Job Description
Essential Duties:
 Report weekly payroll to payroll processing
company
 Place employment advertisements and interview
candidates for vacant positions
 Record personnel information into human
resources database program
 Attend weekly budget reporting meeting

43. Formulating a Job Description
Physical Demands:
• Standing 20%
• Sitting 70%
• Walking 10%
• Stooping – occasional
• Lifting – 10 to 15 lbs. (2 to 5 times per day)
• Computer work – 75%
• Reading – 25%

44. Formulating a Job Description
Other Duties:
• Perform monthly safety inspections in plant and office
• Plan company events and employee recognition
program

45. 45
Formulating a Job Description
STEP
THREE

46. Formulating a Job Description
STEP 3:
Detail Qualifications
• Education;
• Training; and
• Experience

47. Formulating a Job Description
• Education and/or Experience:
• BA or BS + 1 to 3 years general HR experience
• Knowledge, Skills, and General Abilities:
• MS Word, Excel, Interviewing, General Knowledge of
federal and California employment laws and regulations
• Mental Abilities:
• Ability to prioritize; detail oriented and multi-task
functioning

48. Formulating a Job Description
• Certificates, Licenses,
Registrations:
• PHR or equivalent certification
• Other Special Skills and Abilities:
• Typing
• Graphic Design
• Employee orientation and safety
training

49. 49
Formulating a Job Description
STEP
FOUR

50. Formulating a Job Description
STEP 4:
Maintain Consistency
• Consistent Language;
• Preferred Action Words; and
• Ensure equitable comparisons of content
across jobs

51. Job Title:
Department: Reports To:
Exempt or Non-exempt: Salary Range:
Prepared By: Date:
Approved By: Date:
Overall Purpose: A brief description of the major purpose of the position. One or two sentences.
Duties & Responsibilities:
Essential Duties: Why the job exists; they comprise a major percentage of the job; there would be substantial consequences if the
function were not performed.
Other Duties: Things which could be delegated or accommodations could be made if a person (otherwise qualified) were unable to
perform the task.
Relationships/Contacts: (Supervisory, external, internal contacts)
Additional Dimensions: (Budget, accountabilities, etc.)
The preceding functions have been provided examples of the types of work performed by employees assigned to this job classification.
Management reserves the right to add, modify, change or rescind work assignments and to make reasonable accommodations as
needed.
Qualification Requirements:
Education and/or Experience; Knowledge, Skills and General Abilities; Mental Abilities; Certificates, Licenses, Registrations; Other
Special Skills and Abilities:; Physical Demands: Standing, sitting, walking, lifting, etc. (percentage of work time each is required)
To perform this job successfully, an individual must be able to perform each essential duty satisfactorily. The requirements listed above are representative of the
knowledge, skills and/or abilities required. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.
I hereby acknowledge that I have read and understand the content of this job description. I understand that the job description may be revised from time to time
in the future by the Company in its discretion. I understand and agree that nothing in this job description should be construed as a contract of employment, and
that employment with this Company is at-will meaning that the terms of employment may be changed with or without notice, with or without cause, including, but
not limited to termination, demotion, promotion, transfer, compensation, benefits, duties, and location of work.
Employee Signature Date
JOB DESCRIPTION

52. For questions or comments, please contact:
Thank You
Paul S. Fleck
(562) 653-3200
pfleck@aalrr.com

53. 53
Disclaimer
This AALRR presentation is intended for
informational purposes only and should not be
relied upon in reaching a conclusion in a
particular area of law. Applicability of the legal
principles discussed may differ substantially in
individual situations. Receipt of this or any other
AALRR presentation/publication does not create
an attorney-client relationship. The Firm is not
responsible for inadvertent errors that may occur
in the publishing process.
© 2016 Atkinson, Andelson, Loya, Ruud & Romo

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56. Speakers
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