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M A RC H 2 010 >Call To Action - Proposal Makes Businesses Tax Collectors And Forces Small Biz To Make Interest-Free Loans To State >Itemize Or Be Penalized >Important Message From Ed Fairhurst SDEA President >Plus: HR Training Group Purchasing Organization & More...

888.625.7332 HR CONSULTING TRAINING HANDBOOKS AUDITS SURVEYS COMPENSATION LABOR NEGOTIATIONS


COLUMNISTS

888.625.7332 12255 PARKWAY CENTRE DR. POWAY, CA 92064

Jennifer Jacobus, PHR-CA Jessica Zaldivar, PHR

SDEA PRESIDENT Ed Fairhurst

SDEA BOARD OF DIRECTORS Rufino Autus Autus Financial Group Terry Elrod Juli Jacobson San Diego Blood Bank Stacey McKibben ActionCOACH Melanie Potter Walter Anderson Nursery Mike Scacco ALSCO, Inc. Andy Silverman CRES Insurance Darby Vorce Pacific Safety Council SDEA Counsel Mike Daly Daly Law Firm Honorary Life Member Tom Murch

DESIGN

Chabot Designs.com

ADVERTISING AND ARTICLE SUBMISSION INFO This newsletter is published monthly by the San Diego Employers Association. We welcome the submission of articles by our members on topics of interest related to HR. Date for submission of materials and advertising is the 15th of the month prior to publication. If you are interested in submitting an article please email it to: jjacobus@sdea.com. If you are interested in advertising rates please send an email to: mblackford@sdea.com. SDEA is a not-for-profit employer’s association that provides HR advice and consulting to its members in an effort to promote and maintain employer/employee relationships. We are not attorneys and do not render legal advice. Please contact your company’s legal counsel if you need legal advice on any issue. If you do not have an attorney with employment and/or labor relations experience, we would be happy to provide you with referrals.


IN THIS MONTH 03.2010

CALIFORNIA’S “KIN CARE” STATUTE APPLIES ONLY TO MEASURABLE, BANKED-TIME SICK LEAVE POLICIES pg. 6

>FEATURES

8 Harassment Settlement: Big Lots To Pay $400,000 For Race Harassment

2 Call To Action - Proposal Makes

Businesses Tax Collectors And Forces Small Biz To Make Interest-Free Loans To State

3 Itemize Or Be Penalized 3 Important Message From Ed Fairhurst SDEA President

7 New Age-Discrimination Rule Proposed By EEOC

9 What Are Hours Worked In California? 9 SDEA’s Group Purchasing Organization >DEPARTMENTS 5 SDEA Training 8 HR Strange But True

www.sdea.com • 888.625.7332 • San Diego Employers Association 1


>CALL TO ACTION - PROPOSAL MAKES BUSINESSES TAX COLLECTORS AND FORCES SMALL BIZ TO MAKE INTEREST-FREE LOANS TO STATE By: Debra Rosen The San Diego North Chamber of Commerce

California continues to have a severe budget crisis - $20 billion in the hole. Unfortunately, one of the solutions being proposed in Sacramento is yet another budget gimmick - an onerous 3% independent contractor withholding mandate on businesses and public agencies. Any business/agency hiring an independent contractor (anyone who receives a 1099MISC) will have to be reduce every payment by 3%, and is responsible for remitting that money to the Franchise Tax Board, the state tax collection agency. • Almost all companies, agencies and nonprofits of any kind will have to withhold. • Almost anyone who receives a 1099-MISC will be withheld upon, including builders, plumbers, real estate agents, attorneys and health care providers.

Under This Proposal: • The 3% will be withheld even if the business owes no income taxes for the year due to losses/slim profit margins.

Call to Action 1. Add your business’s name to the growing coalition against this proposal! To be added, simply e-mail laurie.lively@calchamber.com. Your business’s name will be added to the coalition fact sheet.

2. Write or call your legislators in the Assembly and Senate. • The state gets to use the money-interest free until tax return Visit CalChamber’s grassroots page to view a sample letter and/or look up your legislators’ phone numbers. time the next year. • Money is taken out of the pockets of businesses that is needed 3. Spread the word. to keep business afloat, make payroll and pay bills. Forward this article to other businesses that should be concerned. • Implementation will be extremely costly and complex for businesses and state and local government agencies. • The mandate is ongoing and  permanent for businesses/ agencies. All for a one-time money grab that is merely an acceleration borrowing that generates very few new revenues for the state!

San Diego Employers Association is on Get exclusive savings on upcoming events stay & connected with the San Diego Employers Association. Follow us at: www.twitter.com/SDEA_HR_Experts

2 San Diego Employers Association • 888.625.7332 • www.sdea.com


>ITEMIZE OR BE PENALIZED >IMPORTANT MESSAGE By: Jennifer Jacobus, PHR-CA FROM ED FAIRHURST Section 226 of the California Labor Code requires employers SDEA PRESIDENT to furnish their employees with an itemized statement, each pay period, that outlines the hours worked, wages paid, deductions, Dear Members, etc. This statement must be provided regardless of whether Recently you received a letter from me introducing wages are paid by check or cash. your organization to the new SDEA “GPO” Group Purchasing Organization. We started with great The required information may be a detachable part of the discounts offered by Fed-Ex. Going forward you will be employee’s check, draft, or voucher or may be a separate introduced to a wide range of products and services to statement. Specifically, the statement must include the assist in your profitability. One of the ways we will be introducing these measures is by e-mail blasts. We following: all have busy lives and to get through our days we sometimes delete and move on. There are at least 3 Gross wages earned, total hours worked (except exempt reasons to take the time and read these e-mails: employees), the number of piece rate units earned and any applicable piece rate if the employee is paid on a piece- • They give you the opportunity to save significant monies on products critical to the daily business rate basis, all deductions, net wages earned, the inclusive environment. dated of the period for which the employee is being paid, the • The savings will dwarf the annual cost of your employee’s name a social security number (last 4 digits only), SDEA membership. the name and address of the legal entity of the employer, and • Taking advantage of these offers gives SDEA the all applicable hourly rates in effect during the pay period and opportunity to reinvest in itself, improving the quality of our product for you. corresponding number of hours worked at each hourly rate. The Division of Labor Standards Enforcement has opinioned that an employer can satisfy the requirements of Labor Code Section 226(a) by allowing for electronic itemized statements, provided each employee retains the right to receive a written paper stub or record and that those who are provided with electronic wage statement retain the ability to easily access the information and convert the electronic statement into hard copies without charge.

There is no limit to the Value & Financial Success we can achieve utilizing our combined purchasing power. It starts with your participation. I urge you to talk to our new partners. Allow representatives from First National Merchant Solutions to come to your place of business and make comparisons. Consider it an annual business health checkup. Then you can make a prudent business decision as to whether or not change makes sense to your business.

I will continue to roll out to you new opportunities. These records must be made available to the current or former Please take the time to take advantage of the savings. employee to whom they pertain either for inspection or copying Thanks again, upon reasonable request. Ed Fairhurst, President If an employer knowingly and intentionally fails to comply San Diego Employers Association with the requirements identified above, it may be liable to the employee for a penalty. The amount of the penalty will equal the greater of the employee’s actual damages of $50 for the initial San Diego Employers Association pay period in which a violation occurs and $100 per employee is on for each violation in a subsequent pay period. The aggregate Get exclusive savings on upcoming penalty may not exceed $4,000. Additional penalties are events stay & connected with the available under Labor Code Section 226.3, authorizing a civil San Diego Employers Association. penalty of $250 per employee in an initial citation for each Visit: www.sdea.com violation for which the employer fails to provide the employee to join our group today! the necessary wage deduction statement or fails to keep the required records identified above. www.sdea.com • 888.625.7332 • San Diego Employers Association 3


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4 San Diego Employers Association • 888.625.7332 • www.sdea.com


Training March 2010 Course Prices SDEA Members: Half Day $70.00 Full Day $130.00 Non Members: Half Day $120.00 Full Day $200.00 Webinars: Members $65.00 Non $115.00 Breakfast Brief FREE for Everyone. HR Roundtables: Members $40.00 Non $55.00

March 1st Compensation Basics 9am - 4pm

This full day course will provide you with an overview of compensation and the role that compensation has to organizations today. Topics will include the “total rewards” approach; regulatory environment; job evaluation and analysis; relating job performance to compensation; wages and incentive plans; utilization of wage and salary surveys; and other non-financial compensation issues. This course is intended for those new to compensation and human resource professionals or managers/supervisors that want to learn more about compensation.

March 4th Documentation & Termination 9am - 4pm

This course will cover the documentation process and the importance of good documentation. We all know we need to document, but are you aware that good documentation may prevent lawsuits while bad documentation may cause lawsuits? Participants in this course will get practical experience writing warnings and creating documentation that will protect both them and their organization’s best interests. You also will be provided with effective methods of applying discipline and the keys for handling terminations, whether due to a reduction in workforce, disciplinary action or any other reason.

March 9th Dealing With Unacceptable Behaviors in the Workplace 9am - 4pm

Do you sometimes have trouble dealing with behaviors you consider rude or unacceptable in your employees? Learn how to identify toxic behaviors and diffuse them before they get out of hand. The practical management methods taught in this workshop will help you restore workforce morale, avoid future disciplinary action and increase productivity levels. Don’t let the personal problems of a few damage the sense of well being your workforce deserves.

March 10th Managing Chaos 9am - 12pm

Do you always feel behind in your job? Do you feel there is no way you are ever going to “catch up”? In this session you will learn time saving habits to move you through a never-ending workload and make you more effective and successful on your job. You will learn techniques that research has shown can save you one to two hours a day!

March 16th SDEA’s Breakfast Brief 7:30am - 9am Sign onto our website for description. March 17th Wage & Hour Basics 9am - 12pm

Do you find yourself easily lost in the maze of calculations when it comes to overtime, alternative workweeks, make up time, travel time and regular rate? Do you get dizzy when trying to remember if reporting time pay and call-in pay are the same or just similar? If you find yourself answering yes to either or both of these questions, this course is for you. Come learn about how to appropriately calculate hours worked, what hours are not considered “worked”, and how to feel confident that you are paying your people according to the requirements of the CA labor code.

March 18th Newly Appointed Supervisor 9am - 4pm

This program will provide participants with the leadership tools they will need to grasp the full range of their responsibilities, inspire others, and achieve results as newly appointed supervisors. This workshop focuses on the communication, motivation and problem solving skills necessary for supervisory success and the practical tools needed to build positive working relationships. This is a “must have” experience for all new supervisors.

March 19th HR Roundtable 11:30am - 1:30pm

Top 10 Handbook Mistakes Presented by SDEA’s Jennifer Jacobus, PHR, CA

March 23rd Worker’s Compensation 9am - 12pm

This presentation is made by attorneys from the Top Worker’s Compensation Defense firm in Southern California, Trovillion, Inveiss, & Demakis. Discussion will focus on the major components of SB899 and their practical effect on worker’s compensation practices; as well as employer costs including but not limited to a discussion of the Medical Provider Networks, apportionment and permanent disability.

March 24th Harassment Prevention Training WEBINAR 9am - 11:30am

SDEA provides a course that meets all the requirements for the training mandated by the State of California under AB 1825. This public course is perfect for your managers and supervisors who were absent the date of your in-house program, and also for newly hired or promoted supervisors who need the training within 6 months of their start date as a supervisor. Our training is highly interactive and makes a sensitive subject easy to absorb and understand. Participants receive an Acknowledgement Form certifying the training has been completed, which we recommend you keep in their personnel files for auditing purposes.

March 25th Skills For Working Leaders II 9am - 4pm

This unique program was developed in response to numerous inquiries from members and specifically designed by surveying the needs of over 100 experienced leads from many different companies. It is designed to help leads and supervisors maintain a productive work environment, improve motivation and morale and provide new tools for managing workers. Powerful techniques are taught that help attendees improve their relationships, move toward their goals, and be more successful at work. This workshop stands alone, or builds nicely on Skills For Working Leaders 1.

March 30th HARRY THE FISH GUY 11:00am - 1:30pm - See ad on previous page. NOTICE: Please register at least 3 days prior to your course in order for us to properly accommodate all registrants. This schedule is subject to change, please confirm your course online prior to attending. SDEA Cancellation Policy Public Workshops: All reservation cancellations must be received five working days prior to the first day of class to receive a full credit. Cancellations made after the five day advance notice will be subject to a fifty percent (50%) credit. There will be no creditswww.sdea.com or refunds on cancellations made within 48 business • hours of theDiego program.Employers Association 5 • 888.625.7332 San


>CALIFORNIA’S “KIN CARE” STATUTE APPLIES ONLY TO MEASURABLE, BANKED-TIME SICK LEAVE POLICIES By: Paul, Plevin, Sullivan & Connaughton

In its first decision interpreting California’s “kin care” statute, the California Supreme Court ruled yesterday that employers may prohibit employees from using uncapped sick leave to care for family members.  In McCarther v. Pacific Telesis Group, the Court held that Labor Code section 233 applies only to paid sick leave policies that provide a measurable, banked amount of compensated sick time. In McCarther, employees were entitled to sick pay under a collective bargaining agreement if they missed work for up to five consecutive days in any seven-day period due to their own illness.  Any new period of absence for an employee’s illness could trigger additional payments under the sick pay policy.  The policy did not provide for a bank of paid sick days that incrementally accrued over a period of time, nor did it include an overall cap on the number of sick days an employee could receive.  The only limit on paid sick time was the employer’s attendance management policy, which provided discipline for excessive absenteeism.

The Court’s decision effectively creates a two-part test to determine whether an employer’s sick leave policy is covered by the kin care statute.  First, the policy must provide paid sick time that accrues or accumulates in increments over a period of time.  Second, the paid sick time must be measurable in relation to the amount of sick time that is accrued in any sixmonth period.  The “measurability” prong of the test is crucial because it puts employers and employees on notice as to the When the employer refused to provide leave under the policy minimum amount of kin care leave each calendar year to to care for sick family members, employees filed a lawsuit, which an employee is entitled. claiming the refusal violated Labor Code section 233, commonly referred to as California’s “kin care” statute.  The statute requires employers that provide paid sick leave to permit What This Means employees to use at least one-half of their annual accrued The overall impact of this case is likely limited because most sick time to care for a sick child, parent, spouse or domestic California employers provide sick time on a measurable, partner.  The trial court dismissed the action, finding the kin accrual basis.  This decision confirms that the kin care statute care statute did not apply because the employer’s sick leave applies to all such banked-time sick leave policies.  However, policy did not provide a bank of sick days that accrued over where employers provide uncapped sick time, this decision gives time.  The California Supreme Court accepted the case after employers the flexibility to prohibit or strictly limit employee use the Court of Appeal reversed the trial court’s decision. of sick leave to care for family members. The Supreme Court refused to apply the kin care statute This article was authored by Brenda Kasper and Lisa Frank.  to the employer’s sick time policy, holding that the reach For more information, please contact Ms. Kasper, Ms. Frank of the statute is limited to sick leave policies that provide a or any other Paul, Plevin attorney by calling (619) 237-5200. measurable, banked amount of sick time.   The employer’s policy did not meet this standard because sick time did not San Diego Employers Association accrue in increments over a period of time, and the employees’ is on maximum entitlement to sick leave was not limited.  The Court Get exclusive savings on upcoming found that the unlimited nature of the employer’s sick leave policy made it impossible to measure the maximum amount of events & stay connected with the sick time an employee would be entitled to receive under the San Diego Employers Association. kin care statute.

Visit: www.facebook.com/sdeaHRexperts to become a fan today!

6 San Diego Employers Association • 888.625.7332 • www.sdea.com


>NEW AGE-DISCRIMINATION RULE PROPOSED BY EEOC Compliments of BLR The U.S. Equal Employment Opportunity Commission (EEOC) has published a proposed rule addressing the “reasonable factors other than age” (RFOA) defense under the Age Discrimination in Employment Act (ADEA). The agency is soliciting comments from the public by Monday, April 19, 2010. The proposed rule follows a March 31, 2008, Notice of Proposed Rulemaking (NPRM) on disparate impact under the ADEA. In addition to requesting comments on its substance, the prior NPRM asked whether the EEOC should provide more information on the meaning of the RFOA defense. Most commenters supported addressing the issue and, accordingly, the EEOC is publishing a new NPRM on RFOA. The NPRM has been coordinated with other federal agencies and reviewed by the Office of Management and Budget. The proposed rule explains that the RFOA defense applies only if the challenged practice is not based on age and that a neutral practice that disproportionately affects older workers • Whether other options were available and the reasons can be justified only by showing that the practice is objectively the employer selected the option it did. reasonable when viewed from the perspective of a reasonable employer under like circumstances. The proposed rule sets Under the proposed regulation, the factors relevant to forth non-exhaustive lists of factors relevant to determining determining whether a factor is “other than age” include, but whether a factor is “reasonable” and “other than age.” are not limited to, the following: Under the proposal, factors relevant to determining whether an employment practice is reasonable include but are not limited to, the following: •

Whether the employment practice and the manner of its implementation are common business practices;

The extent to which the factor is related to the employer’s stated business goal;

The extent to which the employer gave supervisors unchecked discretion to assess employees subjectively;

The extent to which supervisors were asked to evaluate employees based on factors known to be subject to age-based stereotypes; and

The extent to which supervisors were given guidance or training about how to apply the factors and avoid discrimination.

The extent to which the employer took steps to define the factor accurately and to apply the factor fairly and The EEOC will consider the public comments received and accurately (e.g., training, guidance, instruction of will make appropriate changes based on those comments. A managers); proposed final rule covering this and the March 2008 proposed rules will then be coordinated with other federal agencies and • The extent to which the employer took steps to assess reviewed by the Office of Management and Budget before the adverse impact of its employment practice on older becoming effective. workers; •

• Text of Proposed Rule: Definition of The severity of the harm to individuals within the “Reasonable Factors Other Than Age” Under protected age group, in terms of both the degree of the Age Discrimination in Employment Act. injury and the numbers of persons adversely affected, http://edocket.access.gpo.gov/2010/2010-3126. and the extent to which the employer took preventive htm or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and www.sdea.com • 888.625.7332 • San Diego Employers Association 7


>HARASSMENT >HR STRANGE BUT TRUE! SETTLEMENT: BIG LOTS EMPLOYEE MORALE TO PAY $400,000 FOR BOOSTERS GONE BAD RACE HARASSMENT Compliments of BLR By: Jessica Zaldivar, PHR In Los Angeles on February 16th the U.S Equal Employment Opportunity Commission (EEOC) announced the settlement of its race harassment and discrimination lawsuit against Big Lots, Inc., the nation’s largest broadline closeout retailer. The settlement includes total monetary relief of $400,000 to at least five employees and Big lots also agreed to a two-year consent decree that calls for the implantation of a new policy, training, procedures and court monitoring to address harassment and discrimination in the workplace. The EEOC alleged that Big Lots violated Title VII of the Civil Rights Act of 1964 when it subjected a black maintenance mechanic and other black employees to race harassment and discrimination at its Rancho Cucamonga, Calif., distribution center. The EEOC specifically alleged that an immediate supervisor and co-workers, all Hispanic, made racially derogatory jokes, comments, slurs and epithets, including the use to the words “n----r” and “monkey”. The company was made aware of the harassing behavior and did not take steps to address or correct the behavior. The EEOC District Director, Olophius Perry stated “The EEOC is pleased that Big Lots voluntarily entered into a settlement that includes injunctive relief designed to ensure that its black employees are not subjected to harassment or discrimination.” The regional attorney of the EEOC’s Los Angles District Office indicated that the “EEOC will continue to take all steps necessary to ensure that employees at all workplaces are respected and free from harassment, discrimination and retaliation.” This settlement is another reminder to employers to ensure that you address any concerns or complaints that are brought forward in a timely manner and they are addressed appropriately. As an employer you should ensure that the appropriate individuals attend harassment training. If you are an employer of 50 or more employees you are required to follow AB1825 which entails sending all members of management to harassment training. If you have less than 50 employees it is a good practice to send your members of management or leaders of the organization to harassment training so they are able to recognize inappropriate behavior and address it appropriately by following the organizations harassment policy. If you would like more information regarding harassment training please visit our website www.sdea.com and go to our training section or call 858-679-7332. For further information regarding the EEOC please go to www.eeoc.gov.

While employers may have good intentions at healing wounded morale in their workplaces, abc.news.com’s Michelle Goodman reports she’s been hearing some horror stories about “morale events gone bad.” Like your SBT editors, Goodman receives several press releases a week reporting on boosting employees’ spirits and productivity, but lately, she is hearing about events that are more “mangled” than incentivizing. So she asked her readers to send her their most laughable tales: •

Asked employees to shave their heads if they met a goal

Dressed up in bunny suits and served breakfast to employees

Announced at an event “we are here to work, not have fun”

Asked everyone at the event to describe what they didn’t like about the person in the next seat--resulting in 2 hours of yelling

Told employees they would get a home-cooked gourmet dinner if they met a goal--then retired before the date the meal was scheduled

Announced company will give a rose in a vase to each customer service rep who received a complimentary letter from a customer--then going to a dollar store and buying vases that look like urinals

Awarded employees an unexpected cash bonus, then reconsidered and told the employees that they would take half of the bonus back by deducting money from their next few paychecks

Gave the company’s “Award of Excellence” at event to an employee who was just laid off! 8 San Diego Employers Association • 888.625.7332 • www.sdea.com •


WHAT ARE “HOURS WORKED” IN CALIFORNIA? By Mike Daly, Daly Law Firm California wage and hour law mandates that employers must pay their employees for “hours worked.” Under California law, “hours worked” is defined as the time during which an employee is subject to an employer’s control, and includes all the time the employee is permitted to work, whether or not required to do so. However, the State’s broad definition of this term makes the task of determining what constitutes compensable work time a somewhat confusing process. In large part, compensable “hours worked” depends on the degree of control which employers exercise over their employees’ otherwise free time. Unless an employee is deemed “exempt” from minimum wage and overtime laws, he or she may be due compensation for time spent commuting, traveling, being on call or performing incidental work while technically off the clock.

may have to pay employees for incidental work performed The effect which employer control has on whether an employee outside of the workday. must be compensated for commute time is illustrated in the following California decisions. In one case, the Court held Under state wage and hour law, time spent traveling during that employees must be paid for commute time when their a shift is work time for which a non-exempt employee must employers required workers to take employer-supplied be compensated. Travel between work sites during the day transportation to a work site. Morillion v. Royal Packing Co., is considered “hours worked.” Employers may reduce wage 22 Cal. 4th 575, 588 (2000). However, in another California rates for travel time; however, employers should also be aware appellate decision, the Court ruled that employees are not that employees may be entitled to overtime compensation for entitled to compensation when the employer simply offered overnight travel. optional transportation. Overton v. Walt Disney Co., 136 Cal. App. 4th 263, 268 (2006). The distinguishing factor between these decisions was the amount of control which the employers SDEA Group Purchasing Organization exercised over their employees’ commute time. Using our Collective Purchasing Power to Save our Members Money

Similarly, the restrictions which employers place on an employee who is “on call” will affect whether or not that employee must be compensated for the on call time. When an employee is “on call,” he or she is able to exercise free time, but must be prepared to respond to work related issues. Employers may set conditions on response times or place geographical and other constraints on employees while they are on call. However, the more the employer’s requirements impede/limit the employees’ ability to enjoy their otherwise free time, the more likely the “on call” time will amount to “hours worked.”

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Another gray area occurs when employees perform workrelated duties before or after the official workday. The Ninth Circuit has recently held that if the work performed outside of the workday is related to the employee’s “principal” work Save on your Debit Card and Credit Card Processing Rates activities and is not “de minimus,” then it constitutes “hours with First National Merchant Solutions. SDEA Members reworked.” In the Rutti decision, the small amount of time which ceive discounted rates (not available to the general public.) a service technician spent completing paperwork before the Call 800-354-3988 for a Free Price Comparison to learn how much you will save or visit www.1800members.com/sdea for start of a shift was deemed “de minimus;” whereas the time more information. To schedule an appointment with a San Diego reprehe spent uploading data at the end of the day was ruled sentative call Nick @ 619-808-5090 email: ntoledo@fnni.com or call Steve compensable because it was considered a principal work at 619-218-1788 email: sthury@fnni.com. activity which could take several minutes. The Court failed to establish a bright line rule for what constitutes “de minimus;” however, the decision gives employers an idea of when they www.sdea.com • 888.625.7332 • San Diego Employers Association 9


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