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New laws to know in the new year

Posted: December 18, 2008 7:10 p.m.
Updated: December 19, 2008 4:55 a.m.
It's the most wonderful time of the year! Chestnuts roasting, cooler weather, holiday decorations, long lines in retail stores and ... a bevy of new laws passed by the legislature for California employers.

The California legislature passed a number of bills in 2008 that become effective on or before Jan. 1, 2009. Many of these new laws apply specifically to employment, while others have less obvious (but just as relevant) applications to business. The following is a brief summary of the highlights from the 2008 legislative term.

Wage claim releases
Effective Jan. 1, businesses that require employees to certify hours worked as a condition of receiving their paychecks will now be required to ensure the employee's reported hours are accurate and that the employee has had an opportunity to correct any misstatements on the timesheet prior to signing.

The new law modifies the current California statute prohibiting an employee's release of a claim for wages unless full payment of those wages is made. If the employer knows, or has reason to know that an employee is executing a false statement regarding wages, significant liability may attach, and the employer could be held responsible for monetary damages, statutory penalties, interest on the unpaid wages, waiting time penalties (if wages are unpaid at the time of termination) and the employee's attorneys' fees. (A.B. 2075, modifying Cal. Labor Code Section 206.5)

Computer workers
Prior to 2008, in order for employees in the computer software field to be exempt from overtime, employers would have to pay them $49.77 per hour for an annualized salary in excess of $103,000. In response to an outcry by a number of large Silicon Valley businesses (among others), the legislature lowered the minimum salary requirement for these professionals in September to an annualized salary of $75,000, or a monthly salary of $6,250.

The state Department of Industrial Relations apparently felt this rate was too low and adjusted the minimum salary requirement to $6,587 per month, or $79,050 per year, effective Jan. 1, 2009.

This shift from an hourly wage breakdown to a "monthly rate" allows employers to more easily determine whether the software employee is exempt or non-exempt. Employers should still use caution when classifying software professionals as exempt, because the minimum salary test can fluctuate based upon the Consumer Price Index (as opposed to being linked to the state minimum wage for other exemptions).

Therefore, an employee who meets the minimum salary test today may not maintain the exemption if the minimum salary requirement increases. (A.B. 10)

Text messaging
In addition to the hands-free requirement for cell phone use in a car implemented on July 1, the legislature is now banning text messaging, e-mails and instant messages while operating a motor vehicle.

It seems logical. If you can't talk on the phone and drive safely, why would you be able to text and drive safely?

Employers may be exposed to liability if an employee is involved in a collision while operating a vehicle in the course and scope of his/her employment. Therefore, employers should implement a policy in their employee handbooks banning employees from text-messaging while operating a motor vehicle when "on the clock." (S.B. 28).

Meal and rest periods
The state of the law is still a bit unclear on whether California employers must "ensure" or merely "provide an opportunity" for employees to take their prescribed meal and rest periods throughout the workday.

Two appellate courts have ruled the breaks must only be provided, and the Labor Commissioner has modified its policies to reflect these two court decisions; however, the state Supreme Court recently decided to take the matter up and provide its input on the issue.

Employers should remain wary of this situation and continue to take affirmative steps to ensure employees are taking their breaks as required by law (Brinker Restaurant Corp. v. Superior Court (Hohnbaum) and Brinkley v. Public Storage Inc.).

Mileage rates
Although not a new law from the California legislature, effective Jan. 1, 2009, the IRS's approved reimbursement rate for business use of a personal vehicle will be reduced to 55 cents per mile.

From July 1 through Dec. 31, 2008, the reimbursement rate was 58.5 cents per mile. Additionally, the IRS announced the new rates of 24 cents per mile for moving and medical expenses and 14 cents per mile for service to charitable organizations.

Businesses are strongly recommended to comply with the IRS-approved rates for reimbursement. If other arrangements are made for travel reimbursements, they should be discussed with competent legal counsel first to ensure compliance with recent California case law.

Job killers
In addition to the new laws passed by the legislature that were approved by the governor in 2008, there were at least nine other bills that passed both houses, which were ultimately vetoed. Among the vetoed bills identified as "Job Killers" by the state Chamber of Commerce were: 1. a bill that would have extended the time period in which an employee could file an employment discrimination case (A.B. 437); 2. a bill that would have required employers to accommodate employees who used medical marijuana or face disability discrimination lawsuits (A.B. 2279); and 3. a bill that would have eliminated the cap on damages for certain employment claims (A.B. 2874).

As we venture into a new year, there are a number of new regulations and requirements that will put additional burdens on California employers. There may be no better time to meet with your employment attorney, since failure to comply with these laws can result in significant liability and expensive and time-consuming litigation. For those employers "ahead of the curve" who comply with these new laws before problems arise, it certainly is the most wonderful time of the year.

Brian E. Koegle is an attorney with Poole & Shaffery, LLP, a full-service business, corporate and employment law firm. "It's The Law" appears Fridays and rotates between members of the Santa Clarita Valley Bar Association. His column reflects his own views and not necessarily those of The Signal.


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