Blog
The information provided in this blog is intended for general information purposes only. Readers should seek the help of an HR professional for guidance on specific issues.
New Court Ruling: Contractor vs. Employee Definitions
Earlier this year, the California Supreme Court clarified rules around who is a contractor and who an employee. The good news is that the court did in fact make the situation clearer. The bad news is that for some who were operating in the grey areas of the old rules, that territory shrunk substantially and they will want to review their classifications.
The ruling found that workers are assumed to be employees unless three factors can be proven …
The “ABC Test” permits workers to be classified as independent contractors only if the hiring organization demonstrates that the worker in question satisfies all three of the following conditions:
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- (A) That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact;
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- (B) That the worker performs work that is outside the usual course of the hiring entity’s business; and,
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- (C) That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
For most businesses, this is simply a clarification that narrows the grey area. Just make sure you’re still classifying your workers correctly. However, for some, such as Beauty Shops and Salons, it could present a major departure from being in the business of renting space to contractors to becoming the employer of those workers.
For assistance in figuring this out, call Sequoia Personnel Services at (707) 445-9641.
What is Co-Employment?
What is Co-Employment?
Co-Employment is simply dividing up responsibility between the onsite employer and a professional employment services provider like Sequoia Personnel. As your “co-employer,” we pay the employee taxes and process employee paychecks which include tracking PTO, sick leave, and other information to keep you compliant with labor regulations.
But if I co-employ with you, am I still the boss? Am I still the one making decisions about my employees?
According to employment law, when you co-employ with a professional employer service provider like Sequoia Personnel, we then become the “employer of record.” But you are in charge of your operations and your business, and for supervising the employee. You are still the boss making the final call. While you will still make decisions around hiring, performance, and firing, you will have Sequoia Personnel’s help on the HR side. This may include help with recruiting and screening employees, dealing with discipline issues, and developing and implementing workplace policies.
Do I pay any additional taxes because I co-employ with Sequoia Personnel?
No, but with one important caveat. A recent study has shown that employers who co-employ with a service like Sequoia Personnel grow 7-9% faster. This faster growth is achieved by being able to focus on your core competencies while outsourcing the rest of those time-consuming, labor-intensive HR services. This growth often leads to more revenue, which leads to more taxes! So there could be more taxes… and that might be a good thing!
Can I co-employ and still have my own group health insurance plan?
Yes, both federal and state law allows you, as the employer, to choose which benefits you offer to your employees. One of the advantages of Co-Employment with a professional provider is that you will have access to an expanded marketplace – an option to select from a wider array of employee benefits at prices that are often only available to large employers. This allows you to compete for the best talent when recruiting new employees.
Learn more about Co-Employment!
New Ruling Affects Overtime/Bonus Rules
Earlier this month, the California Supreme Court today issued a ruling that affects employers who pay employees a flat rate bonus and overtime. The court ruled that when calculating overtime in pay periods in which an employee earns a flat rate bonus, employers must divide the total compensation earned in a pay period by only the non-overtime hours worked by an employee.
All California employers who pay such bonuses should review their policies and pay practices to ensure compliance with this decision (Alvarado v. Dart Container Corporation of California). For assistance in figuring this out, call Sequoia Personnel Services at (707) 445-9641.
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Top 5 New California HR Laws for 2018
The new year is when the largest number of new state personnel regulations take effect. This year, there are many new regulations. The most widely applicable, as we see it, are these three:
1. “Ban the Box” (AB 1008)
What it does: Employers with 5 or more employees cannot inquire about criminal history before an offer of conditional employment is made. They can run criminal background checks after the offer and prior to first day of employment. However, deciding not to hire based on a criminal conviction needs to be directly job-related, and communicated in writing with the applicant given a chance to respond.
2. Parental Leave (SB 63)
What it does, in brief: Employers with 20 to 49 employees must provide eligible employees with up to 12 weeks of job-protected, unpaid leave to bond with a new child. This includes children by birth, adoption or foster care. You can think of this as extending CFRA (the California Family Rights Act) to employers with as few as 20 employees.
3. Salary History (AB 168)
What it does, in brief: Employers can’t ask about salary history. If an applicant volunteers salary information, the employer may take that into consideration when deciding whether to hire the person and how much to pay them.
It remains o.k. to ask what salary they seek.
4. Immigration Protections (AB 450)
What it does, in brief: Employers cannot provide access to employee records without a subpoena or warrant. This also goes for allowing federal immigration agents access to areas of a business that are not public. There are also procedures specified when it comes to notifying employees of federal inspections of employment records, such as I-9 forms.
5. Minimum Wage
Just a reminder that as of 1/1/18, the minimum wage for employers with 25 or fewer employees increases to $10.50 per hour, while the minimum wage for employers with over 25 employees increases to $11.00 per hour.
Confused? Want to get out of the labor regulation business and back to your real work? Call Sequoia…we have solutions!
California’s minimum wage is increasing!
Effective January 1, 2018, the overtime rate for minimum wage employees is:
- Employers with 26 or more employees: $11.00 per hour
- Employers with 25 or fewer employees: $10.50 per hour
The minimum wage rate change also affects the classification of employees as exempt versus nonexempt. For an employee to qualify under the commonly used administrative, executive or professional exemptions from overtime, the employee must meet the salary-basis test (which means the employee’s salary must be no less than two times the state minimum wage for full-time employment) in addition to meeting all other legal requirements for the exemption. That minimum salary rate is $45,760 annually, effective January 1, 2018, for employers with 26 or more employees. For employers with 25 or fewer employees, the minimum salary threshold for the administrative, executive and professional exemptions is $43,680 for 2018.
Confused? Want to get out of the labor regulation business and back to your real work? Call Sequoia … we have solutions!
Ask HR: Implementing Dress Code.
Dear HR:
Summer is here – I’m wondering about implementing a company dress code. Some of my female employees show up in flip flops, tops with spaghetti straps and low cut shirts. A few male employees come in wearing casual shorts and sandals with socks. (Yes, sandals with socks!) May I require my employees to present/dress themselves in a professional manner, since we all interact with the public?
HR Answer:
As an employer, you may determine your organization’s dress code. Just make sure that you apply it in a non-discriminatory manner; and there is a bona-fide business reason—such as conducting business in the public eye; or you need a dress code for safety concerns. Keep in mind; you may need to make an exception when reasonable, to accommodate an individual’s sincerely held religious belief or medical issue (shorts when leg is in a cast).
You are correct in being concerned: the impression your employee’s give your customers is the lasting impression your customers have of your organization! Let us know if you need assistance establishing and enforcing your new dress code policy.
7/01/2017: New California Labor Regulation
New California Labor Regulation
July 1st often represents a busy date for new labor/human resource regulations in California. This year, however, there appears to be only one which is widely applicable.
