Below is a brief summary of some of the more relevant employment laws taking effect in 2008 and a summary of the Supreme Court cases that will have great ramifications for employers in 2008.
Minimum Wage Increase
As written about previously here
, the California minimum wage will be increased to $8 per hour starting January 1, 2008. Employers will also have to re-examine the pay rates for their exempt employees. One of the items California law requires for an employee to qualify as exempt (which means they are not entitled to overtime) the employee must earn at least two times minimum wage, base on a forty hour workweek. Therefore, the increase in the minimum wage means that the minimum salary for exempt employees will increase from to $31,200 in 2007 to $33,280 as of January 1, 2008.
In addition, employers should also review their pay rates for commissioned inside sales employees. For an employee to qualify as a commissioned inside sales employees who are exempt from overtime under Wage Order Nos. 4 and 7, the employee must earn at least 1.5 times the minimum wage for all hours of work to maintain the exemption. The employee must meet other requirements to qualify for this exemption, but the salary level is a bright-line rule that must be met in order for the exemption to apply.
IRS Mileage Rate Increase and Expense Reimbursement
The IRS announced the standard business mileage rate for 2008 is 50.5 cents per mile. California's DLSE has maintained that employers are required to reimburse employees for business miles driven at the IRS mileage rate in order to comply with California Labor Code section 2802
. However, this year, the California Supreme Court ruled in Gattuso v. Harte-Hanks (as discussed here
) that the reimbursement rate does not have to be the IRS mileage rate but can be negotiated by parties as long as it fully reimburses the employee. The Gattuso Court stated:
We agree that, as with other terms and conditions of employment, a mileage rate for automobile expense reimbursement may be a subject of negotiation and agreement between employer and employee. Under section 2804, however, any agreement made by the employee is null and void insofar as it waives the employee’s rights to full expense reimbursement under section 2802.
California Computer Professionals Hourly Rate Decreased
California Labor Code section 515.5 provides that computer programmers who perform specific computer-related duties are exempt from the overtime requirements in Labor Code section 510. In addition to meeting a duties test, computer professionals must earn a statutorily specified minimum pay rate to be considered exempt. The Division of Labor Statistics and Research revised the hourly rate downward for 2008 to $36.00 per hour or $74,880.00 per year.
Employee Social Security Numbers
California Labor Code section 226(a) was amended to provide greater security against identify theft. Beginning January 1, 2008, employers may ONLY list the employee’s last four digits of an employee’s Social Security Number (or alternatively use the employee’s identification number) on the wage statements provided to employees.
Unpaid Leave for Military Spouses
Governor Schwarzenegger signed California Assembly Bill (AB) 392 into law. The bill creates a new leave of absence right for spouses of military personnel while those personnel are on a leave of absence from deployment.
Specifically, the military spouse law provides that:
- Employers with 25 or more employees in the United States to allow eligible employees to take up to 10-days off from work, on an unpaid basis, when his/her spouse is on leave from deployment during a period of military conflict;
- Eligible employees are defined as employees who work at least an average of 20 hours per week and whose spouse is a member of the United States Armed Forces, National Guard, or Army Reserve on active duty in an area of military conflict;
- Employees must provide notice to the employer within 2 business days of receiving official notice that his/her spouse will be on a leave from deployment.
It is important to note that it does not appear there are any circumstances under which an employer would be permitted to deny an employee's leave request. Accordingly, employers should be extremely careful in dealing with requests for leave under this new law.
Hands Free Devices Required For Cell Phones While Driving
Bill SB 1613 makes it illegal as of July 1, 2008, to drive a motor vehicle while using a wireless telephone, unless that telephone is designed and configured to allow hands-free listening and talking operation, and is used in that manner while driving. This offense would be punishable by a base fine of $20 for a first offense and $50 for each subsequent offense.
Supreme Court Cases to Watch in 2008:
AMALGAMATED TRANSIT UNION v. S.C. (FIRST TRANSIT, INC.)
This case presents the following issues: (1) Does a worker's assignment to the worker's union of a cause of action for meal and rest period violations carry with it the worker's right to sue in a representative capacity under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, sec. 2698 et seq.) or the Unfair Competition Law (Bus. & Prof. Code, sec. 17200 et seq.)? (2) Does Business and Professions Code section 17203, as amended by Proposition 64, which provides that representative claims may be brought only if the injured claimant "complies with Section 382 of the Code of Civil Procedure," require that private representative claims meet the procedural requirements applicable to class action lawsuits?
EDWARDS v. ARTHUR ANDERSEN, LLP
This case presents the following issues: (1) Is a non-competition agreement between an employer and an employee that prohibits the employee from performing services for former clients invalid under Business and Professions Code section 16600, unless it falls within the statutory or judicially-created trade secrets exceptions to the statute? (2) Does a contract provision releasing "any and all" claims the employee might have against the employer encompass non-waivable statutory protections, such as the employee indemnity protection of Labor Code section 2802
HARRIS v. S.C. (LIBERTY MUTUAL INSURANCE)
Case Status: review granted/brief due Issues: Petition for review after the Court of Appeal granted and denied petitions for peremptory writ of mandate. This case presents the following issue: Do claims adjusters employed by insurance companies fall within the administrative exemption (Cal. Code Regs, tit. 8, section 11040) to the requirement that employees are entitled to overtime compensation?
JONES v. LODGE AT TORREY PINES PARTNERSHIP
Case Status: submitted/opinion due Issues: Petition for review after the Court of Appeal reversed a judgment notwithstanding the verdict and an order granting a new trial in a civil action.
The court limited review to the following issue: May an individual be held personally liable for retaliation under the California Fair Employment and Housing Act (Gov. Code section 12900 et seq.)?