On February 19, 2019, Illinois Democratic Governor, JB Pritzker, signed the Lifting Up Illinois Working Families Act (Public Act 101-0001) into law –making New Jersey the latest state to jump on the $15 per hour minimum wage bandwagon.
Under this new law, Illinois’ minimum wage will increase as follows:
- January 1, 2020 — increases to $9.25 per hour
- July 1, 2010 — increases to $10.00 per hour
- January 1, 2021 — increases to $11.00 per hour
- January 1, 2022 — increases to $12.00 per hour
- January 1, 2023 — increases to $13.00 per hour
- January 1, 2024 — increases to $14.00 per hour
- January 1, 2025 — increases to $15.00 per hour
The minimum wage rate for tipped employees will also increase as follows:
- January 1, 2020 — increases to $5.55 per hour
- July 1, 2020 — increases to $6.00 per hour
- January 1, 2021 — increases to $6.60 per hour
- January 1, 2022 — increases to $7.20 per hour
- January 1, 2023 — increases to $7.80 per hour
- January 1, 2024 — increases to $8.40 per hour
- January 1, 2025 — increases to $9.00 per hour
The new law, does, however, provide a small silver lining for small businesses. The law allows employers with 50 or fewer employees claim a tax credit on the difference between an employee’s wage in the prior year and the increased wage each January 1. That credit, is reduced by 4% each year until it is completely eliminated in 2026 for employers with six or more employees (2027 for employers with five employees or fewer).
It is recommended that all Illinois employers prepare for these increases.
The Fair Labor Standards Act (FLSA) outlines federal tip credit and tip pooling provisions.
What is tip credit and tip pooling under Federal Law?
- Under a valid tip credit policy, employers are able to pay tipped employees an hourly rate that is less than minimum wage – provided that the tipped employee’s hourly wage plus tips equals or exceeds the required minimum wage.
- A tip pooling agreement requires tipped employees to deposit a portion of their customer tips into a common “tip pool” to be shared with other employees. A valid Tip Pooling arrangement must meet all the requirements of the FLSA provisions (and any state requirements) for tipped employees.
Continue reading Federal Tip Credit and Tip Pooling Basics
Does your organization require employees to call-in before a scheduled shift to determine if an employee actually needs to report to work that day? If the answer is yes, then this new California Court of Appeals case imposes new reporting time pay requirements on your organization.
In a recent case (Ward v. Tilly’s Inc.), the California Court of Appeals has held that employers who require employees to call-in prior to a scheduled shift to determine whether the employee is needed that day, is required to pay the employee reporting time pay (at a minimum for 2 hours of work) even if the employee is told that he does not need to work that day.
This case arises from a scheduling policy of a retailer (Tilly’s). Under the policy, employees were required to call in approximately two hours before the start of a scheduled shift to determine whether they needed to come to work for that shift. If the employee was told to come into work, the employee was paid for his scheduled shift. However, if the employee was told not to come into work, the employee received no pay for the day. Continue reading NEW CASE: Major Changes to California’s Reporting Time Pay Requirements
On February 4, 2019, New Jersey Governor Phil Murphy signed A15 into law –making New Jersey the latest state to jump on the $15 per hour minimum wage bandwagon.
Under this new law, New Jersey’s minimum wage will increase as follows:
- July 1, 2019 — increases to $10.00 per hour
- January 1, 2020 — increases to $11.00 per hour
- January 1, 2021 — increases to $12.00 per hour
- January 1, 2022 — increases to $13.00 per hour
- January 1, 2023 — increases to $14.00 per hour
- January 1, 2024 — increases to $15.00 per hour
The minimum wage rate for tipped employees will also increase as follows:
- July 1, 2019 — increases to $2.63 per hour
- January 1, 2020 — increases to $3.13 per hour
- January 1, 2021 — increases to $4.13 per hour
- January 1, 2022 — increases to $5.13 per hour
- January 1, 2023 — increases to $5.13 per hour
- January 1, 2024 — increases to $5.13 per hour
It is recommended that all New Jersey employers prepare for these increases.
Philadelphia Mayor Jim Kenney recently signed the Fair Workweek Employment Standards Ordinance into law. The new law, which goes into effect on January 1, 2020, will impact employee scheduling if the employer:
- Is in the retail, hospitality, or food service industries;
- Has 250 or more employees (including full and part-time); and
- Has 30 or more locations worldwide in.
Employers must provide newly hired employees a “Good-faith” estimate of their work schedule which includes:
- The average number of work hours the employee can expect to work each week over a typical 90-day period.
- The expectation to work any on-call shifts,
- Days and times the employee can typically expect to work and when they can expect to be off work.
- A written work schedule through the end of the currently posted work period (provided before the first day of work).
Continue reading NEW LAW: Predictive Scheduling Coming to Philadelphia
In a recent case, (Hernandez v. Pacific Bell Telephone Company) the California Court of Appeal clarified a long-standing law that an employee’s voluntary use of a company vehicle during normal commute is not be considered as “hours worked” for purposes of compensation
The company has issued employees who performed home installations use company vehicles equipped with company tools that employees were required to use for installation jobs. Prior to 2009, these employees began and ended their work day in the company parking garage, where the employees picked up and returned their company vehicle on a daily basis. Employees were paid for the time spent travelling from the garage to their first job of the day and the time spent travelling back to the garage after their last job, but they were not paid for the time spent travelling between the garage and their residence.
In 2009, the company started a program where employees were able to voluntarily take the company vehicle home. This enabled employees who chose to participate in the program to drive from home to the first job of the day and, following the last job of the day, drive back to their residence – bypassing the company parking garage. Continue reading NEW CASE: Employee’s Voluntary Use Of Company Vehicle For Commuting Is Not Compensable
Good news for certain California trucking companies — California’s meal period and rest break requirements no longer apply to truck drivers who are regulated by the U.S. Department of Transportation’s hours-of-service requirements.
How did this happen?
To understand how this happened, we need to first give a brief history of this issue.
California’s meal period and rest period laws are quite onerous – especially for trucking companies. These laws require all California employers provide employees with a duty-free 30-minute meal period to begin before the employee completes five hours of work; employers must also provide paid 10-minute duty-free rest breaks for every four-hour work period or “major fraction thereof.” Among the problems that trucking companies have with complying with these requirements is actually proving compliance with the requirements. How does one prove that a driver actually took the rest and/or meal period? Continue reading NEW DEVELOPMENT: Certain Truck Drivers Exempted From California’s Rest and Meal Period Requirements
The US Department of Labor (DOL) recently issued an opinion letter that reminds employers how to properly calculate an employee’s regular rate of pay for purposes of overtime compensation.
In this letter, the DOL was responding to an inquiry about whether a company’s compensation plan, which pays an average hourly rate that may vary from workweek to workweek, complies with the Fair Labor Standards Act (FLSA). Specifically, to calculate weekly pay, the company was multiplying an employee’s time with clients by his or her hourly pay rate for such work. The employer then divided the product by the employee’s total hours worked. The company then explained that its “standard rate of pay” was $10 per hour and that it paid overtime based on the $10 per hour rate.
According to the DOL, while the employer’s plan likely complied with the FLSA’s minimum wage requirement (that an employee is paid at least minimum wage for every hour worked), it might not comply with the FLSA’s overtime requirement. Continue reading NEW GUIDANCE: DOL Reminds Employers How To Properly Calculate The Regular Rate Of Pay
A recent $5.4 million settlement of a California wage and hour class action (Marley Castro, et al. v. ABM Industries, Inc.) reminds employers of the far-reaching scope of California Labor Code section 2802’s business expense reimbursement requirement.
In this case, the plaintiffs alleged that the company had failed to reimburse all employees for the required use of their personal cell phones for business-related purposes. According to the plaintiffs, the company required all employees to use their personal cell phones to (1) clock in and out from work and (2) to communicate with their supervisors.
While this case was settled, it serves as an important reminder that California employers are required to reimburse their employees for business-related use of their personal cell phones. Specifically that California law requires that employers reimburse employees for “some reasonable percentage” of their cellphone bills if the employer requires them to use their personal cellphones for a business purpose – regardless of whether the employee incurs charges over and above what his or her plan costs.
Some common business-related uses for which employers may require employees use their personal cell phones include:
- Clocking in and out for work or meal periods;
- Checking or updating schedules via a scheduling app or otherwise requiring them to use data;
- Texting or calling a manager regarding scheduling or for other work-related purposes;
- Using data plans for GPS purposes;
- Requiring employees to use cellphones for purposes of responding to emergency calls or for on-call time periods;and
- Any other required use of a personal cellphone (text, call, or data) for business-related purposes.
It is recommended that all California employers review their current reimbursement policies and determine whether they are currently reimbursing employees for required business-related cell phone usage. If employees are required to use their cell phones for work, employers have the following options available to them:
- reimburse employees for actual cell phone fees incurred for business purposes;
- reimburse for a percentage of cell phone fees that accurately reflects the amount of mandatory business usage (and inform employees that if their business-related use exceeds that flat rate, a process employees should follow for reimbursement); or
- provide employees with a cellphone or another communication alternative for business use .
As we reported earlier (in NEW LAW: Massachusetts to Increase Minimum Wage with Grand Bargain), the Massachusetts’ “Grand Bargain” legislation increased the state minimum wage and the “service rate” (tip credit) that tipped employees could receive. Effective January 1, 2019, the minimum wage in Massachusetts increased to $12 per hour and the “service rate” increased to $4.35 per hour.
Under Massachusetts law, employees who make at least $20 per month in tips can be paid a “service rate” provided that (1) they are notified in writing that they will be paid the service rate and (2) the employee’s total wages (the service rate plus all tips earned in the shift) equal or exceed minimum wage. Continue reading REMINDER: Massachusetts Employers Have New Requirements For Tipped Employees