1. Federal Exempt Salary Requirement on Hold; California Increase
The December 1, 2016 increase in the minimum salary level for exempt employees was put on hold nationwide at the decision of a Texas Judge. The scheduled increase was set to raise the salary threshold under which employers designate workers as “exempt” from overtime and breaks from $455 per week ($23,660 annually) to $921 per week ($47,892 annually).
For now, employers should ensure compliance with the new California minimum salary level for exempt employees and check back to see if the federal overtime rule will be implemented at a later date. For employers with over 25 employees, the minimum salary for exempt employees in California will increase from $41,600 to $43,680 on January 1, 2017 due to the minimum wage increase mentioned below.
Remember that the California minimum wage will increase from $10.00 to $10.50 on January 1, 2017 for employers with over 25 employees. Employers with 25 or fewer employees will not be required to meet the increase in minimum wage until January 1, 2018.
2. Proposition 64: Legalization of Marijuana
Although California law now permits adults over the age of 21 to smoke or ingest marijuana in a private home, Proposition 64 also boasts additional employer-friendly laws.
Under Proposition 64 and effective immediately, employers may test candidates for marijuana use before hire or at any point during employment if there is reasonable suspicion of impairment. Further, Proposition 64 allows employers to fire employees if they test positive even if there was no indication that the employee was impaired at work. All employers should review the drug and alcohol policies in their handbooks to ensure compliance with California laws.
3. Expansion of the Equal Pay Act
Last year, California passed the Equal Pay Act to assure pay equality across gender lines for employees performing substantially similar work. An expansion of the Equal Pay Act takes effect January 1, 2017 and prohibits employers from justifying wage disparity between the sexes by relying on prior salary and includes protection from wage disparities due to race and ethnicity.
4. Mandatory Retirement Savings
Effective January 1, 2017, the “California Secure Choice Retirement Savings Trust Act” requires employers to: 1. offer an employer-sponsored retirement plan OR enable employees to make a direct payroll contribution to the employee’s personal state-sponsored Secure Choice Retirement account, 2. provide state-developed information about the program to employees, and 3. transmit a payroll contribution to a state-selected third-party administrator.
Although employers will not be required to automatically enroll employees, employers are required to provide employees with information about the program.
5. Juvenile Criminal History
Effective January 1, 2017, employers are prohibited from asking a candidate for employment about his or her juvenile convictions. This includes information relating to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the candidate was involved with juvenile court.