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Wednesday
May182016

Wage & Hour: DOL Doubles Down on Salary Threshold 

Lawyer for EmployersAttorney for Employers

 

by Tal Burnovski Yeyni

818-907-3224

 

White Collar Overtime ExemptionConsidering all of the political movements regarding minimum wage, equal pay and other wage and hour concerns over the past few years, most employers could read the handwriting on the wall regarding overtime rules. That handwriting has now become official:

The Department of Labor Final Rule regarding the minimum salary level required for the exemption of executive, administrative and professional employees was released today.

In the event of a conflict between federal and state laws, employers must comply with the rule most favorable to employees.  Prior to today’s Final Rule, an employee designated exempt under Federal law must have made at least $455 per week ($23,660 annually). This amount is substantially lower than the minimum salary required for exemption under California law, thus requiring California employers to comply with the state salary level test for exemption.

Here are the key changes: 

  • DOL Final Rule: Effective December 1, 2016, the "standard" salary level will increase to $913 per week (equivalent to $47,476 annually for a full-year employee), nearly double the current federal weekly threshold.  The DOL launched a Frequently Asked Questions page here.


  • California Employers: In this state, the current threshold is $41,600 ($3,466.67 monthly; $800 weekly), so California employers must comply with the higher Federal salary level (for exemption purposes) as of December 1st.  


  • Use of Bonuses to Satisfy the Test: Nondiscretionary bonuses and incentive payments (including commissions) may be used to satisfy up to 10 percent of the standard salary test requirement.

    Moreover, if an employee does not earn enough in nondiscretionary bonuses and incentive payments (including commissions) in a given quarter to retain their exempt status, the DOL now permits a "catch-up" payment at the end of the quarter. If the employer chooses not to make the catch-up payment, the employee would be entitled to overtime pay for any overtime hours worked during the quarter.


  • Automatic Updates: To ensure effectiveness of the salary level test, the DOL will update the standard salary compensation requirements every 3 years, with the first update taking effect on January 1, 2020.


  • Increase in California Minimum Wage Requirements: Note that last month, Governor Jerry Brown signed into law a bill gradually increasing California’s minimum wage to $15.00 per hour by January 1, 2022 (for employers with 26 or more employees).  As the salary level for exemption is an extension of California’s minimum wage (two times the state’s minimum wage), employers must pay close attention to the automatic updates of the DOL and the increase in California’s minimum wage, to determine which salary test they must comply with for the exemption. 

Here’s California’s newly approved Minimum Wage Schedule:  

Wage and hour and other employment laws can become very confusing given how state and federal regulations can trump one another. Employers should seek the advice of experienced employment counsel to stay compliant.

Tal Burnovski Yeyni is an attorney in our Employment Practice Group

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
Apr282016

Living Like a Prince, but not Dying Like One

Tax Law Certified SpecialistTax Law Certified Specialist

 

 

by Michael Hackman

818.907.3279

 

 

The media seems to be concerned with two primary subjects lately, and both topics continue to trounce each other in turn on social networks for attention:

1. The presidential elections

2. The death of Prince, and his lack of a will

Prince at the Los Angeles Forum, 4.22.11

We’ll worry about the elections later, but right now we should clear up a misunderstanding. It’s not the lack of a will that is so important. For a musician of Prince’s caliber – it’s more the lack of a trust and overall estate plan that is most critical.

Here in California, one needs a trust to avoid probate courts if real property is involved – a will won’t help your heirs in that regard, and probate is a very expensive process. 

Having only a will is fine for those who have smaller assets to bequeath, such as small sums of money, a car, jewelry etc. In California, up to $150,000 of otherwise probatable assets can be distributed without requiring a probate.

For those with real estate and larger financial assets, a trust is needed. Additionally, a will only goes into effect when a person passes away, whereas a trust can ensure care and stability during life; which is much more of a concern for those of us who are not living like rock stars.

Even a rock star like Prince should have had an estate plan though, particularly if the rumors of his prescription drug addiction turn out to be true. If an overdose or some other tragedy had left the musician incapacitated, Prince could have used an estate plan to determine who makes health and business decisions until he recovered.

Intellectual Property and Right of Publicity

The website TMZ is reporting that Prince had no will, though it’s entirely possible one will turn up eventually. In the meantime, the musician’s sister filed documentation in probate court to have Prince’s bank, Bremer Trust, administer the estate.

If there really is no will, and if an old but valid will turns up, it is likely that it will be different than what he would do if making decisions in the year before his death. For now it seems Prince’s siblings will divide proceeds from the estate under Minnesota law.

If the bank is approved as Trustee, it will have to determine the values of Prince’s real property (mansion, grounds, memorabilia, etc.) as well as that of his intellectual property, including an issue called right of publicity. Right of publicity puts a value on the musician’s name and image.

We saw this same issue come up when Michael Jackson passed away. The case is still unresolved, eight years after the King of Pop died, and there is no immediate end in sight. Appraisers for the IRS and the estate argue over the value of Jackson’s master recordings, likeness, right of publicity and other details.

Estate Planning for Intellectual Property

Any artist who engages in creation for profit, inventors, and business owners, should include intellectual property rights in their estate planning.

1. Copyrights in the United States exist for the author’s life plus an additional 70 years (if the work was created after 1978). For a “joint work prepared by two or more authors who did not work for hire,” the term lasts for 70 years after the last surviving author’s death. For works made for hire and anonymous and pseudonymous works, the duration of copyright is 95 years from first publication or 120 years from creation, whichever is shorter. Heirs may profit from copyrights until they come to term.

2. Duration of publicity rights (use of name, likeness, voice, image, signature) vary from state to state. In at least 13 states (including California), it runs for 70 years, from the date of the artist’s death.  

3. Trademark rights do not expire so long as they are actively used.  In most countries to maintain trademark registrations, the owner must renew the registrations every 10 years. 

4. For patents, the term is 20 years from the filing date of the application (for those patents filed on or after June 8, 1995. Design patents have a term of 15 years from issuance (for applications filed on or after May 13, 2015).

All intellectual property can be distributed among heirs, just as other property can. But ownership rights may be determined by actions the original author or owner of the intellectual property did during their lifetime.

For example, let’s imagine the album Purple Rain was never released, and left in the famous vault at Paisley Park. Prince may have bequeathed or transferred during his lifetime the original sheet music or recording to one heir, the rights to digital reproductions to another, and the right to turn the song or album into a movie, to a third.

Taxing Challenges for Prince’s Estate

Considering Prince’s habit of living large and presumably, having some unresolved debts;  his personal wealth; innumerable real property assets; and undetermined values for intellectual property assets, the probate courts will be a long time in unraveling how the musician’s estate should be administered. Currently, a very conservative estimate runs at $250 million, which could potentially result in $120 million going to state and federal governments. (Unlike California, Minnesota has a state estate tax.)

So what’s the lesson here? Don’t let nearly half of your net worth go to the government, when it could be better used by your family, friends, or a worthy charity.

Prince was apparently charitably inclined. If he had made gifts to charity through a will or trust, a significant amount of estate taxes could have been saved. Further, to the extent he was making charitable donations during his life, those beneficiaries will now no longer receive support from the music icon's largesse. Prince's legacy in this regard is apparently, no more.

 

Michael Hackman is a Certified Specialist in Tax Law (State Bar of California Board of Legal Specialization), and Chair of our Tax Planning and Trusts & Estates Planning Practice Groups. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Wednesday
Apr202016

That's Just Sick: Paid Sick Days May Increase in Los Angeles

Lawyer for EmployersAttorney for Employers

 

by Tal Burnovski Yeyni

818-907-3224

 

Yesterday, the Los Angeles City Council voted to require employers to offer employees at least six days of paid sick leave per year, twice the minimum amount required under California law. If finally approved, Los Angeles will join more than a dozen cities who have established their own paid sick leave standards. 

In yesterday’s meeting, City Council has asked the City Attorney to prepare and present an Ordinance that should include, among others, the following provisions: 

  • An employee who, on or after July 1, 2016, works in the City for the same employer for 30 days or more within a year from the commencement of employment, is entitled to paid sick leave.

  • Paid sick leave shall begin on the first day of employment or July 1, 2016, whichever is later.

  • Employees will be entitled to take 48 hours of leave per calendar year, that must be provided up front by the employer, or accrued at the rate of one hour per every 30 hours worked.

  • Accrued paid sick leave shall carry over to the following year of employment and may be capped at 72 hours; an employer may set a higher cap or no cap at all.

In response to the City Council’s vote, Mayor Eric Garcetti issued the following statement:

Paid sick leave means a world of difference to working people and their families. That’s why it is important for L.A. to not just comply with state law, but take it a step further on behalf of our people. We set a tone for California and the nation by leading on the minimum wage increase, but we could do more in guaranteeing that people's jobs are secure in the face of illness. We are fixing that, and I'm proud to stand with my City Council colleagues on the principle that workers need and deserve these protections.

Final vote on the Ordinance is expected to take place within the next month. We will keep you posted on further updates. 

Tal Burnovski Yeyni is an attorney in our Employment Practice Group

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Wednesday
Apr132016

California Wage & Hour: Employer Q&A

Wage and Hour DefenseEmployment Litigation Defense

by Sue M. Bendavid

818.907.3220

 

Recently, the California Labor Commissioner cited a residential care provider for multiple wage theft violations, including for failure to pay minimum wage and overtime.

Wage Theft DefenseAs a result of the Labor Commissioner’s investigation the company was found to owe approximately $192,000 in pay. However, in addition to back wages, this particular employer will have to pay nearly $450,000 because of penalties, interest, liquidated damages and other fees.

The lesson for all employers is this:

Ensure proper payment of all wages now, or double (or perhaps triple) the costs later.

So what can employers do to stay compliant and reduce the risk of wage claims? Here’s a Q&A regarding some of the bigger pitfalls in timekeeping and payroll.

 

Payroll & Timekeeping FAQs

Q:  When should an employer change an employee’s time entries?

 

A:   An employer should change an employee’s time records when the employee forgets to record his or her start or end time or meal period on a timesheet or time clock. Further, an employer can record an employee’s work time if the employee is out sick, on vacation, or absent on some other form of time off.

If the employee forgets to clock in or out, or record a meal period, the employer may enter the actual in or out time to ensure the employee is paid correctly. If an employee is out sick or out for some other form of time off, the employer can change the time record to show the reason for the time off. 

Important: Employees should initial any changes to their timecards to confirm they are accurate.

 

Q:  What are some of the common mistakes employers make when tracking time?

 

A:  Don’t assume an employee only works 8 hours a day or 40 hours in the week or takes a 30-minute or 1-hour meal break each day, regardless of the hours the employee was scheduled to work or the Company’s meal break policy or practice.

An employer may not change a time record to show fewer hours than actually worked. For example, an employer may not reduce an employee’s time record from 10 hours in a work day to 8 hours to avoid overtime payment. This is true even if the employee consents to the change.

If an employee wants to take personal time off during a particular day and make up the time later in the same week, consider whether the “makeup” rules can apply.  If done correctly these rules can allow an employee to work up to 11 hours in a workday (3 hours of makeup time) without triggering overtime, as long as the employee does not work more than 40 hours in a workweek).

 

Q:  What are some of the potential claims if the employer fails to accurately pay an employee?

 

A:  Under California law, if an employer does not pay an employee correctly, they can expect to see some or all of the following claims: 

  • Failure to pay minimum wage (for off the clock work/hours that may not have been recorded on time records)

  • Failure to pay wages for hours worked

  • Failure to pay overtime

  • Waiting time penalties (up to 30 days wages)

  • Paystub violations (up to $4,000 in penalties or damages)

  • Failure to keep accurate records

  • Penalty claims under the Private Attorneys General Act (PAGA)

  • Liquidated damages

  • Missed Meal Break Penalties (one additional hour of pay per day missed)

  • Missed Rest Break Penalties (one additional hour of pay per day missed)

  • Violation of Business & Professions Code Section 17200 (restitution and injunctive relief)

  • Interest

  • Attorneys’ fees

  • There is risk of both civil and statutory penalties under various Labor Code provisions.    

Not only is the employer potentially liable, there is a recent move to try and hold individuals liable for penalties (against those who caused the violations to occur).

 

Q:  What is the statute of limitations on these claims?

 

A:  Under California Business & Professions Code Section 17200, employees can assert various wage claims going back up to four years. This includes claims for wages, meal breaks, rest breaks, overtime, minimum wage, failure to pay all wages, etc. Some claims go back one – three years, depending on the particular statute at issue.

 

Q:  How can an employer avoid (or at least reduce the risk of) claims?

 

A:  Strict compliance is critical. Employers should minimize unnecessary changes to time records, including requiring all employees to accurately record and maintain their own time records. Employers should prohibit changes to time records unless pre-approved and signed off by the employee.

Employers should develop policies prohibiting off-the-clock work, ensure employees are authorized and permitted to take all rest periods and meal periods as required by law, and have employees review, sign and date their own time records each pay period.

All work hours must be recorded, even if the work is performed remotely or before or after regular work hours.

PAGA DefenseEmployers who may be exposed to litigation risk because of previous violations should consider a payroll audit (under the attorney-client privilege) to determine the scope of potential liability. Ensure you have non-retaliation policies in place and inform employees there will be no retaliation if they complain about errors or “wage theft” or raise questions about timekeeping, breaks or pay.

It is also important to analyze classification of workers as independent contractors vs. employees and exempt vs. non-exempt. Non-exempt employees are entitled to overtime premiums. Exempt employees must be paid at least two times minimum wage on a salaried basis. Recent minimum wage increases must be complied with and there are many local minimum wage ordinances to be aware of as well.

Pay stubs must be reviewed to ensure accuracy and compliance with the law.

 

Q:  What documentation would be important when changes are made to time records?

 

A:  When changes are made to a time record, employers should keep the original and create a modified record, or line through the error on the original, make the correction, and have both the employer and employee sign and date the corrected record. The reason for any changes should be noted and signed.

If engaging in a wage audit, enlist the help of an experienced employment attorney.

 

Paying Employees in California

Don’t forget the new laws that went into effect in various metro areas like Los Angeles, as well as new state laws affecting pay, including: 

  1. The Fair Pay Act, ensuring equal pay for all genders.

  2. Senate Bill 3, signed by Governor Jerry Brown earlier this month, SB3 amends the Healthy Workplaces, Healthy Families Act and provides an increase in minimum wage as of January 1, 2017.

  3. The Los Angeles Minimum Wage Ordinance also mandates a minimum wage increase as of July 1, 2016. 

Remember, in cases where a city or county law conflicts with state or federal law, employers should always pay the higher standard.

 

Sue M. Bendavid is the Chair of the Employment Practice Group at our firm. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Tuesday
Apr052016

Save the MAMILs - Cyclist Injury & Death Statistics

Injury AttorneyWrongful Death Attorney

 

by Thomas Cecil

(818) 907-3292

 

According to a recent government report, MAMILs (Middle Aged Men In Lycra) are the likeliest of all age groups and genders to be killed or seriously injured while riding a bicycle.

In its report to the US Congress last November (Pedestrian and Cyclist Safety), the General Accounting Office found that of the 743 cyclists who died and the estimated 48,000 who were injured in 2013, 87 percent of those killed were male with an average age of 44, and 83 percent of those injured were male with an average age of 33. Men between 55 and 59 “made up the largest number of cyclist fatalities”.

Although the report didn’t actually reference what the cyclists were wearing, it did confirm that more and more people, in fact over a million more, started riding or walking to work between 2005 and 2013. Riding a bicycle or walking to work clearly is not without risk. As the study points out, fatalities and injuries involving pedestrians and bicyclists remain relatively high while at the same time deaths and injuries from traffic collisions have fallen significantly.

The individual human tragedies are found in the numbers. In 2004, 727 cyclists were killed commuting to work and the annual number of deaths since then “has ranged between 623 and 786”. Cyclist injuries in 2004 were 41,000 and by 2013 were 48,000. Pedestrian deaths and injuries are worse:  4,675 deaths and 68,000 injures in 2004; 4,735 deaths and 66,000 injuries in 2013.

With respect to cyclists, the report notes that most traffic crashes that resulted in death in 2013 “occurred in urban areas, happened in clear weather conditions, and most frequently took place between 6:00 p.m. and 9:00 p.m.”  Unlike pedestrian deaths which occurred under similar circumstances, “more cyclists (405) died during daylight rather than in the dark.”  

Why are MAMILs and Others in Such Danger?

The study notes many possible factors, including increased walking and cycling trips, alcohol use, distracted driving, cycling and walking due to cell phone use, texting and eating. Another factor is the fact that roadways are built to accommodate cars rather than bicyclists and pedestrians.

As noted, as more and more people bike and walk to work, it is more likely that more cyclists and pedestrians will be involved in crashes. The report indicates, however, that when the numbers of cyclists and walkers in a particular area increase, the number of fatalities and injuries in that area decreases. Reasons given include drivers become used to seeing walkers and riders and change their behavior by driving more slowly. Thus more walkers and cyclists may actually improve safety and decrease deaths and injuries.

As also noted, distracted driving remains a serious threat to cyclists and walkers. In 2013 alone, 3,154 people died in motor vehicle crashes involving distracted driving. According to the report, 480 deaths “were pedestrians, cyclists, or other non-motorists.” 

With respect to road design, historically engineers designed roads meant to accommodate motor vehicles with wide straight roads often the goal. Unfortunately, the report notes, wide straight roads lead to faster traffic and speeding. A speeding driver has less time to react and the severity of the crash is much more likely to kill or seriously injure the cyclist or pedestrian.

So, what’s the solution?

Three Es of Safety for Pedestrians & Cyclists

1. Engineering:  better use of data to identify problem roadways and concentrations of cyclists and pedestrians; the use of highway design documents specific for cyclists and pedestrians such as the Pedestrian and Bike Guides, Urban Bikeway Design Guide and Designing Walkable Urban Thoroughfares: A Context Sensitive Approach.

2. Education:  collaborative education campaigns to educate the public on bike riding and walking safety along with officer training on pedestrian and cyclist safety and traffic laws.

3. Enforcement:  targeting areas with a high-frequency of crashes for law enforcement action.


(According to the Federal Highway Administration, there is typically a fourth “E” in highway safety, for “Emergency Medical Services” but it is not mentioned in this report.)

As bicycling and walking in urban areas is likely to only increase, and as more and more people look to biking and walking for exercise and recreation, drivers, city planners and walkers and bike riders will all have to learn to share the road. And remember, #SaveTheMamils.

Thomas Cecil is a Shareholder in our Personal Injury Practice Group

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

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