HR Updates from Silvers HR Management

Several California employment related laws were signed by the Governor this fall. Take note of the new employment laws that require specific action from employers in 2008:

Required notice to all employees of EITC eligibility:
AB 650 requires California employers to notify employees in writing (sorry, no email or bulletin board postings) of their potential eligibility for Earned Income Tax Credit (EITC). This notice must be given within one week before or after giving the annual W-2 or 1099. A sample notice can be found at our website at EITC Notice.

Employers also have an obligation to process Form W-5 for the advance payment of EITC at the employee's request. We recommend you contact your tax or payroll specialist for more information.

Limit of Social Security Number on Wage Statements:
California Labor Code section 226 limits the use of no more than the last four digits of an individual's Social Security number on an itemized wage statement. This law was passed a few years ago and goes into effect on January 1, 2008. Although the law only speaks to itemized wage statements, it is recommended that employers not print the full Social Security number on any documentation that may be available to others, such as the paycheck.

Family Military Leave:
California employees who work an average 20+ hours per week may take up to 10 unpaid days off from work to spend with a family member who is home on military leave during a period of military conflict. The new law applies to California employers with 25 or more employees and is effective immediately.

The new California Family Military Leave does not require paid time off, although the employee may use vacation or PTO, if available. The law does not require that the employer hold the position open for the employee, but it does state that there will be no retaliation. We suggest the employee be allowed the time off without any fear of reprisal.

A sample handbook policy was sent to our clients in November. Please contact our office if you would like a copy.

New Pay Rate for Exempt Computer Specialists:
Each year the California Department of Industrial Relations sets the hourly rate which Computer Specialists who are exempt from overtime must earn in order to meet the exemption status. This is a difficult bar to meet as the wage is only a part of the exemption criteria. The individual must also be engaged in work that is intellectual and creative. (Note that every hour of work must be paid at the hourly rate for exempt computer specialists, although time and one half is not paid.) The new rate for 2008 has changed from $49.77/hr to $36/hr.

New Minimum Wage

Effective January 1, 2008 the California minimum wage will increase to $8.00 per hour. This increase also impacts many exempt employees who must earn at least two times the state's minimum wage for full-time employment as part of the criteria for the overtime exemption. Exempt employees must earn at least $2773.33 per month in order to meet the wage portion of the exemption.

Non-exempt employees who are required to furnish their own tools must be paid two times the state minimum wage ($16) per hour.