HR Management & Compliance

Capitol Notes: Wage and Hour Laws for the New Year; Plus, What Got Vetoed

This was a lean year for
employment-related legislation in California,
including wage and hour measures. We’ll look at a few bills that made it into
law and a host of measures that did not.


What’s Coming in 2008

The following wage and
hour and related bills, signed into law by Gov. Schwarzenegger, take effect on
Jan. 1, 2008.


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Computer software
professional exemption.

S.B. 929 decreases the
hourly pay rate required for the computer software employee overtime exemption.
To qualify for this exemption (set out in Labor Code Section 515.5), an
employee must, among other things, earn the new minimum pay rate of at least
$36 per hour or the annualized full-time equivalent. The rate will be adjusted
annually for inflation on October 1 for the following year. The new lowered
rate will be in effect as of Jan. 1, 2008. Note that under existing law, the
minimum rate for 2007 is $49.77 per hour.


Why the decrease? The
rate language was originally enacted during the “ boom” when there was huge
demand for computer employees. Now, because demand has waned and salaries have
dropped, many workers who previously qualified as exempt no longer do, which
has put a strain on businesses that now have to pay these workers overtime. The
new lower wage rate is designed to apply the exemption to a greater pool of
computer software employees. (More on the computer software professional
exemption is available in the September 2006 issue of CWHA.)


Prevailing wages. S.B. 929 also contains
prevailing wage provisions. Twice per year, the state Department of Industrial
Relations (DIR) publishes prevailing wage determinations, but the specifics on
how rate changes are to be divvied up between hourly wages and employer
payments for benefits often lag behind, leaving contractors and subcontractors
in the dark about how to allocate the increase. This new law authorizes employer
discretion in distributing the rate change until the DIR publishes specific allocation


Alternative workweeks. S.B. 812 permits
pharmacists employed in stores under Wage Order 7 to adopt the same kinds of
alternative workweek schedules already allowed under Wage Order 4 for
employees, including pharmacists, in the healthcare industry.


Leave for military
Under S.B. 392, employers with 25 or more employees must grant up
to 10 days of unpaid leave for an employee to spend time with a military spouse
who is on leave from deployment. To qualify for the leave, the employee must
satisfy these requirements: 1) the employee’s husband or wife is an armed
forces member deployed to a combat theater or zone or a National Guard or
Reserves member  deployed during a period
of military conflict; 2) he

employee works for you an
average of at least 20 hours a week; 3) the employee notifies you of his or her
intention to take leave, within two business days of receiving official notice
that the spouse will be on leave from deployment; and 4) the employee provides
you with written documentation certifying that the service member will be on
leave during the period for which workplace leave is requested. Employers are
prohibited from discriminating or retaliating against an employee who requests
or takes leave under this new law.


Employers with 25 or more employees will
have to grant up to 10 days of unpaid leave for an employee to spend time with
a military spouse who is on leave from deployment


What Was Vetoed

Some key pieces of
wage-hour legislation the governor vetoed are:


Wage claims. A.B.
448 would have permitted employees to recover liquidated damages (a fixed sum a
statute requires for violating the law) in actions before the labor
commissioner alleging payment of less than the minimum wage.


Temporary employee
A.B. 1710 would have eased time restrictions on wage payments to
temporary employees.


Wage statements. A.B.
377 would have required farm labor contractors to print the name and address of
the legal entity (e.g., the farm) that contracted for services on the
farm labor contractor’s employee pay stubs.


S.B. 622 would have imposed fines of up to $25,000 for
deliberately misclassifying employees as independent contractors. You can link
to the new legislation online at