labor lawAdivision of labor law center

The California Labor Agency recently issued an opinion allowing employers to reduce an exempt employee’s salary and hours worked, at the same time, without endangering the worker’s status as a salaried exempt employee.

In the example used, the state labor agency permitted an employer faced with economic difficulties to reduce the work schedule of exempt employees from five days to four days. The state DLSE or Department of Labor Standards Enforcement ruled in a recent opinion letter that simultaneously reducing the employee’s salary by 20%  “did not violate the ‘salary basis’ for the workers’ overtime exemption under the state Labor code and wage orders” as long as the employer’s action is a temporary measure.

This is a radical change, since the DLSE took the opposite position in 2002. In an opinion letter issued in that year, the California agency ruled that the employer could reduce an employee’s salary. However, if the employee’s work hours were also reduced, that change the employee from exempt to non-exempt status.

This is a primary concern for California employers, since non-exempt employees are entitled to overtime under state law. California has the strictest (more…)

Nationwide employers should note that both federal and state courts in California will now throw out almost all noncompetition agreements. California has one of the most restrictive laws regarding noncompetition agreements. In fact, such agreements are almost always unenforceable in the state.

California law specifically requires that every individual shall retain the right to pursue any lawful employment opportunity.

Recently, Edwards v. Arthur Andersen upheld that principle. A tax manager for Arthur Anderson LLP in Los Angeles, Raymond Edwards signed a noncompete agreement in 1997.

The agreement specifically noted that  Edwards would not work directly for any of his Arthur Anderson clients, for 18 months after his separation from Arthur Anderson.

After the Enron debacle, Arthur Anderson closed its Los Angeles office and laid Edwards off. Another company offered Edwards a job, but only (more…)

One of the hottest HR topics right now is salary reductions for exempt employees. Many employers are faced with a choice of laying off employees, or using other tactics to reduce payroll.

When employers reduce exempt employees’ salaries, they must take certain precautions to avoid breaking the law.

One option to reduce payroll is to reduce hours for hourly employees. By having every hourly employee work 36 hours per week rather than 40 hours per week, an employer can reduce his or her payroll expenses by 10%. (In many cases, however, the cost of benefits remains constant.)

However, that solution won’t work for salaried exempt employees. Under the federal Fair Labor Standards Act Fair Labor Standards Act, or FLSA, employers must pay an exempt employee his or her full weekly wage, regardless of how many or how few hours the employee works per week. If the exempt employee works 60 hours per week, he or she is not entitled to overtime. However, if the exempt employee works 20 or 30 hours per week, he or she must still be paid the full weekly salary.

This raises a question for employers. Is there any legal way to reduce an exempt employee’s salary?  (more…)

Minimum wage changes in 2009 will require every employer in the nation to update his or her labor law posters.

On January 1, 2009 eleven states will increase the minimum wage. The majority of these states implement annual cost-of-living increases in the state minimum wage.

The biggest minimum wage increase in the nation this January is $1.00 per hour, in New Mexico. This changes the New Mexico minimum wage from $6.50 to $7.50 per hour. This is a statutory change, not a cost of living change.

The Washington state minimum wage remains the highest in 2009, increasing by 48 cents from $8.07 to $8.55 per hour. The Oregon minimum wage is second, increasing by 45 cents from $7.95 to $8.40 per hour. Third place goes to Vermont, where the minimum wage increases by 38 cents from $7.68 to $8.06 per hour.

There is a 3-way tie for fourth place, between Massachusetts, Connecticut and California. That’s due to a 35 cent increase raising the Connecticut minimum wage from $7.65 to $8.00 per hour.

Massachusetts and California have minimum wages of $8.00 per hour that do not increase in 2009. It’s worth noting that when the Massachusetts and California (more…)

Parents in California are furious at the local school district – but school board officials insist they were merely following federal HIPAA regulations.

Surprised parents in Vacaville were caught off guard when their youngsters reported that last year’s female music teacher was now a “mister.” The teacher is undergoing transgender surgery, and reported to Foxboro Elementary school as a man at the beginning of the school year.

Angry taxpayers lodged complaints (more…)