Seasons Greetings

Welcome one and all to the first of many issues to come of HRFocus. I hope you will find this newsletter useful and informative. As it is our inaugural issue, we encourage feedback and value all comments you may have regarding important labor issues to be addressed. We look forward to bringing you the most current and up-to-date HR information possible. Feel free to e-mail us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or call us at (800) 400-3809.

Health Insurance Mandate Overturned

The Proposition 72 requiring California employers to sponsor health care insurance did not pass this November. What a relief for employers in general and certainly for our small business clients, partners and prospects. Employee benefits are considered to be one of the most effective tools in retaining employees. Healthcare is one of the benefits most commonly offered. In our current working environment with multiple generations in the workforce at the same time, healthcare may not be the benefit of choice for many employees. We recommend that when considering providing benefits, employers offer benefits that employees want. Creativity and options are the key. If you can’t afford to offer the benefits, you may want to give employees the opportunity to buy benefits through a group that is usually cheaper than an individual plan.

There is also the new Medicare Prescription Drug Improvement and Modernization Act of 2003 that creates the new Health-Saving Accounts (HSA). The HSA is tied to a high-deductible (greater than $1,000 for single employees) health-insurance plans. It allows employees to save funds on a pre-tax basis to pay for medical expenses (including prescribed drugs, wellness programs, and other various and sundry medical services) under the deductible or those not covered by the general health insurance, such as vision care or dental treatment (but not for dental or vision insurance premiums). Unlike the flexible spending accounts, employees don’t lose money when they don’t use it in one year. The unused funds can roll-over to next year. The new HSA can be used by all sizes of employers, even employers with one or two employees. Another benefit of the HSA is the account can pay for long-term-care insurance policies and supplemental health insurance that covers specific diseases, such as cancer, or congestive heart failure.

State Mandates Sexual Harassment Training for Supervisors

Gov. Schwarzenegger signed Assembly Bill 1825 requiring California employers of 50 or more to provide supervisors with two hours of sexual harassment training every two years. The employee count includes temporary employees, independent contractors and out of state workers. Supervisory staff can be broadly defined as someone who has authority to hire/fire/promote/transfer/reward/discipline/direct work of other employees.

The law has two phases of implementation: a) Supervisory employees as of July 1, 2005 must receive two hours of training by 01-01-06. b) Supervisors hired after July 1, 2005 must complete the training within the first 6 month of employment or promotion. It is very important that the training include practical guidance regarding federal and state sexual harassment laws including harassment prevention, correction and remedies available to the victims. There are also requirements of the training to be interactive with discussion, role-playing, question and answer formats. Documentation of the training is also key to this mandate. Contact our office for help in complying with this new law.

"Old and Continuing News on Sexual Harassment, Third Party Protection

Effective 2004, an employer would be liable for sexual harassment of an employee by a customer, client, vendor, supplier, or any other third party, where the employer knows or should have known of the harassing conduct and failed to take appropriate corrective action.

Domestic Partner Rights and Responsibilities

Effective 2005, registered domestic partners shall have the same rights, protections, and benefits and be subject to the same responsibilities, obligations and duties as are granted to married spouses.

Changes in I-9 Acceptable Documents

The United States Customs and Immigration Service (USCIS) recently announced a change in the acceptable “List A” documents. This does not change the Form I-9 itself just the “List A” on the third page of the form. Form I-766 (Employment Authorization Document), although not listed on Form I-9, is an acceptable List A document added.

The followings are no longer acceptable to establish identity and employment eligibility:

• Certificate of Citizenship- INS Forms N-560 or N-561
• Certificate of Naturalization – INS Forms N-550 or N-570
• Form 1-151
• Unexpired Reentry Permit – INS Form I-327
• Unexpired Refugee Travel Document – INS Form I-571

Paid Family Leave (benefit effective 07/01/04)

• Beginning January 1, 2004 employees began contributing to the Paid Family Leave Fund administered by the California EDD. Beginning July 1, 2004, employees can make claims for benefits under this new law. Weekly benefits range from $50-$728 and are limited to six weeks of benefits. There is a seven-day waiting period before benefits are paid. An employer may require the employee to use up to two weeks of vacation leave prior to receiving benefits.
• Employers must provide a copy of the EDD form DE2511 “Paid Family Leave” to each newly hired employees as of January 1, 2004 and to each employee leaving work to care for a seriously ill family member or to bond with a new child beginning July 1, 2004.
• Employer must post the EDD notice DE 1857A
• A medical certificate will be required when a claim is filed to provide care for a seriously ill family member.
• Paid Family Leave does not provide employees with job protection or return rights with employers that have less than 50 employees in most cases (subject to Federal and State Family Leave Acts)

An employee may not receive Paid Family Leave if the employee is eligible for, or receiving, state disability insurance, unemployment compensation insurance or workers’ compensation benefits within the same time frame.

Unpaid Leave for Crime Victims

Effective 2004 this law prohibits an employer from discharging or in any manner discriminating against an employee who is a victim of a crime, or a relative of a crime victim, who is absent from work to attend a judicial proceeding.

Whistleblower Protections (SB 777)

This law broadens the definition of a “whistleblower” to include, under certain circumstances, both current employees, and applicants for employment. The new law extends protection to employees who report a violation of a State or Federal law or regulation, who refuse to participate in an activity that would result in violation of a State or Federal statute, rule or regulation, or who exercised these rights during their former employment. This law prohibits an employer from retaliating against an employee and adds civil penalty of up to $10,000 for any violation. The new law established a “whistleblower hotline” within the Office of the Attorney General and requires employers to display a list of employee’s rights under the whistleblower law.

Workers Compensation Reform (effective after 4/19/04)

Key Changes

• Limits amount paid for medical services to the reasonable fee amounts in official medical fee service in effect on date of service.
• Requires that medical treatment follows nationally recognized guidelines.
• Authorized employers or insurers, as of Jan. 1, 2005 to establish a new medical network and require that injured workers be treated by a physician in the network. Injured workers who are dissatisfied with their care will be able to change doctors within the network and, if necessary, ask for an independent medical review. If the IMR agrees with the injured worker, the injured worker may seek treatment from a doctor of his/her choice.
• Specifies that employees may only pre-designate treating physicians who are part of the employer’s health benefit plan, or physician who has treated the injured worker in the past.
• Limits temporary disability payments to 24 months from the first payment.
• Promotes return-to-work programs by providing employers with fewer than 50 employees with subsidies for workplace modifications and special equipment.
• Provides incentives to employers of 50+ employees who return disabled employees to work. Allows a 15% reduction in permanent disability payments if an employer brings an employee back to the same job, at the same pay, or accommodates him/her with a modified or alternative job, as long as the job pays at least 85% of the previous job and lasts for 12 months. Increases benefits by 15% when the employer fails to do so.
• Elimination of vocational rehabilitation services.
• Immunizes from civil liability any person who reports a fraudulent workers compensation claim in good faith.
• Provides retraining vouchers valued at $1000-$10,000 for workers injured on the job and not returned to work with their same employer.

The Sue Your Boss Law (SB 796) 2004

The original law allowed employees the right of action for any violation of labor codes directly bypassing the state agency. An employee may bring a civil suit for violation of the Labor Code and collect a 25% penalties awarded by the court. The court could also award attorney’s fee. Governor Schwarzenegger signed a reform measure August 11 and amended the law.

The new law takes effect 08/12/04 does not repeal the SB796. However, it creates procedural steps that must be followed. The employee must notify the employer and the appropriate state agency first. After the agency’s investigation and resolution or inaction, if employee disagrees, then the lawsuit may be filed.

The new law also has changed the sharing of the penalty. Previously any penalty was 50% to the General Fund, 25% to the Agency and 25% to the employee. Now 75% goes to the Agency, the remaining 25% goes to employee along with attorney’s fee.

Penalties for proven violations still can be large, $100-200 per employee multiplied by the number of pay periods during which the violation exists. Employees are protected from discrimination or retaliation for giving notice alleging a violation to the Agency, the employer, or filing a lawsuit. Protection is included in matters involving: employment, discharge or threat of discharge, demotion, suspension, terms and conditions of employment; or training opportunities.