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You’re Hired! (What Now?)

by | Dec 20, 2021 | Employment Law, Wage & Hour Laws |

(This is Part II of a Two-Part Series on Hiring. Part I “Now Hiring! Best Practices for a Lawful Interview Process” can be found here.)

Finding the right employee can be challenging, however even after an employer hires a candidate, they still have their work cut out for them. It’s important that employers complete the hiring process in accordance with California law. Here are a few tips to help employers ensure they address important legal issues so that they satisfy their obligations from the outset of the employment relationship.

Exempt or Non-Exempt? Before making a job offer, employers should determine whether the new employee will be exempt or non-exempt under relevant laws. Generally, exempt employees are higher level employees who are paid on a weekly, salary basis and are not entitled to overtime pay. Non-exempt employees are paid on an hourly basis, and are entitled to overtime pay, meal periods, and rest breaks. Employers sometimes mistakenly believe that as long as an employee is paid on a salary basis, they are automatically “exempt” employees. But this is not the case. To qualify as an exempt employee, the employee must: 1) be paid at least twice the current state minimum wage for full time work, regardless of whether that person works full time or not; and 2) meet a particular “duties test,” meaning that the employee performs certain types of duties (depending on the exemption), with a high level of autonomy and discretion. Employers should consult with legal counsel if they are unsure if an employee’s duties qualifies them as exempt.  Once an employer has determined the appropriate classification, they need to make that status clear to the new employee.

Required Notices. Upon hiring a new employee, employers should provide the new hire with all required notices, pamphlets, and disclosures. Required notices may vary depending on the classification of the employee, the number of employees, or the even the employer’s type of establishment. For example, Labor Code 2810.5 requires private California employers to provide written notice to employees no later than their first day at work informing them of their rate of pay, whether they are hourly or salaried, the regular pay day, contact information for the employer, and, information about the employer’s worker’s compensation carrier. In addition, AB 701 was recently passed which will require certain warehouse distribution centers to provide written notice to new hires including a written description of quotas which apply to the employee. There are other notice requirements such as the employer’s sexual harassment policy, Paid Family Leave, victim rights, and the employer’s lactation accommodation policy. Many of these policies may exist in the employer’s handbook.

Confirm At-Will Status: It’s an unfortunate reality that not all new employees end up being a good fit.  California law presumes that employees are employed “at-will,” meaning they can be terminated at any time with or without notice or cause. Including an at-will statement in an employee handbook, or an at-will acknowledgement for the employee to sign on their first day can help employers preserve the freedom to terminate without cause at a later date. However, employers should keep in mind that an at-will status does automatically mean that an employer is protected from future liability regarding terminations, and should consult with legal counsel if issues or concerns arise when preparing to terminate an at-will employee.

Minimum Wage: Employers also need to ensure that employees are paid at least minimum wage. In 2022, the minimum wage will be $14.00 per hour for employers with 25 employees or less, and $15.00 per hour for large employers.  Beginning January 1, 2023, the minimum wage for all California employers will be $15.00 per hour. However, employers should be aware that local minimum wage ordinances may provide for even higher wages. There are also additional overtime requirements related to agricultural employees and other industry-specific employees.

Sexual Harassment Prevention Training: California employers with five or more employees must provide at least two hours of sexual harassment training to all supervisory employees and at least one-hour training to all nonsupervisory employees once every two years. New hires must receive their initial training within the first six-months of their employment.  Attorneys at Duggan McHugh regularly conduct sexual harassment prevention training, both virtually and on-site for our clients. See our Trainings Page for more information if you are interested in having us assist. In addition, there are several online training programs available to employers, such as those offered by CalChamber.

Provide an Employee Handbook: Although employers are not required to have an employee handbook, keeping all policies in one place is beneficial to both employers and employees. Having an employee handbook allows employers to provide a single resource to employee questions related to common questions about workplace policies and practices such as company paydays and timekeeping practices, rules on meal periods and rest breaks, company-provided benefits, vacation and sick pay, leaves of absence and complaint procedures. In addition, an employer can fulfill its obligation of providing notices of certain rights to employees, such as an anti-harassment policy (see above), by including such in its employee handbook. It is recommended that employers who provide employee handbooks do so at the outset of employment and have employees sign a receipt, acknowledging that they have received the handbook and agreeing that they have read it. This will make it more difficult down the road for an employee to claim that they were not on notice of the employer’s policies. We suggest that employers have an attorney review and update their handbooks once a year to ensure their policies are compliant with current laws, which are always changing.

Arbitration Agreements: An arbitration agreement is an agreement signed by both the employer and the employee, stating that if the employee has any workplace claims against the employer, the employee agree to bring them in a private arbitration forum, rather than in court. An arbitration agreement may also provide that the employee waives class action claims. The issue of whether or not such an agreement can also mandate individual arbitration of Private Attorney General Act (PAGA) claims will come before the United States Supreme Court in 2022.  The legalities surrounding arbitration agreement programs in the employment context are in a state of flux in California. California employers can continue to request that employees enter into an arbitration agreement voluntarily. However, as a result of a recently enacted statute and a 9th Circuit ruling, employers generally (with potentially a very limited exception) may not require employees to enter into an arbitration agreement that covers claims under the Fair Employment and Housing Act and Labor Code as a condition of their employment or retaliate against an employee who will not sign. Employers who are interested in using workplace arbitration agreements should consult with legal counsel regarding the risks and benefits of such, and for assistance in properly drafting a legally compliant arbitration agreement and implementing a lawful arbitration program.

Of course, this is only a bird’s eye view of issues that employers should be aware of when hiring a new employee. In reality, these laws are much more nuanced. Employers should also recognize that local ordinances and regulations may impose more intensive and protective procedures than those addressed in this article. Because the circumstances of each employment situation and an employer’s hiring needs will likely differ, it is always a best practice to seek guidance from employment law counsel to address your specific issues. Of course, attorneys at Duggan McHugh are always available to answer any questions that arise throughout the hiring process.