Governor Gavin Newsom has just finished signing a flurry of bills as part of an annual tradition coinciding with the end of the legislative season.
This year it was particularly significant for employers, with a number of new laws going into effect in 2020 that could have huge ramifications on businesses in the state. Here’s a rundown on SB 530 and AB 749:
With the holiday party season upon us, many will be dreading much more than simply the prospect of small talk over appetizers with their colleagues. Perhaps one of your otherwise excellent employees had an embarrassing incident at last year’s soiree, or your business’s reputation was comprised some other way.
2019 has been a year of change for the employment legislation. The influence of the #MeToo movement can be seen in the number of bills meant to protect employees who have suffered harassment, discrimination, and retaliation. The California Legislature also targeted arbitration abuse, worker misclassification, and other wage and hour law violations. Below, we cover two of the employment laws that were signed into law:
The battle over AB 5 is over; however the path to clarity is on the horizon. The bill is expected to dramatically reshape the contours of California’s workforce and economy, and potentially reclassify two-million independent contractors. Across the state, employers must now examine their workforce and determine whether and how to modify their business structure to account for these extensive changes.
AB 5 may profoundly impact businesses that classify a large part of their employee base as independent contractors, commonly referred to as “gig-workers.” If these companies reclassify these workers as employees, they will be subject to a bevy of federal and state labor and wage laws that they were not previously subject to as independent contractors.
On September 18, 2019, Governor Gavin Newsom signed into law Assembly Bill 5, which clarifies when workers should be considered “employees” under the California Labor Code and the California Unemployment Insurance Code, thereby entitling them to the protections afforded by those laws. The bill codifies the standard set out in last year’s California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which narrowed the circumstances under which a worker can correctly be classified as an independent contractor. Most of the provisions of AB 5 become effective on January 1, 2020.
Specifically, under the new law, for a worker to correctly be classified as an independent contractor, the hiring entity has the burden of establishing the following three elements
(commonly referred to as the “ABC” test):
The bill will cause many industries to reclassify workers by allowing the state to enforce a stricter standard for freelancers. Here are some major ones:
The bill exempts a variety of professional workers and a lot of those with licenses, such as stylists and barbers. These professions would get to use a previous 11-point employment test:
Deciding what to do is only the first step – how to transition workers from independent contractors to employees is just as important to avoid triggering claims for past misclassification.
The California Attorney General and confident city attorneys will be empowered to pursue injunctions against businesses suspected of misclassifying workers. This, along with the ability to base PAGA representative action claims on Labor Code violations, will circumvent some employee arbitration and class action waiver agreements when PAGA claims are made.
RTR Consulting has more than 20 years devoted to developing effective and efficient human resources policies, procedures, and best practices for small, start-ups, and medium-sized businesses. Contact us today if you need help keeping your business running smoothly.
Worker’s Compensation is required for most employers in most states. It covers more than 140 million U.S. workers, over 94% of employees. The total cost to employers of workers’ compensation insurance is more than $95 billion annually. But the individual price for workers’ compensation insurance for each employer is dependent on various variables.
Career development is often an understated perk that many candidates look for when hunting for their next job. Besides a comfortable salary, health benefits, and a decent number of vacation days, prospective employees want the assurance that they’ll not just survive at their next company but actually thrive at it.
As we discussed in our last blog, millennials make up a significant portion of the U.S. workforce. But for many companies, it has become increasingly difficult to retain them. Their reasons for leaving may have to do with them not being a good fit for their employer, a desire for a better benefits package, or a big life change. However, it should also be noted that people may leave an organization because they’re not sure what their career trajectory may look like at a particular company over the next few years.
At RTR Consulting, we believe that working with your employees to create a development plan for their growth benefits both parties – your employee’s vision of their future at your company will become clearer, and you will help cultivate a potential star employee for your business. The following are some ways in which you can develop a career plan for your team members:
Evaluate your desires for your company’s overall growth. Are there certain departments that you expect to grow exponentially over time? What skills is your organization lacking? And perhaps most importantly, do you have enough time to pursue career development with your employees? You’ll probably come to find that being proactive about making career development plans will help you prepare for your business’s future needs while reducing the chances of having to seek out new employees to keep your company running.
Don’t underestimate the power of simple communication with your employees. Set aside some time to have a frank conversation about how your employee wants to grow at your company and what steps will need to be taken to get there.
It’s important to know what your staff is thinking as far as career growth, but be sure you also give them enough time to really think about where they see themselves in a year, five years, or even ten years from now. Talk about how your employee is performing currently, where there may be areas of growth or improvement, and be prepared to share some ideas as to what tools are available to assist with this, such as special classes, programs, mentorship opportunities, and shadowing coworkers.
Remember, just because a certain employee may have potential doesn’t mean he or she will fit the exact mold of what you want. Even if your most reliable worker shows the potential to move up the ladder, he or she may not necessarily want to take on a managerial role. A person who proves to be regularly productive may not thrive in a leadership position or a role that requires a lot of public speaking.
On the other hand, you may have employees working in positions that limit their skill sets. Keep an eye out and identify any employees that you suspect would thrive in other departments.
How will you measure your employees’ progress? If you’re having them take part in classes, conferences, seminars, mentorships, and shadowing opportunities, have your employees show off what they’ve learned during one-on-one sessions with you. You can also have team members that are involved in the employee’s development process provide evaluations.
A critical step in fine-tuning your plan of action will be ensuring that neither your employee nor other involved coworkers fall behind on their work due to training and mentoring.
Make time to meet with your employees to get a better understanding of how their career growth is coming along and to discuss if there are areas in your plan that you need to modify or change. Additionally, you can use this time as an opportunity to start applying the skills they’ve developed at your workplace once you both feel confident and ready.
RTR Consulting has more than 20 years devoted to developing effective and efficient human resources policies, procedures, and best practices for small, start-ups, and medium-sized businesses. Contact us today if you need help keeping your business running smoothly.
As the working world has evolved, it’s no secret that priorities have shifted and what employees looked for in a workplace a decade ago is different from what they desire now. For example, millennials, who make up just about one-third of the American workforce, tend to place great importance on work-life balance and career growth and opportunities, rather than just a high salary.
