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Good News for California Employers – PAGA Reform Is Here!

Earlier this year CALSAGA made a contribution of $100,000 to join with other industry associations and chambers of commerce to support FixPAGA.

Please see information below from CALSAGA Legal Advisor Bradley, Glemich + Wellerstein, LLP with good information regarding PAGA reform!

California employers can breathe a sigh of relief (for once)! On June 27, 2024, California Gov. Newsom signed Assembly Bill (AB) 2288 and Senate Bill (SB) 92, significantly reforming the 20-year old Private Attorneys General Act of 2004 (PAGA). While employers may not have gotten rid of this one-sided adversary, they’ve finally been given some tools to defend PAGA claims. As a result of this new law, the November ballot initiative to repeal PAGA has been withdrawn.

The PAGA reform will apply to civil actions brought on or after June 19, 2024, and will not apply to matters in which notice was filed before June 19, 2024.

Here are the highlights about PAGA reform:

Standing

AB 2288 provides that a plaintiff must have personally suffered each Labor Code violation they seek to pursue on behalf of other aggrieved employees within one year of filing the required administrative notice (PAGA Notice) with the California Labor & Workforce Development Agency (LWDA). This is a significant win for employers as previously, any employee that suffered even one Labor Code violation was entitled to file a PAGA lawsuit for all alleged violations, even for those the employee did not suffer.

PAGA Penalties 

AB 2288 reforms PAGA’s penalty structure by incorporating new caps and reductions, as follows:

  1. For employers who proactively take steps to comply with the Labor Code before receiving a PAGA notice, the maximum penalty that can be awarded is 15% of the applicable penalty amount.
  2. For employers who take steps to fix policies and practices after receiving a PAGA notice, the maximum penalty that can be awarded is 30% of the applicable penalty amount.Examples of such reasonable steps include, but are not limited to, conducting periodic payroll audits and taking action in response to the results of those audits, disseminating lawful written policies, training supervisors on applicable Labor Code and Wage Order compliance, and/or taking appropriate corrective action with regard to supervisors as needed. Whether or not the employer took reasonable steps will be a decision left to the discretion of the court, which can take into account factors such as the size and resources available to the employer, and the nature, severity and duration of the alleged violations.
  3. Penalties for wage statement violations under Labor Code Section 226 that do not cause injury (i.e. misspelling of company name or forgetting to add “Inc.” on the wage statement) will be capped at $25 per employee per pay period. Note: there is no cap on penalties for a failure to provide wage statements.
  4. The penalty for isolated errors that do not extend beyond the lesser of 30 days or four consecutive pay periods will be capped at $50.
  5. Penalties will be reduced by 50% for employers who pay employees on a weekly basis (such as private patrol operators).
  6. Creates a new penalty ($200 per pay period) if an employer acted maliciously, fraudulently, or oppressively. However, this penalty will be assessed only after (1) a court or agency “has issued a finding or determination to the employer that its policy or practice giving rise to the violation was unlawful” within the 5 years preceding the allegation violation, or (2) the court determines an employer acted maliciously, fraudulently or oppressively.
  7. Employees may not receive penalties for “derivative” violations (in other words, PAGA penalties when an employee has already received penalties for the underlying violation) for (1) failure to timely pay wages at termination (i.e., Labor Code §§ 201-203); (2) failure to timely pay wages during an employment (i.e., Labor Code § 204) if the violation was neither willful nor intentional; or (3) wage statement violations (i.e., Labor Code § 226) that are neither knowing or intentional, or a failure to provide a wage statement.
  8. The allocation of penalties to the LWDA will decrease from 75% to 65%.
  9. The allocation of penalties to the aggrieved employees will increase from 25% to 35%.

Employer Cure Provisions

The reform contains various cure provisions and separate processes for small and large employers, as follows:

Small employers (with fewer than 100 employees during the period covered by the PAGA Notice) may submit a confidential proposal to LWDA to cure the alleged violations. If deemed necessary, the LWDA will have the ability for a conference with the parties. The employer will be provided time to complete the cure, and the employee will be given an opportunity to respond. All proceedings will be deemed confidential.

Large employers (with at least 100 employees during the period covered by the PAGA Notice), will be able to request an early evaluation conference, which will include a statement regarding whether the employer intends to cure any or all of the alleged violations, and a request for a stay of court proceedings. While the proceedings are stayed, the parties will work with a neutral evaluator assigned by the court through a multistep process designed to help resolve the dispute.

Importantly, an employer may only use the notice and cure provisions once in any 12-month period for violations of the same provisions set forth in the PAGA Notice.

Strengthening Enforcement Agency

The Administration will pursue a trailer bill to give the California Department of Industrial Relations (DIR) the ability to expedite hiring and filling vacancies to improve and expedite enforcement of employee labor claims.

Judicial Discretion (Manageability)

AB 2288 expressly provides the courts with the power to manage PAGA claims, including the discretion to limit the evidence to be presented at trial or “otherwise limit the scope of any claim filed pursuant to this part to ensure that the claim can be effectively tried.”

Injunctive Relief

For the first time, AB 2288 allows PAGA plaintiffs to seek injunctive relief.

Employer Takeaway 

PAGA reform should be viewed as an opportunity – employers are given the chance to lower and cap potential exposure, and in some cases, cure the violations before penalties even arise. The new law is intended to incentivize employers to be proactive and stay compliant, so you are encouraged to take action immediately.

Employers should become familiar with the new law. Take reasonable steps to become compliant, including conducting regular audits, ensuring policies and procedures are lawful and disseminated to employees (and documented), train (and retrain) supervisors on all applicable wage and hour issues, pay employees correctly, and correct/modify/change anything, as needed.

If you have any questions about how this new law may affect your business or need assistance conducting audits, preparing compliant policies or revising your practices or policies, please contact your attorneys at Bradley, Gmelich & Wellerstein LLP. We are here to help.

 

Jaimee K. Wellerstein, Esq. is a Partner and the firm’s Employment Team Head. Representing employers in all aspects of employment law, Ms. Wellerstein collaborates with her clients to develop proactive business and legal strategies to try to avoid workplace conflict and employment disputes. She provides legal advice and counsel to numerous businesses, including conducting individualized training programs for both management and employees.

Ms. Wellerstein performs internal audits of her clients’ employment practices to ensure compliance with the rapidly-changing world of employment laws, and guides investigations of employee allegations regarding harassment, discrimination, and employee misconduct. When litigation cannot be avoided, Jaimee K. Wellerstein aggressively defends her clients against employment law claims in the state and federal courts, as well as at administrative hearings, arbitrations, and mediations. Having defended numerous representative and individual lawsuits on behalf of her clients, Ms. Wellerstein is a skilled litigator and negotiator with a broad spectrum of experience upon which to draw.

A frequent speaker on numerous topics, including employment law and contract law, Ms. Wellerstein regularly conducts training seminars and programs for managers and employees in all areas of employment practices and policies.

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Aley Moyer

The Californian 2024 Q2 – Member Spotlight: Fisotec Security

Member Spotlight: Fisotec Security

Ashlee Cervantes, CALSAGA Ambassador Committee Chair

The CALSAGA Ambassador Committee is proud to spotlight one of our very own this quarter, Fisotec Security Inc.

Fisotec is not only one of CALSAGA’s longest running members, of 18 years, their executive management team collectively boasts 106+ years in the industry.

Their Mission Statement says it all; “With a commitment to making your mission as our mission, Fisotec Security, Inc. is revolutionizing the industry by bringing forth integrity, courage, and wisdom from each of our security professionals to ensure the ultimate protection of your staff, property, and life’s work.”

Fisotec Security stands out among the competition for a variety of reasons, but their core values are certainly at the forefront. The company founder, Bobby Debozi, describes their core values as being rooted in the principles taught to him by his late mentor, Daisaku Ikeda. Speaking fondly of his late mentor Mr. Debozi explains, “He taught and demonstrated living with a mission, the importance of integrity, being united, and servant leadership.” To this day, these characteristics serve as the foundation of Fisotec Security, Inc.

These core values translate into fostering and empowering security personnel who feel respected, appreciated, and take to heart their roles and responsibility.

Fisotec Security goes to great lengths to invest in the growth of our officers and inspire them to bring out their highest potential. Each of them has a tremendous mission and by helping them tap into that, the officers, in turn, are able to provide our clients the highest level of professional security service possible.

Mr. Debozi describes CALSAGA as the leader in the industry, “in ensuring the success of every security provider.” Mr. Debozi goes on to explain, “Through its educational, coaching, networking, and legislative advocacy efforts, it has striven to raise the standards in the security industry benefitting both security professionals and their clients, alike.” He concludes by explaining how we can all regard CALSAGA as the, “guardian of guardians.”

When asked what challenges Mr. Debozi  believes will face the industry in the future, he did not hesitate to explain, “Technology is advancing at a pace that no one can keep up with.” He elaborated, speaking as a true veteran, “The security industry is constantly evolving, so as security providers we need to evolve, as well.” As our interview continued, Mr. Debozi was asked how an organization such as CALSAGA can help Fisotec, and other member companies, overcome these challenges in such a rapid changing environment. He explained,

that he’d like to see CALSAGA continue to strive to, “keep its members and the industry in rhythm with the changing trends.” Speaking as a seasoned professional he concluded with, “CALSAGA’s commitment to that allows us to see the future with a broader and wiser lens and enables us to navigate our way through that uncertainty.”

Our favorite quote from Mr. Debozi frames the “why” to Fisotec’s purpose, core values and mission succinctly, eloquently and precisely, “Without living a mission, nothing is sustainable, and sense of purpose is lost. Therefore, our client’s mission becomes our mission.”

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Aley Moyer

The Californian 2024 Q2 – FROM COMPLEXITY TO CLARITY: CLEAERING THE HURDLES OF PAYROLL

From Complexity to Clarity: Clearing the Hurdles of Payroll

Jordan Wallach, Belfry Software, Associate Member

Handling payroll in the security industry is notoriously complicated.

Each contract is different, with pay rates that could change based on site, time of day, overtime & holidays, qualifications, and more. This variability makes the payroll process very challenging and time-consuming.

Most security firms use several different systems to manage payroll, which means data must be moved manually from one system to another — one for scheduling, one for tracking time, another for processing payroll. This not only raises the chances of making mistakes but also takes a lot of time. Payroll teams find themselves spending days managing what should be straightforward tasks, from verifying hours worked against shifts to ensuring compliance with ever-changing labor laws.

These problems can have a big impact. Payroll errors can lead to dissatisfaction among officers, potentially increasing turnover in an industry where reliability and trust are key. Moreover, the time consumed by manual processes detracts from more strategic activities that could enhance client relationships and operational effectiveness.

It’s clear that a single, connected system would be a huge help. A system that smoothly links scheduling, time tracking, and payroll within the same experience would cut out unnecessary steps and mistakes. By automating these processes, companies could focus more on growing and providing excellent service, making sure their back office helps rather than holds back their business goals.

This is where Belfry comes in. Our all-in-one software platform changes how payroll is managed in the security industry. By bringing together everything from scheduling and time tracking to payroll and billing, Belfry offers a complete solution that effortlessly handles the industry’s complexities.

Our system not only cuts down payroll processing time from days to just a few hours — but also ensures accuracy and compliance, allowing security companies to focus on their main job: protecting and serving their clients.

Jordan Wallach is the Co-Founder and CEO of Belfry, the modern operating system for security guard services companies and a CALSAGA Member. Prior to founding Belfry, Jordan was a consultant at McKinsey & Company and a Product Manager at Microsoft, building software used by millions of people worldwide. He has a bachelor’s degree in Data Science from Stanford University.

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Aley Moyer

The Californian 2024 Q2 – ENSURING PAY DATA REPORTING COMPLIANCE THROUGH TECHNOLOGY

Ensuring Pay Data Reporting Compliance Through Technology

Jeff DiDomenico, Trackforce Valiant + TrackTik, Network Partner

California employers must take note of new legislation around employee pay data that could come with fines if they don’t comply. Back in 2020, California required employers with 100 or more employees to report certain pay data to the California Civil Rights Department (CRD) each year. In 2022, the law was amended and expanded to update the filing requirements and now includes civil penalties for noncompliance. In fact, employers need to report their 2023 employee pay data to the state no later than May 8, 2024, or else they face the possibility of civil penalties of $100 per employee, with the penalties increasing to $200 per employee for each subsequent failure to report.

Employers have an obligation to calculate the mean and median hourly rates of employees among these reportable categories: establishment location, job category, race/ethnicity, & sex. For an FAQ document with specific instructions on how to properly calculate pay data according to the CRD, click here.

For security employers still tracking payroll and employee records manually, reporting on employee pay data for the CRD might become a challenge. However, with security workforce management technology, these data records can be auto generated and easily pulled within seconds. Keep track of pay data records across multiple site locations, guard certifications and job categories with access to employee records at your fingertips.

With the right technology tools in place, employers can meet compliance requirements with ease, generating the necessary MS Excel spreadsheets to adhere to CRD pay data reporting laws.

Tracking employee pay data through a security workforce management solution is not only beneficial for compliance concerns but also for ensuring accurate payroll and that employees are being paid fairly based on their responsibilities, skills, and hours worked. Easily track all pay variances for security guards like multiple pay rates for overtime, training, or travel time. To discover more strategies employers like you can use to reduce state and federal compliance payroll risks, download your copy of our Guide to Calculating Multiple Pay Rates for Security Guards.

 

In 2000, Jeff joined Trackforce Valiant + TrackTik as a partner and took on the role of VP of Business Development & Strategy. Throughout his tenure with Trackforce Valiant + TrackTik, Jeff has been dedicated to establishing the company as North America’s foremost provider of security management software. In addition, Jeff is a frequent speaker at various security associations and is recognized as a leading figure and content curator in the security industry. 

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Aley Moyer

The Californian 2024 Q2 – WOMEN IN THE SECURITY INDUSTRY: TRENDS, CHALLENGES & ADVICE

Women In the Security Industry: Trends, Challenges and Advice

Jill Davie, TEAM Software by WorkWave, CALSAGA Network Partner

For security employers in today’s market, it’s important to understand the labor pool to encourage diversity in the workforce.  Women in the security industry only represent 22.5% of the leadership roles and only 24.9% of guards,  according to the U.S. Bureau of Labor and Statistics.

Moving closer to equal representation takes understanding the challenges in attracting and retaining women who want to work in the security field, while removing barriers to ensure that women can have an equal opportunity to climb up the professional ladder. According to several female leaders in the field services industry, there are a number of contributing factors that are creating barriers for women – both external and internal.

Overcoming gender biases and stereotypes

Gaining respect – particularly from male colleagues – is a critical factor for women across the field service industries. Historically, women have reported facing skepticism about their abilities, ideas or experiences both in the field and in leadership roles.

To overcome these barriers, it’s important for women to be assertive, express opinions and push back if needed – while employers can build an environment based on respect that fosters a culture where women’s opinions, skills and accomplishments are valued and recognized. The businesses that achieve this will reap the benefits of having access to different perspectives, strategies and process improvements.

“One of the biggest benefits of having women in leadership roles is that it creates a space for more overall diversity within your business. When your organization becomes an advocate for different perspectives, mindsets and collaboration, the sky’s the limit,” said Sharon Roebuck-McBride, the Senior Executive Vice President at Triangle Home Services.

Bridging the confidence gap

The confidence gap is a psychological phenomenon that often plagues the female workforce, where women generally feel less confident in their qualifications, skills and potential than men.

In typically male-dominated industries, this phenomenon can even be chalked up to the perception of the type of labor involved in a job and whether or not women can physically achieve the same outcomes as men on security patrols. Studies show that women who tend to underestimate their abilities take fewer risks and thereby miss opportunities for advancement.

To overcome this issue, it’s important to continue learning, celebrate achievements and cultivate a self-assured mindset. Taking these steps can help keep momentum high, instead of holding back from potential success.

“Sometimes, we are our own biggest barrier. Once we get out of our own way, recognize that our skill sets matter — our opinions matter — that’s how we’ll begin to break these perceptions down,” said Roebuck-McBride.

Advice for drawing in more female applicants

  1. Be Visible. Since the security industry is historically male-dominated, women may have trouble viewing themselves in some industry roles. That said, perceptions are always just that, which means they can change.

“We need both men and women in the industry. Everyone is important, no matter what your gender is, and women bring a different perspective to the table,” said Jenny Schoenfeld, Chief Operating Officer for ACT Security Group.

  1. Change your marketing. Adjust your job postings to attract a broader demographic. For example, making simple adjustments to job descriptions like, Have the freedom to run your own schedule or Do you like to work outside? or Do you like to work independently? can draw in more female applicants. Word of mouth is also huge, so you’re encouraged to leverage your existing team to help build your future team – all while fostering a more diverse work environment.
  2. Balance your business. While it may be tough to offer work from home arrangements in the security industry, providing employees with flexible work arrangements whenever possible to attract female job seekers, such as flexible scheduling, parental leave policies and even vocalizing how your business accommodates last-minute illness or daycare closure, may increase interest among applicants.

Businesses who foster an inclusive work environment reap numerous benefits – from having a greater pool of potential job candidates, to bringing new skill sets and experiences to the table.

Jill Davie, Chief Customer Experience Officer at TEAM Software by WorkWave

Jill Davie started full time with TEAM Software in May 1998 and has held various roles in Sales, Marketing, Communications, Customer Success and Professional Services. Currently, Jill serves as the Chief Customer Experience Officer at WorkWave where she is responsible for Customer Success Management, Professional Services and Customer Engagement. She is passionate about operational excellence, engaging directly with customers and attracting and retaining top talent with a people-centric culture.

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Aley Moyer

The Californian 2024 Q2 – MARKET TRENDS FOR SECURITY CONTRACTORS

Market Trends for Security Contractors

Carissa Gappa, TEAM Software by WorkWave, CALSAGA Network Partner

Employers in the security industry can gain a competitive advantage by integrating market research, global economic outlooks, and industry-specific predictions. Accurate data is particularly important due to challenges like increased demands from clients. They can stay one step ahead by understanding market trends and the broader macroeconomic picture.

Inflation

The U.S. inflation rate was 3.5% as of March 2024, based on a 12-month percentage change from the year prior, according to the U.S. Bureau of Labor Statistics.

Although the inflation rate is still higher than the Federal Reserve’s target of 2%, that number has significantly dropped from the 9.1% spike in June 2022. With the latest drop in unemployment rate to 3.8% in March, the U.S. economy remains strong, discouraging the Fed from cutting interest rates again until prices decline at a more consistent rate.

Despite wages increasing by 4.5% in 2023, the increase felt like 0.8% with inflation. Economists believe that the elevated rate may explain why many Americans feel dissatisfied with the economy, despite reports of steady economic growth, ongoing wage increases and low unemployment.

Interest rates

To combat current inflation, the Federal Reserve leveraged interest rates to engineer a ‘soft landing’ and avoid a full recession. Rising interest rates can affect a company’s ability to service debt, especially if it incurs rising costs without a boost in revenue to balance it out.
Throughout most of last year, the cost of capital was exceeding 5%. Economists report that interest rates are holding somewhat steady, increasing by about 1% between January and July 2023 — but the Federal Reserve predicted decreases in 2024, which set the table for multiple interest rate cuts at some point this year.

Recent job and inflation reports, indicating ongoing pricing pressure and job growth through the first quarter, have pushed the probability of any rate cuts later into the year than initially projected.

Mergers and Acquisitions

‘Dry powder’ describes cash reserves, liquid assets for available use or capital waiting to be deployed in the private equity market. In December 2023, dry powder rose 8% to $2.59 trillion globally, according to S&P Global Market Intelligence — meaning, idle cash is available for use amongst private investment partnerships that specialize in buying and managing companies before selling them.
Merger and acquisition activity started returning in Q3 2023 after a decline since 2019, according to the BSCAI’s M&A Watch Report and Robert Perry’s 2023 white paper on the U.S. Contract Security Market – with both projecting more deal volume in coming quarters.
Building occupancy

The COVID-19 pandemic forced many businesses to change their policies for working onsite, with remote or hybrid models becoming the norm. Employees reported more productivity and increased work-life balance, while employers have seen the benefits of choosing from a larger talent pool. However, office vacancy rates have spiked.

Before 2020, the quarterly vacancy rate was around 12%, but with COVID-19 that number rose to 15%. As the pandemic slowed by the first quarter of 2023, 16.1% of office space in the country was vacant — and in some markets, vacancies reached up to 30%. Security contractors have stated that trying to scale down or change previous contracts has caused challenges since those written agreements can lack flexibility.

Technology

Breakthroughs in artificial intelligence are being discussed in the security industry, as those advancements could have a major impact on the economy. According to a Goldman Sachs report, it is estimated that AI tools could drive a $7 trillion increase in GDP while lifting productivity growth by 1.5% over a decade-long period.

Approximately 300 million jobs could be impacted by workflow changes triggered by AI. Luckily, changes in automated work could only partially impact various job roles by complementing the work currently performed, instead of substituting it.

Researchers predict that jobs requiring physical labor or outdoor work would be less impacted by AI, while administrative personnel and lawyers could experience more of an impact. Additionally, it is theorized that AI advancements could create future employment opportunities.

Read our 2024 Labor Trends Report for more info.

Carissa Gappa, Senior Product Manager at TEAM Software by WorkWave. As a Senior Product Manager, you’ll find Carissa championing customer needs, analyzing cross-industry data trends, and coordinating customer advisory board programs. Armed with a Bachelor’s degree in Marketing from the University of Northern Iowa and her MBA from the University of Nebraska Omaha, Carissa has spent the last 19 years bringing together people, process and technology to solve problems in a variety of industries.

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Aley Moyer

The Californian 2024 Q2 – SB 553 – WORKPLACE VIOLENCE PREVENTION PLAN

SB 553 – WORKPLACE VIOLENCE PREVENTION PLAN

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

It is every employers’ priority to provide a safe workplace environment. Now with SB 553, California employers are mandated to implement a program regarding the prevention of workplace violence.

The new bill signed by the Governor requires employers to implement a Workplace Violence Prevention Plan (WVPP) no later than 7-1-24. The WVPP is being established to educate employees, identify the concerns/hazards, evaluate the concerns/hazards and implement corrective actions. Workplace violence includes but is not limited to any act or threat of physical violence, harassment, intimidation, or other disrupting behavior that occurs at the worksite. Workplace violence can affect employees, customers, clients, visitors and others.

CAL/OSHA as part of the Department of Industrial relations will be the enforcing agency, as they also enforce the Injury & Illness Prevention Plan and the Heat Illness Prevention Plan. They will require employers to engage and implement the WVPP with employee involvement.

California is the first State to mandate a WVPP, however it is expected that others States will follow.

Attached is a Workplace Violence Prevention Plan template from CAL/OSHA. You can use this as a guide to implement and customize your own plan.

Model-WPV-Plan-General-Industry

If you have any questions, please do not hesitate to contact me.

Take care.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

 

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Aley Moyer

The Californian 2024 Q1 – RECENT CHANGES TO COVID-19 REPORTING REQUIREMENTS FOR EMPLOYERS

RECENT CHANGES TO COVID-19 REPORTING REQUIREMENTS FOR EMPLOYERS

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

Happy New Year and hope the year is starting off well for everyone!

With each new year come changes, some not so good and some not so bad. For good news, some reporting requirements for COVID-19 positive tests have been removed. Here is a “Policyholder email” from the State Fund explaining the changes that take effect January 1, 2024:

The new changes apply to all insurance carriers and employers, not just the State Fund clients.

COVID-19 injuries can still be reported, however they are to be managed just like any other industrial injury. Just like with any industrial injury, a thorough and complete claim investigation into the events leading up to the injury will assist in determining whether a claim is work-related.

We wanted to start off with some good news and we wish everyone a great year in 2024!

Take care.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

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Aley Moyer

The Californian 2024 Q1 – LEGAL COMPLIANCE: CALCULATING MULTIPLE PAY RATES FOR SECURITY GUARDS

LEGAL COMPLIANCE: CALCULATING MULTIPLE PAY RATES FOR SECURITY GUARDS

Jeff DiDomenico, VP Business Development & Strategy, Trackforce Valiant + TrackTik

To hire and retain high-quality talent, it’s essential that guards are paid fairly based on their responsibilities, skills, and hours worked. Employers may seek to pay different wage rates for different job duties performed by employees during the same workweek. For example, employers might want to pay armed security guards a higher rate than unarmed security guards or pay one rate for guarding time and a lower rate for training or travel time.

While state and federal wage and hour laws permit employers to pay employees at more than one hourly rate for different kinds of work, employers must ensure that employees are properly compensated or face serious legal repercussions. Adding overtime to the mix only increases the potential for compliance headaches. For example, federal law prohibits any compensation plan that artificially deflates an employee’s regular hourly rate or evades overtime requirements.

Many states also have strict rules for calculating pay rates, and an acceptable method of calculation in one state may not work in another state. Plus, employers must comply with both federal and state law and must pay employees according to whichever law is more favorable (i.e., generous) to the employee. Consider California as an example, where employers must pay the California minimum wage of $16.00 per hour, because it is more generous than the federal rate of $7.25 per hour.

When an employee performs two or more different types of work in a single workweek and receives different base rates of pay, the regular rate for that week is calculated according to one of two methods: the weighted average or the rate-in-effect.

How are these methods calculated and what strategies can employers use to reduce state and federal compliance risks? Download a copy of our guide: Calculating Multiple Pay Rates for Security Guards to find out.

 

In 2000, Jeff joined Trackforce Valiant + TrackTik as a partner and took on the role of VP of Sales & Marketing. Before this, he successfully owned a computer supply company, which he later sold to OfficeMax. Throughout his tenure with Trackforce Valiant + TrackTik, Jeff has been dedicated to establishing the company as North America’s foremost provider of security management software.

In addition, Jeff has played a pivotal role in advancing the Valiant Partner Marketplace, the Security Executive Roadshow, and various client events. He is a frequent speaker at various security associations and is recognized as a leading figure and content curator in the security industry.

Moreover, Jeff also serves as the host and co-content creator of Thinkcurity, a dynamic platform revolutionizing education in the physical security industry. Through engaging content and profound thought leadership, Thinkcurity empowers individuals in all aspects of running a thriving security operation.

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Aley Moyer

California Expands Mandatory Paid Sick Leave

California Expands Mandatory Paid Sick Leave

On October 4, 2023, Governor Newsom signed Senate Bill (SB) 616 authorizing the expansion of California’s Paid Sick Leave law, the Healthy Workers Healthy Families Act of 2014. The new bill includes notable expansions to the amount of protected, paid sick time that must be provided to employees in California, as well as the amount of accrued time they are able to roll over from one year to the next. The new requirements take effect on January 1, 2024.

Background

In 2014, California enacted the Healthy Workplaces, Healthy Families Act of 2014 (“HWHFA”), providing California employees with mandatory paid sick leave. The HWHFA became effective on July 1, 2015.
Under the existing law, eligible employees accrue paid sick days at the rate of one hour per every 30 hours worked, beginning at the commencement of employment. The HWHFA applies to full-time, part-time, and temporary workers who work for the same employer for at least 30 days within a year in California and complete a 90-day employment period before taking any paid sick leave. Upon the oral or written request of an employee, an employer must provide paid sick days for the following purposes:

  1. Diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member; and
  2. For an employee who is a victim of domestic violence, sexual assault, or stalking.

The HWHFA defines “family member” to include the following:

  • A child, meaning a biological, adopted, or foster child, stepchild, legal ward, or a child to whom the employee stands in loco parentis regardless of age or dependency status;
  • A parent, meaning a biological, adoptive or foster parent, stepparent or legal guardian of an employee or a person who stood in loco parentis when the employee was a minor child;
  • The employee’s spouse or registered domestic partner;
  • A grandparent;
  • A grandchild;
  • A sibling;
  • And a designated person, meaning a person identified by the employee at the time the employee requests paid sick days.

An employer may limit an employee to one designated person per 12-month period for paid sick days.

Although these basics remain the same under SB 616, the new law amends various provisions of HWHFA, requiring employers to revise their California paid sick leave policies to ensure compliance.

Accrual and Carryover

Under California law, accrued paid sick days must carry over to the following year and use-it-or-lose-it policies are prohibited. However, California employers may set a threshold accrual cap. Once an employee accumulates an amount of paid sick time that equals the cap amount, they stop accruing. Once an employee uses the sick time and their banked time falls below the cap, they immediately commence accruing leave again. The accrual cap also operates as a cap on the amount of unused leave employees can carry over from one year to the next.

  • Current Law: Currently, an employee’s banked, accrued paid leave may be capped at 48 hours or 6 days, whichever is greater.
  • New Law: Effective January 1, 2024, the cap increases to 80 hours or 10 days, whichever is greater.

Under SB 616, the default approved accrual formula of 1 hour of paid sick leave accrued for every 30 hours worked by the employee remains unchanged.

Frontloading

The HWHFA allows employers to frontload a specific amount of paid sick leave each year, rather than accruing hours.
• Current Law: Currently, the law requires employers that frontload to provide 24 hours or 3 days, whichever is greater.
• New Law: Effective January 1, 2024, the frontloading requirement increases to 40 hours or 5 days, whichever is greater.

Notably, no accrual or carryover is required if the full amount of leave is received at the beginning of each year of employment, calendar year, or 12-month period (i.e., frontloaded). Effective January 1, 2024, the term “full amount of leave” means five days or 40 hours.

Alternative Accrual Methods

Instead of using the standard accrual rate of 1 hour for every 30 hours worked, employers may use a different accrual method, as long as the method meets certain requirements.

  • Current Law: Currently, instead of using the standard accrual rate, the HWHFA allows employers to use a different accrual rate as long as employees accrue leave on a regular basis resulting in them having accrued no less than 24 hours of paid sick leave by the completion of their 120th day of employment and having that same amount by the completion of the 120th day in each subsequent year.
  • New Law: Effective January 1, 2024 employees must also have accrued no less than 40 hours (or 5 days) of paid sick leave by the 200th day of employment and that same amount by the 200th day in each subsequent year.

Use Caps

Employers must allow accrued paid sick leave to carry over from year to year. However, an employer may limit the use of paid sick days in each year of employment.

  • Current Law: Currently, the HWHFA allows employers to limit employees’ paid sick leave use per year to 24 hours or 3 days, whichever is greater.
  • New Law: Effective January 1, 2024, employers may limit employees’ annual use cap to 40 hours or 5 days, whichever is greater.

Employer Takeaway

As the new law goes into effect January 1, 2024, all covered employers should update their Paid Sick Leave policies to reflect the coming changes now. Additionally, employers should ensure they are prepared to implement procedures to comply with the new law, including wage statement compliance. Employers should also take care to update their Wage Theft Prevention Act Notice provided to all new hires (also known as a Labor Code section 2810.5 Notice). The Department of Industrial Relations will provide an updated template to reflect these changes, check the DIR Website HEREfor the release of the update.

If you have any questions about how this new law may affect your business or need assistance preparing compliant policies or revising your practices, please contact your attorneys at Bradley, Gmelich + Wellerstein LLP. We are here to help.

About the Authors

Jaimee K. Wellerstein, Esq. is a Partner and the firm’s Employment Team Head. Representing employers in all aspects of employment law, Ms. Wellerstein collaborates with her clients to develop proactive business and legal strategies to try to avoid workplace conflict and employment disputes. She provides legal advice and counsel to numerous businesses, including conducting individualized training programs for both management and employees. Ms. Wellerstein performs internal audits of her client’s employment practices to ensure compliance with the rapidly changing world of employment laws and guides investigations of employee allegations regarding harassment, discrimination, and employee misconduct.

When litigation cannot be avoided, Jaimee K. Wellerstein aggressively defends her clients against employment law claims in the state and federal courts, as well as at administrative hearings, arbitrations, and mediations. Having defended numerous representative and individual lawsuits on behalf of her clients, Ms. Wellerstein is a skilled litigator and negotiator with a broad spectrum of experience upon which to draw.

A frequent speaker on numerous topics, including employment law and contract law, Ms. Wellerstein regularly conducts training seminars and programs for managers and employees in all areas of employment practices and policies.

Michael J. Bruskin, Esq. is Special Counsel for the firm’s Employment Team Advice & Counsel Practice Group. Advising employers in all aspects of employment law, Mr. Bruskin develops deep relationships and working knowledge of his clients’ operational preferences and devises forward-thinking strategies to align business needs with risk mitigation and legal compliance. Mr. Bruskin performs internal audits of his client’s employment practices to ensure compliance with the rapidly changing world of employment laws and guides their employment and business strategies to create successful and lasting relationships with their employees.

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