California Online Sexual Harassment Prevention Training

The California Department of Fair Employment and Housing (DFEH) has released its California online non-supervisory sexual harassment prevention training courses. The training courses are available here. Employees must be paid for time spent taking this training. This online training from DFEH is a compliant option available to employers to meet the California requirement for non-supervisory training. This requirement can also be met through in-person, virtual, and other online training providers.

The Law

California law requires all employers with five or more employees to provide one hour of sexual harassment and abusive conduct prevention training to non-supervisory employees and two hours of training to supervisors and managers once every two years. (Employers with 50 or more employees were already required to provide training to supervisors.)Current employees must receive training by January 1, 2021. Beginning January 1, 2021, new supervisory employees in workplaces of five or more employees must be trained within six months of assuming their supervisory position, and new non-supervisory employees must be trained within six months of hire.

Employer Requirements

Employers must retain a record of all employees’ training for a minimum of two years. Employers must also provide employees this poster, this fact sheet, or equivalent information. To learn more about these requirements, please see the DFEH’s Frequently Asked Questions.

Read about how to prepare for violence in the workplace here

What Employees Should Know About the DFEH Training Option

At the end of the training, employees will be able to save, print, take a screenshot, or email their certificate of completion. Make sure employees know how they should save the certificate before they begin. Employees  should also be informed that the training module will not save their progress, so if employees refresh or reload a page, they may have to restart from the beginning.

Why is this training required

California takes sexual harassment very seriously. Despite the greater awareness of sexual harassment and its harms, many workers are still subjected to harassment because of their gender or other protected characteristics. These trainings are legally required and designed to educate or remind everyone about what is and what is not acceptable behavior in the workplace.

FFCRA Sick Leave Rules Changes

The Families First Coronavirus Response Act (FFCRA) put in place sick leave rules to help employees take sick leave without losing their jobs. These Coronavirus sick leave rules have not been without issues. As a result, some aspects of the Coronavirus sick leave rules (FFCRA) sick leaves have been changed, making them more favorable to employees as discussed below.

A federal court in New York recently struck down four federal Department of Labor (DOL) rules related to the leaves provided by the Families First Coronavirus Response Act (FFCRA). As a result, certain aspects of the FFCRA are now more favorable to employees.

Unfortunately, it’s not clear if the ruling applies nationwide or only in the Southern District of New York, where that court is located. Until there is further activity in the case—which may clarify whether the rules remain intact throughout the rest of the country—we recommend that employers err on the side of caution when administering FFCRA leaves and assume these particular rules no longer apply.

What is clear is that these four rules definitely do not apply to the counties of Bronx, Dutchess, New York, Orange, Putnam, Rockland, Sullivan, and Westchester (i.e., the Southern District of New York).

Here are the rules that the court invalidated:

The requirement that work be available for an employee to use leave

DOL Rule: The DOL said that for an employee to use Emergency Paid Sick Leave (EPSL) or Emergency Family Medical Leave (EFMLA, aka EFMLEA), the employer had to have work available for them during the time they needed leave. For instance, if an employee was furloughed while sick with COVID-19, they would not be eligible for EPSL.

The Court’s Ruling: Availability of work is irrelevant. If an employee is still employed, whether on the schedule or not, they should be allowed to use FFCRA leave for qualifying reasons.

The requirement that employers agree to intermittent leave

DOL Rule: Employees must get approval from their employer to use intermittent leave to care for their children when their school or place of care is unavailable because of COVID-19.

The Court’s Ruling: If an employee needs intermittent leave (partial weeks or partial days off) to care for their child whose school or place of care is unavailable because of COVID-19, the employer must allow it.

The requirement that employees provide documentation before taking leave

DOL Rule: Employers could require that employees provide certain documentation before being allowed to take FFCRA leave or before designating the leave as EPSL or EFMLA.

The Court’s Ruling: Employers can still require documentation (which is necessary to get their tax credit), but they can’t prevent an employee from starting leave until the documentation is received. The law clearly states that an employee must provide notice “as is practicable” when taking EFMLA and after the first workday of leave when taking EPSL.

The definition of health care provider, for the purpose of exemption from leave

DOL Rule: The DOL defined health care providers very broadly, to include anyone who works for a healthcare entity and many who contract with one. (The rule was so broad that a custodian working at a drugstore or an English professor at a university with a medical school could be exempt.)

The Court’s Ruling: The definition is too broad. However, the court did not provide a new definition. We recommend that employers apply the exemption only to those employees capable of directly providing healthcare services.

We will be watching closely for activity in this case and will let employers know if and when things change or become clearer.

Temporary Employee Tax Deferral

The temporary employee tax deferral program is as a result of a Presidential memorandum. On August 8th, President Trump directed the Treasury Secretary to use his authority to defer the withholding, deposit and payment of employees’ portions of Social Security taxes from September 1 through December 31, 2020.

The goal is to put more money in the pockets of workers during the COVID-19 pandemic emergency. 

Social Security Tax Withholding Deferred

The temporary employee tax deferral applies to the 6.2% tax on wages or compensation paid for a bi-weekly pay period of less than $4,000 or the equivalent threshold amount for other pay periods. In other words, employees with annual wages up to $104,000 are generally eligible for the deferral.

IRS Guidance on The Temporary Employee Tax Deferral

Just a few days before the start of the deferral period, the IRS has issued some vague guidance regarding the temporary employee tax deferral program. It explained that the due date for withholding and paying Social Security taxes has been postponed. These taxes are now due between January 1, 2021 and April 30, 2021.

This means that Social Security taxes not withheld in the last 4 months of 2020 are to be withheld from employees’ wages during the first 4 months of 2021. Furthermore, in those 4 months, the required taxes on the 2021 wages will be continue to be withheld as well. 

Obviously, the temporary deferred withholding will increase employees’ take-home pay in September through December of this year. On the contrary, their winter and early spring 2021 paychecks will be smaller because the Social Security tax withholding will be twice the usual amount.

Example

Assumption: This employee lives in a state without income tax.

An employee is paid weekly and his wages in 2020 are $1,000 per week. Normally, $62.00 in Social Security (6.2%), $14.50 in Medicare (1.45%) and $120 in federal income taxes are withheld from his wages by the employer. The employer adds $76.50 (the employer’s matching amount for Social Security and Medicare tax) before paying the withheld amount to the government. Therefore, the employee’s take-home pay is $803.50. 

Under the temporary employee tax deferral arrangement, nothing would be withheld for the Social Security tax. So the employee’s take-home pay for the week would go up by $62.00 for a total of $865.50. The amount transmitted to the government would be $62.00 less per week. 

Fast forward to 2021: The employee’s wages are still $1,000. And for as many pay periods in 2020 as the deferral occurred, the Social Security tax withholding in 2021 will be $124. This amount is made up of the amount deferred in 2020 and the regular 2021 withholding. For these pay periods, the take-home pay will be $741.50.

Employer’s Responsibility

The IRS Notice places the responsibility on the employer to make payment of the deferred payroll taxes by May 1 of 2021. Otherwise, the employer may owe penalties, interest and additional tax.

This may create a problem if an employee no longer works for the same employer in 2021. Obviously, the employer can’t withhold the makeup tax, since the worker has no wages from that employer.

According to the IRS notice, if necessary, the employer may make other arrangements to collect the total deferred taxes from the employee. Unfortunately, it doesn’t specify what those arrangements should or could be.

Unresolved Issues

Whether an employer must stop withholding the Social Security tax from September 1 through the end of the year is NOT addressed in the guidance. Nevertheless, Treasury Secretary Mnuchin is reported to have said that he can’t force employers to stop withholding.

Also not covered is if an employee may decline to have the tax deferred. Some large employer organizations have said is logistically unworkable.

The president has indicated that he would like the deferred taxes permanently forgiven. As it is with all tax matters, it would take congressional approval to change the law. Unfortunately, given the highly charged political climate in Washington, that may not happen.

AccuPay’s Opinion

We strongly advice you to stay away from the temporary employee tax deferral of their social security withholding. It is obvious in so many fronts that this memorandum is more problematic than good. Here is why:

1. 1The amount deferred is still due. There is no guarantee for forgiveness (unless president Trump wins a second term, but congress still has to legislate it)
2. 2If an employee leaves, whether voluntarily or not, employers will not be able to collect the deferred taxes
3. 3Employers are stuck with the nightmare of collecting the deferred taxes, even if all employees stay (what are the chances for the majority?)
4. 4Tax filing will be a challenge, though doable. 

Overall, this temporary employee tax deferral memorandum is a compliance nightmare and should be avoided at all costs. Send us an email or call us on Thursday or Friday if you would like to discuss further.

California Minimum Wage and Employment Law Changes for 2019

As usual, the California legislature and various city councils had a busy year regulating the world’s fifth largest economy. Included below are both state and city minimum wage increases as well as summaries of the laws that impact the human resources function. Beginning January 1, 2019, the following minimum hourly wages will be in effect:

• State—Employers with 26 or more employees: $12.00
• State—Employers with 25 or fewer employees: $11.00

Cities with a different minimum wage

• Belmont: $13.50
• Cupertino: $15.00
• El Cerrito: $15.00
• Los Altos: $15.00
• Mountain View: $15.65
• Palo Alto: $15.00
• Richmond: $15.00

• San Diego: $12.00
• Oakland: $13.80
• San Jose: $15.00
• San Mateo: $15.00, but $13.50 for 501(C)(3) organizations
• Santa Clara: $15.00
• Sunnyvale: $15.65

The entire schedule for California minimum wage rates from 2017 to 2023 and frequently asked questions can be found here.

Exempt Employee Minimum Salary

The yearly minimum salary for properly classified exempt employees in California is twice the minimum wage x 2080 hours per year. Therefore, each year as the minimum wage goes up, so does the minimum amount an exempt employee must be paid. Exempt employee minimum salaries are as follows for 2019:Employers with 25 or fewer employees: $45,760 per year, or $880 per week. Employers with 26 or more employees: $49,920 per year, or $960 per week.

References and Sexual Harassment

Currently, employers who are providing a reference are allowed to share certain factual information about the individual’s job performance and qualifications for a position, as well as whether they would rehire that person. Effective January 1, 2019, the law will specify that an employer may also say whether its decision not to rehire is based on its determination that the individual engaged in sexual harassment. For this kind of communication to be protected, it must be provided only to someone who the employer reasonably believes is a prospective employer. The information also must be given without malice; this means without hatred or ill will, and with reasonable grounds for believing their statements are true.

Finally, an employer may only share that its decision not to rehire is due to sexual harassment if that decision is based on credible evidence. For example, if an employer terminated an employee for multiple reasons, including an unsubstantiated and uninvestigated sexual harassment complaint (perhaps the final straw), it should not share information about the sexual harassment complaint with a prospective employer.   Currently it’s unclear whether employers can say more than, “our decision to rehire is based on sexual harassment,” so until further guidance is provided by the state, we recommend that employers share only that much information when asked about eligibility for rehire.

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Families First Coronavirus Response Act (FFCRA)

The Emergency Sick and Family Leave Measure for American Workers

Families First Coronavirus Response Act (FFCRA) is an emergency initiative in response to the impact of Coronavirus on American workers and businesses.

There are a number of relief measures the FFCRA provides, including:

1. Paid sick leave/time
2. Paid family and medical leave
3. Family and Medical Leave Act (FMLA) expansion
4. Employer tax credits
5. Unemployment insurance expansion
6. Nutrition aid

Before we get into the details, here is a snapshot of what you need to know relating to the Coronavirus paid sick and family leave:

• Employers with fewer than 500 employees must provide paid sick time or paid family leave to eligible employees
• Some employers with fewer than 50 employees may be exempt from providing paid sick leave
• Employees are entitled to their regular rate of pay for 10 days if they can’t work because they are in quarantine or isolation due to a federal, state, or local government order; the advice of a healthcare provider; or have coronavirus symptoms and are seeking a medical diagnosis
• Employees are entitled to two-thirds their regular rate of pay for 10 days if they are using paid sick time to care for someone who is in quarantine or isolation due to a federal, state, or local government order or the advice of a healthcare provider
• Employees are entitled to two-thirds their regular rate of pay (after 10 days, which employees can cover with paid sick leave or accrued time off) for 10 weeks if they are using paid family leave to care for a child whose school or childcare provider closed due to the coronavirus
• Employers who provide paid leave to employees are entitled to an employer tax credit, worth 100% of the paid leave, plus 100% of the employer Medicare share associated with the leave wages
• Employers do not have to pay the employer Social Security tax share on leave wages
• The leave benefits are not retroactive

According to the act, these effects begin taking place “no later than 15 days after the date of enactment,” which was March 18. The FFCRA provides paid leave for employees with qualifying reasons related to COVID19. 

There are two paid leave types:

The Emergency Paid Sick Leave Act (EPSLA – 2 weeks of leave)

This provides full-time employees with 10 days of paid time off – at their regular wage rate – if they have to quarantine or isolate due to the coronavirus. It also provides employees with 10 days of partial paid time off—at two-thirds their regular wage rate—if they are caring for someone who must quarantine or isolate due to the coronavirus.

Full time employees get the full 80 hours while part time employees get the number of hours, they average over a two-week period.

Rate of Pay

The sick or quarantined employee is entitled to their regular rate of pay but not to exceed a daily rate of $511.00 or ($5110 over 10 days).

Employees taking EPSLA to care for someone who is sick or quarantined are entitled to two thirds of their regular rate of pay, not to exceed $200.00 per day (or $2,000.00 over a 10-day period).

Eligibility

All employees regardless of how long they have been employed at your business

Applies to employees who are:

1. Subject to a federal, state, or local quarantine or isolation order relating to the coronavirus
2. Advised by a healthcare provider to self-quarantine due to coronavirus concerns
3. Experiencing coronavirus symptoms and seeking a medical diagnosis
4. Caring for someone who is subject to a quarantine or isolation order or advice from a healthcare provider
5. Experiencing a substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor

The Emergency Family and Medical Leave Expansion Act (EFMLEA – 10 weeks of leave)

This provides full-time employees with up to 10 additional weeks of paid time off – at two-thirds their regular wage rate – if they must care for a child, under the age of 18, whose school or place of care is closed in response to the coronavirus.

The first 2 weeks can be unpaid, or the employee can use their EPSLA (#1 above). The employee can also use their accrued PTO, but you cannot force them to use their accrued PTO if they don’t want to.

Rate of Pay

Employees taking EFMLEA leave care a child whose school or childcare center has closed are entitled to two-thirds of their regular rate of pay, not to exceed $200.00 per day (or $10,000.00 over a 10-week period).

Eligibility

All employees who have been employed for 30 or more calendar days at your business.

Applies to employees who are caring for a child whose school, place of care, or childcare provider is closed or unavailable due to coronavirus precautions.

To be eligible the employee also must not be able to work or telework (work-from-home).  If the nature of the employee’s job allows telework and telework is approved by the manager, then the employee is not eligible for EFMLEA.

Required FFCRA Poster

The Department of Labor (DOL) has released a mandatory employee rights poster for the FFCRA. It should be posted or distributed to employees electronically (via email or online portal) by April 1. The required poster can be downloaded here.

Enforcement of FFCRA

The DOL will not bring enforcement actions against employers for violations of the FFCRA prior to April 17, 2020, provided that the employer has made reasonable, good faith efforts to comply with the Act. You can read more about the brief non-enforcement period here.

New Guidance from the DOL on Administering FFCRA Leaves

We strongly suggest that employers read through the entire Question and Answers document, so they have an understanding of how the leaves work. The following are some highlights from the updated guidance:

• These leaves are not available to employees with reduced hours, furloughed employees, or employees’ whose workplaces are closed. See questions 23-28.
• These leaves are not available to employees whose workplaces are closed due to a federal, state, or local shelter-in-place or stay-at-home orders, or due to business slowdowns. See question 23.
• These leaves (and payroll tax credit) are not retroactive. Employees are not entitled to pay under these leaves if they were absent or out of work (for any reasons) prior to April 1. See question 13.
• Both emergency paid sick leave (EPSL) and emergency Family and Medical Leave (EFMLA) can be taken on an intermittent basis in certain situations. See Questions 20-22 for explanations about when intermittent leave is allowed.
• Employees may not be required to use other forms of paid leave prior to or concurrently with EPSL or EFMLA. See questions 32 and 33.
• Employers should keep documentation to show that employees who received leave were actually in need of leave. The documentation requirements will be outlined in soon-to-be-released IRS guidance. See Questions 15 and 16.

What the employer gets for providing sick leave benefits

The government is providing two employer benefits for providing the EPSL and EFMLA leave payments:

• Exemption from Social Security tax – 6.2%. Employers are normally responsible for paying 6.2% of each employee’s wages for social security taxes. With this exemption, you do not have to pay this 6.2% on the paid sick leave or the paid family leave wages.
• Employer payroll tax credits, equal to 100% of the leave wages. This allows you to receive 100% of the wages you paid, up to the limits set depending on the type of leave.

Employers are normally responsible for paying 6.2% of each employee’s wages for social security taxes. With this exemption, you do not have to pay this 6.2% on the paid sick leave or the paid family leave wages.

These wages are subject to all regular taxes but employers are allowed to take credit for the 6.2% social security taxes immediately. This means that they can calculate and withhold all the other taxes other than social security taxes – hence taking an instant credit. This would be handled by us, your payroll processor. So please do not stress about implementation. Make sure you designate your wages accordingly.

The payroll tax credit lets you use withheld payroll taxes to cover the amount you owe an employee for paid sick or family leave.

Let’s look at an example. Say you owe an employee $5,000 in paid sick leave. You owe $7500 in payroll taxes to the IRS. Rather than depositing the $7,500 with the IRS, you can take a $5,000 credit to cover your sick employee’s wages. Then, you would only owe $2,500 to the IRS.

The tax credit also lets you take 100% of the employer share of Medicare tax on the leave wages as an additional credit. 

If you don’t have enough money to cover the cost of paid sick and family leave, you can request an accelerated credit from the IRS. Use Form 7200, Advance Payment of Employer Credits Due to COVID-19 to do so.

To claim the credit, you must hold onto necessary documents in your records. You will report your total qualified leave wages and related credits for each quarter on Form 941, Employer’s Quarterly Federal Tax Return (AccuPay will do this for all our clients)