F&I and Showroom, August 2017

www fi magazine com 32 F I and Showroom August 2017 sales duties rest breaks are not considered as paid by the commissions salespeople earn This means dealerships must now track the amount of time salespeople spend each day taking statutory rest breaks and pay them separately for that time Due to the numerous penalties that may be sought for rest break and pay violations what may appear to be a small difference in pay can quickly become a costly mistake 3 CALIFORNIAS FAIR PAY ACT The California Fair Pay Act which forbids employers from gender based discrimination in compensation has been significantly amended twice in the last two years In 2016 the law was expanded to broaden its scope Now all employees who perform substantially similar work even if they have a different title or position are included when conducting a pay comparison to determine if there is a violation The law was also expanded to include new recordkeeping requirements In 2017 the law was expanded again this time to extend its application to pay disparities based on race or ethnicity Employers with less gender or ethnic diversity in positions seen as traditionally dominated by white males are likely to see more agency action and employee litigation 4 LOCAL ORDINANCES ON MINIMUM WAGE AND SICK LEAVE More than a dozen municipalities in California from Los Angeles to Berkeley to Pasadena to San Jose are leading a national trend of setting local minimum wage requirements that are higher than those in national and statewide minimum wage laws These local ordinances vary widely in terms of the hourly rates imposed the employers to whom they apply and their effective dates of application and future increases Dealers who own groups with operations in more than one of these municipalities or any cities that join the trend in the future must track their compliance with these requirements to avoid being hit with costly wage and hour litigation In such cases an employee will seek not only back wages but several types of derivative penalties that can easily exceed the amount owed in unpaid wages 5 NEW RULES FOR WORKPLACE HARASSMENT TRAINING New California regulations went into effect on April 1 2016 that raise the workplace harassment training and complaint procedure requirements applicable to all employers Regulations previously in place required all employers with 50 employees or more to ensure that all their supervisors receive legally compliant training in various topic areas relating to workplace harassment The new rules now add to these content requirements by requiring that the training cover abusive workplace conduct legal remedies available to harassment victims supervisor obligations and strategies to prevent and remedy harassment In addition auto dealers must comply with stricter recordkeeping requirements with respect to the harassment training they provide to their supervisors 6 PAGA REPRESENTATIVE ACTIONS California dealers also face the statewide trend of employees filing representative actions under the California Labor Codes Private Attorneys General Act commonly known as PAGA Although the PAGA statute has been law since 2004 plaintiffs attorneys only recently started to litigate these cases with force This has been partly in response to a decrease in class action opportunities due to many employers adopting arbitration agreements which include a ban on employee pursuing their wagerelated claims as a class action lawsuit California courts have ruled that a PAGA action is not subject to these types of bans in arbitration agreements In a PAGA action the employee seeks to collect penalties on behalf of the state for a variety of wage and hour violations with 25 of the penalties collected being paid to aggrieved employees as a bounty hunter fee The potential exposure to PAGA penalties can be very significant for employers with a large workforce or substantial employee turnover because they are calculated on a per employee and per violation basis Effectively responding to these and other changes in employee law requires that dealers devise a strategy that is not only compliant but business smart as well In many instances small changes to existing policies or procedures may be all that is required to remain compliant In other scenarios it may be necessary to consider more drastic changes such as restructuring compensation for certain employee groups in order to avoid runaway increases in payroll costs or burdensome administrative processes Either way it is essential that management partner with experienced counsel who understands the unique features and challenges of a dealerships business ABOUT THE AUTHOR Alejandro David Szwarcsztejn is an attorney at Carothers DiSante Freudenberger LLP a California statewide law firm focused on labor employment and immigration Email him at alejandro david szwarcsztejn@ bobit com COMPLIANCE GETTYIMAGES COM SKYNESHER