Keeping up with California’s ever-changing employment law landscape

California employment law is always changing. The laws change so fast, it is difficult for employers to keep up. Often, new legal requirements “fly under the radar,” and companies find themselves in trouble for their failure to implement the new rules. The year 2008 has been no exception. Several new laws or changes to existing laws have come into effect this year. Here are a few key changes:

Social security numbers cannot be used as identification

Beginning in 2008, employers are only allowed to use the last four digits of an employee’s social security number for an ID number on an employee’s pay stub. Employers are free to come up with another identification system that does not incorporate the employee’s social security number.

Minimum wage increase to $8.00

Chances are that most employers are aware of the California minimum wage increase to $8.00 per hour. Yet, increasing the minimum wage has a ripple effect on other workplace issues. First, employees classified as exempt under the Administrative, Executive and Professional exemptions must be paid a salary of at least twice the minimum wage in order to be properly classified as exempt. As such, as of 2008, an employee must earn at least $33,280 per year to be legally exempt from overtime.

Another employment law tied to minimum wage applies to employees who use their own hand tools. Any employee who is allowed or required to use his or her own personal hand tools at work must be paid two times the minimum wage, or $16.00 per hour.

New I-9 form and new W-4 form

Beginning in 2008, employers must use a new I-9 form and a new W-4 form. The I-9 form can be found at http://www.uscis.gov. The W-9 form can be found at http://www.irs.gov/pub/irs-pdf/fw4.pdf.

Mileage increases

Employees in 2008 were given a minor reprieve from higher fuel prices, as the recommended IRS mileage reimbursement rate increased this year to 50.5 cents per mile in January. (See my February 2008 article on the IRS mileage increase).

The IRS increased the mileage rate again to 58.5 cents per mile on June 23, 2008. The new mileage rate went into effect on July 1, 2008 and will be in effect through December 31, 2008. As you can imagine, the IRS cited rising gas prices as a motivating factor for the increase. The IRS normally raises rates only at year end – as such, many may not be aware of the increase.

Conclusion

Keeping up with our state’s ever-changing employment law landscape is simply a necessary part of doing business in California. Changes come frequently, and often with little fanfare. And while some of these changes may seem minor or limited in scope, employers can find themselves with very real problems if they do not adapt their businesses to new rules and regulations.