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Labor Law Update: Overtime Pay And Paid Family Leave

Posted by Leslie Ruhland on May 4, 2017 4:57:46 PM
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If anything is constant about labor laws it’s that they are always changing. Overtime pay and paid family leave are recent examples.


On May 2, 2017 the U.S. House passed a bill that will give employees the ability to choose how they are compensated for overtime work.

Overtime Pay Vs. Paid Time Off

The bill is called the Working Families Flexibility Act and sponsored by Alabama Rep. Martha Roby, R-Montgomery. Essentially, the new rules would allow employees of private sector businesses to convert their accrued overtime pay into paid time off if they choose to.

It would, however, be up to the employers to decide if they will offer the option. If they initially choose paid time off, workers would still be able to change their minds and receive the equivalent overtime pay within a 30-day window.

Currently, federal employees already have the option to choose paid time off in lieu of overtime pay.

Rep. Roby said in a statement that,

"The workforce has changed tremendously over the years, but the laws and policies that govern the workplace have not. Today's working parents need more time flexibility to balance the demands of work and family. I've always said Congress cannot legislate another hour into the day, but we can update our laws to allow more choice and fairness in how working Americans use their time."

On the following day, May 3, the White House said President Trump supports the bill that now goes to the Senate, where it is being sponsored by Senator Mike Lee of Utah.

In a statement regarding the legislation, the White House said it,

"...would help American workers balance the competing demands of family and work by giving them flexibility to earn paid time off--time they can later use for any reason, including family commitments like attending school appointments and caring for a sick child."

Opponents of the bill claim that it is simply a ploy to provide employers with the ability to further defraud their workers of legitimate overtime pay. They claim that the new rules would allow employers to require overtime of single parent employees, for example, in exchange for equivalent hours off. This would simply cost the employee more in child-care costs without the compensation of overtime pay.

employee rest and meal breaks guide

California Paid Parental Leave

On January 1, 2017 San Francisco’s Paid Parental Leave for Bonding with New Child Ordinance went into effect. The comprehensive ordinance requires employers to provide six weeks of fully paid parental leave for the purpose of bonding with a new child. The mandate also requires employers with 50 or more employees to provide supplemental compensation so that employees receive 100 percent of their salary during their leave.

Beginning on July 1, 2017 companies with 35 to 49 employees must also comply with the paid parental leave requirements, and on January 1, 2018, the mandate will include all employers with just20 to 34 employees.

For those companies that fail to comply, they will be subject to penalties that include mandatory reinstatement if the employee was fired, any back-pay, injunctive relief, and attorneys’ fees, as well as and additional $50 per employee for each day of a violation.

In addition, the San Francisco ordinance also prohibits employers from interfering with an employee’s right to request or apply for Paid Family Leave.  Employers cannot threaten discharge, demote, discriminate or discharge employees who take the leave. In addition, employers cannot prevent an employee from informing any person of an employer’s alleged violation, and informing others of their rights under the ordinance.

On the statewide level there are changes to the leave benefits currently being provided under the state’s Paid Family Leave program. Beginning on January 1, 2018, the wage replacement rate will increase from 55 percent to 70 percent for those earners below one-third of California’s average weekly wage and to 60 percent for those who earn more than one-third of the weekly wage.

The State Average Weekly Wage (SAWW) for California, as determined by the United States Department of Labor for the first quarter of 2017, is $1172.57.

Stay Informed of Overtime and Paid Family Leave Laws

Changes in regulations expand the potential of risk for employers, require new workplace postings, or mandate updates to existing workplace policies. We recommend that all employers consult with experienced employment counsel to ensure compliance.

Accurate and timely management and compliance practices are required for every business and every payroll professional. But there are options.

Accuchex, a reputable payroll management services provider, can not only relieve you of the burden of your ongoing payroll process demands, but can potentially prove to be a more cost-effective solution, as well.

Follow this link to get your free download of our Payroll Outsourcing Guide. Or click the button below to learn what you need to know about labor law in California. For more immediate information, feel free to call Accuchex Payroll Management Services at 877-422-2824.

Free Guide: California Labor Law – What You Need To Know

Topics: california labor law, overtime pay, labor law compliance, family leave, paid family leave, paid time off

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