California Employee Rights Advocate : California Labor Attorney & Lawyer : Southern CA Employment Law : Los Angeles, Orange County : United Employees Law Group

With the end of the year quickly approaching some people will be working on holidays others will be taking time off from work and we will all be hopeful for a little extra cash. California labor laws are pretty clear about how employers must treat these situations and what employees should expect.

Holiday Pay

California labor law does not require employers to pay employees extra for working on holidays. However, there are quite a few companies out there that offer their employees 1.5 times their regular rate or even double time. If this is a company policy then the employer must adhere to it. The best way to make sure you know what the company policies are regarding holiday pay would be to review your employee handbook or contact your human resource department. If these policies are not in writing it would be a good idea to request a written copy.

Vacation Pay

Vacation pay, sometimes referred to as paid time off (PTO). California labor laws do not require employers to offer PTO or vacation pay but if it is offered by the employer then the employee is either entitled to use it or be paid for its monetary value. It is important to note that the employer cannot take it away. “Use it or lose it” policies are not legal in the state of California. With that being said, the employee must understand that the employer does not have to give you the time off that you request. If your request for time off is denied you could lose your job if you leave anyway. You may decide to ask for your vacation pay on your next pay check instead of actually taking the paid time off.

Bonuses

Again, bonuses not required by California labor law but still common practice by most employers. Other common practices during the holidays are gift giving either in the form of actual tangible gifts or in the form of gift cards. In either instance you will notice that the monetary value of these gifts or bonuses will be taxed on your pay check. This often confusing to read on your paystub, but more than likely you will see the value on the gift added to your wages, then taxes will be taken out of your pay, then you will see the original amount of the gift deducted. This practice is required by law nationwide, all gifts and bonuses must be counted as wages according to the IRS.

Labor law is complex if you have any questions regarding your employment it is recommended that you contact a California labor law attorney who can help you understand your rights and in many cases will review your situation without charge.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
San Francisco – (415) 200-0012 or (415) 230-2755
San Diego – (619) 342-1242 or (619) 272-2193

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Worker misclassification is becoming a new hot button issue at both the state and national levels. It has been a long standing practice of employers to misclassify employees as independent contractors so as to avoid payment of taxes, unemployment benefits, workers compensation benefits, overtime, etc. This is a problem for California workers, because they are being denied compensation and benefits to which they are rightfully entitled. It is also a problem for the state of California, which continues to struggle with a huge budget deficit.

The test for determining whether an individual is an employee or an independent contractor depends on the state or federal law being applied. Under common law, an individual is considered an employee “if the person contracting for the services has a right to control and direct both the results of the services and the means by which those results are achieved.”  
At the federal level, the IRS and Social Security Administration have developed a 20-factor test for determining the level of control held by the person contracting for the services. The factors focus on three primary components:

• Behavior control – the right of the worker to control how a specific task is accomplished
• Financial control – the right of the worker to control the “business aspects” of accomplishing a specific task
• Relationship of the parties – how the parties perceive their relationship 

At the state level, California has several different tests including those found in the California Labor Code and California Tax Code.  When enforcing wage and hour laws, the California Division of Labor Standards Enforcement (DLSE) uses the “economic realities” test,  which like federal law focuses on the degree of control held by the person performing the services. As Jonathan Siegel explains, there are many questions that can be asked, including whether the worker is performing specialized services and providing the required tools and equipment.
 

To ensure that workers are being properly classified, the IRS has developed a new audit program for employment taxes. Beginning in February 2010 and lasting through 2013, approximately 6,000 companies will be audited. In addition to resolving any worker misclassification issues, the IRS plans to collect data that will be used to improve future employment audits. 

President Obama is also doing his part to crack down on worker misclassification. The proposed budget for the fiscal year of 2011 provides the Department of Labor with an additional $25 million to increase enforcement personnel and issue grants to bolster the states’ ability to address this problem. 

If you believe your employer has wrongfully classified you as an independent contractor, contact a knowledgeable California labor law attorney. An attorney can explain your rights and may be able to collect many benefits to which you are entitled.

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