Small But Mighty: Enhancing Employee Engagement in Tiny Teams

Small But Mighty: Enhancing Employee Engagement in Tiny Teams

Success in business isn't solely determined by the size of your team; it's equally influenced by the level of engagement within that team. Smaller teams, often found in businesses with fewer than ten employees, possess a unique advantage in their ability to foster close-knit environments. However, they also face distinct challenges when it comes to employee engagement. In this blog post, we will explore tailored strategies for enhancing employee engagement in small businesses, drawing inspiration from recent articles while providing practical advice for small business owners.

The Significance of Employee Engagement in Small Teams: In small businesses, the dedication and enthusiasm of each team member are magnified. Every contribution counts, and this is why maintaining high levels of employee engagement is not just beneficial, but absolutely essential.

1. Acknowledge and Value Your Employees: In tiny teams, the impact of individual efforts is readily apparent. Make it a priority to let your employees know that their contributions are valued. Recognize their accomplishments, celebrate their successes, and applaud improvements in their work. When employees feel that their work matters, their engagement and motivation skyrocket.

2. Foster a Culture of Recognition and Feedback: Feedback is the lifeblood of personal and professional growth. Regularly acknowledge a job well done and provide constructive feedback. For Gen Z employees, in particular, immediate feedback is highly appreciated. Continuous dialogue keeps employees engaged and propels their ongoing development.

3. Cultivate Team Bonding: Small teams have the advantage of being closely knit. Use this to your benefit by organizing team-building activities. These events not only boost camaraderie but also enhance teamwork and deepen personal connections among team members. A positive community culture is vital for engagement.

4. Personalized Check-Ins: In the intimate setting of a small business, one-on-one check-ins with employees are invaluable. These personal interactions offer insights into individual needs and aspirations. They stimulate creativity, promote collaboration, and establish trust—key ingredients for enhancing engagement in your small yet dynamic team.

5. Prioritize Employee Well-Being: Healthy and content employees are more productive. Prioritize both physical and mental well-being within your small business. Implement wellness initiatives and incentives to encourage a healthy lifestyle among your team members.

6. Encourage Peer Recognition: Promote a culture of peer recognition and appreciation.

Creating an environment where colleagues acknowledge and celebrate each other's accomplishments can significantly boost engagement. Research by SHRM and Globoforce underscores the value of peer recognition, with higher employee engagement and retention rates reported in businesses that embrace peer-to-peer recognition programs.

7. Nurture Strong Manager-Employee Relationships: Invest in identifying and cultivating effective managers who can lead by example, mentor employees, and inspire motivation. Trust between employees and their managers is a cornerstone of engagement.

8. Emphasize an Empathy-Driven Culture: Demonstrate genuine appreciation for your employees and create an environment where they feel comfortable sharing their thoughts and concerns. Balancing compassion with effective leadership fosters a supportive work atmosphere.

9. Promote Diversity and Inclusion: Actively recruit individuals from underrepresented groups to create a more diverse workforce. Inclusivity enriches your team and leads to higher engagement.

10. Evaluate Performance, Not Office Hours: In small teams, performance should be measured by results rather than physical presence in the office. Implement clear performance measurement methods, such as SMART goals and KPIs, to ensure that top performers are duly recognized and rewarded.

Enhancing employee engagement in small teams goes beyond just implementing strategies; it entails creating a culture where employees feel valued, heard, and motivated to contribute their best. In a small but dynamic business, engagement can be the catalyst for success, fueling sustainable growth and excellence

Important Reminder To All CA Employers

REMINDER TO ALL CALIFORNIA EMPLOYERS: MINIMUM WAGE INCREASE EFFECTIVE JANUARY 1, 2024

The current minimum wage rate for all employers (including both employers with 25 or fewer employees and those with 26 or more employees) is $15.50. As a result of this inflation-related minimum wage increase, the minimum wage rate for all employers with California employees will increase from $15.50 to $16. 

The California white collar exemption minimum annual salary will increase to $66,560, increasing from $64,480 per year. Employers will want  to audit employees classified under one of these exemptions to determine whether both the duties and salary satisfy the exemption’s requirements.

Please do not forget that employers will need to adjust their split-shift premium calculations since they will be impacted by the increased minimum wage. The same is true for rates of pay for meal period premiums, rest period premiums, paid sick leave, and other related items.

Cheers to the Holidays: HR's Tips for Successful Celebrations

Cheers to the Holidays: HR's Tips for Successful Celebrations

As Essential HR, we understand that the holiday season is more than just a time for festivities; it's an opportunity to foster inclusivity, respect diverse traditions, and create a sense of unity among our workforce.

In this blog post, we'll explore why inclusive holiday celebrations are vital and provide Essential HR's guide to promoting diversity and joy during this special time of year.

1. Choose a Neutral Name for Celebrations

Avoid denominational or religious labels for holiday events. Instead of a "Christmas party," consider calling it an "End-of-Year Celebration" or "Winter Gala." This helps to ensure that no one feels excluded based on their beliefs.

2. Schedule Wisely

Select a date for your celebration that doesn't coincide with a major religious holiday. This avoids conflicts and ensures that all employees can participate without feeling torn between work and personal traditions.

3. Create an Inclusive Holiday Calendar

Consider using an interfaith diversity calendar when planning holiday events. Invite employees to share their traditions and cultural celebrations, and add them to the holiday calendar. This approach ensures that all traditions are recognized and respected.

4. Offer Floating Holidays

Provide employees with the option of taking a floating holiday in addition to traditional paid holidays. This allows them to celebrate their specific traditions or simply enjoy a longer holiday break. Ensure your policy clearly outlines how and when floating holidays can be used.

5. Respect Employee Choices

Respect employees' choices to opt in or opt out of holiday celebrations, such as gift exchanges or parties. Make these events optional and free from pressure, ensuring that everyone feels comfortable participating or abstaining.

6. Inclusive Decorations

Select decorations that reflect a winter or New Year theme, such as snowflakes, icicles, balloons, and streamers. Employee appreciation decorations, like ribbons and trophies, can also foster a sense of recognition and inclusion.

7. Consider Remote Celebrations

For remote or off-site employees, offer virtual celebrations to ensure they can be part of the festivities. This helps remote workers feel connected and valued during the holiday season.

8. Encourage Employee Resource Groups (ERGs)

Highlight ERGs that focus on diversity and inclusion. Schedule guest speakers, share external events, and foster open discussions on diversity to promote ongoing learning and understanding.

9. Learn from Mistakes

Creating an inclusive environment takes time and effort. Embrace feedback and learn from any mistakes or oversights. Encourage open communication to continuously improve your efforts in promoting diversity and inclusion.

As Essential HR professionals, we play a pivotal role in making holiday celebrations inclusive, respectful, and enjoyable for all employees. Let this holiday season be a testament to unity and celebration, where every member of our organization feels valued, respected, and included. Cheers to a joyful and inclusive holiday season for everyone!

Up In Smoke: California’s New Cannabis Laws Become Effective January 1, 2024

Up In Smoke: California’s New Cannabis Laws Become Effective January 1, 2024

In September of 2022, Governor Gavin Newsom signed AB 2188 into law and in October of 2022, he also signed SB 700 into law. AB 2188 prohibits discrimination based on off-duty cannabis use and drug tests which show non-psychoactive THC metabolites, while SB 700 prohibits pre-employment inquiries into prior cannabis use. Both AB 2188 and SB 700 will take effect on January 1, 2024.   

What This Means for Employers:

• Off-Duty Cannabis Use – Employers may no longer discriminate or take adverse action against candidates or employees based on off-duty cannabis use. Employers are not allowed to inquire or request information about a candidate’s prior cannabis use.

• Drug Testing – AB 2188 limits drug testing to only allow for current and active THC, which indicates impairment and causes psychoactive effects. Employers are no longer allowed to test for non-psychoactive cannabis metabolites, which can stay in a user’s system for up to 60 days.

• Drug-Free Workplace – While employers may continue to enforce a drug-free workplace policy, most CA employers will not be able to take any adverse employment actions if an employee uses cannabis while off-duty. Candidates or employees who are actively impaired or bring cannabis to work may still be denied employment opportunities, disciplined, or terminated.

• Exemptions – These laws do not apply to the building or construction trades, employees who are hired for positions that require federal background investigations or security clearances, and it does not preempt state or federal laws that require applicants or employees to be tested for controlled substances.

• Most CA Employers Will Not Meet Exemptions – There is a distinction between laws that require a drug free workplace, which is very common, versus laws that require actual drug testing, which is not common. Review government contracts for language specifics and requirements.

What do employers need to do next to be compliant with both AB 2188 and SB 700? There are several actions employers can take to safeguard your business for compliance as listed below:

• Review & Revise Current Policies – Employers should review and likely revise their anti-discrimination and drug policies to ensure compliant language and procedures. Polices should distinguish between cannabis use while off-duty versus impairment at work and may describe which testing procedures will be utilized.

• Drug Testing – Employers need to make sure they are using compliant testing procedures that measure only psychoactive marijuana components for current impairment and not marijuana metabolites that only measure prior cannabis use. 

• Applications & Background Checks – Employers should review their applications and new hire paperwork to ensure there are no inquiries about a candidate’s prior cannabis use. Employers should also review and possibly revise policies and procedures for criminal background checks. 

Staying informed and proactive about HR matters and the new cannabis laws are critical for California small businesses. To ensure your compliance with the latest developments in cannabis laws or employment laws in general, schedule an HR Audit with Essential HR, Inc. Our team of experts will assess your HR policies, procedures, and practices while providing valuable insights to safeguard your business. Don't wait; reach out to us today and take the first step toward a resilient and compliant workplace!

Employee Appreciation: 5 Powerful Ways to Say 'Thank You’

Employee Appreciation: 5 Powerful Ways to Say 'Thank You’

In today's dynamic work landscape, characterized by increased remote work and diverse job opportunities, ensuring that employee recognition doesn't fall through the gaps is imperative. The global workforce is now more mobile and siloed, making genuine recognition and gratitude essential for fostering a positive and loyal workforce.

As the workforce becomes increasingly global and mobile, organizations must recognize that appreciating employees is not just a nicety; it's a strategic imperative. In this blog post, we explore five meaningful ways to show your employees that their contributions are valued, drawing inspiration from industry experts and best practices.

1. Align Work with Purpose

Employees want to know that their work matters, that it contributes to a larger mission, and that there are opportunities for growth and advancement. Managers and HR professionals can demonstrate appreciation by helping employees understand how their roles fit into the company's broader mission and how they can progress in their careers.

The most profound way to show appreciation is by laying out a clear career path for each employee. This involves mapping out their journey within the organization, detailing training opportunities, and highlighting what each role entails. When employees see a future within the company, they feel valued and motivated to excel.

2. Personalized Thank-You Notes

Never underestimate the power of a heartfelt thank-you note, especially when it comes from top executives. A personalized message, whether handwritten or digital, can convey genuine appreciation. Employees treasure knowing that leadership acknowledges their contributions.

A handwritten note from the CEO, mentioning specific achievements and successes, is a powerful gesture that can boost morale and loyalty. If the CEO's schedule doesn't allow for this, managers can take the lead by penning their own notes, sending e-cards, or making personal phone calls to express gratitude.

3. Encourage the Use of Paid Time Off (PTO)

In light of the pandemic, many employees deferred using their paid time off (PTO). To demonstrate appreciation, organizations can work with HR to allow employees to roll over unused vacation time. This policy change can be formally communicated in the employee handbook, ensuring that unused hours won't be paid out if the employee leaves the organization during the year.

However, extra PTO is meaningful only if employees feel encouraged to use it. Managers can play a crucial role by reminding employees to disconnect during their time off and notifying colleagues of their absence. This enables employees to recharge and return to work refreshed.

4. Create Meeting-Free Time

Endless meetings can be draining. Organizations can show appreciation by designating meeting-free times to provide employees with a break from both non-stop virtual and in-person interactions. For example, Wednesday afternoons could be designated as meeting-free to allow employees to focus on individual tasks or take a breather.

In addition, consider offering surprise days off, such as extending three-day holiday weekends to four days. Recognizing the toll of continuous virtual work and providing periodic reprieves can greatly boost employee morale and well-being.

5. Listen to Employee Concerns

In the current era of remote and hybrid work, employee well-being takes precedence over office perks like free food and swag. Employees want to know that their managers genuinely care about them, especially as they navigate remote work challenges.

Active listening and flexibility are paramount. Organizations should pay attention to employees' concerns about returning to the office and adapt to their needs. Some may still prefer remote work, while others may require schedule adjustments due to childcare responsibilities. Supporting employees in their day-to-day lives is a powerful form of appreciation.

Conclusion

Employee appreciation is not a one-size-fits-all endeavor. It's about understanding what motivates and resonates with your workforce. These five meaningful ways to show appreciation can serve as a foundation for building a culture of gratitude in your organization.

Remember, genuine recognition should be personalized, consistent, and reflective of your employees' unique contributions. By fostering a culture of appreciation, organizations can create a workplace where employees feel valued, motivated, and inspired to give their best each day.

At Essential HR, we understand the critical role of employee appreciation in building a thriving organization. If you need guidance on developing employee recognition programs or enhancing your HR practices to promote appreciation, reach out to us. We're here to help you create a workplace where gratitude thrives, leading to a more engaged and dedicated workforce.

A Day of Respect: Why Giving Employees Veterans Day Off Matters

A Day of Respect: Why Giving Employees Veterans Day Off Matters

Every year on November 11th, Veterans Day is observed in the United States, a day dedicated to honoring and expressing gratitude to all military veterans who have served their country. While it's customary to commemorate this day with parades, ceremonies, and moments of reflection, there's a growing recognition of the importance of giving employees the day off to observe Veterans Day. In this blog post, we'll explore why offering employees Veterans Day off matters and the positive impact it can have on your organization.

1. Honoring Sacrifice and Service

At its core, Veterans Day is about recognizing and honoring the sacrifices and service of our veterans. By providing employees with a day off on Veterans Day, your organization sends a powerful message: you value and respect the dedication and sacrifices made by those who have served in the military. This gesture reflects your dedication to acknowledging their valuable contributions

2. Promoting Employee Well-Being

In today's fast-paced work environments, employees often face high levels of stress and burnout. Offering a day off on Veterans Day can be a meaningful way to promote employee well-being. It allows employees to recharge, spend quality time with their families, and engage in activities that contribute to honoring veterans or commemorating Veterans Day. This can contribute to improved mental and emotional health, which, in turn, benefits your organization by fostering a more productive and engaged workforce.

3. Strengthening Employee Loyalty

Employees who feel supported and appreciated by their employers are more likely to exhibit loyalty and commitment to their organizations. Providing Veterans Day off demonstrates that you care about your employees' values and life outside of work. In return, this can strengthen the bond between your employees and your company, potentially leading to increased employee retention rates and a more positive workplace culture.

4. Fostering a Respectful Workplace Culture

Respect is a cornerstone of a healthy workplace culture. By acknowledging Veterans Day and granting time off to employees who wish to observe it, you demonstrate your commitment to fostering a culture of respect. This inclusive approach sends a message that diversity of thought and values is celebrated within your organization, contributing to a more harmonious and respectful work environment.

5. Attracting Top Talent

In today's competitive job market, potential employees often evaluate companies not only based on compensation and benefits but also on their values and commitment to social responsibility. Offering Veterans Day off can be a unique and attractive perk that sets your organization apart. It signals to potential hires that you are a company that values principles like respect, gratitude, and work-life balance, making your company more appealing to top talent.

Alternative Commemorations

If giving employees the day off on Veterans Day isn't feasible for your organization, there are alternative ways to commemorate this important day. Consider hosting a lunch and learn event, like the one organized by my employer this year, where you can invite veteran speakers to share their experiences and insights. These speakers can provide valuable perspectives on their time in service and how they prefer to be commemorated on this day.

Additionally, making Veterans Day a meeting-free day can further enhance the observance. By doing so, you create a focused and respectful atmosphere that allows employees to actively engage in commemorative activities, attend special events, or simply take a moment to reflect on the significance of the day. This pause from regular work-related meetings demonstrates your organization's commitment to honoring veterans and emphasizes the importance of this day in your workplace culture.

Conclusion

Incorporating Veterans Day as a recognized day off for your employees or hosting a meaningful event like a lunch and learn is a simple yet powerful way to honor veterans, promote employee well-being, strengthen loyalty, and foster a respectful workplace culture. It's a win-win for both your employees and your organization. By acknowledging the significance of Veterans Day, you contribute to a workplace environment where employees feel valued, respected, and proud to be part of your organization.

At Essential HR, we understand the importance of creating policies and practices that support both employees and the mission of your organization. If you need assistance in implementing policies or organizing events like a Veterans Day lunch and learn, please don't hesitate to reach out to us. We're here to help you build a thriving and respectful work environment.

Wishing you a Veterans Day filled with gratitude and a workplace culture that celebrates the contributions of veterans and all your dedicated employees.

Halloween at Work: 5 Guidelines to Safeguard Your Organization

Halloween is a time of year when fun and creativity can take center stage in the workplace. However, it's essential to ensure that the festivities do not inadvertently create uncomfortable situations or offend employees. At Essential HR, we believe that striking a balance between celebrating Halloween and maintaining a respectful, inclusive, and safe work environment is crucial. In this blog post, we'll provide you with five guidelines to ensure a spooktacular yet responsible Halloween celebration at work.

1. Foster Inclusivity

First and foremost, recognize that not everyone may celebrate Halloween due to personal, cultural, or religious beliefs. Be inclusive in your approach and make it clear that participation is entirely voluntary. Encourage employees to respect one another's choices, whether they choose to participate or not. Setting the right tone starts with your invitation: consider stating something like, "In our workplace, Halloween is intended as a secular celebration. We recognize that not everyone celebrates Halloween, and you should not feel compelled to participate."

2. Educate on Costume Choices

Costumes are a hallmark of Halloween, but they can also be a source of tension if not chosen thoughtfully. Encourage employees to use good judgment when selecting costumes and ask themselves if their choice may offend someone. Remind them that culturally insensitive or offensive costumes have no place in the workplace. Consider sharing examples of costumes to avoid, such as those that mimic religious leaders or perpetuate stereotypes.

3. Avoid Political Costumes

Given the potential for heightened political sensitivities, especially during election years, it's wise to discourage political-themed costumes. Halloween falls between political debates and Election Day, so remind employees that maintaining a harmonious work environment is crucial regardless of political beliefs. At Essential HR, we advise steering clear of costumes that may inadvertently spark political debates or discomfort among colleagues.

4. Promote Safety

Safety should always be a priority, even during Halloween celebrations. Be mindful of decorations that could pose safety hazards or violate fire codes. If you host activities like pumpkin carving contests, provide safe alternatives like LED lights and pumpkin painting to prevent accidents. Additionally, consider whether customer-facing employees should wear costumes and how it might impact the perception of your company. As experts suggest, think about the message you want to send to customers.

5. Encourage Alternative Celebrations

For a Halloween celebration that goes beyond costumes and candy, consider incorporating a charitable aspect. At Essential HR, we support the idea of turning Halloween into an opportunity to give back to the community. For instance, you can allow employees to wear costumes if they make a donation to a noncontroversial charity chosen by the company. This not only adds a meaningful dimension to your celebration but also reinforces your company's commitment to social responsibility.

Conclusion

Halloween at work can be an enjoyable experience that strengthens team spirit and boosts morale. By following these five guidelines, you can ensure a Halloween celebration that safeguards your organization's culture and values while promoting respect and inclusion.

At Essential HR, we specialize in helping companies create and maintain respectful and inclusive workplaces. If you need guidance on HR policies or have concerns about workplace celebrations, please don't hesitate to reach out to us. We're here to ensure your organization's success while fostering a positive and respectful work environment.

Navigating Workforce Reduction: The Comprehensive Guide

Navigating Workforce Reduction: The Comprehensive Guide

In today's fast-changing business world, companies sometimes have to cut their workforce. This can happen because of financial problems, restructuring, or unexpected crises. It's a tough decision, but HR experts, we know how important it is to do it right. In this guide, we'll show you the key steps and best ways to reduce your workforce while being considerate of your employees and your business

1. Start with a Comprehensive Assessment

Before implementing any workforce reduction measures, it's crucial to conduct a comprehensive assessment of your organization's current situation. Review financial data, analyze performance metrics, and identify areas where cost reductions are necessary. Engage with key stakeholders, such as department heads and financial advisors, to gain a holistic understanding of your organization's needs. Additionally, assess the legal and ethical considerations associated with workforce reduction. Familiarize yourself with employment laws in your jurisdiction to ensure compliance throughout the process. Seek legal counsel if necessary to navigate these complexities and minimize legal risks.

2. Prioritize Open and Transparent Communication

Effective communication is paramount during a workforce reduction. Employees should be informed about the situation as early as possible to reduce uncertainty and anxiety. Craft a clear and compassionate message that outlines the reasons for the reduction, the criteria for selection, and the support services available to affected employees. Encourage them to ask questions and express their concerns openly. In addition, communicate with the remaining workforce to reassure them about the stability of the organization and the steps being taken to secure its future. If you or your employees need assistance during this transition, remember that Essential HR is here to help. We offer transition services such as resume assistance and job search support to aid in the process of finding new employment.

3. Implement Thoughtful Solutions and Explore Alternatives

Workforce reduction doesn't have to mean simply cutting jobs; there are various strategies to consider. Explore alternatives such as voluntary retirements, job-sharing arrangements, or temporary layoffs before resorting to permanent job cuts. If layoffs are unavoidable, focus on fairness and objectivity in the selection process, ensuring that it aligns with your organization's values and goals. In these uncertain times, it's crucial to answer important questions: What alternatives do you have to downsizing? What headcount reduction strategies should you adopt? How to ensure you make fact-based decisions? Leveraging people analytics during a workforce reduction can provide HR managers with valuable insights to make informed and beneficial decisions for their organizations. In this article, we'll explore the steps to take in integrating data into your headcount reduction process while minimizing the impact on your people.

4. Reevaluate the Headcount Reduction Process with Data-Driven Insights

When it's necessary to proceed with a reduction, determining which employees will be affected is a critical challenge. Often, Finance departments initiate cost reduction efforts and task HR leaders with executing them. However, decision-making often relies on intuition rather than evidence. Another common approach is "last in, first out" layoffs based on tenure or targeting the highest earners. Unfortunately, these methods lack a data-driven approach. Utilizing people analytics can transform the process. HR leaders gain insights into their organization's skills, roles, and operational needs. This precise understanding can lead to more creative and effective solutions.

5. Determine the Right Workforce Reduction Strategy with Data-Driven Insights

If your organization must proceed with a headcount reduction, people analytics can provide a clearer understanding of the situation and offer a range of strategies to address cost challenges while minimizing the human impact.

Discover a comprehensive five-step approach to determining the right reduction in force strategy:

Step 1: Gather Information for Strategy Planning

Collaborate with Finance to understand their targets and explore the "why" behind the need to cut costs. Understanding the future business state allows HR to produce solutions aligned with business goals.

Step 2: Run Potential Scenarios

Utilize analytics to explore different scenarios for reducing employee counts, including alternatives to layoffs. Analytics provide insights into the possible outcomes of your decisions.

Step 3: Determine the Mitigation Plan

Identify high-performing employees to retain and implement targeted retention strategies, such as merit increases. Consider the need to scale up in one department before scaling down in another.

Step 4: Monitor the Impacts

Track the effects of the workforce reduction on metrics like high-performer retention, labor costs, and applicant numbers. These indicators offer insights into potential issues or opportunities arising from the headcount reduction.

Step 5: Motivating Downsizing Survivors

Downsizing can impact employee loyalty and productivity. Employees who remain may experience decreased morale and engagement. Leadership is crucial during this time to maintain engagement and productivity. Supporting your employees during a reduction is critical to keep your organization on track and may inspire meaningful changes for your company. Employee engagement remains high when leaders provide support and effective internal communication. Incorporating these comprehensive steps and insights into your workforce reduction strategy can help you navigate this challenging process successfully.

At Essential HR, we understand the complexities of workforce management. If you need guidance or support in navigating workforce reduction or any other HR-related matters, don't hesitate to reach out to us. We're here to help you through these challenging times.

Get Ready! California Expands Paid Sick Leave Effective January 1, 2024

On October 4, 2023, Governor Gavin Newsom signed Senate Bill (SB) 616 into law. SB 616 will take effect on January 1, 2024, and it expands California’s mandatory Paid Sick Leave (PSL) from three days/24 hours to five days/40 hours.

While many cities in California have already passed local PSL mandates, California has now created more hurdles for employers and the new SB 616 law will apply to all employees who work in CA for 30 days or more in a year.

What This Means for Employers:

• PSL Entitlement – SB 616 increases an employee’s entitlement to PSL from three days/24 hours to five days/40 hours.

• Accrual or Frontload – For employers who utilize an accrual model, increasing the number of PSL hours owed to 40 hours by the employee’s 200th day of employment, in addition to accruing at least 24 hours of PSL by their 120th day of employment. Employers may continue to frontload the entire PSL amount.

• Increased Carryover Cap – SB 616 increases the number of days allowed for carryover from three days/24 hours to five days/40 hours.

• Increased Accrual Cap – Under SB 616, employees accrual cap of PSL increases from six days/48 hours to ten days/ 80 hours.

• Employment Eligibility – SB 616 increases the number of days of PSL an employee is eligible to receive from three days/24 hours within nine months of employment to five days/40 hours within six months.

• Collective Bargaining Agreements – SB 616 extends certain procedural and anti-retaliation provisions of existing law to employees who are covered by a valid collective bargaining agreement that provides for different paid sick leave obligations.

• Local City Ordinances – SB 616 preempts any local cities’ PSL ordinances with less generous leave requirements to establish the state-wide minimums of five days/40 hours.

How Employers Can Prepare for SB 616:

Don’t wait to make changes to your CA PSL procedures! Employers need to ensure compliance with SB 616 by January 1, 2024, and should take several proactive steps before then, which may include the following:

• Review local PSL ordinances to determine whether they still apply to your company, or if they are preempted by the new law or if they will remain unaffected.

• Update company sick leave policies and employee handbooks to ensure compliance since noncompliant handbook language about PSL may be used by employees to establish violations.

• Train managers/supervisors about the PSL increases to ensure they understand what employees are now entitled to use, carryover and accruals that impact their workforce.

• Review SB 616 with your company’s payroll processor to ensure the accrual and frontloading allowances are correct, carryover and caps are correct and that wage statements accurately reflect the employee’s PSL entitlement.

Staying informed and proactive about HR matters and the new PSL law is critical for California small businesses. To ensure your compliance with the latest developments in employment law, schedule an HR Audit with Essential HR, Inc. Our team of experts will assess your HR policies, procedures, and practices while providing valuable insights to safeguard your business. Don't wait; reach out to us today and take the first step toward a resilient and compliant workplace!

Understanding PAGA Claims in California: How Businesses Can Mitigate Risk

As a small business owner in California, staying compliant with the ever-changing workplace and labor laws is vital for the success of your company. The Private Attorneys General Act (PAGA) is a unique California law that allows employees to sue employers on behalf of themselves and other employees for alleged violations of labor laws. These claims can lead to costly and time-consuming legal battles, making it essential for businesses to protect themselves proactively. In this article, we will further explore PAGA claims, highlight the recent California Supreme Court ruling and provide practical steps for businesses to mitigate the risk of facing such lawsuits in the future.

What is PAGA?

The Private Attorneys General Act, enacted in 2004, empowers employees to act as "private attorneys general" to enforce California's labor laws. Under PAGA, employees can bring lawsuits against employers for various violations, such as wage and hour violations, meal and rest break violations, failure to provide accurate wage statements, and more.

Unlike traditional lawsuits, PAGA claims are not limited to recovering damages for individual plaintiffs. Instead, the penalties recovered in PAGA lawsuits are primarily used to remedy violations on a broader scale and benefit affected employees as well as the state.

The Potential Impact on Businesses:

PAGA claims can pose significant challenges and risks for businesses, including:

• Costly Penalties: PAGA penalties can be substantial, with fines ranging from $100 to $200 per employee per pay period for initial violations and $200 to $1,000 per employee per pay period for subsequent violations.

• Legal Expenses: Defending against PAGA claims often involves complex legal procedures, leading to substantial legal expenses for businesses.

• Reputation Damage: Publicized PAGA claims can harm a business's reputation, affecting customer perception and potential partnerships.

How Businesses Can Protect Themselves:

While businesses cannot completely eliminate the risk of facing PAGA claims, there are practical steps they can take to mitigate the risk and ensure compliance with California's labor laws.

• Stay Compliant with Labor Laws: The most effective way to reduce the risk of PAGA claims is to ensure strict adherence to California's labor laws. Regularly review and update policies and practices related to wages, overtime, meal and rest breaks, accurate wage statements, and other relevant labor regulations.

• Conduct Internal Audits: Regular internal audits can help identify potential compliance issues and allow businesses to address them promptly. Working with HR professionals or legal experts to conduct thorough audits can provide valuable insights and recommendations for improvement.

• Employee Training: Educate your workforce about their rights and responsibilities under labor laws. Training sessions can help employees understand the importance of compliance and create a culture of adherence to company policies.

• Implement Arbitration Agreements: Consider implementing arbitration agreements as part of your employment contracts. Arbitration can provide a more efficient and cost-effective way to resolve disputes, potentially reducing the likelihood of costly PAGA lawsuits.

• Consult with Legal Experts: Engage with employment law attorneys who specialize in California labor laws. Seeking legal advice and guidance can help businesses navigate complex employment regulations and implement best practices.

• Maintain Accurate Records: Keep meticulous records of employees' work hours, wages, and other relevant data. Accurate record-keeping can serve as essential evidence in the event of a PAGA claim.

What About the Recent PAGA Ruling?

On July 17, 2023, The California Supreme Court ignored guidance from the US Supreme Court and clarified that a PAGA plaintiff retains standing to litigate non-individual PAGA claims in court, even if their individual PAGA claim is compelled to arbitration. This interpretation aligns with PAGA's purpose of ensuring effective code enforcement.

Key Takeaways from the Ruling:

• Arbitrate, Stay, then Dismiss: The court provided a clear framework for handling PAGA actions—arbitrate the individual claim, stay the non-individual claim at the court's discretion, and dismiss if the plaintiff loses arbitration.

• No Loss of Standing: PAGA plaintiffs can pursue non-individual PAGA claims even when their individual PAGA claims are sent to arbitration.

• Court’s Discretion: The court suggested that non-individual PAGA claims can be stayed in state court while the individual PAGA claim undergoes arbitration. This prevents duplication of legal proceedings.

• Potential Ballot Measure: Due to the conflicting decision with the U.S. Supreme Court, there is a proposed ballot measure for the November 2024 election, "California Fair Pay and Employer Accountability Act of 2024" that could eliminate PAGA and replace it with increased DLSE enforcement.

What’s Next for Employers?

For small business owners in California, it's critical to review wage and hour compliance and arbitration agreements. Staying compliant with workplace laws can help prevent employees from pursuing non-individual PAGA claims if they fail to prove individual labor violations.

Your 5-Step Plan for HR Compliance:

1. Review and Revise Arbitration Agreements: Ensure your arbitration agreements align with recent rulings and protect your business from potential PAGA claims.

2. Consider Staying Representative Claims: Amend arbitration agreements to include a stay on any representative claim under PAGA pending the arbitration of individual PAGA claims.

3. Implement Arbitration if Necessary: Evaluate implementing arbitration agreements if you currently lack them to strengthen your position in potential legal disputes.

4. Conduct a Thorough Wage and Hour Compliance Review: Review policies related to overtime, timekeeping, pay, meal and rest breaks, and other wage and hour practices. Train employees and managers on these policies and appoint a team to address related inquiries.

5. Evaluate Active Litigation: Determine if arbitrating individual claims could weaken the standing of PAGA plaintiffs to pursue non-individual PAGA claims.

Staying informed and proactive about HR matters and PAGA claims is critical for California small businesses. To ensure your compliance with the latest developments in employment law, schedule an HR Audit with Essential HR Services. Our team of experts will assess your HR policies, procedures, and practices, providing valuable insights to safeguard your business. Don't wait; reach out to us today and take the first step toward a resilient and compliant workplace.

OSHA Compliance for Summer: Ensuring Workplace Safety with Heat and Air Quality Requirements

OSHA Compliance for Summer: Ensuring Workplace Safety with Heat and Air Quality Requirements

Now that we are in the midst of summer, the temperatures are rising and  poses significant challenges for businesses in maintaining a safe and healthy work environment for their employees. Ensuring Occupational Safety and Health Administration (OSHA) compliance during the hot months is essential to protect the well-being of workers and avoid potential liability.  Below is a list of  OSHA compliance requirements related to heat and air quality, and provide valuable tips for HR professionals to keep their workforce safe and comfortable during the summer.

1. Understanding the Impact of Heat on Workers

Companies (HR) should  take preventive measures to safeguard their workforce. OSHA recommends the following steps:

a) Implementing a Heat Illness Prevention Program

Create a comprehensive plan that includes acclimatization procedures, scheduled breaks, and access to shaded areas or air-conditioned spaces. Train employees and supervisors on recognizing heat-related illnesses and emergency procedures.

b) Monitoring Weather Conditions

Keep track of weather forecasts to anticipate extremely hot days. Make adjustments to work schedules when necessary to avoid activities during the hottest parts of the day.

c) Providing Adequate Hydration

Encourage regular water breaks and provide water to employees.

d) Allowing Rest and Recovery

Implement frequent rest breaks, especially in extreme heat conditions. Encourage employees to take advantage of breaks to cool down and recuperate.

2. Ensuring Optimal Air Quality

In addition to heat concerns, air quality can significantly impact employee health and well-being. Poor indoor air quality can lead to various health issues, including respiratory problems and allergies. To comply with OSHA regulations, Companies (HR) should consider the following:

a) Ventilation and Air Circulation

Ensure that workspaces are well-ventilated and have proper air circulation systems in place. Periodically check and maintain air conditioning and filtration systems to prevent airborne contaminants.

b) Controlling Air Pollutants

Identify and address potential sources of air pollutants, such as dust, mold, or chemical fumes. Implement regular cleaning and maintenance.

c) Monitoring Humidity Levels

Maintain optimal humidity levels within the workplace. High humidity can promote the growth of mold, while low humidity can cause discomfort and respiratory issues.

d) Provide Training to Employees

Provide training to employees about the importance of indoor air quality and encourage them to report any concerns or symptoms they may experience related to air pollution.

By taking proactive measures to address heat-related issues and air quality concerns, Companies (HR) demonstrate their commitment to employee well-being, foster a positive work culture, and mitigate potential liability for the organization.

(Written by Essential HR in partnership with ChatGPT)

CA Supplemental Paid Sick Leave Extended Through 12/31/22

CA Supplemental Paid Sick Leave Extended Through 12/31/22

Assembly Bill 152 was signed into law 9/29/22 extending the CA 2022 Supplemental Paid Sick Leave through the end of 2022 for employers with 26+ employees.  Below are the highlights and recommended action items.

• Employers are not required to provide a new bank of leave.

• Changes to employee testing.

In cases where the diagnostic test on or after day 5 is positive, employers may now require a third test within no less than 24 hours (at no cost to the employee). Employers can deny additional CA 2022 SPSL to an employee who refuses to submit to a diagnostic test.

• Grants for small employers.

Grants of up to $50,000 to cover the actual costs incurred for providing CA 2022 SPSL will be available through the California Small Business and Nonprofit COVID-19 Relief Grant Program to qualified small businesses and nonprofit organizations that meet the criteria below.  Check with your tax advisor to determine if you qualify and how a grant could affect your federal taxes. 

• Incorporated as a "C" corporation, "S" corporation, cooperative, limited liability company, partnerships, or limited partnership or registered as a 501(c)(3), 501(c)(6), or 501(c)(19)

• Began operation before June 1, 2021

• Are currently in operation

• Have 26 to 49 employees

• Post the updated 2022 SPSL poster.

• Check for any local ordinances that remain in effect or may have been extended.

• Review existing COVID paid leave policies and procedures and revise if needed to reflect the extension and other changes.

• Check the CA 2022 SPSL FAQs for updates.

If you have questions, please contact your Essential HR Consultant.

Minimum Wage Increase January 1, 2020 – How will it affect you?

A REMINDER TO OUR CLIENTS

The California state minimum wage will increase on January 1, to $12 per hour for employers with 25 or fewer employees and to $13 per hour for employers with 26 or more employees.

In addition to state laws, California businesses will also need to pay attention to local ordinances and upcoming changes for January 1.

The minimum wage increase also increases the salary threshold for exempt positions under the FLSA. FLSA thresholds in California are specific to Administrative, Executive, and Professional exemptions, each with distinct thresholds. The new wage requirements will be:

Under 26 employees:     $49,920

26 employees or more:  $54,080

 

Essential HR INC. recommends that our clients conduct a payroll audit before the end of the year to ensure that the exempt salary threshold is adjusted if needed. Additionally, we recommend capitalizing on this time to conduct an FLSA Exempt Audit on all of your exempt level positions/job descriptions. This will not only verify that the salary threshold is met, but delineate that duties and test guidelines for the various FSLA categories successfully qualify the position as exempt. Misclassification of exempt employees creates liability for unpaid meal/rest periods, overtime, and fines and penalties. For assistance in conducting a FLSA Classification audit, reach out to us, your trusted partner. 

AB 5 Changes Independent Contractor Classification Standards in California

On April 30th, 2018, the California Supreme Court issued a landmark decision in Dynamex Operations West, Inc. v. Superior Court and adopted the three-prong ABC test, requiring businesses to meet all three prongs to legally classify a worker as an independent contractor under the California wage orders.  The prongs of the ABC test are:

(A)  the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; 

(B) the worker performs work that is outside the usual course of the hiring entity’s business; and

(C)the worker is customarily engaged in an independently established trade, occupation, or business.

This was a significant change from the prior Borellotest, which previously considered multiple factors to examine the total circumstances of the relationship between the business and the person performing the work. Crucially, the Borello test determined if the business had a “right to control” the manner in which the worker performed the service. The Borello similarly included whether the person performing the work was engaged in an occupation or business distinct from that of the company, the method of payment, if the company or the worker supplied the equipment, tools, or office space, and the skill required in the particular occupation.

 Dynamex dramatically changed the legal landscape and had a far-reaching impact across all industries. Businesses that historically relied on the ability to classify workers as independent contractors were suddenly forced to address this change. Independent contractor status for gig economy positions created by tech giants, such as Uber and Lyft, became threatened. The Dynamex standard also led to much confusion and raised many questions.  Does it apply retroactively? Does it apply to all wage and hour claims? How do you define the usual or primary purpose of the business? Would governmental agencies, such as the Employment Development Department and Division of Labor Standards Enforcement, adopt the same standard as the courts?  

The Legislative Response to Dynamex

Legislators began wrestling over this judge-made law; some advocated against it and sought to overturn Dynamex, others moved to solidify Dynamex. Assembly Bill 5 (AB 5), which codified Dynamex, was introduced by California assemblywoman Lorena Gonzalez and endorsed by Governor Gavin Newsom. Lobbying efforts kicked into high gear with industries jockeying for exceptions from the onerous Dynamexstandard and various amendments were made to AB 5. In September 2019, AB 5 passed the legislature and was signed by Governor Gavin Newsom. AB 5 becomes effective on January 1, 2020.

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Here’s what you need to know

 Under AB 5, the Dynamexstandard applies unless an exception is met, in which case the older Borello multi-factor test must be used.Various occupations, such as doctors, dentists, psychologists, insurance agents, stockbrokers, lawyers, accountants, engineers, and real estate agents,were granted relatively simple exceptions from the Dynamex standard.  The older Borello multi-factor test will continue to apply for those occupations. 

However, AB 5 creates other exceptions that are unfortunately complex, and ensuring compliance requires careful review. For instance, the misleading “professional services exception,” only applies to very specific categories of “professional services,” such as graphic design, marketing, photography or photojournalism, human resources administration, travel agent services, fine art, payment processing, freelance writing, enrolled agents, and certain beauty service providers. Further, various factors must all be met to fit within this exception including: 

• The individual maintains a business location (may be a residence) that is separate from hiring entity. The individual may choose to perform services at the hiring entity’s location; 

•  If work is performed more than six months after January 1, 2020, the individual has a business license, in addition to any required professional licenses or permits for the individual to practice in his or her profession;

• The individual has the ability to set or negotiate his or her own rates for the services performed;

• Outside of project completion dates and reasonable business hours, the individual may set the individual’s own hours;

• The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other customers as available to perform the same type of work; and

• The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.  

Another notable exception is the “business-to-business exception” in which a business is exempt from the Dynamextest if the contracting business demonstrates that all of the following criteria are satisfied:

• The business service provider is free from the control and direction of the contracting business entity, both under the contract for the performance of the work and in fact;

• The business service provider is providing services directly to the contracting business rather than to customers of the contracting business;

• The business service contract is in writing;

• If the work is performed in a jurisdiction that requires the business service provider to have a business license or business tax registration, the business service provider has the required business license or business tax registration;

• The business service provider maintains a business location that is separate from the business or work location of the contracting business;

• The business service provider is customarily engaged in an independently established business of the same nature as that involved in the work performed;

• The business service provider actually contracts with other businesses to provide the same or similar services and maintains a clientele without restrictions from the hiring entity;

• The business service provider advertises and holds itself out to the public as available to provide the same or similar services;

• The business service provider provides its own tools, vehicles, and equipment;

•  The business service provider negotiates its own rates;

• The business service provider sets its own hours and location of work; and

• The business service provider is not performing the type of work for which a license from the Contractor’s State License Board is required.

Importantly, this “business-to-business exception” does not apply to an individual worker, as opposed to a business entity, who performs labor or services for a contracting business.  

Compliance requires extraordinary diligence. The above is a non-exhaustive description of AB 5 and should not be relied upon in replace of legal advice.  Other exceptions, such as a referral agency exception and construction industry exception, are found within AB 5 but are subject to limitations as with the business-to-business exception.  

Moving Forward

Properly classifying a person or entity that does work for you as an independent contractor has become exceedingly complex with the passage of AB 5.  Businesses with California workers must now carefully analyze their relationships with these workers to ensure compliance since misclassification can lead to significant legal exposure in the areas of wage and hour liability, benefits coverage, workers’ compensation, unemployment compensation, and a whole host of other legal issues. Therefore, businesses that rely on independent contractor classifications should seek legal review now and develop a compliance strategy before January 1, 2020.

Shannon Wolf, Esq.
The Law Office of Shannon Wolf
1201 Puerta del Sol, Suite 213
San Clemente, CA 92673
(949) 276-4214 | swolf@swolflegal.com

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