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VIA event stresses law for employers

Posted: March 22, 2012 2:00 a.m.
Updated: March 22, 2012 2:00 a.m.

David Poole, foreground, addresses a crowd gathered as Brian Koegle, left, looks on at the VIA luncheon Wednesday. Both men are attorneys for Poole & Shaffery, a local law firm, and spoke about employer law at the monthly event.


In the midst of a rising number of employee complaints statewide, lawyers offered advice on how to better classify employees and handle their wages at Tuesday’s Valley Industry Association luncheon.

Most frequently, employers face litigation issues that stem from misclassifying employees as independent contractors, or as exempt when they are nonexempt, said David Poole and Brian Koegle, attorneys from local firm Poole & Shaffery.

However, these issues can be avoided more often if employers defaulted to classifying staff as nonexempt and as employees, since most will fall under those categories, the pair said at the monthly VIA luncheon held at the Valencia Country Club.

“Very rarely can you qualify someone properly as an independent contractor in the state of California,” Koegle said. There is a 14-point test to determine if someone qualifies as an independent contractor, and it mainly centers on how much control the employer has over the employee.

“How much discretion, control and freedom do they have?” Koegle asked.

Particularly in this economy and with California’s budget shortfalls, both employees and the state are going after employers that are misclassifying employees or making mistakes regarding overtime and breaks. Koegle explained that the state saw a 4.4-percent uptick in claims that employees filed regarding unfair practices by their employers.

Additionally, Koegle said, the Internal Revenue Service and California are more strictly enforcing employment statutes lately as an extra revenue source, by levying the fines and penalties that come with violations. The IRS hired 170 new enforcement agencies nationwide to tackle misclassifications.

“It really is an area of risk for you, and that’s what we’re trying to put out,” Poole told the audience, many of them human resources advisers or management from local companies.

Many employers have common misconceptions about classifying an employee, Koegle said. For instance, a salaried employee is not automatically considered exempt — and the only employees that are classified as exempt are ones who are in narrow categories, such as executive management, administrative, outside-sales staff who are in the field more than half of the time and computer-related professions with a minimum annual salary of $81,026.25.

The pair touched on a 4-year-old case awaiting a California Supreme Court decision in April 2012, which will determine whether employers must “ensure” employees take meal and rest periods or whether employers must merely “provide an opportunity” for employees to take the mandatory breaks.

Koegle also summarized new employment-related legislation recently, including a state law that narrows the reasons for which an employer can request a credit check on an employee (employers still can if the employee handles at least $10,000 in cash regularly, has access to third-party personal information or qualifies as an executive manager exempt).

Additionally, as of Jan. 1, employers had to provide a written form to new employees with his or her rate of pay, regular pay days and specific information on the employer.

At the end of the session, the pair recommended that companies perform annual audits of their employment procedures and of every exempt employee’s classification. They also told the crowd to maintain written descriptions of every category of employment, update their employee handbooks to reflect the new legal changes and to get Employment Practices Liability Insurance.

“A lot of you just aren’t getting it,” Poole said. “We call people who don’t listen to our advice ‘defendants.’”

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