Increase in Minimum Salary for Employees to be Exempt from Overtime Pay

June 2016
Number 39

On May 23, 2016, the United States Department of Labor published updated overtime regulations that increase the minimum salary amount necessary for employees to be exempt from overtime pay requirements. The updated regulations (Final Rule) will take effect on December 1, 2016.

The federal Fair Labor Standards Act of 1983 (FLSA) requires an employer to pay an employee at an overtime rate if the employee works more than 40 hours in one week. Employees can be exempt from the FLSA overtime rules if:

  1. They are paid a fixed salary (salary basis test);
  2. The salary is at or above the government-set salary level (salary level test); and
  3. The employment is in an executive, administrative or professional capacity, as defined by the FLSA.

The Final Rule makes the following changes:

  • Increases the salary and compensation levels for the salary level test from $455 per week, or $23,660 annually, to $913 per week, or $47,476 annually. The salary level test now allows use of non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.
  • Increases the annual salary requirement for highly compensated employees (HCE) subject to a minimal duties test. The new salary requirement is $134,004 annually for a full-time employee. The expiring rule set the salary level at $100,000 annually for a full-time employee.
  • Creates a method for automatically updating the salary and compensation levels on a three-year cycle, beginning on January 1, 2020.

While the FLSA overtime pay requirement affects classified school employees who work over 40 hours per week, school employers should note that it does not apply to certificated employees under a specific “teaching professional” exemption in the FLSA regulations. (29 C.F.R. § 541.303.) School employers should also be mindful that California law entitles classified school employees to an overtime pay rate after working eight hours in one day (unless a statutorily-allowed alternative schedule is approved).

Before the final rule takes effect, public agencies should evaluate their employment rosters prior to determine whether currently exempt employees will continue to qualify for an exempt status under the higher salary levels contained in the new regulations. If currently exempt employees do not meet the new minimum salary level, the employer must either: 1) begin paying the employee for the overtime he or she works, or 2) increase the employee’s salary so that he or she will meet the new minimum salary level and continue to be exempt from overtime pay. Thus, the new regulations will likely result in increased costs for the employer.

If you have questions about the new overtime regulations or any other employee compensation issues, please contact the authors of this Client News Brief or an attorney at one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written by:

Desiree Serrano
Associate

 

©2016 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Proposed Amendments to FEHA Regulations Regarding Transgender Identity and Expression

June 2016
Number 38

California’s Fair Employment and Housing Council (Council) is set to consider amendments to the Fair Employment and Housing Act (FEHA or Act) that the Council says will more explicitly spell out existing protections for transgender workers and bring those protections in line with federal guidance and state law.

The Council will discuss the proposed amendments at its June 27 meeting and is now accepting public comment. A date to consider approval of the proposed amendments – or some version of them – has not yet been announced.

The Act, which is spelled out in Government Code sections 12900 et. seq. and implemented by the California Code of Regulations title 2, division 4.1, subchapter 2, article 5, already bars employers from discriminating against employees and applicants on the basis of gender identity or expression. In its initial statement of reasons for the proposed changes, the Council said its goals are to clarify an “often misunderstood and increasingly prominent facet of the law” and to better align FEHA with state law and federal guidance.

The list of proposed changes includes:

  • Gender-neutral language. Overall, the Council proposes to use gender-neutral language and eliminate dichotomous references to gender in the Act, substituting “individual” for “male” or “female” and “opposite sex” with “different sex.” In addition, the term “transitioning” is proposed to be included within the definitions found in section 11030 as “the process some transgender people go through to begin living as the gender with which they identify, rather than the sex assigned to them at birth,” which “may or may not include changes in name and pronoun, bathroom, facility usage, participation in activities like sports teams, hormone therapy, sex reassignment surgery, or other medical procedures.”
  • Working Conditions. The Council proposes to expand employees’ equal access to workplace facilities to include locker rooms, dressing rooms, dormitories and restrooms and to establish employers’ obligations to make such facilities available. The proposed amendments provide that employees must be permitted to use facilities that correspond to their gender identity or expression, regardless of the employee’s assigned sex at birth. If individual facilities are not available, employers are to provide alternatives to ensure privacy, such as locking toilet stalls and shower curtains. The proposed amendments also prohibit an employer from requiring an employee to use a particular facility and from requiring transitioning employees to undergo, or provide proof of, any particular medical treatment in order to use facilities designated for a particular gender. Employers with single-occupancy facilities under their control will have to use gender-neutral signage, such as “Restroom,” “Unisex,” “Gender Neutral,” or “All Gender Restroom.”
  • Physical Appearance, Grooming and Dress Standards. Clarifying employers’ existing obligations under FEHA, the proposed amendment would only permit employers to impose physical appearance, grooming or dress standards if they serve a legitimate business purpose and do not discriminate based on an individual’s sex, gender, gender identity or gender expression. The proposed amendment also adds that employers may not require individuals to “dress or groom themselves in a manner inconsistent with their gender identity or gender expression.”
  • Recording of Gender and Name. The Council proposes provisions that will make it unlawful to require an applicant or employee to disclose whether the individual is transgender, on a job application or otherwise. In situations where a job application requires an individual to identify as male or female, an employer cannot consider fraudulent or a misrepresentation, an applicant’s designation of a gender inconsistent with the applicant’s assigned sex at birth or presumed gender.

    Under the proposed amendments, employers will also be required to honor employees’ requests to be identified with a preferred gender, name and/or pronoun, except under limited circumstances. Acknowledging that the severe or pervasive misuse of an employee’s name could be sufficient to create a hostile or abusive work environment, the Council deemed this amendment necessary to prevent the occurrence of sexual harassment.

  • Additional Rights. Finally, the proposed amendments prohibit the denial of employment based wholly or in part on an individual’s gender identity or gender expression, as well as discrimination against an individual who is transitioning or has transitioned. If adopted, it will be unlawful for employers to inquire or request documentation or proof of an individual’s sex, gender, gender identity or gender expression as a condition of employment, except under limited circumstances.

If adopted as currently written, the amendments will require employers to review and potentially revise their existing policies and standards, and to make changes to facility access, signage and privacy considerations. FEHA defines an employer as “any person regularly employing five or more persons; any person acting as an agent of an employer, directly or indirectly; the state or any political subdivision thereof.”

Prior to adopting its proposed amendments, the Council will consider comments submitted in writing or presented at the June 27 public hearing. Written comments may be submitted via e-mail to FEHCouncil@dfeh.ca.gov until 5 p.m. June 27.

If you would like additional information about the proposed FEHA changes or your responsibilities with respect to transgender workers, please contact the authors of this Client News Brief or an attorney in one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written by:
Darren Kameya
Partner

Joanne Kim
Associate

©2016 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Ninth Circuit Holds that Medically Necessary Occupational Therapy Services Are “Related Services” Under the IDEA

June 2016
Number 37

In a recent decision, Douglas v. California Office of Administrative Hearings (9th Cir., May 13, 2016, No. 15-15261) __ Fed.Appx. __ [2016 U.S.App. LEXIS 8844], the Ninth Circuit Court of Appeals confirmed that occupational therapy services, whether educationally or medically necessary, are “related services” under the Individuals with Disabilities Education Act (IDEA) when they are included in a student’s Individualized Education Plan (IEP).

The appellate court also held that California’s Office of Administrative Hearings (OAH) has jurisdiction to decide disputes regarding California Children’s Services’ (CCS) determination of the medical necessity of occupational therapy services included in a student’s IEP, and that OAH can award a student compensatory education, reimbursement for independently obtained assessments and prevailing party attorneys’ fees.

The decision is important for school districts and county offices of education because it clarifies that “related services” may include medically necessary services like occupational and physical therapy if they are listed in a student’s IEP. The decision also confirms that disputes regarding medically necessary “related services” provided through CCS are subject to due process review, pursuant to the IDEA.

Government Code section 7575(a) requires CCS to provide for medically necessary occupational and physical therapy services, by reason of a medical diagnosis, when included in a student’s IEP.

Plaintiff California Department of Health Care Services (DHCS) argued that the law allows CCS to determine the level of therapy that is medically necessary for a student’s condition and that review of this decision is limited to the appeal process within CCS. The district court agreed, finding that OAH’s jurisdiction extends only to whether CCS failed to provide required occupational or physical therapy services; the court held that under the Health and Safety Code, the determination regarding whether services were medically necessary rests with CCS.

The appellate court disagreed, finding that the Government Code section 7585 specifically provides that disputes regarding occupational therapy recommendations by medical personnel and an IEP team may be resolved through due process proceedings before OAH. The appellate court reasoned that medically necessary occupational therapy services included in a student’s IEP are “related services,” so families who dispute them are entitled to procedural protections, including the right to due process review under the IDEA.

The appellate court also returned the case to the district court to make an award of compensatory occupational therapy services, reimbursement for privately obtained independent assessments and prevailing party attorneys’ fees against CCS.

The Douglas decision clarifies CCS’s obligation to implement related services in an IEP in cases where CCS is designated as the provider of those services.

While this unpublished decision is not necessarily binding, it is likely that the lower California federal courts will follow the Ninth Circuit’s interpretation of federal law, and its interplay with state law, as set forth in the Douglas decision. However, to the extent that this case also raises issues of interpretation of California law, California state courts may consider this decision as merely persuasive.

Lozano Smith is currently representing two local education agencies in a very similar dispute with DHCS that is now pending with a state appeals court. If you have a dispute regarding CCS services pursuant to an IEP, it may be prudent to consult with legal counsel.

If you have questions regarding this decision or other special education obligations, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written by:
Marcy Gutierrez
Senior Counsel

Jessi Gasbarro
Associate

©2016 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Reminder – Looming June 30 Deadline for Posting Competitive Athletics Data

June 2016
Number 36

The 2015-16 school year marks the first time that public elementary and secondary schools that offer “competitive athletics” must post data about the gender makeup of their teams and their student participation. Charter schools must also comply.

By June 30 of each school year starting in 2016, each school must make the following information available on its website:
1) The total enrollment of the school, classified by gender;
2) The number of pupils enrolled at the school who participate in competitive athletics, classified by gender; and
3) The number of boys’ and girls’ teams, classified by sport and by competition level.

If the school does not have a website, the data must be posted on the website of the school district or charter operator.

This requirement is found in Education Code section 221.9, which defines “competitive athletics” to mean sports where the activity has coaches, a governing organization and practices, competes during a defined season, and has competition as its primary goal.

Section 221.9 does not include a specific exception or any other guidance for schools that do not offer any competitive athletics. Those schools may consider posting a notice simply stating that they do not offer competitive athletics.

As we previously reported (see 2015 Client News Brief No. 76), the legislative history of Education Code section 221.9 indicates that a major purpose of this new law is to make it easier to monitor and enforce Title IX and state requirements for gender equity in public school athletics. Because of the increasing focus on gender equity issues, it is more important than ever for schools and districts to monitor and ensure compliance with Title IX’s numerous requirements.

Lozano Smith has dedicated additional focus to this area by forming a Title IX Impact Team that can assist districts with addressing legal needs related to Title IX and gender equity.

If your school site or district needs sample language for these new posting requirements or additional information, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written by:
Ruth Mendyk
Partner

Desiree Serrano
Associate
©2016 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Job Order Contracting for School District Public Works Projects

June 2016
Number 35

As of January 1, California school districts have been authorized to use job order contracts for public works projects greater than $25,000. Approved by Governor Jerry Brown in October of last year, Assembly Bill No. 1431 modified the Local Agency Public Construction Act to authorize job order contracting for school districts until January 1, 2022. This bill comes after a decade-long pilot program of the job order contract project delivery method at Los Angeles Unified School District. At the same time, the new law requires prequalification and project labor agreements, echoing other recent laws.

Job order contracting is an alternative to the traditional lump-sum competitive bidding process used by school districts, and allows a district to assemble a stable of approved “on call” contractors from which the district may select to perform a clearly defined task for a pre-established unit price. This time-and-material contracting procedure is intended to minimize project costs, expedite project completion and reduce construction contracting complexity for school districts. (See Public Contract Code sections 20919.20 et seq. for the entire statutory scheme.)

If a school district wants to utilize job order contracting, it may do so by preparing a set of documents for job order contracts, including a price catalog with various tasks and proposed unit prices for those tasks, job order contract technical specifications, and any other necessary information to describe the school’s needs. The school district’s proposed unit prices must be based on local prevailing wages, but may not include overhead and profit. The school district may prepare a request for bid that invites prequalified job order contractors to submit competitive sealed bids that include “adjustment factors.” In their adjustment factors, bidding contractors increase or decrease the school district’s unit prices in the catalog as part of their bid. The statutes do not provide any specifics regarding the permitted bases for a bidding contractor’s adjustment factors. Awards are then made to the prequalified bidders that the school district determines to be the most qualified based upon criteria established by the school district.

This process enables school districts to enter into “master” contracts with contractors where each contractor may perform multiple projects (or “job orders”) on a time-and-material basis. Each job order may only include work covered by the district’s price catalog; any other work not listed in the catalog must be competitively bid, unless a legal exception to competitive bidding applies. Contractors are also given incentive to provide responsive services, quality work, and accurate proposals because their contracts may be renewed or extended after their initial term.

There are, however, limitations to a school district’s ability to use job order contracts. To take advantage of this process, a school district must prequalify the contractors, and also must have entered into a project labor agreement or agreements that will apply to all public works in excess of $25,000. Additionally, the maximum total dollar amount that may be awarded under a single job order contract may not exceed $5 million for the first term of the job order contract and, if extended or renewed, a maximum of $10 million over the subsequent two terms of the job order contract.

If you have any questions regarding job order contracting, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written by:

Arne Sandberg
Senior Counsel

Ellen Denham
Associate

 

©2016 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

California’s Constitution Does Not Mandate a Specific Quality Level of Education or Minimum K-12 Education Funding

June 2016
Number 34

In Campaign for Quality Education v. State of California (2016) 246 Cal.App.4th 896 (Campaign), the California Court of Appeal held that the “free school guarantee” enshrined in California’s Constitution does not require the Legislature to provide a set minimum quality of education, or level of funding, for public schools.

In Campaign, student advocacy groups and non-profit organizations representing low-income and minority families filed suit in 2010 in hopes of securing a judicial declaration that the Legislature denies students access to a quality education by underfunding certain public schools. The trial court dismissed the plaintiffs’ case, which the plaintiffs appealed.

While the court of appeal agreed with plaintiffs in their assertion that “the provision of a quality education for all public school students is an important goal for society,” the court disagreed that the state’s Constitution provides the right to a certain quality of education. Upholding the trial court’s dismissal of the case, the appellate court determined that the plain text of the free school guarantee lacks qualitative and financial benchmarks that the court could enforce. Correspondingly, there is no “magic level” of education funding that the state is legally bound to provide. The Campaign court explained that it is the Legislature’s prerogative to set school funding levels and courts are obliged to defer to its decisions in this regard.

In reaching its decision, the court of appeal analyzed the language of California’s Constitution and unequivocally found that it “speaks only of a general duty to provide for a system of common schools.” The court reasoned that this “does not require the attainment of any standard of resulting educational quality.”

The court found no right to a particular quality of education and declared itself powerless under the state Constitution to conform the Legislature’s budgetary actions, concluding that plaintiffs’ remedy “lies squarely with the Legislature, not the Judiciary.” Campaign’s holding is thus unambiguous: Courts should “not entertain claims of educational malfeasance” stemming from “issues [regarding] the quality of education and the academic results produced.”

Despite these pronouncements, Campaign’s plaintiffs have expressed their intent to ask the California Supreme Court to review the decision. We will keep you updated on any further developments in this case.

If you have questions regarding this decision or students’ educational rights, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written by:

Sloan Simmons
Co-Chair, Litigation Practice Group

Carey Ash
Associate

 

©2016 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.