Following the 2018 decision in Dynamex Operations West, Inc. v. Superior Court, which established a three-part ABC test to determine coverage under the California Wage Orders—regulations from which many higher level and higher paid workers are exempt—Assembly Bill 5 now applies the ABC test to determine worker eligibility for inclusion in the workers compensation and unemployment insurance systems. All the employee rights found in the California Labor Code, including things such as paid sick leave, business expense reimbursement, and rules governing the frequency and timing of the payment of wages, are now determined by the new statute.
What you need to know: Effective January 1, 2020, the Fair Labor Standards Act (FLSA) will update the salary level test for overtime exempt status in the following ways:
When a 60-year-old nonprofit in New York City placing volunteers in schools closed its doors a few years ago, it recognized a sizeable fundraising risk it faced: its major donor, the City, was giving less and giving inconsistently. The nonprofit did take steps to address this, such as reducing expenses and asking schools for a “partnership fee.” Unfortunately, that was not enough to avoid closure.
There’s an old saying: “What you don’t know, can’t hurt you.” In the employment context, recent federal court cases have sometimes called for that phrase to become, “What you do know can hurt you”—especially if you ask the wrong questions and uncover information you shouldn’t have! Background checks help ensure you have all relevant information when making a hiring decision. Any good nonprofit conducts background checks on applicants for employment or volunteer positions as part of due diligence and risk management.
Proper classification of workers as employees or independent contractors has always been a major risk management consideration because of the potential for the imposition of penalties. Since the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, California employers have been examining existing and potential independent contract relationships to see if they run afoul of the new ABC classification test presented by the Court.