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UPDATED: On July 8, Hawaii’s Governor signed into law H.B. 1814 and it is effective immediately. Among other things, it authorizes employers to pay wages to an employee using a pay card if certain requirements are met.

Employers’ use of payroll cards to pay employee wages and other benefits is tremendously popular, for among other reasons, the convenience that the cards provide for both employers and employees. If you pay your employees by payroll card in Hawaii, keep an on eye on House Bill 1814. On April 3, 2014, the Hawaii Department of Labor and Industrial Relations issued an Amended Notice Re: Department of Labor and Industrial Relations Guidelines on the Use of Payroll Debit Cards, warning that, effective September 1, 2014, it is suspending its April 13, 2006 Declaratory Ruling, which administratively allows the use of payroll, pay, or debit cards for the payment of wages to employees. (A copy of the April 13, 2006 Declaratory Ruling is appended to the Amended Notice.) Unless the pending legislation permits it, employers will no longer be permitted to use payroll cards starting on September 1, 2014. The Department acknowledged that legislation on point, specifically H.B. 1814 (2014 Reg. Sess.) relating to payment of wages currently is being deliberated. H.B. 1814 was introduced on January 17, 2014, passed by the House on March 4, 2014 and the Senate on April 8, 2014, and transmitted to the Governor on May 5, 2014.

Additional Sources: Consumer Financial Protection Bureau Bulletin 2013-10; Comptroller of the Currency, Payroll Cards: An Innovative Product for Reaching the Unbanked and Underbanked (June 2005); Construction Executive, To Pay, Or Not To Pay, By Payroll Debit Card (Oct. 28, 2013)

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Before submitting your contractor’s license application in Tennessee, check to make sure you can use the chosen company name…

On March 12, 2014, Tennessee Governor Bill Haslam signed into law House Bill 1464, a bill that amends Tennessee Code § 62-6-111 to require the Tennessee Department of Commerce and Insurance, Board for Licensing Contractors, to “deny any application for licensure as a contractor if the board determines that the name under which the applicant will be trading is identical with the name being used by an existing licensee, or is so nearly similar to the name being used by an existing licensee that it is likely to cause confusion on the part of the public at large” (emphasis added). TN Code § 62-6-111(m). This does not apply to any applicant who has acquired an exclusive right to use the name as a registered trademark pursuant to 15 U.S.C. § 1051. This law became effective March 12, 2014.

Additional Sources: Tennessee Department of Commerce and Insurance, Board for Licensing Contractors; Tennessee General Assembly,

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On April 8, 2014, Tennessee Governor signed into law Senate Bill 1713, a bill amending by deleting the section in its entirety and substituting Title 62, Chapter 6, Part 1, § 62-6-119, relative to requirements for invitations to bid. The amended law is effective July 1, 2014.

Amended Section 62-6-119(b) will read:

“The person or entity involved in the preparation of the invitation to bid or comparable bid documents, including any electronic bid documents, shall direct that the following information be written upon the bid envelope or provided within the electronic bid document:

(1) The name, license number, expiration date thereof, and license classification of the contractor applying to bid for the prime contract;

(2) The name, license number, expiration date thereof, and license classification of the contractor applying to bid for the masonry contract where the total cost of the materials and labor for the masonry portion of the construction project exceeds one hundred thousand dollars ($100,000);

(3) The name, license number, expiration date thereof, and license classification of the contractor applying to bid for the electrical, plumbing, heating, ventilation, or air conditioning contracts except when such contractor’s portion of the construction project is less than twenty-five thousand dollars ($25,000);

(4) For each vertical closed loop geothermal heating and cooling project, the company name, department of environment and conservation license number, classification (G, L or G,L) and the expiration date, except when the geothermal portion of the construction project is in an amount less than twenty-five thousand dollars ($25,000);

(5) Prime contractor bidders who are to perform the masonry portion of the construction project which exceeds one hundred thousand dollars ($100,000), materials and labor, the electrical, plumbing, heating, ventilation or air conditioning or the geothermal heating and cooling must be so designated; and

(6) Only one (1) contractor in each of the classifications listed above shall be written on the bid envelope or provided within the electronic bid document.”

“Failure of any bidder to furnish the required information shall void such bid and such bid shall not be considered.” TN Code § 62-6-119(c). However, prior to awarding a contract, “any discrepancies found in the spelling of names of bidders, transposition of license numbers, or other similar typographical errors or omissions may be corrected within forty-eight (48) hours after the bid opening excluding weekends and state-recognized holidays.” Id.

Additional Resources: Tennessee Department Of Commerce and Insurance, Board for Licensing Contractors; LegiScan, TN S.B. 1713

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Virginia’s 2014 General Assembly approved an increase in the civil penalty imposed when an employer fails to properly insure, as required by the Workers’ Compensation Act. Amendments to Section 65.2-805 expose an employer in violation of this law to a civil penalty of not more than $250 per day for each day of noncompliance, subject to a maximum penalty of $50,000, plus collection costs. The amendments are effective July 1, 2014.

As summarized by the Virginia Workers’ Compensation Commission, Virginia law requires an employer to insure in Virginia when they regularly employ more than two part-time (or full-time) employees. In addition, a business that hires subcontractors or another business(es) to assist it in its trade or to fulfill a contract must count the subcontractor’s or other business’ employees as well as its own employees in determining the total employees for coverage requirements. It further explained that, for a contractor whose work varies, the Commission will look to the “established mode” of performing work and, a contractor that hires one or more subcontractors with employees to accomplish their business, will be required to carry workers’ compensation insurance.

It cautions employers that the term “employee” is defined broadly under Virginia law and includes every person in the service of another under any contract of hire, written or implied, lawfully or unlawfully employed, and “employee” includes statutory employees (subcontractor’s employees), corporate officers, minors, aliens, working family members, apprentices, temporary and seasonal employees; designating a worker as an “independent contractor” does not necessarily mean they are not an employee. The workers’ compensation insurance coverage requirements focus on number of employees, and a business that doesn’t count all of its employees may not realize it is required to carry coverage.

Workers’ compensation is mandatory coverage. Virginia law does not permit other forms of insurance as a substitute. Failure to properly insure due to lack of knowledge will not excuse an employer’s failure to comply with Virginia’s Act or protect the employer from civil penalties.

Virginia workers’ compensation information is available at www.workcomp.virginia.gov. For specific coverage questions, contact the Insurance Department of the Commission at vwcinsurance@workcomp.virginia.gov or by phone at (804) 205-3586.

Additional Source: Commonwealth of Virginia, Virginia Workers’ Compensation Commission, Important Notice for Employers

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On August 27, 2013, California Governor Edmund G. Brown Jr. signed into law Senate Bill 745 recasting smoke alarm requirements:

Listing Smoke Alarms

Existing law provides that no person may market, distribute, offer for sale, or sell any fire alarm system or fire alarm device in California unless the system or device has been approved and listed by the State Fire Marshal. As amended, Health & Safety Code § 13114(2)(A) provides that, except as otherwise permitted by Subdivision (2)(B), commencing July 1, 2014, in order to be approved and listed by the State Fire Marshal, a smoke alarm that is only operated by a battery will be required to contain a non-replaceable, non-removable battery that is capable of powering the smoke alarm for at least 10 years. This does not apply to smoke alarms that have been ordered by, or are in the inventory of, an owner, managing agent, contractor, wholesaler, or retailer on or before July 1, 2014, until July 1, 2015.

The new law further requires that, commencing January 1, 2015, in order to be approved and listed by the State Fire Marshal, a smoke alarm must display the date of manufacture on the device, provide a place on the device where the date of installation can be written, and incorporate a hush feature. The new law gives the State Fire Marshal authority to create exceptions through its regulatory process, including, but not limited to, fire alarm systems with smoke detectors, fire alarm devices that connect to a panel, or other devices that use a low-power radio frequency wireless communication signal. The State Fire Marshal is required to approve the manufacturer’s instructions for each smoke alarm and ensure that the instructions are consistent with current building standard requirements for the location and placement of smoke alarms.

Smoke Alarms Installed in Dwelling Units Intended for Human Occupancy

Owners of dwelling units intended for human occupancy should consider reviewing the new smoke alarm law to determine whether they are subject to new requirements. “Dwelling units intended for human occupancy” is defined to include “a one- or two-unit dwelling, lodging house, apartment complex, hotel, motel, condominium, stock cooperative, time-share project, or dwelling unit of a multiple-unit dwelling complex or factory-built housing as defined in [Health & Safety Code §] 19971.” Health & Safety Code § 13113.7(b). It does not include “manufactured homes,” as defined in Health & Safety Code § 18007, “mobile homes,” as defined in Health & Safety Code § 18008, or “commercial coaches,” as defined in Health & Safety Code § 18001.8. A “high rise structure,” as defined in Health & Safety Code § 13210(b), and regulated by Chapter 3 (commencing with Health & Safety Code § 13210), and which is used for purposes other than as dwelling units intended for human occupancy, is exempt from the Health & Safety Code § 13113.7 requirements, discussed below.

Building Permits On or After January 1, 2014

Section 13113.7 prohibits, for all “dwelling units intended for human occupancy,” for which a building permit is issued on or after January 1, 2014, for alterations, repairs, or additions exceeding $1,000, the permit issuer signing off on the completion of work if the permittee has not demonstrated that all smoke alarms required for the dwelling unit are devices approved and listed by the Office of the State Fire Marshal pursuant to Health & Safety Code § 13114. Certain exceptions set forth in Section 13113.7 may apply.

Testing Smoke Alarms

Section 13113.7(d) provides that the “owner shall be responsible for testing and maintaining alarms in hotels, motels, lodging houses, apartment complexes, and other multiple dwelling complexes in which units are neither rented nor leased.” It further provides that the owner of a hotel, motel, lodging houses, apartment complex, or other multiple-dwelling complexes in which units are rented or leased, and commencing January 1, 2014, the owner of a single-family dwelling that is rented or leased, shall be responsible for testing and maintaining alarms required by this section as follows:

“(A) An owner or the owner’s agent may enter any dwelling unit, efficiency dwelling unit, guest room, and suite owned by the owner for the purpose of installing, repairing, testing, and maintaining single station smoke detectors required by this section. Except in cases of emergency, the owner or owner’s agent shall give the tenants of each such unit, room, or suite reasonable notice in writing of the intention to enter and shall enter only during normal business hours. Twenty-four hours shall be presumed to be reasonable notice in absence of evidence to the contrary.
(B) At the time that a new tenancy is created, the owner shall ensure that smoke alarms are operable. The tenant shall be responsible for notifying the manager or owner if the tenant becomes aware of an inoperable smoke alarm within his or her unit. The owner or authorized agent shall correct any reported deficiencies in the smoke alarm when he or she has not received notice of the deficiency.”

Additional Smoke Alarms Required

Unless exempt, on or before January 1, 2016, the owner of a “dwelling unit intended for human occupancy” in which one or more units is rented or leased is to install additional smoke alarms, as needed, to ensure that smoke alarms are located in compliance with current building standards. New smoke alarms may be battery operated provided that alarms have been approved by the State Fire Marshal for sale in the State, and existing alarms need not be replaced unless that alarm is inoperable. This requirement does not apply to fire alarm systems with smoke detectors, fire alarms devices that connect to a panel, or other devices that use a low-power radio frequency wireless communication signal.

Additional Source: California State Fire Marshal Information Bulletin 13-006; California Senate Bill 745; Health & Safety Code §§ 13113.7, 13114; Carbon Monoxide Poisoning Prevention Act of 2010 ; Frequently Asked Questions (FAQ) on Carbon Monoxide (CO) Devices

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Today, Pillsbury attorney Paul Casas published his advisory titled Lingering Questions About the San Francisco Gross Receipts Tax. The Advisory discusses the San Francisco Board of Supervisors’ November 26, 2013 approved amendments to the San Francisco Business and Tax Regulations Code (Code), providing for penalty relief for delinquent Gross Receipts Tax (GRT) installment payments, mandatory combined reporting for Payroll Expense Tax purposes, and the imposition of a new penalty for failure to file returns on a combined basis or failure to provide worldwide payroll or gross receipts information. The first installment payment for the new GRT is due April 30, 2014. While the City has provided some relief from installment underpayment penalties, many questions about the new tax remain as this deadline approaches.

The GRT rate for the construction industry starts at 0.300% and gradually increases to 0.450% for gross receipts over $25,000,000. The GRT provides a special provision allowing taxpayers in the construction industry to reduce taxable gross receipts for amounts paid to subcontractors that possess valid San Francisco business registration certificates during the tax year. In order to claim this reduction, a person must maintain an itemized schedule of payments to subcontractors and sufficient information to verify the subcontractor possessed a valid San Francisco business registration certificate. Reductions for any other costs, including without limitation, costs for materials, fees, equipment, or other services are not permitted.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work.

Additional Sources: San Francisco Ordinance No. 271-13

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The Truck and Bus Regulation was adopted in 2008 to significantly reduce toxic particulate matter and oxides of nitrogen emissions from existing diesel vehicles operating in California. It targeted approximately 1 million diesel trucks. The existing regulation requires nearly all heavier trucks to have filters to reduce PM emissions beginning January 1, 2012, and replacement of older trucks starting January 1, 2015. The regulation requires most heavy trucks in California to install soot filters or upgrade to newer models with filters by January 1, 2014, and that nearly all trucks have them installed by January 1, 2016. By January 1, 2023, all trucks and buses operating in most urban areas and in regions not meeting federal clean air standards will need 2010 or newer model year engines.

On Friday, April 25, 2014, the California Air Resources Board (ARB) issued a press release announcing that “today it adopted amendments to its Truck and Bus Regulation that will provide new flexible compliance options to owners of aging diesel fleets and recognize fleet owners that have made investments to comply, while also protecting air quality.” ARB confirmed that this will “provide additional regulatory flexibility to small fleets, lower use vehicles, and fleets in rural areas that have made substantial progress towards cleaner air.” It also confirmed that “[f]leets that have invested in cleaner, compliant equipment and trucks will be able to use credits longer and any vehicles retrofit by 2014 do not have to be replaced until 2023.”

The adopted amendments to the Truck and Bus Regulation include:

  • A longer phase-in period for diesel PM requirements for trucks that operate exclusively in certain rural areas with cleaner air
  • Additional time and incentive funding opportunities for small fleets
  • A new compliance option for owners who cannot currently afford compliance
  • Expansion of the low-use exemption and the construction truck extension
  • Recognition of fleet owners who have already complied by providing additional “useable life” for retrofit trucks and reducing near-term compliance requirements

Additional Resource: Los Angeles Times, Air quality regulators give truckers more time to meet smog standards (Apr. 25, 2014)

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The Occupational Safety and Health Standards Board’s (OSHA) recently amended Operating Rules for Compaction Equipment and amended hand protection regulations are effective July 1, 2014. Contractors who use compaction equipment should consider reviewing their written operating procedures to confirm compliance with the amended regulations in anticipation of July 1.

Title 8, Div. 1, Ch. 4, § 4355 is amended to read (newly added text is underlined):

§ 4355. Operating Rules for Compaction Equipment
(a) General.
(1) The employer shall develop a written set of operating procedures. These operating procedures shall include at least the applicable operating rules contained in this section.
…
(c) Mobile Collection/Compaction Equipment.
(1) The operator shall be instructed to ascertain that all individuals are clear of the point of operation or any pinch points before actuating the controls, and shall be ready to stop the packing cycle or loading operation.
(2) No employee shall be positioned in the path of the moving vehicle, standing on front or rear steps or on side steps, or in any other location where the employee cannot be seen by the vehicle operator and is subject to being struck by the vehicle or being thrown off the vehicle.
(3) No employee shall be permitted to ride on a loading sills, collection bins, containers, or attachments to the equipment located in front of the vehicle operator…”

OSHA’s amended hand protection regulations are also effective July 1, 2014. OSHA repealed Title 8, Div. 1, Ch. 4, § 1520, but it amended Title 8, Div. 1, Ch. 4, § 3384. Section 3384 is amended to read (stricken text is not reflected but newly added text is underlined):

§3384. Hand Protection.
(a) Employers shall select, provide and require employees to use appropriate hand protection when employee’s hands are exposed to hazards such as those from skin absorption of harmful substances, cuts or lacerations, abrasions, punctures, chemical burns, thermal burns, radioactive materials, and harmful temperature extremes.

EXCEPTION: Hand protection for cuts, lacerations, and abrasions shall not be required when the employer’s personal protective equipment hazard assessment, required by Section 3380(f) of this Article, determines that the risk of such injury to the employee’s hands is infrequent and superficial.

(b) Hand protection, such as gloves, shall not be worn where there is a danger of the hand protection becoming entangled in moving machinery or materials.
EXCEPTION: Machinery or equipment provided with a momentary contact device as defined in Section 3941.

NOTE: 1. As used in subsection (b) the term entangled refers to hand protection (gloves) being caught and pulled into the danger zone of machinery/equipment. Use of hand protection around smooth surfaced rotating equipment does not constitute an entanglement hazard if it is unlikely that the hand protection will be drawn into the danger zone.

NOTE: 2. Wrist watches, rings, or other jewelry should not be worn while working with or around machinery with moving parts in which such objects may be caught, or around electrically energized equipment.”

Additional Resource: California Department of Industrial Relations

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On April 24, at the Contractors State License Board’s (CSLB) quarterly board meeting, Registrar of Contractors Steve Sands announced his plan to retire at the end of the year. Mr. Sands has been “at the helm” of the CSLB since January 1, 2001. The Registrar of Contractors oversees a $60 million budget and more than 400 employees at the CSLB headquarters in Sacramento and 10 other offices around California. Life is a beach.jpg

“Under Mr. Sands’ leadership, CSLB has been recognized as a leader in proactive enforcement programs and partnerships with state and local agencies that help curb the underground economy. CSLB’s Licensing, Examination, Enforcement, and Public Affairs programs have been used as models for the National Association of State Contractors Licensing Agencies (NASCLA) and other agencies within the Department of Consumer Affairs,” reports the CSLB in its April 25, 2014 Industry Bulletin 14-05. Thank you for your service and best wishes!

The CSLB confirmed that the process of selecting the next Registrar of Contractors will begin immediately.

Additional Resources: Contractors State License Board

Photo: anda (: taken May 3, 2005 – Creative Commons

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The minimum wage has been in the news recently, with new developments at both the state and federal levels.

On the federal side, President Obama signed an executive order in February 2014 raising the minimum wage for federal contractors to $10.10 per hour effective January 1, 2015. President Obama has also called for passage of the Harkin-Miller bill, which would raise the federal minimum wage from $7.25 to $10.10 per hour over three years in 95-cent increments and then tie the rate to inflation. And in March 2014, President Obama directed the Department of Labor to revise the federal regulations governing overtime pay for hours worked in excess of 40 per week. It is not yet clear what the specific changes to the overtime regulations will be, but likely areas of focus are: (1) raising the minimum salary an employee must earn in order to be classified as exempt from overtime pay requirements; (2) incorporating a quantitative component that would require a manager to spend a specified percentage of time performing “executive” level work in order to qualify for an exemption; and (3) clarifying who qualifies for the “computer professional” exemption.

On the state side, California has already enacted an increase in the state-wide minimum wage. Effective July 1, 2014, California’s minimum wage will increase to $9.00 per hour. On January 1, 2016, California’s minimum wage will rise again, to $10.00 per hour. Employers should keep in mind that these increases in the minimum wage affect exempt employees, as well: under California’s Labor Code, exempt employees must receive at least two times the minimum wage. This means that as the minimum wage goes up, so too does the minimum salary that must be paid to all exempt employees. Currently, that annual minimum salary is $33,280, but with the increase in the minimum wage, the annual minimum salary for an exempt employee will rise to $37,440. Of course, the so-called “salary test” is only one component of determining whether a given employee is exempt from overtime requirements; the job description must also satisfy the “duties” test that speaks to the employee’s responsibilities.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Ellen Cohen, the author of this blog.

Additional Source: President Takes Action Meant to Increase Pay Equity for Employees of Federal Contractors; New York Employers Face Far-Reaching Employment Law Changes; 2013 State Legislation on Minimum Wage; Sacramento Business Journal, Seattle outstrips California with a $15 minimum wage proposal (May 1, 2014)