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New Minimum Hourly Rates for Exempt Computer Software and Licensed Physicians and Surgeons

By Deborah H. Petito

The minimum hourly rates for computer software professionals and licensed physicians and surgeons was announced by the Department of Industrial Relations (“DIR”). Effective January 1, 2017, the rates are as follows:

Physicians – $77.23 per hour. Previously, the hourly rate was $76.24 (the DIR does not set monthly or annual minimums for physicians and surgeons.

Computer Software Professionals – $42.39 per hour, $7359.88 per month and $88,318.55 per year. Previously, the rates were $41.85 per hour, $7,265.43 per month and $87,185.14 per year. A computer software professional must meet the following criteria in order to be exempt under the professional exemption:

  • The employee is primarily engaged in work that is intellectual or creative and requires the exercise of discretion and independent judgment.
  • The employee is primarily engaged in duties that consist of one or more of the following:
  • The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
  • The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to, user or system design specifications.
  • The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
  • The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering. A job title shall not be determinative of the applicability of the exemption.

Also, remember that the Department of Labor’s Final Rule on exempt employees is effective December 1, 2016 and requires that all exempt employees be paid at least $46,467 annually in order to be exempt. This is higher than current California law (except in some cities where the minimum wage is higher. You can read more on this topic in my blog article posted in May. Will Your Exempt Employee Still Be Exempt?


Thank you for joining us on ClarkTalk!  We look forward to seeing you again on this forum.  Please note that the views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog.  You should certainly consult legal counsel of your choice if you need assistance in determining whether or not an employee is exempt or whether they are being paid appropriately.  If you wish to consult with the author of this post or another attorney at Clark & Trevithick, please contact Debbie Petito dpetito@clarktrev.com or Leonard Brazil lbrazil@clarktrev.com by email at or telephonically by calling the author at (213) 629-5700.

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After the Judgment – What Happens Now? Part 2

By Stephen E. Hyam, Esq.

I recently discussed the judgment debtor examination process in a Clarktalk post.  In this article, we address other post-judgment enforcement options available to creditors that will help increase the chances of satisfying  their judgments.

Options for Asset Investigation

In addition to judgment debtor examinations, there are other methods to investigate a judgment debtor’s assets. Similar to pre-judgment litigation, a judgment creditor may require that the judgment debtor answer a series of questions, called written interrogatories, and produce documents, called requests for production.  When served with interrogatories and requests for production, the receiving party must respond within 30 days.  If the debtor fails to respond, the judgment creditor may seek a Court order compelling the response and production.  Such order is obtained by filing a motion with the Court.  Bringing a motion will cause delays because, absent exigent circumstances, there is at least a 16 court day delay between filing the motion and hearing the motion.  Additionally, since the hearing must be set when the Court has availability, there can be a delay even greater than 16 court days.  While interrogatories and requests for production are initially less expensive than a judgment debtor examination, they may be less effective.

Once you have information related to the judgment debtor’s assets, the creditor can take a number of different steps to enforce the judgment.

Liens on Personal and Real Property

If a judgment debtor owns real property in California, a judgment creditor may record an Abstract of Judgment with the county recorder where the property is located. Recording the abstract provides a blanket lien on all real property in that county owned by the judgment debtor – even if the judgment creditor is unaware of the judgment debtor’s ownership of the property.  The lien generally lasts 10 years from the date of the judgment.  The lien gives the judgment creditor the right to foreclose upon the property.  The lien will also give notice to the public that the creditor has right to payment if the property is sold, creating a cloud on title.

A personal property lien can be asserted against certain business personal property by filing the appropriate form with the California Secretary of State. The lien gives notice of the judgment creditor’s priority over later lienholders.

Wage Garnishments

Wage garnishment orders compel the judgment debtor’s employer to withhold a portion of the judgment debtor’s earnings. Wages, in this case, include salary, bonuses, commissions, and the like.  Wage garnishments do not take every dollar that is paid to the employee.  Generally, at least 75% of take home/after tax earnings (after deductions for social security, federal and state taxes, state disability insurance, etc.) are automatically exempt from garnishment.  The judgment debtor may also seek a Court order to have even more of the take-home income exempted from the enforcement.  Conversely, on a motion to the Court, a judgment debtor may seek an equitable division of the judgment debtor’s earnings, but such order must factor in the needs of the judgment debtor and anyone who the judgment debtor is required to support.

Assignment Orders

If the judgment debtor has a right to payments due in the future that are not wages, a judgment creditor may apply to the Court for an assignment order. Assignment orders compel a third party to pay the judgment creditor instead of the judgment debtor.  Assignment orders may be useful for capturing payment streams from royalty agreements, rents, accounts receivable, and general intangibles, such as promissory notes.  A judgment creditor must file a motion with the Court for the assignment order.  The assignment order, if issued, must then be served on the third party.  Should the third party ignore the order and pay the judgment debtor, the third party is liable to the judgment creditor for the payment.

Charging Orders

Assets of a partnership or a limited liability company are not subject to enforcement of the judgment debtor partner’s/member’s liability. However, the judgment debtor’s partnership or membership interest is subject to enforcement.  A charging order charges the judgment debtor’s share of partnership or limited liability company profits and any other monies due, or to become due, to the debtor.  If a creditor wants to pursue those interests, the judgment creditor must file a motion with the Court.  Service of the motion creates a lien on the judgment debtor’s interests that lasts until the judgment becomes unenforceable.  Naturally, if the motion is denied, the lien is extinguished.  If the motion for a charging order is granted, the creditor may foreclose on the judgment debtor’s interest, applying the proceeds from the foreclosure to the amount of the judgment.

Conclusion

These are only a few of the options that judgment creditors have to enforce their judgment. With many options available, it is important that you and your counsel carefully consider which enforcement procedures are worthwhile.  Clark & Trevithick’s attorneys are skilled in enforcement procedures and can help you fashion a plan that will help you efficiently and effectively satisfy your judgment.


Thank you for joining us on ClarkTalk!  We look forward to seeing you again on this forum.  Please note that the views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog. If you have any questions about judgment enforcement options , please feel free to contact Stephen E. Hyam at shyam@clarktrev.com by email or telephonically at (213) 629-5700.

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A Trust May Not Protect You or Your Beneficiaries From Paying Child or Spousal Support

By Tiffany A. Halimi

The Fourth District of the California Court of Appeal issued an opinion last month (September 6, 2016) in the case of Pratt v. Ferguson upholding the Court’s power to order a trustee to make distributions from a trust to satisfy a beneficiary’s community property judgments and child support obligations.  In other words, even if a trust has provisions that would typically protect a trust’s assets from a beneficiary’s creditors (such as a spendthrift provision) those protections could be pierced by the beneficiary’s children or ex-spouse for the purpose of providing child support or satisfying a community property judgment.

The opinion highlights the power of the California Probate Code, which gives the trial court discretion to order a trustee to make distributions of income and principal to satisfy child support orders. The Court held that the Probate Code supersedes a spendthrift clause in the trust instrument, which would otherwise allow trustee to refuse to make distributions that would be subject to claims of creditors.

The opinion of Pratt v. Ferguson is not limited to child support; it also extends to Community Property judgment liens, which one spouse may obtain against another spouse during a divorce proceeding.  The Court opined that the California Code of Civil Procedure gives the Court discretion to direct a trustee to satisfy a community property judgment lien from a beneficiary’s share of the trust.

This ruling is important for spouses who either owe or expect to receive child support obligations or a Community Property judgment lien. Such obligations can be satisfied from a person’s beneficial interest in a trust, even if the trust’s provisions purport to protect the beneficiary’s interests from the beneficiary’s creditors.

If you or a client of yours is a trustee of a trust, you may want to consider a consultation to determine if the administration of that trust is in compliance with all rules, regulations, statutes and case law. To learn more about trust administration, please contact Tiffany A. Halimi, Esq. or one of our other trust and estate attorneys.

Thank you for joining us on ClarkTalk!  We look forward to seeing you again on this forum.  Please note that the views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog.

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Employers Cannot Deprive Employees of Access to California Courts or Law

By Deborah H. Petito

A new statute has been added to the Labor Code (§925) which prohibits employers from requiring employees to agree to a provision requiring them to bring claims arising, either in court or before an arbitrator, in a jurisdiction other than California. The new statute also prohibits an employer from requiring employees to agree to a provision which deprives the employee of the substantive protections of California law in any lawsuit or arbitration.  This means that employers cannot require employees to sign employment agreements, including arbitration agreements, confidentiality agreements, etc., which state that the matter will be adjudicated in another state or that the law of another state will govern any litigation or arbitration dispute.

This new statute applies to an employee who “primarily resides and works in California.” While the statute does not differentiate between the level of the employee, it does exclude contracts when the employee is individually represented by legal counsel in negotiating the terms of the contract.  This will generally mean a higher level employee.  While the law does not apply to contracts where the employee is individually represented, there are no guarantees that a California court will uphold a legal challenge to such contracts so they should be cautiously approached.

There are teeth in the new statute which provides that any contract requiring the employee to adjudicate his or her claims in another state or apply another state’s laws is voidable by the employee and provides that a court may award attorney’s fees to an employee who enforces his or her rights. The dreaded attorney’s fees language – a motivation for plaintiff’s attorneys to file lawsuits.

Presumably, if another state has the same substantive law in a given area, the employer could designate that other law would apply but in the employment area, chances are that California’s laws are tougher.  This is an area where legal counsel should be consulted.

This new statute is effective January 1, 2017 and applies to any contract entered into, modified or extended after that date.

Thank you for joining us on ClarkTalk!  We look forward to seeing you again on this forum.  Please note that the views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog.   If you wish to consult with the author of this post or another attorney at Clark & Trevithick, please contact Deborah H. Petito by email at dpetito@clarktrev.com or telephonically by calling the author at (213) 629-5700.