CWS 3.0: December 7, 2011 - Vol. 3.35


Legal Eagle: New Year, New Requirements in the Golden State

Come 2012, California employers will have new documentation requests to fulfill. Going into effect Jan. 1 is the Wage Theft Prevention Act of 2011 (AB 469), which creates new, detailed disclosure requirements companies must provide to non-exempt employees. This statute also imposes document retention requirements and several new penalties and other enforcement tools for violations of wage laws. 

This Act requires employers to provide written notice upon hire to each non-exempt employee detailing the worker's rate of pay (including overtime compensation rates), the basis for the pay (hour, shift, day, week, salary, etc.), any allowances claimed as part of the employee's wages (including meal or lodging allowances), the regular payday designated by the employer, the employer's name (including dba names), the physical address of the employer's main office or principal place of business (and a mailing address, if different), the employer’s telephone number, and the contact information for the employer’s worker’s compensation carrier.

These disclosures are to be made “at the time of hiring,” which makes sense for traditional employment situations, but what about those in the staffing business? “In staffing, the moment of hire is not always clear,” says George Reardon, special counsel at Littler Mendelson, a law firm specializing in employment law matters. Temporary workers could be given most of this written information at the time of their interview and acceptance into active status, but if there is no immediate assignment, the pay rate may not yet be known, calling for other disclosures when assignments are arranged. And because temporary employees often do not return to the staffing firm in person, later written disclosures are more difficult to provide. It’s a burden and an expense to keep providing detailed written disclosures upon hiring and when changes occur. The statute suggests that some changes might be disclosed by pay stub, but how that will work is not yet clear. Reardon adds that the law includes an "ominously" open-ended provision authorizing the Labor Commissioner to add other kinds of information to the disclosure requirement.

California has made a number of other employment law changes.  It also now bans state or local governmental E-verify requirements (with exception for federal mandates) and is enforcing a requirement for written commission contracts with triple damages for violations effective Jan. 1. 2013. Also, employees may recover attorney’s fees and costs in enforcing judgments for unpaid wages. Employers should be aware that there are increased civil and criminal penalties for nonpayment of wage awards. Yes, that’s right, criminal penalties. And to top it off, don’t forget that on Jan. 1, 2012, the golden state will focus on misclassification of independent contractors with associated penalty enforcement.


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