As discussed in our Year End Newsletter, one of the laws affecting California employers, effective January 1, 2012, is the requirement to provide a notice to new hires which complies with newly enacted Labor Code §2810.5(a) entitled Wage Theft Protection Act of 2011.

The new law not only adds new requirements and amends several existing Labor Code Sections, but also sets forth that willful violations for non-payment of wages after a court judgment or final administrative order will be considered a criminal penalty. It also provides for restitution to the employee in addition to a civil penalty for failure to pay minimum wages.

Specifically, the new law requires employers to provide notice to new employees at the time of hire of the following information:

  • the rate(s) of pay and the basis – whether the employee is paid by the hour, shift, day, week, salary, piece; commission, or otherwise, including any rates for overtime, as applicable;
  • the employer’s intent to claim allowances (meal or lodging allowances) as part of the minimum wage;
  • the regular paydays designated by the employer as required by law;
  • the name of the employer, including any “doing business as” names used by the employer;
  • the physical address of the employer’s main office or principal place of business, and a mailing address, if different;
  • the telephone number of the employer;
  • the name, address, and telephone number of the employer’s workers’ compensation insurance carrier; and,
  • any other information the Labor Commissioner deems material and necessary.

If there are any changes to the above information, such must be provided to the employee within 7 days of a change if the change is not listed on the employee’s pay stub for the following pay period.

The new law also establishes that the penalties under the Labor Code for failure to comply with wage-related statutes are minimum penalties; and allows employees to recover attorney’s fees and costs incurred to enforce a judgment for unpaid wages.

The notice must be provided in the language the employer normally uses to communicate employment-related information to the employee.

The Labor Commissioner has just published their version of the notice. You can obtain a copy of the notice by contacting our office or you can download the form at: http://www.dir.ca.gov/dlse/LC_2810.5_Notice.pdf

Some employees are not covered by the written notice requirement. These employees include:

  • Employees exempt from the payment of overtime wages by statute or Wage Order;
  • Employees of the state or any political subdivision;
  • Employees covered by a collective bargaining agreement if the agreement expressly provides for the wages, hours of work and working conditions of the employee, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage.

Frequently Asked Questions (FAQ) About the Wage Theft Protection Act

The Labor Commissioner has published the following answers to frequently asked questions about the new Wage Theft Protection Act. This information is also available on their web site at: http://www.dir.ca.gov/dlse/FAQs-NoticeToEmployee.html

1. What is the Wage Theft Prevention Act?

A new law, effective January 1, 2012 which gives greater protection to workers, and makes changes in the way workers are notified of basic employment information.

It also requires that the employer notify the employee in writing of any changes to the information set forth in the Notice To Employee within seven (7) calendar days after the time of the changes, unless one of the following applies: (a) All changes are reflected on a timely wage statement furnished in accordance with Labor Code §226, or (b) Notice of all changes is provided in another writing require by law within seven days of the changes.

2. Who is covered by the law?

All private sector employers are covered unless there is a specified exception. The notice is not required for an employee: directly employed by the state or any political subdivision, including any city, county, city and county, or special district; an employee who is exempt from the payment of overtime wages by statute or the wage orders of the Industrial Welfare Commission; or for an employee who is covered by a valid collective bargaining agreement if it meets specified conditions. It is important to note that charter schools, private schools, and not-for-profit corporations are covered, as they are not public entities.

3. What does the law require?

Workers have to receive the required notice containing specific information at the time of hire: (A) the rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable; (B) allowances, regular payday designated by the employer as required by law; (D) the name of the employer, including any “doing business as” names used by the employer; (E) the physical address of the employer’s main office or principal place of business, and a mailing address, if different; (F) the telephone number of the employer; (G) the name, address, and telephone number of the employer’s workers’ compensation insurance carrier; and (H) any other information the Labor Commissioner deems material and necessary.

4. What if a worker’s primary language is not English?

Notices need to be given in the language the employer normally uses to communicate employment-related information to the employee. DLSE will be posting versions of the notice template in other languages and will be available on our website for use by employers.

5. For what languages will the Labor Commissioner provide templates?

Templates will be available in non-English languages on our website as they are completed. In an effort to assist employers as much as possible with translations, Spanish, Chinese, Korean, Vietnamese and Tagalog will be provided. We will endeavor to provide other translations.

6. Do I have to use the Labor Commissioner’s template?

No, employers can develop their own notices so long as they contain all the information required by the law, including all the information requested on DLSE’s template. The template includes all required information, including that which the Labor Commissioner deems material and necessary for purposes of the notice. Employers should keep a record of the notices provided to their employees.

7. May the notice be included in letters and/or employment agreements provided to new hires?

Yes, it can be given with other materials that are presented at the time of hire, but the notice required under Labor Code §2810.5 must be on its own form.

Employees should not be required to piece together the information from several separate documents or pages of a manual.

8. Can a worker waive the notice requirement?

No, it is a notice required by statute and is not subject to waiver (Labor Code §2804).

9. Can the notice be given electronically?

Yes, but there needs to be a system where the worker can acknowledge the receipt of the notice and print out a copy of the notice.

10. What if a worker refuses to sign the notice?

The employer should still give the notice to the worker and note the worker’s refusal on its copy of the notice. A worker’s signature on the notice merely constitutes acknowledgment of receipt. In accordance with an employer’s general record keeping requirements under the law, it is the employer’s obligation to ensure that the employment and wage-related information provided on the notice is accurate and complete. Furthermore, a worker’s signature acknowledging receipt of the notice does not constitute a voluntary written agreement between the employer and employee to credit any meals or lodging against the minimum wage. Any such voluntary written agreement (as required under the law) must be evidenced by a separate document

11. Do I have to give a new notice every time a wage rate changes?

If the wage rate is the only change, notice is not required where there is an increase in a rate and the new rate is shown on the pay stub (itemized wage statement) with the next payment of wages.

Note: Decreases in wage rates can only be made prospectively and not retroactively where work was performed and earned under a specified rate.

12. What procedures should be followed if an employee has multiple pay rates?

An employer must put all pay rates on the notice (and on the wage statement).

13. What should we do if the worker has multiple hourly or piece rates?

The purpose of the notice is to inform workers of the wage rates that apply to them. Multiple rates need to be identified as part of the notice. Only the rates used to determine a worker’s pay need be shown on the wage statement for that period.

14. Does the notice requirement apply to workers covered by a union contract?

Generally no. If the workers are under a valid collective bargaining agreement which expressly provides for the wages, hours of work, and working conditions of the employee and provides premium wage rates for all overtime hours worked and a regular hourly rate for those employees of not less than 30% more than the state minimum wage, the notice is not required for those employees. If these conditions are not satisfied, then a notice is required for such employees.

15. Are exempt employees, including professionals, executives, or administrators, excluded from the notice requirements?

Yes, as they are not “employees” only for purposes of the notice requirement (Labor Code §2810.5(c)(2).

 

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