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California 2012 to 2013 Employment Law Update
Written By: Melissa C. Marsh, Esq.
, California Attorney, October 2012
Below is a brief summary of the employment-related legislation that will become law on January 1, 2013:
- Written Commission Agreement Required. Labor Code §2751 is amended to provide that except in limited circumstances, employers must provide their employees who receive any part of their compensation via a commission with a written employment contract that specifies numerous items. For more information, see
Written Employment Contracts Required For California Employees Paid Commissions. See also, Employers May Be Able To Claw Back Advances On Commissions.
- Employee Personnel Records. Labor Code §§226 and 1198.5 are amended to provide both current and former employees with the right to inspect and/or receive a copy of their personnel file within 30 days of making a written request and employers are now required to maintain these records for a minimum of three (3) post termination. For more information, see CA Employers Must Adhere to Newly Enacted Personnel Records Inspection Procedures, Time, and Penalties
- Pay Agreements For Employees Not Exempt From Overtime. Labor Code §515 is amended to prohibit employers from providing a non-exempt employees with a written employment agreement that sets forth a fixed salary to cover hours worked in excess of 8 in a day, or 40 in a week. In other words, a fixed salary paid to a nonexempt employee will be deemed to provide compensation only for the employee's regular, non-overtime hours, even if the employee's written employment agreement states otherwise. For more information, see Overtime Compensation Agreements Are Void
- Wage Statements and Payroll Check Stubs. Pursuant to Labor Code §226, all employers are required at the time of each wage payment to provide each employee an accurate itemized wage statement (pay or check stub). Effective January 1, 2013, the failure to provide an accurate wage statement can lead to an award of stiff statutory damages plus attorney’s fees and costs. Absent proof that the omission of required information, or misinformation, on a wage statement (or payroll stub) was an “isolated and unintentional payroll error due to a clerical or inadvertent mistake,” the employee may sue the employer for a reasonable attorneys fees and costs plus a statutory penalty of $50 for the initial pay period in which the violation occurred, and a $100 penalty per employee per pay period for each subsequent violation up to $4,000.
- Religious Dress and Grooming Protections. The California Fair Employment Housing Act (FEHA) and Government Code §12926 and §12940 are amended to prohibit employers from discriminating on the basis of religious dress and grooming practices, both of which are now protected under the FEHA. For more information, see California FEHA Amended to Prohibit Discrimination For Religious Dress and Grooming Practices
- Breastfeeding Protections. Under the California Fair Employment and Housing Act (FEHA), it is unlawful to engage in specified discriminatory practices in employment or housing accommodations on the basis of sex. Under existing law, "sex" is specifically defined to include gender, pregnancy, childbirth, and medical conditions related to pregnancy or childbirth. Effective immediately, AB 2386 amends the definition of "sex" in the FEHA (Government Code §12926) to add breastfeeding and medical conditions related to breastfeeding. California employers are thus prohibited from discriminating against an employee who needs to breastfeed.
- Employee's Social Media Passwords. Labor Code §980 now prohibits an employer from asking an employee, or prospective employee, for access to their personal social media accounts like FaceBook and Twitter except in limited circumstances; if an employee refuses to provide such access and is thereafter discharged, or demoted, the employer can be sued for retaliation.
- New Slavery and Human Trafficking Notice. Civil Code §52.6 requires certain California employers (including but not limited to bars, restaurants that sell alcohol, massage businesses, adult or sexually oriented businesses, etc..) to conspicuously post a notice that contains information related to slavery and human trafficking. Failure to comply with the posting requirements may result in a $500 civil penalty for a first offense, and a $1000 penalty for each subsequent offense.
- Wage Garnishments. Code of Civil Procedure is amended to increase the amount of wages exempt from garnishment to 40 times the California minimum wage, or $320, per week.
- Labor Code §1197.2 is amended to provide an increased fine if the employer willfully fails to pay an employee all wages determined due under a final court judgment , or final order issued by the Labor Commission. If the total amount of wages due is $1000 or less, the employer shall be fined at least $1,000 but not more than $10,000. If the total wages due exceed $1,000, the employer shall be fined not less than $10,000 but not more than $20,000 for each offense.
- California Retirement Savings Plan. Senate Bill 1234 establishes the California Secure Choice Retirement Savings Trust Act, which requires "eligible employers," (with 5 or more employees) to offer a payroll deposit retirement savings arrangement to "eligible employees" who absent execution of a written opt-out form promulgated by the EDD must contribute a portion of their wages to a retirement savings program account in the California Secure Choice Retirement Savings Program.
- Reminder: Earned Income Tax Credit. As of January 1, 2008, California employers must notify each of their employees that they may be eligible for the federal Earned Income Tax Credit (EITC) within one week before or after, or simultaneously, when providing them with their annual wage summary (Form W-2 or 1099). Posting this notification on a bulletin board or sending it through email is insufficient. The notification must be handed directly to the employee or mailed to the employee's last known address.
- Reminder: Written Notice Required For New Hires. Wage Theft Prevention Act adds Labor Code §2810.5, which as of January 1, 2012, requires California employers to provide newly hired non-exempt employees (employees exempt from overtime) with a written notice specifying various items such as their rate of pay, the employer's paydays, etc.. In addition, within 7 days of any changes, the employer must provide its non-exempt employee(s) with a subsequent written notice. For more information see, Hiring New Employees in 2012 – New California Laws.
What California Employers Should Do Now.
- If any of your employees work on commission, review and revise as necessary the required written employment agreement, or commission pay plan.
- Review and revise as necessary any written employment contracts, or oral agreements, with salaried employees who are not exempt from overtime to ensure that their salary only represents pay for regular non overtime hours.
- Review and revise as necessary existing employment policies and practices regarding the inspection of employee personnel files, the provision of proper wage statements (payroll check stubs), access to personal social media accounts, restrictions and accommodations made for breastfeeding, and dress codes.
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