Wage Theft Protection Act of 2011

The Wage Theft Protection act of 2011 added Labor Code section 2810.5 requiring all private California employers to provide a written notice containing specific information to non-exempt employees upon hire. Below are five indispensable items employers should understand about the Notice to Employee (“Notice”) required under the law.

1. All private employers, regardless of size, must provide the Notice to employee with some limited exceptions.
The DLSE explains that the Notice is not required for employees “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.” So for private employers, no matter how small, must provide the Notice to an employee unless the employee is an exempt employee.

2. DLSE publishes a template Notice to Employee, but it is not required.
It is recommended that employers use the DLSE’s template to avoid any potential challenges (the most current template published as of January 2015 is embedded below). If the template is not used, the employer is still required to provide all of the information required by the law on one form to the employee. It is not compliant to provide the information piecemeal to the employee on various forms. As explained in number 4 below, the DLSE’s webpage regarding the Wage Theft Protection Act has not been updated to reflect the new template published by the DLSE to address the new paid sick leave requirement in 2015. The current Notices for 2015 can be found on the DLSE’s website at its Publications webpage (or embedded below). Hopefully the DLSE will update its website to avoid any potential employer confusion in this regard.

3. Electronic delivery is acceptable under certain conditions.
Electronic delivery of the Notice is fine as long as there is a process for the employee to acknowledge receipt of the Notice and print a copy of the Notice.

4. Notices must be in the language usually used to communicate employment policies with the employee.
The DLSE has published previous templates in various languages, such as Chinese, Spanish and Korean on its Wage Theft Protection Act page. However, the DLSE has not updated many of these translations since it has published the new Notice to Employee effective January 1, 2015 to address California’s paid sick leave requirement. In fact, the DLSE’s own page on the Wage Theft Protection Act still contains the old Notice to Employee. The current templates for 2015 are only found on the DLSE’s Publications page which contains the updated 2015 Notice in English, Spanish and Vietnamese.

5. If any information listed on the Notice changes, the notice does not have to be reissued as long as the information is listed on the employee’s next pay stub.
Employers must notify the employee in writing of any changes to the information set forth in the Notice within seven calendar days after the time of the changes, unless one of the following applies:

  1. All changes are reflected on a timely wage statement furnished in accordance with Labor Code section 226, or
  2. Notice of all changes is provided in another writing require by law within seven days of the changes.

LC_2810.5_Notice_(Revised-11_2014).pdf by anthonyzaller

https://www.scribd.com/embeds/248859089/content?start_page=1&view_mode=scroll&access_key=key-4lE9ENPjaZ1Zp4iCYVVc&show_recommendations=true

Here is a list of some of the required notices employers must provide to new employees in California. Sometimes I have a hard time coming up with five rules or items for the Friday’s Five list, but not this time – I blew through five items (it is California after all): 

Document Title

Link to Document

Notice to Employee (Wage Theft Prevention Act) (for non-exempt employees)

Download here

I-9 – Employment Eligibility Verification

Download here

Right to Workers’ Compensation Benefits pamphlet

Download here

State Disability Insurance Provisions pamphlet – DE 2515

Download here

Paid Family Leave pamphlet – DE 2511

Download here

Sexual Harassment pamphlet

Download here

New Health Insurance Marketplace Coverage Options Form

Form for employers with health insurance plans – download here

Form for employer without health insurance plans – download here

Other documents I often recommend that employers have in their new hire packets are:

·   Commission Agreement (if applicable)

·   Meal and Rest Break Acknowledgment of employer’s policy

·   Employee Handbook and Acknowledgment

 

Come July 1, 2014, California’s minimum wage will increase from $8 per hour to $9 per hour for all workers. The minimum wage will increase again to $10 per hour on July 1, 2016. Other than starting to work with their payroll provider to ensure that all hours worked as of July 1 will be paid at the higher rate, here is a list of five other issues California employers should also review in preparation for the wage increase:

1. Review base salary for all exempt employees.
In order to qualify as an exempt employee, which is an employee who is not entitled to receive overtime for work performed over eight hours in one day or 40 hours in one week, the employee must be paid an equivalent of two times minimum wage. Before the minimum wage increase in July 2014, this amount is $33,280 annual salary. When the minimum wage increases to $9 per hour, this amount will increase to $37,440 annual salary, and when the minimum wage increases to $10 per hour, an exempt employee will need to be paid $41,600 annually.  I’ve discussed this issue in a short video previously, which can be viewed here.  

2. Review compliance with the Wage Theft Protection Act Notice.
Since 2012 every California employer has been required to provide written notices to employees regarding certain information about their jobs, including their wage rate. The good news is that employers will not have to re-issue new wage notices to employees as a result of the increase of minimum wage as long as the new minimum wage rate is shown on the pay stub (itemized wage statement) with the next payment of wages.

3. Review timekeeping system and policies.
With the higher minimum wage rate, there is more potential exposure from wage and hour lawsuits alleging off the clock work or unpaid minimum wage. Companies should remind employees of policies that prohibit off the clock work and about complaint procedures available should anyone ask the employee to work off the clock or the employee not receive all minimum wages.

4. Review classification of independent contractors.
A company that has independent contractors should review the classification to ensure that it can withstand scrutiny from a court, Department of Labor, Labor Commissioner, or the EDD. As employers already face large penalties for misclassifying independent contractors, the potential exposure for unpaid minimum wages as a result of a misclassification will also increase as discussed above.

5. Review wage agreements with employees.
Ensure that all agreements with the employees comply with the law. Under California law, employees cannot agree to work for less than the state minimum wage. This waiver cannot be done through a collective bargaining agreement. All agreements to do so are void under the law.

Today the Division of Labor Standards Enforcement (“DLSE”) published a template that employers can use in order to comply with the new notice requirements set forth in Labor Code section 2810.5. A Word version can be downloaded here and a PDF version can be downloaded here.

All California employers are required to provide a notice to all employees hired beginning on January 1, 2012 that complies with the requirements of section 2810.5. The new law required the Labor Commissioner to publish a template for employers to use in order to comply with the new law. For more information regarding the notice, and the new law, see my previous post.

I’ve only had a chance to do a quick review of the template, but one area of new information that the DLSE is apparently requiring on the notice is whether the “employment agreement” is oral or written in the wage information section of the template. The new Labor Code section 2810.5 did not require this to be on the notice to the employee, but the law does provide that there may be “[o]ther information added by the Labor Commissioner as material and necessary.” I am wondering if the fact that all employers are required to provide this information on the form necessary means that the “employment agreement” is therefore always going to be written.

The new law affecting every employer in California is the Wage Theft Protection Act of 2011. It takes effect on January 1, 2012 and adds additional notice and record keeping requirements that employers must comply with. The new law added Labor Code section 2810.5, which requires private employers to provide all new employees with a written notice that contains certain information.

The new law requires private employers to provide all newly-hired, non-overtime-exempt employees with a disclosure containing the following information:

(a) The job rate or rates of pay and whether it pays by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime.
(b) Any allowances claimed as part of the minimum wage, such as for uniforms, meals, and lodging.
(c) The employer’s regular payday, subject to the Labor Code.
(d) The employer’s name, including any “doing business as” names used.
(e) The address of the employer’s main office or principal place of business, and its mailing address, if different.
(f) The employer’s telephone number.
(g) The name, address, and telephone number of the employer’s workers’ compensation insurance carrier.
(h) Other information added by the Labor Commissioner as material and necessary.

The new law also requires employers to notify employees in writing of any changes to the information in the notice within seven calendar days of any changes, unless the changes are reflected on a timely wage statement that complies with Labor code Section 226. Employers also do not need to notify employees of any changes if the change is provided in another writing required by law within seven days of the changes.

The new law requires the Labor Commissioner to publish a template for employers to follow in order to comply with the law. The Labor Commissioner’s website states it is “anticipated” and the template will be published in mid-December. However, as of the publishing of this post, the Labor Commissioner has not yet published the template.

There is no prescribed requirement in the law about how long this notice should be retained, but as wage and hour violations contain a four year statute of limitations, these notices should be retained in the employee’s personnel file for four years. It is also important to note that the new law does not apply to exempt employees. However, if there is ever a challenge to the employee’s classification as exempt and they are found to be non-exempt, this provision could result in increased penalties. Therefore, it may be wise to complete this form for exempt employees just as a safety precaution.