Labor Code § 2810.5, which was added to the Labor Code as part of the "Wage Theft Prevention Act of 2011" ("WTPA") became effective on January 1, 2012. It imposes a new requirement on employers to provide certain information in writing to all new hires, as set forth below.

          The Act is intended to make it easier for employees to pursue wage and workers' compensation claims and to obtain payments once administrative orders or civil court judgments have been obtained. In addition to the notice requirements, it extends the time for the Labor Commissioner's Division of Labor Standards Enforcement ("DLSE") to obtain a civil judgment after an administrative ruling against the employer, and makes it a misdemeanor for an employer to fail to pay wages within 90 days after all appeals have been exhausted and a final ruling against the employer has been issued. Fines up to $20,000 per violation may be imposed and employees can recover attorneys' fees and costs incurred in enforcing such judgments.

Employees Exempt from the New Requirements

          The new notice requirements do not apply to:

• public employees;
• overtime exempt employees (although employers should consider giving the notice to all employees to reduce the risk of liability if a position classified exempt is later determined to have been misclassified); and 
• employees covered by a valid collective bargaining agreement whose regular pay exceeds the state minimum wage by at least 30% and who are paid overtime premiums. (This is the same showing required for the existing collective bargaining exemption from overtime pay requirements.)

 Specific Notice Requirements

            The new law requires employers to provide each new employee, at the time of hiring, with a written notice which includes the following information:

1)      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.

2)      Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances.

3)      The regular payday designated by the employer in accordance with the requirements of this code.

4)      The name of the employer, including any "doing business as" names used by the employer.

5)      The physical address of the employer's main office or principal place of business, and a mailing address, if different.

6)      The telephone number of the employer.

7)      The name, address, and telephone number of the employer's workers' compensation insurance carrier.

8)      Any other information the Labor Commissioner deems material and necessary.

            The new law also requires employers to provide written notice to all non-exempt employees as to any changes to this information within seven days of the change. This requirement may be met by reflecting the changes in the wage statements already required under Labor Code  § 226.  However, changes not reflected in pay stubs, which would typically include changes in fictitious business names, workers' compensation carrier information or a change of address of a company's main office, will nonetheless require separate written notice.

            The DLSE has issued a sample Notice which is available on its website at: www.dir.ca.gov/dlse/LC_2810.5_Notice.doc and has also posted a "Frequently Asked Questions" page regarding the new requirements on its website at http://www.dir.ca.gov/dlse/FAQs-NoticeToEmployee.html. Employers may furnish the notices electronically, provided that systems are in place for workers to acknowledge receipt of the notice and to print copies if desired.

            While employers are not required to use the DLSE's sample form, use of the form will likely be deemed to be presumptively adequate to meet the requirements of the new law. Although the sample notice is currently only available in English, the DLSE will be posting sample notices in Spanish, Chinese, Korean, Vietnamese and Tagalog as well. The statute provides that all required information must be provided in the language the employer normally uses to communicate employment-related information to employees.

Steps to Ensure Compliance 

• Written notice of the required information should be issued to any employee hired on or after January 1, 2012.
• Employers who have not already done so should review their new hire packets and consider whether to use the sample notice provided by the DLSE, create their own notice or incorporate the required information into a document they already provide new hires. (Note: the DLSE has taken the position that the information must all be contained within a single document.)
• Review information provided on paystubs to determine the extent to which the notice-of-change requirement may be met in this way. 
• Although not required by the statute, employers should keep a copy of the notice, with a signed acknowledgment of receipt, in each employee's personnel file as proof that the required notice has been given.

         Please call your Firm contact with any questions.  

Sincerely,

Richard S. Rosenberg

Partner

BRG&S, LLP