RECENT NEW LAWS AFFECTING CALIFORNIA EMPLOYERS

By Rachel Hulst

California’s Governor Jerry Brown recently signed a number of bills into law.  The following are a few that will affect the business of private employers.

AB2103: Employment, Wage And Hour, Overtime

This new law will exclude overtime hours from the fixed salary of a nonexempt employee, notwithstanding an “explicit mutual wage agreement” to the contrary.  The proposed law stated its intent to explicitly overturn the decision of Arechiga v. Dolores Press, Inc., 192 Cal. App. 4th 567 (2011).

In the Arechiga case, a janitor and his employer agreed that payment of a fixed salary of $880 a week would provide compensation for 66 hours of work each week. The Court of Appeal held that this method of payment comported with California overtime law, and that no additional overtime compensation was owed. The Court rejected the employee’s contention that existing Labor Code Section 515(d) prohibits any sort of agreement that would allow a fixed salary to serve as a non-exempt employee’s compensation for anything more than a 40 hour workweek.

This bill now amends Labor Code 515, adding section (c)(2): Payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee’s regular, non-overtime hours, notwithstanding any private agreement to the contrary.

AB 2674: Employment Records/Right To Inspect:

This new law revises section 1198.5 of the CA Labor Code to now provide:

  • Employers must maintain personnel records for a minimum of three years after termination of employment.
  • Employers must provide a current or former employee (or their representative) an opportunity to inspect and/or receive a copy of those records (at the employee’s expense) not later than 30 calendar days from the date of a written or oral request, except during a lawsuit filed by the employee relating to a personnel matter .  Previously, employee shad a right to just inspect the records, not obtain a copy of those records.
    • Current employees are permitted inspection at their place of work or at another location agreeable to the employer and the employee;
    • Former employees are permitted inspection at the place where the records are stored, another agreeable location or a copy by mail (at the employee’s expense).
    • Requests are limited to once a year.
    • An employer who fails to permit the inspection:
      • Is liable for a penalty of $750;
      •  is guilty of an “infraction” (previously, it was a misdemeanor).
      • A current or former employee may also bring an action for injunctive relief to obtain compliance with this section.

AB 1255: Employee Compensation/Itemized Statements

This new law will add section 2 (A)-(C) to labor code 226 that governs the requirement to furnish itemized statements to employees.  Current law provides for the recovery of penalties up to $4,000 in connection with any injury due to an employer’s knowing and intentional failure to provide those wage statements.  This new law tells us specifically what that “injury” is.  It states that the employee is “deemed to suffer injury for purposes of the section” if:

  • The employer fails to provide a wage statement; or
  • The employer fails to provide accurate and complete information as currently required by section 226 AND the employee cannot easily determine from the wage statement alone, one or more of the following:
    • The gross wage amount or net wages paid to the employee, total hours worked of non-exempt employee,  all deductions, the dates of the period for which the employee is paid, the hourly rates;
    • Which deductions the employer made from gross wages to determine net wages;
    • The name and address of the employer.

AB 1744: Employee Compensation/Itemized Statements

Effective July 1, 2013, temporary services employers are now required to provide additional information on their employees’ wage statements.   In addition to the pay stub requirements of Labor Code 226 discussed above, these employers must also include on all pay stubs: 1) the rate of pay for each temporary assignment during the pay period; and 2) the total hours worked for each legal entity to which the temporary worker was assigned.

Temporary services employers must also include the physical address of the main office, the mailing address if different from the physical address of the main office, and the telephone number of the legal entity for whom the employee will perform work.

SUMMARY

The majority of these laws go into effect on January 1, 2013.  Employers should review their policies to ensure compliance.  For assistance, contact KHK.

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