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California Employers Must Comply With New Wage Theft Prevention Act Requirements

Posted by attorney James Wu

The new Wage Theft Prevention Act went into effect on January 1, 2012 in California. Part of this law requires employers to provide to all new non-exempt employees (with some exceptions) certain information about their employment. The main provisions of the Act deal with new hires starting in 2012. However, the notice requirements are ongoing. In other words, for current/continuing non-exempt employees (hired in 2010, for example), when any of the required information changes (for example, an employee gets a raise), the employer has seven (7) calendar days to notify the employee of the change. So, you will have to provide the required information to current/continuing non-exempt employees when changes of any of the required information are made.

In late-December 2011, the California Department of Labor Standards Enforcement (DLSE) published a sample form that can be used to comply with the new law. The form has been revised a few times, most recently in April 2012. It might be easier for employers to use the DLSE’s Form, however the form includes some ambiguities and raises some questions.

To help employers, the DLSE issued FAQs regarding the new law and the DLSE’s Form. The FAQs themselves have been a source of frustration, and already have been revised a couple times – most recently on April 12, 2012. In this most recent update, the DLSE added several new FAQs and revised its answers to the original FAQs. Below are some of the newest FAQs to help in compliance:

  • Importantly, the FAQs make clear that an employer need not issue a new Notice to the employees who were provided notices using the earlier templates provided by the DLSE. However, if there is a substantive change in the information previously provided on an old template, then the employer must use the new Notice to communicate such change within 7 calendar days of such change. And all new hires after April 11, 2012 should be provided notice via the newest Notice template. (FAQ #27).
  • The DLSE has clarified that, on the April 11, 2012 template, the Acknowledgment of Receipt is optional. I would recommend that the employer attempt to obtain the employee’s signature acknowledging receipt of the Notice. If the employee refuses to sign, the employer should still give notice to the employee and note the employee’s refusal to sign on its copy of the notice. (FAQ ## 10 and 23).
  • Employers must provide overtime rates on the Notice, and may not just simply state “the multiplier for overtime (e.g., 1.5 and/or double the regular rate)" since the multiplier does not specify the overtime rate. (FAQ #19).
  • For new hires, the Notice must be provided “at the time of hiring," which is an ambiguous term. The DLSE provides that “the employer must provide the notice to new hires reasonably close in time to the inception of the employment relationship which may be a date determined by the employer and employee, however, in no event later than the first day services are performed by the employee." (FAQ #20).
  • The new Notice has deleted the prior questions regarding at-will employment – questions that I recommended employers take unique steps in answering on the original notice. The FAQs make clear that the Notice “has nothing to do with ‘at will’ employment in California." (FAQ #21).
  • The FAQs also explains why the statute requires that the Notice contain “the name of the employer, including other ‘doing business as’ names used by the employer." (FAQ #26).
  • The FAQs also provide further information specific to an employer that is a “staffing agency or business." (FAQ ##28, 29 & 30).

If you are an employer in CA, you must comply with this new law. If you are a non-exempt employee in CA, and were hired to a new job in 2012, you should have received the completed form, or something similar with the required information, on or before your first day of work.

Additional resources provided by the author

For more information about the California Wage Theft Prevention Act, you can refer to the DLSE Website, and contact the DLSE.

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