California Wage Theft Prevention Act Update

The California Wage Theft Prevention Act, which amends the California Labor Code to impose certain wage notice requirements on employers, became effective January 1, 2012. At the end of last year, the California Division of Labor Standards Enforcement (DLSE) finally released a template that employers can use to provide this information. To aid you in your compliance efforts, we’ve summarized the key aspects of the new law and the DLSE template below.

Notice Requirements

Under the new law, all private-sector employers are required to provide each non-exempt employee at the time of hire who is not covered by a valid collective bargaining agreement, in the language it normally uses to communicate employment-related information, with a notice containing the following:

1.  the employee’s rate or rates of pay (including the overtime rate, as applicable)
2.  whether the employee is paid on an hourly, daily, weekly or other basis
3.  allowances claimed as part of the minimum wage (e.g., for meals or lodging), if applicable
4.  the regular payday designated by the employer
5.  the name of the employer, including any “doing business as” names the employer uses
6.  the address of the employer’s main office or principal place of business (and a mailing address, if different)
7.  the employer’s telephone number
8.  the name, address, and telephone number of the employer’s workers’ compensation insurance carrier
9.  any other information the Labor Commissioner deems material and necessary.

An employer must further notify an employee of any changes to the information within seven calendar days after the changes, unless the changes are reflected on a timely wage statement furnished in accordance with Labor Code section 226 or another writing required by law.

DLSE Template

 The template issued by the DLSE includes all of the information identified above. However, it also includes several other types of information not expressly included in the statute, including the identity of any co-employer or other business or entity used by the employer to hire employees or administer wages or benefits; whether the employment agreement is oral or written; the workers’ compensation policy number; and an acknowledgment of receipt. This additional information falls in the category of “other information the Labor Commissioner deems material and necessary.” Employers are not required to use the DLSE template, but any notice used must be its own form and must include all the information included in the DLSE template. Employers should keep a record of the notices provided to employees. The DLSE template is available in English and a variety of other languages on the DLSE website at www.dir.ca.gov/DLSE. A copy is included with this alert as well.

Penalties

The new law does not include any specific penalties for failing to provide the required notice. However, employees who do not receive the information could potentially seek penalties pursuant to California’s Private Attorneys General Act (Labor Code section 2699), which provides for penalties of $100 per aggrieved employee for an initial violation, and $200 per aggrieved employee per pay period for each subsequent violation, for certain violations of the Labor Code.

Further, although the notice is not required for exempt employees, an employee might allege the failure to provide the notice as an additional claim in a lawsuit challenging his or her exempt status. Therefore, employers may want to consider providing the wage notice to both exempt and non-exempt employees.

Contact Information

If you have any questions regarding this alert, please contact—