We have some changes in employment law for 2013. I have put together the highlights of the changes. Employers are going to need to update their policies and procedures.
Wage and Hour: Compensation Agreements: California law generally requires the payment of overtime to nonexempt employees for hours worked over 8 in a day, 40 in a workweek, and on the seventh consecutive day of work. This calculation is simple for nonexempt employees paid an hourly wage, but not for nonexempt employees paid a fixed salary. Existing law, therefore, specifies, for purposes of computing the overtime rate of compensation, that a nonexempt full-time salaried employee’s regular “hourly” rate of pay is 1/40th of the employee’s weekly salary.
Effective January 1, 2013, payment of a fixed salary to a nonexempt employee includes compensation only for the employee’s regular, non-overtime hours. The legislation effectively invalidates any private agreement to the contrary. In other words, parties who enter into “explicit mutual wage agreements” may only, through those agreements, provide for regular compensation, not overtime compensation. The stated intent of this legislation is to overturn Arechiga v. Dolores Press (2011) 192 Cal.App.4th 567, in which the Court of Appeal held an “explicit mutual wage agreement”, between an employer and employee that provided a fixed salary for 66 hours of work each week, complied with California overtime laws and that no further overtime compensation was owed to the employee.
Itemized Wage Statements and Wage Theft Notice: (A) the employer fails to provide a wage statement, or (B)fails to provide accurate and complete information and the employee cannot promptly without reference to other documents or information determine the following from the wage statement alone: (1) gross or net wages paid during the pay period, (2) total hours worked, PayStub(3) piece-rate units earned and rate, (4) deductions, (5) pay period, (6) hourly rates and corresponding hours worked at each rates, (7) the employer’s name and address, (8) the employee’s name, and (9) the employee’s last 4 digits (only) of his or her social security number or employee identification number. http://www.dir.ca.gov/dlse/PayStub.pdf A “knowing and intentional failure” will not include an isolated and unintentional payroll error due to a clerical or inadvertent mistake. The fact finder is authorized to consider, in reviewing for compliance with these provisions, whether the employer, prior to an alleged violation, has adopted and is in compliance with a set of policies, procedures, and practices that fully comply with section 226. This legislation clarifies that an itemized wage statement “copy”, for purposes of Labor Code section 226’s requirement that an employer to keep a copy of the statement on file for at least 3 years at the place of employment or at a central location within the State of California, can include a computer-generated record rather than an actual duplicate copy. Beginning July 1, 2013, in addition to existing requirements of Labor Code section 226 for itemized wage statements, the itemized statement temporary services employers issue will be required to include the rate of pay and the total hours worked for each temporary service assignment.
Personnel Records: Inspection Procedures, Time, and Penalties: The employer will be required to make the personnel records available for inspection, or provide a copy if the employee so requests, to the current or former employee or employee’s representative within 30 calendar days of the employer’s receipt of the employee’s written request. The employee and employer may agree in writing to a date longer than 30 days, but not to exceed 35 days, from the employer’s receipt of the employee’s request. The bill requires the employee to make the request to inspect or copy in writing but provides that it may be on an employer-provided form and that the employer may designate the person to whom a request must be made. The employer may redact the name of any non-supervisory employee contained in the personnel records prior to inspection or copying.
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For current employees, the employer must make the records available for inspection or provide a copy at the place where the employee reports to work or another mutually-agreeable location. For former employees, the employer must make the records available for inspection or provide a copy at the location where the employer stores the records unless a different location is mutually agreed upon in writing. The employee may receive a copy by mail if he or she reimburses the employer for postal expenses. For an employee who was terminated for a violation of law or an employment-related policy, involving harassment or workplace violence, the employer may make the records available at a location a reasonable driving distance from the former employee’s residence or mail the records to the employee.
Social Media: Employer Use:
Effective January 1, 2013, employers will be prohibited from requiring or requesting an employee or applicant for employment to: (1) disclose a user name or account password to access a personal social media account, (2) access personal social media in the employer’s presence, or (3) divulge any personal social media. This legislation does not affect an employer’s ability to request that an employee divulge personal social media reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, as long as the social media is used solely for that or a related investigation or proceeding. This legislation applies purely to personal social media. It does not restrict an employer from requesting or requiring an employee to disclose a username, password, or other method of accessing an employer-issued electronic device.
Written Commission Agreements:
Effective of January 1, 2013, an employer who enters into an employment contract with an employee involving commissions as a method of payment will be required to put the employment contract in writing and set forth the method by which the commissions will be computed and paid. In other words, in practice, this bill requires that commission agreements (1) be in writing; (2) set forth the method by which the commissions are required to be computed and paid; and (3) contain a signed receipt for the contract from each employee. This new requirement was the result of AB 1396, which the Governor signed into law in 2011. AB 2675 (2012) exempts from this requirement temporary, variable incentive payments that increase, but do not decrease, payment under the written contract
Human Trafficking: Public Posting Requirements: The notice must be placed in a conspicuous location near the entrance or otherwise easily visible by the public and employees, and be printed notice in English, Spanish, and in one other language that is the most widely spoken language in the county where the establishment is located and for which translation is mandated by the federal Voting Rights Act. The notice must provide information about and contact information for specified nonprofit organizations that provide services in support of the elimination of slavery and human trafficking. Even though the statute specifies the notice’s specific content, font, and size, it also requires the Department of Justice to, on or before April 1, 2013, develops a model notice and make it available for download on the department’s Internet Web site.