In addition to the new laws relating to religious accommodation and social media (reported in our recent eAlerts), Governor Brown recently signed into law the following bills affecting employers. Unless otherwise noted below, these laws will come into effect on January 1, 2013:
New Laws Affecting All Employers
Itemized Wage Statements (AB 1744)
- Amends Labor Code section 226 to define what is an “injury” for purposes of violating the itemized wage statement statute. Specifically, an employee suffers an injury if either no wage statement is provided or if the employer fails to provide accurate and complete information and the employee cannot promptly and easily determine from the wage statement the following: (1) amount of gross or net wages paid to the employee during the pay period; (2) total hours worked; (3) piece rate units earned and rate; (4) deductions; (5) pay period; (6) hourly rates and corresponding hours worked at each rate; (7) name and address of the employer or legal entity that secured the employer’s services; and (8) name of the employee and only the last four digits of the employee’s social security number or identification number.
- Clarifies that an itemized wage statement “copy,” which employers are required to keep on file for at least 3 years, can include a computer-generated record instead of an actual duplicate copy.
- Beginning July 1, 2013, temporary services employers are required to include the rate of pay and total hours worked for each temporary services assignment. Additionally, effective January 1, 2013, temporary services employers must include in the mandatory Wage Theft Notice provided to new employees the name, physical address of the main office, mailing address (if different from physical address) and phone number of the legal entity for whom the employee will perform work.
Wage Garnishment (AB 1775)
- Increases the amount of wages protected from garnishment. Under existing law, the maximum amount of wages exempt from garnishment was the lesser of 25% of an individual’s weekly disposable earnings or 30 times the federal minimum hourly wage (i.e. 30 x $7.25). Under the new law, the maximum amount of wages exempt from garnishment will be the lesser of 25% of an individual’s weekly disposable earnings or 40 times the California minimum wage (40 x $8.00).
Warehouse Contractors And Sufficient Funds (AB 1855)
- Adds warehouse contractors to a list of labor services contractors (construction, farm labor, garment, janitorial, security guard) with whom companies are prohibited from entering into contracts where the company knows or should know that the contract does not provide sufficient funds to allow the contactor to comply with state and federal wage and hour laws.
Compensation Agreements (AB 2103)
- Overturns existing appellate case law by specifying that payment of a fixed salary to a nonexempt employee provides compensation only for the employee’s regular, non-overtime hours, notwithstanding any “explicit mutual wage agreement” or other private agreement to the contrary.
Breastfeeding (AB 2386)
- Amends the Fair Employment and Housing Act to provide that the term “sex” includes breastfeeding or medical conditions related to breastfeeding.
Inspection And Copying Of Employee Personnel Records (AB 2674)
- Requires employers to make current or former employees’ personnel records available for inspection or provide a copy if the employee requests within 30 calendar days of the employer’s receipt of the employee’s written request. The request must be in writing but may be on an employer-provided form. The employer may designate the person to whom a request must be made. The parties may agree in writing to a date longer than 30 days but not to exceed 35 days from the employer’s receipt of the request. The employer may redact the names of any nonsupervisory employees contained in the records prior to inspection or copying.
- The employer must make the records available for inspection or copying to current employees at the place where the employee reports to work or another mutually agreed upon location.
- The employer must make the records available for inspection or copying to former employees where the employer stores the records, unless mutually agreed upon in writing.
- The employee may receive a copy by mail if he or she reimburses the employer for postal expenses. If the employee was terminated for 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 may mail the records.
- Employers are only required to comply with one request for inspection or copying per year by a former employee. An employee representative cannot request more than 50 records (i.e. of 50 different employees) per calendar month.
- Employers are required to retain personnel files for three years after the employee’s termination of employment.
- These provisions do not apply to an employee covered by a valid collective bargaining agreement that provides for a procedure for copying and inspection of personnel records.
Exempting Certain Payments From Written Agreement Requirement (AB 2675)
- Legislation passed last year mandates that effective January 1, 2013, employment contracts involving commissions as a method of payment must (1) be in writing; (2) set forth the method by which the commissions are required to be computed and paid; and (3) contain a singed receipt for the contract from each employee. AB 2675 clarifies that the term “commissions” does not include short-term productivity bonuses, temporary variable incentive payments that increase but do not decrease payment under the written contract, or bonus and profit-sharing plans, unless the employer has offered to pay a fixed percentage of sales or profits as compensation for work to be performed.
Prevailing Wages (AB 2677)
- Increased employer payment contributions that result in a lower hourly straight time or overtime wage is not a violation of the applicable prevailing wage determination as long as certain specified conditions are met.
New Laws Affecting Public Sector Employers
Paid Leaves Of Absences For Unelected Members (AB 1203)
- Requires a school district or a community college district to provide a paid leave of absence to a classified employee who is an unelected member of a school district public employee organization or community college district public employee organization for activities the member is authorized by the organization to attend and would require the employee organization to reimburse the school district or community college district on behalf of an unelected member who receives a paid leave of absence. It also requires an employee organization to provide reasonable notification to the employer requesting a leave of absence without loss of compensation for any of the above-described activities.
On September 30, 2012, Governor Brown vetoed bills that: (1) governed the working conditions of domestic employees; (2) prohibited an employer from refusing to hire an individual who was unemployed; and (3) governed the working conditions of agricultural workers. Those bills may resurface in the future.
In light of these upcoming changes to the law, employers should focus on the following highlights:
- Ensure that their itemized wage statements comply with the new requirements of Labor Code section 226;
- Ensure that as of January 1, 2013, that garnishment of employees’ wages comports with California’s new wage garnishment law and be aware that they may receive garnishment orders in 2013 that are out of date;
- Familiarize themselves with the new rules and deadlines regarding inspection and copying of current and former employees’ personnel files;
- Ensure that compliant commission agreements are executed by employees by January 1, 2013; and
- Update all handbooks and employment policies regarding breastfeeding, religious dress and grooming and social media protection.