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California's New Wage Theft Protection Act- Happy New Year to California Employers

By Brandon T. Willenberg

The start of a new year often means new laws for California employers to follow, and new administrative burdens for them to bear.  The start of 2012 will be no exception.  Effective January 1, 2012, California employers must comply with California’s new Wage Theft Protection Act, Labor Code Section 2810.5.  This new California law, which is similar to the New York Wage Theft Protection Act, requires employers to provide certain employees with a written notice containing the following wage-related and employer information:

  1. The employee’s rate or rates of pay and the basis for that pay -- whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable;
  2. Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances;
  3. The regular payday designated by the employer in accordance with the requirements of this code;
  4. The name of the employer, including any "doing business as" names used by the employer;
  5. The physical address of the employer's main office or principal place of business, and a mailing address, if different;
  6. The telephone number of the employer;
  7. The name, address, and telephone number of the employer's workers' compensation insurance carrier; and 
  8. Any other information the Labor Commissioner deems material and necessary.

Private employers must provide notice to newly-hired employees who are not exempt from the overtime provisions of the Fair Labor Standards Act or the California equivalent. If, after hire, the employer changes any of the above-referenced information, the employer must provide the non-exempt employees with a new notice within seven days, either in the required form or in a wage statement compliant with California Labor Code §226. Notice need not be provided to employees exempt from the overtime provisions of federal and state law or to non-exempt employees who are both covered by a collective bargaining agreement and who earn at least 30% more than the California minimum wage per hour.

The Labor Commissioner will be publishing a notice template later this month for employers to use.

Of course, it would not be a new California law if there were not new or increased penalties associated with it. Here, the Wage Theft Act adds or increases existing civil and criminal penalties, in some instances allowing liquidated damages and attorneys’ fees, and extends the applicable statute of limitation to three years.

As discussed in a recent blog entry, New York has enacted a similar law, with similar requirements and penalties.

The new year is nearly upon us. California and New York employers should act now and consult counsel as needed, to prepare the required notices and to develop an administrative process to manage compliance.

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Martha Zackin