Ottone Leach Olsen & Ray LLP

Notice at the Time of Hire

Employers will have additional paperwork thanks to the new Labor Code §2810.5 that requires employers to provide each newly hired non-exempt employee a written notice in the language the employer normally uses to communicate employment-related information to the employee, containing the following information:

• The rate of pay and the basis, e.g., hourly, commission, piece rate;
• Any allowances claimed as part of minimum wage, e.g., meals and lodging;
• The regular pay day;
• The employer's name including "dba", physical address, mailing address if different, and telephone number;
• The workers' compensation insurance carrier name, address, and telephone number; and
• Any other information the Labor Commissioner deems material.

The Labor Commissioner is required to prepare a template that will comply with the notice requirements and is expected to post that information on its website, www.dir.ca.gov/dlse, by mid-December. This Labor Code section also requires employers to notify employees in writing of any changes to the above information within seven calendar days after the time of the changes. The notice to employees may be a new notice, or a notice of only the changes, or if the changes are all contained in the normal wage statement provided, that will be sufficient.

Labor Code §2810.5 does not apply to exempt or public employees and some employees covered by collective bargaining agreements.

Although not required by law, as a practical matter, employers should retain copies of the notice(s) in the employee's personnel file in the event there is a dispute about whether or not the employee received the required notice.

Written Commission Contract Required

As amended Labor Code §2751 gives employers until January 1, 2013 to put in writing all contracts for employment involving commissions as a method of payment and to set forth the method by which the commissions are required to be computed and paid.

Employers Using Credit Reports Face New Restrictions

New Labor Code §1024.5 limits when employers or prospective employers can use a credit report for employment purposes. It limits the use of credit reports to:

• Employees in managerial positions, positions that involve access to sensitive consumer information on a regular basis;
• Positions involving fiduciary responsibilities (e.g., regular access to an employer's funds totaling $10,000 or more; the ability to transfer funds; or to enter into contracts on behalf of the employer); and
• Positions with access to confidential or proprietary information.

In addition, the written notice to prospective employees prior to requesting a credit report for employment purposes must identify the specific basis for use of the report.

Payroll Records Retention

Labor Code §1174 was amended to require employers to retain payroll records for three years rather than two years. Multiple government agencies have the power to inspect payroll records and employers are required to make them available. And of course payroll records can be essential for a successful defense against any wage and hour lawsuits or claim made with the Labor Commissioner.

Farm Labor Contractor Wage Statements

As amended, Labor Code §226 requires farm labor contractors to include on an employee's itemized wage statement the name and address of the legal entity that secured the services of the farm labor contractor.

Employers should review their policies and procedures to ensure that they are in compliance with these new laws. If you have any questions, please contact Anne Frassetto Olsen or Ana C. Toledo at our office.