California Wage Theft Prevention Act: What You Need To Know for January 1

A new law goes into effect January 1 which will require additional paperwork to be filled out and distributed to all non-exempt hires in California who are not covered by a collective bargaining agreement.

Under the Wage Theft Prevention Act, California Labor Code Section 2810.5 requires an employer to provide each non-exempt employee at the time of hire with a written notice including the following information:

• Employee’s rate or rates of pay, including the employee’s overtime rate of pay, as applicable.
• Basis for the employee’s rate of pay (e.g., by the hour, shift, day, week, salary, piece, commission or other).
• Any allowances claimed as part of the minimum wage (e.g., tips, meals, lodging).
• Regular pay day designated by the employer.
• Employer’s name, including any “doing business as” names used by the employer.
• Physical address of the employer’s main office or principal place of business, and a mailing address, if different.
• Employer’s telephone number.
• The name, address, and telephone number of the employer’s workers’ compensation insurance carrier.
• Any other information that the Labor Commissioner deems important and necessary.

If an employer makes changes to the information listed above, the employer must provide notice of the changes to the employee within seven days.  This may be accomplished by providing a written amendment, a whole new written notice, or a revised wage statement (i.e. paycheck stub) furnished in accordance with Section 226, containing the new information.

The notice must be in “the language the employer normally uses to communicate employment-related information” to the employee (if other than English).

For purposes of this section, “employee” does not include any of the following:

• An employee directly employed by the state or any political subdivision thereof, including any city, county, or special district.

• An employee who is exempt from the payment of overtime wages by statute or the wage orders of the Industrial Welfare Commission.

• An employee who is covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of the employee, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage.

Accordingly, the statute only mandates written notices to non-union, non-exempt employees.

In addition to the notice requirements, the Labor Code still provides for the following information to be listed in the wage statements as always:

• Employee’s name.
• Employer’s name, address and telephone number.
• Dates of work covered by the payment of wages.
• Employee’s rate or rates of pay.
• Basis for the employee’s rate of pay (e.g., by the hour, shift, day, week, salary, piece, commission, or other).
• Gross wages.
• Any allowances claimed as part of the minimum wage (e.g., tips, meals, lodging).
• Deductions.
• Net Wages.
• For non-exempt employees, the employee’s regular rate of pay, regular hours worked, and overtime rate of pay and overtime hours worked.
• Employees paid by piece, the number of pieces completed and the piece rate therefore.

We recommend you maintain payroll records for at least three years after the employment for the employee ends.

The Labor Commissioner will prepare a template of the notice in accordance with Section 2810.5, and will make it available for employers to use.

As a service to clients, Media Services will amend and prepare a notice template specific to the entertainment industry for new hires and will distribute packets of these forms to production companies with which we do payroll business.  The notice form will be in three parts: a top copy for the new hire, a copy for the production company’s records and a copy to be sent to the payroll company for our records.

Please note: it is the responsibility of the production company to provide new hires with the new hire notices containing all of the required information, in a timely and accurate manner. And although some information addressed in the written notice is already contained in the workplace posters mandated by other laws, Section 2810.5 does not change any of those posting requirements.

Media Services will be conducting a free, interactive webinar on this subject on Thursday, December 15 at 11am PST, where all questions will be answered. Space is limited.