In late January the California Division of Labor Standards Enforcement (DLSE) again revised its Frequently Asked Questions (FAQs) regarding the Wage Theft Prevention Act’s employee notice requirements.
As discussed in our October 20, 2011 post, California’s Wage Theft Prevention Act of 2011 requires private sector employers to provide each newly hired, non-exempt employee with a written notice that contains specified information. Employers must also provide updated notices to their covered employees whenever the information on previously-issued notices changes. The new law, which went into effect on January 1, 2012, is modeled on a similar New York law that took effect in 2011.
On December 28, 2011 (just three working days before the new law went into effect), the DLSE published a template to assist employers in complying with the law’s notice requirements. The DLSE had earlier published (and later revised) a set of Frequently Asked Questions (FAQs) to address common questions regarding the notice requirements. Both the template and the newly revised FAQs can be downloaded here.
The template and the previous versions of the FAQs failed to provide clear guidance on a number of issues, so the DLSE has now published another revised set of FAQs. Several of the previous FAQs have been revised, and ten new FAQs have been added. The changes/additions include the following:
- FAQ 12 – It has always been a requirement for employers to include all pay rates on the notice. This requirement has caused a great deal of confusion to employers who have employees who may be subject to several different rates of pay, which could make it impractical to include all pay rates on the notice. The DLSE added language to FAQ 12 to allow employers to attach a separate sheet containing all rates of pay, provided language is included on the notice itself that clearly references the attachment(s).
- FAQ 18 – This new FAQ provides guidance on how to describe pay rates apart from those calculated by fixed hourly, commission and piece rates.
- FAQ 19 – This new FAQ provides that “only rates known and determinable” in dollar amounts need be included on the notice. This is an attempt to address instances where an employee’s regular rate and overtime rate may fluctuate due to the inclusion of different types of pay (such as supplementary commissions, bonuses or piece rates) other than hourly pay. In these instances, an employer may designate an employee’s “regular rate of pay” on the notice as a rate which “is subject to upward adjustment when other specified forms of wages are earned during the applicable pay period.”
- FAQ 20 – This new FAQ provides guidance on when a “hire” occurs, which triggers the employer’s obligation to provide a notice.
- FAQ 22 – This new FAQ clarifies that a notice of changes relating to an employer’s workers’ compensation policy may be accomplished by posting the workers’ compensation notice already required by Labor Code sections 3550-3551, and that such changes do not require an employer to issue a new notice to each employee.
The newly revised FAQs answer some of the questions that employers have been asking over the past few months. California employers should make sure that the individuals in their organizations who exercise responsibility for preparing and issuing notices to new hires are aware of the revised FAQs and use them. In addition, employers who have chosen to create their own notice forms (as opposed to using the template provided by the DLSE) should review their forms to make sure they are consistent with the DLSE’s new guidance.
Additionally, California employers are reminded of the continuing obligation to provide updated notices to their covered employees whenever the information on previously-issued notices changes. It is particularly important to be vigilant on this issue because the time period to provide the updated notification is short (i.e., within seven days of the information changing or in the next timely issued wage statement).
Aaron Buckley – Paul, Plevin, Sullivan & Connaughton LLP – San Diego, CA
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