New California Employment Laws: More for 2012

Yesterday, Cathleen Yonahara of Freeland Cooper & Foreman in San Francisco ran down some of the key new California employment-related legislation coming at you in 2012. Today, a look at some important new wage/hour measures.

[For yesterday’s rundown, click here.]

Independent contractor misclassification penalties

Under Senate Bill 459, effective January 1, 2012, it will be unlawful for any person or employer to willfully misclassify an individual as an independent contractor. Willful misclassification means avoiding employee status for an individual by voluntarily and knowingly misclassifying him as an independent contractor.

This new law also makes it unlawful for an employer to charge an individual who has been willfully misclassified as an independent contractor a fee or to make any deductions from compensation for any purpose ― including for goods, materials, space rental, services, government licenses, repairs, equipment maintenance, or fines arising from the individual’s employment — if any of those fees or deductions would have violated the law had the individual not been misclassified.

If the California Labor and Workforce Development Agency or a court determines that a person or employer has violated this new law, the person or employer will be subject to a civil penalty of $5,000 to $15,000 for each violation, in addition to any other penalties or fines permitted by law. If the agency or a court determines that a person or employer is engaging in a pattern or practice of these violations, the civil penalty will be $10,000 to $25,000 for each violation.

Furthermore, any person who for money or something else of value knowingly advises an employer to treat an individual as an independent contractor to avoid employee status will be jointly and severally liable with the employer if the individual is found to be misclassified. This provision doesn’t apply to an employee who provides advice to his employer or attorneys who provide legal advice.

How to Comply with California Wage & Hour Law — newly updated for 2012!

Wage information for new hires

Under current law, you must post specified wage and hour information in a conspicuous location where employees can view it. Effective January 1, 2012, Assembly Bill 469 requires that at the time of hiring , you must provide each newly hired employee a notice that specifies: 

1. the rates of pay and the basis for those rates, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable;
2. any allowances claimed as part of the minimum wage, including meal or lodging allowances;
3. the regular payday designated by the employer;
4. the name of the employer, including any “doing business as” names it uses;
5. the physical address of the employer’s main office or principal place of business and a mailing address if different;
6. the employer’s telephone number;
7. the name, address, and telephone number of the employer’s workers’ compensation insurance carrier;
8. and any other information the labor commissioner deems significant and necessary.

You will be required to notify your employees in writing of any changes to the information set forth in the notice within seven calendar days of making the changes unless all the changes are reflected on a timely wage statement. In addition, Assembly Bill 469 directs the labor commissioner to prepare a template that complies with these requirements and make it available to employers.

This new law doesn’t apply to: 

1. employees directly employed by the state or any political subdivision;
2. employees who are exempt from the payment of overtime wages by statute or the wage orders of the Industrial Welfare Commission; or
3. employees who are covered by a valid collective bargaining agreement if the agreement expressly provides for the employees’ wages, hours of work, and working conditions and provides premium wage rates for all overtime hours worked and a regular hourly rate of pay of not less than 30 percent more than the state minimum wage.

Everything you need to know about wage hour compliance in California

Written commission agreements required

Under Assembly Bill 1396, effective January 1, 2013, whenever an employee’s method of payment involves commissions, you must provide a written contract that sets forth the method by which the commissions will be computed and paid. You must provide a signed copy of the contract to the employee and obtain a signed receipt for it. If a contract expires and the employee continues to work under its terms, the terms are presumed to remain in effect until the contract is replaced by another contract or the employment relationship terminates.

Everything You Need To Know About California Wage/Hour Law

Whenever you’re dealing with issues relating to compensation and wage/hour, your best defense is a strong offense.

We think the best weapon out there for California employers is our newly updated 2012 edition of our HR Management & Compliance Report, How To Comply with California Wage & Hour Law.

This information-packed guide, written by an experienced California employment lawyer, features in-depth coverage of all the topics you need to know about in an easy-read, quick-reference style:

• The California Labor Code vs. the federal Fair Labor Standards Act (FLSA)
• Who the California wage/hour laws apply to
• The Wage Orders that cover your organization
• Hours of work – including travel time, make-up time, meal and rest periods, and the definition of “hours worked”
• The rules for hourly, salary, and piece-rate pay
• Bonuses, profit-sharing plans, and tips
• Overtime and double-time wages
• Alternative workweeks
• Tools and equipment, uniforms, and work-related expenses and losses
• Paid time off – vacation, PTO, holidays, and sick leave
• Unpaid time off
• When and how employees must be paid
• Payment of final wages upon termination
• Deductions from pay
• Recordkeeping requirements
• Pay-related discrimination
• A new appendix of key cases you need to know about
• And much more!