Wage Theft Prevention Act

DLSE Revises (Again) Wage Theft Prevention Act FAQs and Notice

DLSE Revises (Again) Wage Theft Prevention Act FAQs and Notice

What does the revised Wage Theft Prevention Act mean for employers and employees?

For most who keep up with California employment law/HR issues, Thursday, April 12, 2012 will be remembered as the day the CA Supreme Court published its long-awaited Brinker decision. That same day, however, the CA Division of Labor Standards Enforcement (DLSE) issued revised FAQs and Notice regarding the new CA Wage Theft Prevention Act – a law I previously wrote about in February (here).

The new FAQs provide additional information about how the DLSE contemplates employers should comply with the law and it contains many new questions/answers for guidance, including the following (the full text of the FAQs and the new Notice can be found here): (Update (4/25/2012): The Notice is available in many languages including English, Spanish, Vietnamese, Korean, Chinese, and Tagolog).

  • Importantly, the FAQs make clear that an employer need not issue a new Notice to the employees who were provided notices using the earlier templates provided by the DLSE. However, if there is a substantive change in the information previously provided on an old template, then the employer must use the new Notice to communicate such change within 7 calendar days of such change. And all new hires after April 11, 2012 should be provided notice via the newest Notice template. (FAQ #27).
  • The DLSE has clarified that, on the April 11, 2012 template, the Acknowledgment of Receipt is optional. I would recommend that the employer attempt to obtain the employee’s signature acknowledging receipt of the Notice. If the employee refuses to sign, the employer should still give notice to the employee and note the employee’s refusal to sign on its copy of the notice. (FAQ ## 10 and 23).
  • Employers must provide overtime rates on the Notice, and may not just simply state “the multiplier for overtime (e.g., 1.5 and/or double the regular rate)” since the multiplier does not specify the overtime rate. (FAQ #19).
  • For new hires, the Notice must be provided “at the time of hiring,” which is an ambiguous term. The DLSE provides that “the employer must provide the notice to new hires reasonably close in time to the inception of the employment relationship which may be a date determined by the employer and employee, however, in no event later than the first day services are performed by the employee.” (FAQ #20).
  • The new Notice has deleted the prior questions regarding at-will employment – questions that I recommended employers take unique steps in answering on the original notice. The FAQs make clear that the Notice “has nothing to do with ‘at will’ employment in California.” (FAQ #21).
  • The FAQs also explains why the statute requires that the Notice contain “the name of the employer, including other ‘doing business as’ names used by the employer.” (FAQ #26).
  • The FAQs also provide further information specific to an employer that is a “staffing agency or business.” (FAQ ##28, 29 & 30).

Employers are NOT required to use the template Notice provided by the DLSE, but it may be easier to do so in order to comply with the law, and it is nice to show the DLSE that the company relied on DLSE guidance and forms should any audits/claims arise.

DLSE Provides Updated FAQs on Wage Theft Prevention Act

DLSE Provides Updated FAQs on Wage Theft Prevention Act

New employees must receive employment and wage information as per the Wage Theft Prevention Act.

As I have discussed with many companies, the new Wage Theft Prevention Act went into effect on January 1, 2012 in California. Part of this law requires employers to provide to all new non-exempt employees (with some exceptions) certain information about their employment. The main provisions of the Act deal with new hires starting in 2012. However, the notice requirements are ongoing. In other words, for current/continuing employees (hired in 2010, for example), when any of the required information changes (for example, an employee gets a raise), the employer has seven (7) calendar days to notify the employee of the change. So, you will have to provide the required information to current/continuing employees when changes of any of the required information are made.

In late-December 2011, the California Department of Labor Standards Enforcement (DLSE) published a sample form that can be used to comply with the new law. It might be easier for employers to use the DLSE’s Form, however the form includes some ambiguities and raises some questions.

To help employers, the DLSE issued FAQs regarding the new law and the DLSE’s Form. The FAQs themselves have been a source of frustration, and already have been revised a couple times – most recently on January 23, 2012. In this most recent update, the DLSE added several new FAQs and revised its answers to two of the original FAQs. The most recent update states that it would be a “best practice” for employers to provide the required information to current employees, even thought the law only requires the information be provided to new hires and to current employees only if there is a change in the required information. As this is a new law in California, employers should continue to monitor my updates, and check with the DLSE for more guidance.

The DLSE Form (available in English and five other languages) and the DLSE FAQs can be found here.