New 2013 Employment Laws
2013 Employment Law Update For California Businesses
Every year the California legislature creates new laws affecting California employers. These laws create new benefits for employees and new pitfalls for employers. The following summary reviews some of the more significant changes in the law for 2013. If you have any questions or would like to discuss how these laws impact your business, please feel free to contact us at your convenience.
Presumed Damages and New Requirements for Some Wage Statements
Labor Code §226 requires employers to provide itemized wage statements with specified categories of information. The legislature amended §226 to specify that an employee has “suffered an injury” if an itemized wage statement is not provided. An injury is also suffered if an employee cannot “promptly and easily” determine the amount of wages, which deductions have been made from wages, the employers name and address, and/or the employee’s identification. It is particularly important for all employers to ensure their pay stubs include all required information.
Temporary service employers (which includes a business that contracts with clients or customers to supply workers to perform services for the clients or customers) are now required to provide wage statements containing rate of pay and total hours worked for each temporary assignment. The new Labor Code §226 requires temporary employers to provide a written notice to employees at the time of hire that includes rate of pay, name and physical address of the employer, telephone number of legal entity that the employee will be performing work for, and any other information deemed necessary by the labor commissioner.
Mutual Wage Agreements No Longer Valid
The general rule is that a salary only compensates a non-exempt employee for the regular hours worked. There is (or was) a small exception when the employer and employee enter into an explicit mutual wage agreement specifying the employee’s hourly rate and the fact that the salary will cover all regular and overtime hours worked. While the Labor Commissioner did not believe such agreements could exists, in the 2011 case, Arechiga v. Delores Press, Inc., the court upheld an explicit mutual wage agreement. In response, the California legislature passed AB 2103 nullifying the courts ruling in Arechiga.
Starting January 1, 2013, employers will no longer be able to limit their overtime liability to non-exempt employees through an explicit mutual wage agreement. Remember that paying an employee a salary does not necessarily mean you do not have to pay overtime.
Modified Requirement for Written Commission Agreements
In 2012 the legislature amended California Labor Code §§2751 and 2752 requiring employers to provide a written contract containing specified information for all employees receiving commissions. Responding to employer criticisms, §2751 was amended to exempt bonuses based on productivity of profit sharing, or any other temporary variable that increases but does not decrease the value of compensation under a contract.
Employers oftentimes misconstrue a bonus as a commission, and vice versa. We recommend employers commit any variable pay plan (e.g., commission, bonus, profit-sharing) to writing so the terms are clear.
Social Media Privacy Law
Due to rising concerns regarding employee privacy, starting January 1, 2013, employers MAY NOT ask applicants or current employees for their social media passwords or usernames. The new law allows an employer to require disclosure if the information is relevant to an investigation of employee misconduct or other illegal act. Employers can also access an employee’s social network on an electronic device issued by the employer.
Businesses should consult an attorney before asking for any social media usernames or passwords to ensure one or more of the applicable exceptions apply.
Employee Personnel File Inspection Rights Amended
Prior to 2013, employees were entitled to receive a copy of any employment document they signed, and they had a right to view their personnel files. Beginning in 2013, employees have the right to a copy of their personnel file or any grievances regarding the employees. Employers must provide the documents within 30 days or risk penalties of up to $750 plus fees. Current and former employees, as well as their representatives, have the right to view and make copies of their personnel file within 30 days of any request. Employers can charge for the copies, but cannot exceed the actual cost of reproduction. Employers can require employees use specified forms to request the records. Please consult with an attorney about what records need to be produced and how to create compliant forms.
Employers only need to comply with one request per employee per calendar year or up to 50 requests per month from employee representatives.
Revised Accommodation Requirements Under FEHA
California’s Fair Employment and Housing Act (FEHA) requires employers to make accommodations for an employee’s religious beliefs. The legislature clarified that the accommodations extend to religious “dress and grooming” practices, including wearing or carrying of religious clothing, head or face coverings, jewelry, artifacts, and any other item that is part of an individual’s religious observation.
Employers cannot segregate an employee from customers or the general public as an accommodation. The clarification also clarifies that the “undue hardship” test used for disability accommodation extends to religious accommodation.
The legislature also clarified that breast-feeding is protected under FEHA’s sex discrimination laws. Employers are required to make reasonable accommodations for lactating employees, including providing private areas and possibly extending breaks so that the employee can express milk.
Hands Free Wireless Communications
California prohibits texting while driving, but until recently did not allow hands free dictation and operation. Recognizing the advance in technology, California’s hands free communications law is amended to allow dictation, sending and listening to text messages. The law allows drivers to activate and deactivate a function of their wireless device while driving.
Employer policies may need updating, but should still prohibit distractive conduct while driving.
Feel free to distribute copies of this letter to friends and colleagues that might be interested in these new developments. If you have any questions regarding theses changes, or any other matter related to employment or business law in California, please give me a call. Thank you for taking the time to prepare yourself.
Robert E. Nuddleman, Esq. Phillip J. Griego
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