Summary

On Thursday, April 12, 2012, the California Division of Labor Standards Enforcement (“DLSE”) once again revised and posted its template “Notice to Employee” (“Notice”) and Frequently Asked Questions (“FAQs”) regarding the Wage Theft Prevention Act. The Notice and FAQs should make it easier for California employers to complete the Notice form by removing the troublesome “Oral or Written Contract” question, and clarifying the sections regarding signatures, start date, and staffing agencies.

The revised template Notice can be accessed here. The revised FAQs can be accessed here.  

What’s New

The revised Notice template and FAQ’s clarify a number of common questions and concerns.  

  • Employers Are No Longer Forced to Choose Between “Oral or Written” Contract. As revised, the new template inquires whether “a written agreement exists providing the rate(s) of pay.” If so, the employer must check another box indicating whether all rates of pay are contained in the written agreement.
  • Signatures. Although Labor Code section 2810.5 does not require the form be signed by either the employer or employee, the DLSE initially required that the form be signed by both parties. As revised, the template clarifies that a signature in the “Acknowledgment of Receipt” portion of the notice is optional, and that signatures by either party simply provide assurance and confirmation that the notice was, in fact, provided and received. The DLSE explains that “any person the employer has authorized to sign the acknowledgment” may serve as the employer representative.
  • Clarification for Staffing Agencies, Temp Services and Professional Employer Organizations (PEOs). The new template clarifies that when a staffing agency (which for purposes of the notice includes a temp service, leasing company, or PEO) hires an employee, it is the staffing agency, and not the staffing agency’s client, that is responsible for issuing the notice to the employee. According to the FAQs, there is an employment relationship between the staffing agency and the employee “even where the work is performed at and for another business.”

Nonetheless, staffing agencies must still provide information regarding “the other entity for whom [the] employee will perform work” when the staffing agency is the hiring employer. The new FAQs clarify that a recruiting service or simple payroll processing service is not a staffing agency or business for purposes of the notice.

  • When the “Time of Hiring” Occurs. Notice must be given “at the time of hiring,” which the FAQs clarify may be a date determined by the employer and employee, but in no event may the notice be provided to the employee later than the “start date” for work.
  • New Notice Not Required Based on DLSE’s Updates. According to the FAQs, until there is a substantive change in the provided information, an employer need not issue a new notice to hires who were previously provided notice using the earlier template.
  • New Template Notice Required for New Hires and Where Changes Have Occurred. For new hires made after the posting of the updated template on the DLSE’s website, the newer posted version of the template must be used. Moreover, if there are changes to the information provided in the earlier template, an employer must, within seven calendar days of the change, provide notice using the updated template information or otherwise provide notice of a change in the manner specified in Labor Code 2810.5 (b)(1)-(2).

Background

California’s Wage Theft Prevention Act, California Labor Code § 2810.5, was signed into law by California Governor Jerry Brown (Assembly Bill 469) and went into effect on January 1, 2012.

Under the Act, at “the time of hiring” of any nonexempt employee, an employer is required to provide the employee a written notice containing the following information:

  • the employee’s rate or rates of pay (including overtime rates), and whether the employee is paid hourly, by the shift, by the day, by the week, by salary, by piece, by commission, or otherwise;
  • any allowances claimed as part of the minimum wage (e.g., allowances for meals or lodging);
  • the regular payday;
  • the name of the employer, including any D/B/A names the employer uses;
  • the physical address of the employer’s main office or principal place of business, and a mailing address if it is different;
  • the employer’s telephone number;
  • the name, address, and telephone number of the employer’s workers’ compensation insurance carrier; and,
  • any other information that the Labor Commissioner deemed “material and necessary.”

In addition, the Act required California’s Labor Commissioner to prepare a template of the written notice, which the DLSE issued on December 29, 2011, just before the law went into effect. The DLSE’s notice template generated numerous questions. In response, the DLSE published FAQs on December 30, 2011, and then revised them on January 3 and then again on January 23, 2012.

This most recent round of revised FAQs and notice template posted on April 12, 2012, and discussed above, address some of the many inquiries the DLSE has received in connection with its original FAQs and template notice.

Conclusion

The latest information provides some clarification, but ambiguities remain in the Wage Theft Prevention Act, the DLSE’s notice template, and the FAQs. Nonetheless, employers must become familiar with the (revised) requirements and take steps to bring their policies and procedures into compliance. Moreover, employers who decided to create their own notice forms should review them to ensure they are consistent with the DLSE’s new guidance.