Oct 21, 2014
Tea Party Tribune
Tea Party Tribune
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New California Employment Laws For 2013

   

by Allen Matkins Leck Gamble Mallory & Natsis LLP

Posted: Dec.4th,2012

Effective January 1, 2013, an unusually large number of new employment laws will affect private employers with employees working in California. Several of these new laws require immediate attention from most employers. Heading into the end of 2012 is a good time for employers to make sure that their policies and practices are compliant with California’s evolving employment laws and regulations.

New Pregnancy Regulations Approved -

On Friday, November 30, 2012, 28 pages of new pregnancy regulations were approved by the Office of Administrative Law. They become effective December 30, 2012, and will affect virtually every California employer. While some of the amendments are technical and simply update certain terms in the existing regulations, other changes are significant. (Access the full text of the new regulations here: FEHC’s Pregnancy Regulations) For example, the written notices that employers are required to post and to give to employees who are affected by pregnancy (“Notice A” for employers with less than 50 employees, and “Notice B” for employers with 50 or more employees) are completely re-worded. Thus, new postings and notices are required as of December 30, 2012. Other substantive changes include the requirement that employers must notify an employee in writing of any medical certification requirement each time a certification is required and provide the employee with a form for the employee’s health care provider to complete. The regulations include an approved form for this purpose entitled “Certification of Health Care Provider for Pregnancy Disability Leave, Transfer and/or Reasonable Accommodation.” The new regulations also attempt to clarify the term “four months” of leave, which the drafters found ambiguous because calendar months do not have an equal number of days. The new definition of four months now includes various methods of calculation and defines the period as the number of days the employee would normally work within four calendar months (one-third of a year equaling 17-1/3 weeks), if the leave is taken continuously following the date the pregnancy disability leave commences. The definition becomes more involved under the new regulations when intermittent leave is taken.

New California Employment Laws For 2013
Effective January 1, 2013, an unusually large number of new employment laws will affect private employers
with employees working in California. Several of these new laws require immediate attention from
most employers. Heading into the end of 2012 is a good time for employers to make sure that their
policies and practices are compliant with California’s evolving employment laws and regulations.

New Pregnancy Regulations Approved
On Friday, November 30, 2012, 28 pages of new pregnancy regulations were approved by the Office of
Administrative Law. They become effective December 30, 2012, and will affect virtually every California
employer. While some of the amendments are technical and simply update certain terms in the existing
regulations, other changes are significant. (Access the full text of the new regulations here: FEHC’s Pregnancy
Regulations) For example, the written notices that employers are required to post and to give to employees
who are affected by pregnancy (“Notice A” for employers with less than 50 employees, and “Notice B” for
employers with 50 or more employees) are completely re-worded. Thus, new postings and notices are
required as of December 30, 2012. Other substantive changes include the requirement that employers
must notify an employee in writing of any medical certification requirement each time a certification is
required and provide the employee with a form for the employee’s health care provider to complete. The
regulations include an approved form for this purpose entitled “Certification of Health Care Provider for
Pregnancy Disability Leave, Transfer and/or Reasonable Accommodation.” The new regulations also
attempt to clarify the term “four months” of leave, which the drafters found ambiguous because calendar
months do not have an equal number of days. The new definition of four months now includes various
methods of calculation and defines the period as the number of days the employee would normally work
within four calendar months (one-third of a year equaling 17-1/3 weeks), if the leave is taken continuously
following the date the pregnancy disability leave commences. The definition becomes more involved
under the new regulations when intermittent leave is taken.
California employers are encouraged to familiarize themselves with these significant new regulations
before year-end and to ensure strict compliance with respect to all employees “affected by pregnancy.”

New Requirements For “Commission” Plans To Be In Writing (AB 1396, AB 2675)
Enacted in 2011 but effective January 1, 2013, a new Labor Code provision will require that all in-state
and out-of-state employers paying commissions to employees working in California provide them with
written “contracts” setting forth both the formula for calculating commissions as well as the method of
payment. The employer must give a signed copy of the contract to the employee and must get a signed
receipt for the contract from the employee. AB 1396 provides that if the commissions contract expires
legal alert labor & employment
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and the parties continue to perform without change, its terms will remain in full force and effect.
AB 1396 incorporates the meaning of the term “commissions” from Labor Code section 204.1, which
provides that “[c]ommission wages are compensation paid to any person for services rendered in the sale
of such employer’s property or services and based proportionately upon the amount or value thereof.”
Under the new law, “commissions” do not include short-term productivity bonuses or profit-sharing
plans “unless there has been an offer by the employer to pay a fixed percentage of sales or profits as
compensation for work to be performed.”
Although neither AB 1396 nor AB 2675 expressly provides for any statutory liability, employers may
still face penalties under California’s Private Attorneys General Act (PAGA) in the amount of $100 for
each affected employee for an initial violation and $200 per employee for each violation thereafter.
Action Items
Employers should review variable compensation plans to determine if they qualify as commission plans
and, if so, begin preparing written commission agreements to be effective no later than January 1,
2013. Employers must provide and retain signed agreements for all employees receiving any kind of
proportional performance-based compensation. (Such agreements should also clearly set forth, where
applicable, that the employees are “at will.”)

Salaries For Nonexempt Employees Do Not Include Overtime (AB 2103)

Some employers have a practice of paying nonexempt employees a fixed or guaranteed salary which
includes all overtime hours worked (e.g., a fixed amount for all hours worked up to 50 in a week). AB
2103 amends section 515 of the Labor Code to specifically forbid this practice.
AB 2103 provides that payment of a fixed salary to a nonexempt employee only compensates his or
her regular non-overtime hours even if an agreement with the employee provides otherwise. This law
overturns a recent California Court of Appeal decision (Arechiga v. Dolores Press) that held that a
nonexempt employee can agree to a fixed weekly salary that includes payment of both regular hourly
wages and overtime. Under the new law, Labor Code section 515(d)(2) is amended to state that payment
of a fixed salary to a nonexempt employee will be deemed to be payment only for the employee’s regular
non-overtime hours, notwithstanding any private agreement or “explicit mutual wage agreement” to the
contrary. For purposes of calculating overtime, a nonexempt full-time employee’s regular hourly rate is
1/40th of the employee’s weekly salary under Labor Code section 515(d).

Action Items
Employers must ensure that all nonexempt employees, salaried or hourly, keep accurate time records of
legal alert labor & employment hours worked and meal periods taken and receive hourly overtime
pay for any overtime hours. Additionally, employers should consider converting nonexempt
salaried employees to an hourly wage rate to reduce potential liability.

Required Information for Employee Pay Statements — A Mistake Here Can Cost Employers $4,000
Per Employee (SB 1255)
Employers are required to provide at least nine categories of specified information to employees on every
wage statement each time wages are paid to an employee. An employee who “suffers an injury” as a
result of an employer knowingly or intentionally failing to comply with the statute is entitled to recover
damages against the employer.
SB 1255 amends Labor Code section 226 to define an “injury” for purposes of violating the itemized
wage statement statute. Under prior case law, an employee did not definitively suffer an “injury” if only
one of the nine itemized requirements in Labor Code section 226 was not included on the pay statement.
However, now an employee showing that any of the nine categories of information was omitted from a
pay statement will be entitled to recover $50 for the initial pay period in which a violation occurs and $100
for each subsequent pay period, up to $4,000 plus costs and attorneys’ fees.

Action Items
Ensure that pay statements include all of the following information as required by Labor Code section 226:
• Gross wages earned
• Total hours worked (except for exempt employees)
• Applicable piece rate units and piece rates
• All deductions (which may be aggregated)
• Net wages earned
• Inclusive pay period
• Employee name and last four digits of social security number or employee ID
• Name and address of the legal entity serving as employer
• All applicable hourly rates in effect during the pay period and corresponding number of hours worked
• For temporary service employers: the name, address, and telephone number of the entity
(client company) where the employee will provide services.

Employers May Not Require or Request Applicants/Employees To Divulge “Social Media” (AB 1844)
Employees’ increasing use of electronic communication and social media (Facebook, MySpace, Twitter,
Instagram, etc.) has created new challenges for employers and, effective January 1, 2013, a new California
law, AB 1844, adds provisions to the California Labor Code which prohibit California employers from
legal alert labor & employment
requiring or requesting current employees or job applicants to: (i) disclose their username or password
so the employer can access their personal “social media;” (ii) access their personal “social media” in
front of the employer; or (iii) divulge their personal “social media” to the employer. The definition of
“social media” under the new law is broad, and covers more than typical social media sites such as an
employee’s or applicant’s Facebook page. Indeed, the new law considers an employee’s or applicant’s
personal e-mail and text messages as “social media.”
Despite this law’s wide reach, the new law does not prohibit employers from requesting an employee to
divulge personal social media “reasonably believed to be relevant to an investigation of allegations of
employee misconduct or employee violation of applicable laws and regulations.” In addition, employers
are not prohibited from requesting an employee to provide a username or password so that the employer
can access an employer-issued electronic device.

NLRB Also Limits Use of Social Media By Employers
Employers should also be mindful that the National Labor Relations Board (“NLRB”) has issued several
rulings invalidating social media policies that might be read to impermissibly interfere with employees’
rights to engage in protected concerted activity under the National Labor Relations Act (“NLRA”). In fact,
the NLRB’s General Counsel has issued a report illustrating the types of social media policies that are
unlawful. Problematic policies include those that prohibit employees from posting confidential information,
inaccurate information, personal information about co-workers, offensive or abusive remarks, information
on legal matters, and the employer’s logo.
The NLRB also found in a case involving Costco Wholesale Corp. that the employer’s prohibition of
the electronic posting of statements “that damage the Company, defame any individual or damage
any person’s reputation” violates the NLRA. The NLRB’s recent actions in this area demonstrate that
employers should carefully reevaluate existing social media polices.

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