The Labor Commissioner provides the following answers to frequently asked questions about the new Wage Theft Protection Act, specifically with respect to the required notice by employers to all employees at the time of hire. 

The Wage Theft Prevention Act (AB 469) goes into effect on January 1, 2012. The new legislation amends existing laws (Labor Code sections 98, 226, 240, 243, 1174, and 1197.1), and adds new requirements (Labor Code sections 200.5, 1194.3, 1197.2, 1206, and 2810.5) which criminalizes willful violations for non-payment of wages after a court judgment or final administrative order; requires restitution to the employee in addition to a civil penalty for failure to pay minimum wages; requires that specified information be provided to employees at the time of hire and in wage claim proceedings and that employers update changes within specified periods; extends the time period for obtaining judgments on final orders for collection of penalties by the Division of Labor Standards Enforcement (DLSE); enhances bond requirements for employers with convictions or court judgments for non-payment of wages including requiring an accounting of assets upon request by DLSE or court order; establishes that penalties under the Labor Code for failure to comply with wage-related statutes are minimum penalties; and allows employees to recover attorney’s fees and costs incurred to enforce a judgment for unpaid wages. 

Specifically, new Section 2810.5 of the Labor Code requires that employers provide notice to employees of their rate(s) of pay, designated pay day, the employer’s intent to claim allowances (meal or lodging allowances) as part of the minimum wage, and the basis of wage payment (whether paying by hour, shift, day, week, piece, etc.), including any applicable rates for overtime. The law requires that the notice contain the employer's "doing business as" names, and that it be provided at the time of hiring and within 7 days of a change if the change is not listed on the employee’s pay stub for the following pay period. The notice must be provided in the language the employer normally uses to communicate employment-related information to the employee, through translated notices provided by the Department of Labor.

Based upon inquiries received by DLSE in anticipation of the effective date for this new requirement, the following are frequently asked questions regarding the new Notice requirements of the Wage Theft Prevention Act:

1.  What is the Wage Theft Prevention Act?

A:  A new law, effective January 1, 2012 which gives greater protection to workers, and makes changes in the way workers are notified of basic employment information.

2.  Who is covered by the law?

A: All private sector employers are covered unless there is a specified exception.  The notice is not required for an employee: directly employed by the state or any political subdivision, including any city, county, city and county, or special district; an employee who is exempt from the payment of overtime wages by statute or the wage orders of the Industrial Welfare Commission; or for an employee who is covered by a valid collective bargaining agreement if it meets specified conditions. It is important to note that charter schools, private schools, and not-for-profit corporations are covered, as they are not public entities.

 
3.  What does the law require?

A: Workers have to receive the required notice containing specific information at the time of hire: (A) the rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable; (B) allowances, regular payday designated by the employer as required by law; (D) the name of the employer, including any “doing business as” names used by the employer; (E) the physical address of the employer’s main office or principal place of business, and a mailing address, if different; (F) the telephone number of the employer; (G) the name, address, and telephone number of the employer’s workers’ compensation insurance carrier; and (H) any other information the Labor Commissioner deems material and necessary.

It also requires that the employer notify the employee in writing of any changes to the information set forth in the Notice To Employee within seven (7) calendar days after the time of the changes, unless one of the following applies: (a) All changes are reflected on a timely wage statement furnished in accordance with Labor Code section 226, or (b) Notice of all changes is provided in another writing require by law within seven days of the changes.

4.  What if a worker’s primary language is not English?

A: Notices need to be given in the language the employer normally uses to communicate employment-related information to the employee. DLSE will be posting versions of the notice template in other languages and will be available on our website for use by employers.
 

5.  For what languages will the Labor Commissioner provide templates?

A: Templates will be available in non-English languages on our website as they are completed.    In an effort to assist employers as much as possible with translations, Spanish, Chinese, Korean, Vietnamese and Tagalog will be provided.  We will endeavor to provide other translations.

6.  Do I have to use the Labor Commissioner’s template?

A: No, employers can develop their own notices so long as they contain all the information required by the law, including all the information requested on DLSE’s template.  The template includes all required information, including that which the Labor Commissioner deems material and necessary for purposes of the notice.  Employers should keep a record of the notices provided to their employees.

7.  May the notice be included in letters and/or employment agreements provided to new hires?

A: Yes, it can be given with other materials that are presented at the time of hire, but the notice required under Labor Code 2810.5 must be on its own form.  Employees should not be required to piece together the information from several separate documents or pages of a manual.

8.  Can a worker waive the notice requirement?

A: No, it is a notice required by statute and is not subject to waiver (Labor Code 2804).

 
9.  Can the notice be given electronically?

A: Yes, but there needs to be a system where the worker can acknowledge the receipt of the notice and print out a copy of the notice.

10. What if a worker refuses to sign the notice?

A: The employer should still give the notice to the worker and note the worker’s refusal on its copy of the notice. A worker’s signature on the notice merely constitutes acknowledgement of receipt.  In accordance with an employer’s general recordkeeping requirements under the law, it is the employer’s obligation to ensure that the employment and wage-related information provided on the notice is accurate and complete.  Furthermore, a worker’s signature acknowledging receipt of the notice does not constitute a voluntary written agreement between the employer and employee to credit any meals or lodging against the minimum wage.  Any such voluntary written agreement (as required under the law) must be evidenced by a separate document

11. Do I have to give a new notice every time a wage rate changes?

A: If the wage rate is the only change, notice is not required where there is an increase in a rate and the new rate is shown on the pay stub (itemized wage statement) with the next payment of wages. Note: Decreases in wage rates can only be made prospectively and not retroactively where work was performed and earned under a specified rate.

12.  What procedures should be followed if an employee has multiple pay rates?

A: An employer must put all pay rates on the notice (and on the wage statement).

13.  What should we do if the worker has multiple hourly or piece rates?

A: The purpose of the notice is to inform workers of the wage rates that apply to them.  Multiple rates need to be identified as part of the notice. Only the rates used to determine a worker’s pay need be shown on the wage statement for that period.

14.  Does the notice requirement apply to workers covered by a union contract?

A:  Generally no. If the workers are under a valid collective bargaining agreement which expressly provides for the wages, hours of work, and working conditions of the employee and provides premium wage rates for all overtime hours worked and a regular hourly rate for those employees of not less than 30% more than the state minimum wage, the notice is not required for those employees. If these conditions are not satisfied, then a notice is required for such employees.

15.  Are exempt employees, including professionals, executives, or administrators, excluded from the notice requirements?

A: Yes, as they are not “employees” only for purposes of the notice requirement (Labor Code 2810.5(c)(2).