Clarification of Employer Obligations in California Regarding Notice to New Hires

The California Wage Theft Prevention Act requires employers, except the government, to provide written notice of certain information to all newly-hired non-exempt employees, excluding those covered by union contracts that satisfy certain criteria. The Act took effect Jan. 1, 2012 and is Section 2810.5 of the Labor Code. On Dec. 29, 2011, the Labor Commissioner published a template implementing the Act. The Labor Commissioner has revised the template effective April 12, 2012, and its related Frequency Asked Questions (FAQs). The revised notice, or one containing the same information, must be provided to new employees starting April 12, 2012.

Here is what employers with new hires in California need to know about the revised template:

Must the Employer Give the Revised Notice to Employees Hired This Year before April 12, 2012?

No. The revised FAQs state that employers need not provide the amended notice to new hires who received the previous notice, as long as the information in the previous notice remains the same. If any of that information changes, the employer must, within 7 days of the change, provide those employees with the new notice or reflect the change in a timely wage statement (pay stub) or other writing required by law, such as a poster identifying the employer’s workers’ compensation insurance carrier.  Likewise, employees hired on or after April 12, 2012, who receive the new notice form must receive a revised notice within 7 days of any such change, unless the change is reflected in a timely wage statement or other writing required by law.

How Has the Template Changed?

Explanation of When the Notice Must be Provided

The revised FAQs clarify that the notice must be given “at the time of hiring,” which may be a date agreed to by the employer and employee, but in no event may the notice be provided later than the “start date” for work.  Also, the revised template asks for the employee’s “Start Date” whereas the original template asked for the “Hire Date.”

Information About Employment Agreement

The original template caused controversy by asking if “employment terms” are “oral” or “written.” The revised template no longer asks that question. Instead, it asks if a written agreement exists providing the rate(s) of pay and, if so, whether “all rate(s) of pay and bases thereof” are contained in that written agreement. The FAQs explain that “[t]he designation in the notice of such agreement or contract information has nothing to do with ‘at will’ employment in California . . . .”

Clarification Regarding Legal Name of Employer and “Doing Business As” Names

The revised template asks for the “Legal Name of Hiring Employer,” rather than the “Name of Employer” in the original template, and requires the full legal name of the employer, including any legal designation such as “Corp.,” “Inc.” or “LLC.” The employer must also provide any “Other Names Hiring Employer is ‘doing business as.’” 

Acknowledgement of Receipt by Employee is Optional

Previously, it was unclear what to do if an employee refused to sign the “Acknowledgement of Receipt” portion of the notice. The revised template adds the word “Optional” under that heading, and states that the employee’s signature “merely constitutes acknowledgement of receipt.” The FAQs explain that “[s]ignatures by the employer or employee may provide assurance and confirmation that the notice was, in fact, provided by the employer and received by the employee, as intended by the Legislature.” If the employee refuses to sign, the employer may write on the employee’s signature line that the employee refused to sign.

Information Relating to Staffing Agencies

The revised notice specifically asks whether the hiring employer is “a staffing agency/business (e.g., Temporary Services Agency; Employee Leasing Company; or Professional Employer Organization [PEO]).” If so, the employer must identify, by name, physical address of main office, mailing address and telephone number, “the other entity for whom this employee will perform work.” The FAQs state that if the staffing agency or leasing company provides that required information, the client business is not required to provide a separate notice to the employee.

The FAQs add that if, at the time of hire, the staffing agency or leasing company knows the name of the client business for whom the employee will be placed and perform work, that information must be stated on the notice under “other entity for whom this employee will perform work.” If the employee is placed elsewhere subsequently, the staffing agency must provide notice “within 7 calendar days of the change” by providing a new notice or stating the change on an itemized wage statement (pay stub) or other notice required by law.

The Act and the template were the subjects of our Jan. 3, 2012 advisory.

The revised template and FAQs are available on-line at:

        http://www.dir.ca.gov/dlse/LC_2810.5_Notice.pdf (PDF version)
        http://www.dir.ca.gov/dlse/FAQs-NoticeToEmployee.html

If you have any questions regarding the Act, or the Labor Commissioner template or Frequently Asked Questions, please direct them to the author or any of our California employment attorneys.