California Enacts Wage Theft Prevention Act for Private Sector Employers

February 12, 2012

Much like New York’s Wage Theft Prevention Act, California’s Wage Theft Prevention Act (which went into effect January 1, 2012,) places new notice requirements on California employers, and enhances enforcement and penalties for violations of California wage laws.

Notice Requirement

Private-sector employees hired on or after January 1, 2012 must receive the required notice at the time of hire. However, the following private-sector employees are exempt from the notice requirement: (a) any employee exempt from the payment of overtime wages by statute or the wage orders of the Industrial Welfare Commission; and (b) employees governed by certain collective bargaining agreements.

California Labor Law §2810.5(a) requires covered employees to be provided with the following information:

  • 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, if applicable;
  • Allowances, if any, claimed as part of the minimum wage (including meal and lodging allowances);
  • The regular payday designated by the employer (in accordance with the Labor Code);
  • The name of the employer, including any “doing business as” (dba) names used by the employer;
  • The physical address of the employer’s main office or principal place of business, and a mailing address, if different;
  • The telephone number of the employer; and
  • The name, address, and telephone number of the employer’s workers’ compensation insurance carrier.

The California Division of Labor Standards Enforcement (DLSE) takes the position that the following information is also required:

  • The employee’s date of hire;
  • The business form of employer (i.e., corporation);
  • The name, type of agency (i.e., temporary services agency), main address, mailing address and telephone number of any other business or entity used by the employer to hire employees or administer wages or benefits;Whether the employment agreement is oral or written;
    • Please note: this information is not required if the other entity is a payroll processing company or recruiting service.
  • The workers’ compensation policy number or certificate number for consent to self-insure;
  • The name and signature of the employee and the date in which the employee received and signed the notice;
  • The name and signature of the employer and the date in which the employer provided the notice to the employee and signed the notice; and
  • A description of the notice requirements of California Labor Law §2810.

The DLSE has issued a template form which includes all of the above information, available at:www.dir.ca.gov/dlse/LC_2810.5_Notice.pdf. Employers are not required to use this template, but must include in their notices all the information provided by the template.

Enhanced Enforcement and Penalties for Wage Violations

The Act also makes important changes to the enforcement and penalty provisions of California wage laws. For example, the Act amends Labor Code § 1174 to extend the period of time in which employers must retain payroll records from two (2) years to three (3) years. The Act also declares that employers who fail to pay their employees the minimum wage must now pay restitution to their employees in the amount of unpaid wages (in addition to paying civil penalties). Furthermore, the Act now permits employees to recover attorney’s fees and costs incurred to enforce a court judgment for unpaid wages.

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