California's New Wage Disclosure Notice And The Wage Theft Prevention Act Of 2011

UPDATE: On January 3, 2012, the Labor Commissioner changed the FAQs on this notice requirement to clarify that the notice does not need to be given to current employees except under certain circumstances. The Labor Commissioner did so by simply deleting the following sentence formerly in the answer to FAQ 2: "The notice should be given to all current employees and then to all new employees at the time of hire."

California's Wage Theft Prevention Act of 2011 ("WTPA" or "Act")1 takes effect on the first day of next year – January 1, 2012. The WTPA is one of half a dozen new laws that affect an employer's wage payment obligations. The WTPA amended five existing statutes within the California Labor Code, and created five new statutes in the same code.2 All are discussed below.

Labor Code Section 2810.5 – Wage Notice for Certain Non-exempt Employees

The most important of the Act's new statutes is Labor Code section 2810.5, which requires employers to give new employees and, in other circumstances, current employees a particularized notice about their wages and other employment-related information. The wage notice requirement, which will take effect on January 1, 2012, will affect most of the more than eight million California employees who are entitled to receive overtime.

Which Employees Must Receive A Wage Notice?

The new statute specifically requires that all employees hired on or after January 1, 2012, receive the notice except:

An employee directly employed by the state or any political subdivision thereof, 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. This exception covers employees properly classified under the wage laws as professional, executive, or administrative, outside salespersons, and some members of an employee's family, and can cover some employees such as those in particular occupations who receive more than half their compensation in commissions, truck and other drivers (including taxi cab drivers), broadcasting industry employees, irrigators, and motion picture projectionists. An employee who is covered by a valid collective bargaining agreement (CBA) if the CBA "expressly provides for:" wages; hours of work; working conditions of the employee; premium wage rates for all overtime hours worked; and a regular hourly rate of pay for those employees of not less than 30 percent more than the state's minimum wage.3 The Labor Commissioner has taken the position in its "Frequently Asked Questions" (FAQs) that the wage notice must be provided to all current employees on January 1, 2012, as well as new employees.4 The Labor Commissioner's position that notices must be provided to current employees is highly debatable given the absence of such a specific requirement in the statute. The statute only states that "an employer shall notify his or her employees in writing of any changes to the information set forth in the notice" within specified time periods. Given the sizeable penalties that can be imposed for non-compliance, employers are well advised to consult with their employment counsel as to this important issue.

What Information Must the Wage Notice Contain?

According to the statute, a wage notice must contain at least eight categories of information5:

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. Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances. The regular payday designated by the employer in accordance with the requirements of 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. The name, address, and telephone number of the employer's workers' compensation insurance carrier. Any other information the Labor Commissioner deems material and necessary. What Additional Information Must Be Included in the Wage Notice?

The Labor Commissioner has issued a template wage...