On October 9, 2011, Governor Brown signed Assembly Bill 469 (“AB 469”) which will require private employers in California to provide written notice to most new hires of critical employment information, including the employer’s legal name, physical address, payroll dates, and workers’ compensation carrier, as well the wage rate and basis of pay for the new employee. This represents a major change in California law that goes into effect on January 1, 2012.
What is A.B. 469?
Existing law requires California employers to post specific wage and hour information in a prominent location where it can be viewed by employees. Usually, California employers comply with this obligation by prominently posting a copy of the relevant Wage Order that applies to their industry or occupation.
But recent studies suggested that existing law was not doing enough to inform employees of their labor rights and prevent wage theft by employers. One such study, released by UCLA in 2010, claimed that employers in the Los Angeles area were stealing an estimated $26,000,000 per week from workers. The problem, according to some experts, is that as the State’s labor enforcement has been so lax for so long that it has created an “underground economy” where employers pay workers in cash to avoid paying taxes and complying with labor laws. This, in turn, allows unscrupulous employers to withhold wages, hide deductions, or commit other abuses against unsuspecting employees who, because they were paid in cash, cannot decipher what they were paid or whether they are owed anything further. AB 469, sponsored by Sandré R. Swanson (D-Oakland), seeks to address this perceived problem. AB 469 amends the California Labor Code to require all private employers in California now to provide additional employment information, in writing, to all non-union, non-exempt new hires.
Specifically, AB 469 requires that employers provide all such new hires with the following written information at the time of hire:
- The rate of pay and the basis thereof, whether by hour, shift, day, week, salary, piece, commission, or otherwise;
- Any allowances claimed by the employer as part of the minimum wage, including meal or lodging allowances;
- The regular payday of the employer;
- The legal name of the employer, as well as any “doing business as” names that are used;
- They physical address, mailing address, and telephone number of the employer;
- The name, address, and telephone number of the employer’s workers’ compensation insurance carrier; and
- Any other information deemed necessary by the California Labor Commissioner.
Under AB 469, if any of this information changes, the employer must provide written notice of the change(s) within seven (7) days to all employees previously notified. The notice can be accomplished by a new written notice, a written amendment, or by a written paycheck stub that contains the required information.
In addition, AB 469 increases the penalties on an employer who has a prior wage violation and/or who has failed to satisfy any wage judgment. For an employer with a prior such violation, a subsequent violation will require the employer, as a condition of being allowed to continue operations, to (1) post a bond for two (2) years, and (2) provide an accounting of assets to the California Labor Commissioner.
Finally, AB 469 makes it a crime for any California employer to willfully (1) violate a State wage statute or order, and/or (2) fail to pay a final court judgment or final order of the California Labor Commissioner for wages due.
Despite all this bad news, AB 469 does one nice thing for employers – the new law requires the California Labor Commissioner to prepare a template of the written notice requirement for use by private employers. As of this writing, that template was not yet available; however, affected employers can go to the Labor Commissioner’s website for updates.
Impact on California Employers
AB 469 goes into effect on January 1, 2012. Therefore, before that date, private employers in California who hire non-exempt employees should consult with competent employment counsel to ensure that they are providing new hires with proper written notice as required by A.B. 469.