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Quintilone & Associates focuses in Class Actions, Employment Law, Personal Injury, Trade Secrets Litigation, and Business Litigation in Orange County, CA area.

New Employment Laws – New Wage Statement and Record Inspection Requirements

Employment Law Bills Signed

AB 1598 Public Contracts: Public Works: Installation.

Existing law defines the term “public works” for purposes of requirements regarding the payment of prevailing wages. Existing law generally defines “public works” to include construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds. Existing law makes a willful violation of laws relating to the payment of prevailing wages on public works a misdemeanor. This bill modifies the definition of installation to include the assembly and disassembly of freestanding and affixed modular office systems.

This bill must have been passed to require the payment prevailing wages for the install of the modular classrooms or trailers all too common around overcrowded school buildings.

AB 1794 – Unemployment Insurance: Use of Employer Reports: Reporting and Payroll.

Existing law provides for the payment of unemployment compensation benefits to eligible unemployed individuals, and requires the Employment Development Department to implement and administer the unemployment insurance system in the state. Existing law requires each employer to file with the department a report of wages paid to his or her workers and to furnish to each employee a written statement showing, among other things, the total amount of wages, and total wages subject to personal income tax, as provided. Existing law also requires each employer to file with the department specified information on new employees, and authorizes the use of that information for specified purposes including, among other things, administration of the law regarding unemployment compensation benefits. Existing law provides that a person who knowingly accesses, uses, or discloses confidential information without authorization is guilty of a misdemeanor. This bill, until January 1, 2019, authorizes the Employment Development Department to provide the specified new employee information to the Joint Enforcement Strike Force on the Underground Economy, the Contractors’ State License Board, and the State Compensation Insurance Fund, as provided. By expanding the crime of knowingly and wrongfully accessing, using, or disclosing specified information, this bill would impose a state-mandated local program.

AB 1855 – Employment Contractors: Sufficient Funds.

Existing law prohibits a person or entity from entering into a contract or agreement for labor or services with specified types of contractors if the person or entity knows or should know that the contract or agreement does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided. This bill, in addition, makes these provisions applicable with regard to warehouse contractors. Existing law provides for a rebuttable presumption affecting the burden of proof that there has been no violation of this requirement of sufficient funding if specified conditions are met, including that the contract or agreement be in writing. The California Public Records Act requires state and local agencies to make public records available for inspection, subject to specified criteria, and with specified exceptions. This bill requires that upon the request of the Labor Commissioner, the person entering into the written agreement or contract to provide to the Labor Commissioner a copy of the provisions of the contract or agreement, and any other documentation, as provided.

Basically, do not hire an employee or contractor if you do not have the money to pay them.

AB 2103 – Employment Wage and Hour: Overtime.

Existing law, with certain exceptions, establishes 8 hours as a day’s work and a 40-hour workweek, and requires payment of prescribed overtime compensation for additional hours worked. Existing law provides that for the purpose of computing the overtime rate of compensation required to be paid to a nonexempt full-time salaried employee, the employee’s regular hourly rate shall be 1/40th of the employee’s weekly salary. This bill provides that payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee’s regular, non-overtime hours, notwithstanding any private agreement to the contrary. Because a violation of this provision would be a crime, the bill would impose a state-mandated local program.

AB 2298 – Insurance: Public Safety Employees: Accidents.

Existing law provides that no insurer shall, in issuing or renewing a private automobile insurance policy to a peace officer, member of the Department of the California Highway Patrol, or firefighter, with respect to his or her operation of a private motor vehicle, increase the premium on that policy for the reason that the insured or applicant for insurance has been involved in an accident while operating an authorized emergency vehicle, as defined, in the performance of his or her duty during the hours of his or her employment. This bill also provides that no insurer shall, in issuing or renewing a private automobile insurance policy to a peace officer, member of the Department of the California Highway Patrol, or firefighter, with respect to his or her operation of a private passenger motor vehicle, increase the premium on that policy for the reason that the insured or applicant for insurance has been involved in an accident while operating his or her private passenger motor vehicle in the performance of his or her duty at the request or direction of the employer.

AB 2674 – Employment Records: The Right to Inspect- Labor Code section 1198.5

Existing law requires that every employer, semimonthly or at the time of each payment of wages, furnish to each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing specified items. Existing law requires an employer to keep a copy of the statement and the record of deductions on file for at least 3 years at the place of employment or at a central location within the State of California. This bill provides that the term “copy,” for purposes of these provisions, includes a duplicate of the itemized statement provided to an employee or a computer-generated record that accurately shows all of the information that existing law requires to be included in the itemized statement. This bill requires an employer to maintain personnel records for a specified period of time and to provide a current or former employee, or his or her representative, an opportunity to inspect and receive a copy of those records within a specified period of time, except during the pendency of a lawsuit filed by the employee or former employer relating to a personnel matter. The bill would provide that an employer is not required to comply with more than 50 requests for a copy of the above-described records filed by a representative or representatives of employees in one calendar month. The bill would provide that the above provisions shall not apply with respect to an employee covered by a valid collective bargaining agreement if the agreement provides, among other things, for a procedure for inspection and copying of personnel records. In the event an employer violates these provisions, the bill would permit a current or former employee or the Labor Commissioner to recover a penalty of $750 from the employer, and would further permit a current or former employee to obtain injunctive relief and attorney’s fees.

Employers in California have long had a duty to permit employees the right to inspect, “within a reasonable time” after the request, their personnel records “relating to the employee’s performance or to any grievance concerning the employee.” This time for wage records was later determined to be 21 days of a written or oral request. These requests are sometimes made by current employers. However, more often than not they are made by a former employee. Effective January 1, 2013, AB 2674 makes the following changes to Labor Code § 1198.5:

1. The request can be made by an employee’s “representative,” which is a person authorized in writing by the employee. An employer need not respond to more than 50 requests by a “representative” in one calendar month. The language regarding “representative” includes Plaintiff’s or Workers Compensation Applicant’s attorney.

2. The request must be in writing. Employers also must provide a request form for employees’ use, but employees are not required to use the form as email should suffice.

3. Employers must provide a copy of personnel records or make them available for inspection within thirty (30) calendar days of a written request. The parties can agree to extend this deadline but only up to five (5) additional days.

4. Employers may redact the names of any nonsupervisory employees.

5. The requirements do not apply to (1) records relating to the investigation of a possible criminal offense; (2) letters of reference; (3) ratings, reports, or records that were obtained prior to the employee’s employment, prepared by identifiable examination committee members, or obtained in connection with a promotional examination.

6. Employers must maintain copies of personnel records for a minimum of three (3) years after termination.

7. For employees currently employed with the employer, inspection or copies must be provided at the place where the employee reports to work or at another mutually agreeable location. If the employee is required to go to a different location, no loss of compensation to the employee is permitted.

8. For employees no longer employed with the employer, inspection or copies must be provided at the location where the employer stores the records, unless the parties mutually agree in writing to a different location. Former employees may receive a copy by mail if they reimburse the employer for actual postal expenses. Employers are required to respond to only one request per year from each former employee, not successive, abusive requests.

9. For former employees who were terminated for a violation of law or policy involving harassment or workplace violence, employers may comply by (i) making the personnel records available to the former employee for inspection at a location other than the workplace that is within a reasonable driving distance of the former employee’s residence or (ii) providing a copy by mail.

10. If a current or former employee files a lawsuit that relates to a personnel matter, the right to inspect or copy files ceases during the pendency of the lawsuit.

11. The requirements do not apply to employees covered by a collective bargaining agreement that provides for (1) wages, hours of work, and working conditions; (2) a procedure for the inspection and copying of personnel records; (3) premium wage rates for all overtime hours worked; and (4) a regular rate of pay of not less than 30% more than the state minimum wage rate.

12. An employer that fails to comply is liable to the employee or the Labor Commissioner for a penalty of $750, plus injunctive relief and attorneys’ fees. An employer may assert impossibility of performance as an affirmative defense to an alleged violation.

In addition to the amendment of Labor Code § 1198.5, AB 2674 amends Labor Code § 226(a) to require that, when an employee requests copies of his or her itemized wage statements, the employer must produce a copy that is actually a duplicate of the original itemized statement or a computer-generated record that contains all of the information required by Labor Code Section 226(a).

What Should California Employers Do To Remain in Compliance?

California employers need to be mindful of the implications of this legislation. Have a point man to handle requests is a good start. Employers should also now create a request form for inspection or a copy of personnel records. To ensure compliance, employers should track the dates on which requests are made, number of requests per employee or representatives, and review document (including electronically stored information aka ESI) retention policies to make sure that personnel records are maintained for three (3) years after the employee’s termination. If there are any questions about this legislation, please contact Richard Quintilone II, Esq. at req@quintlaw.com or Quintilone & Associates at 949.458.9675.

SB 1255 – Employee Compensation: Itemized Statements – Labor Code section 226(e)

This bill is a significant amendment to Labor Code section 226(e), and now provides that an employee is deemed to suffer injury if the employer fails to provide a wage statement. The bill also provides that an employee is deemed to suffer injury for that penalty if the employer fails to provide accurate and complete information, as specified, and the employee cannot promptly and easily determine from the wage statement alone the amount of the gross or net wages paid to the employee during the pay period or other specified information, the deductions the employer made from the gross wages to determine the net wages paid to the employee during the pay period, the name and address of the employer or legal entity that secured the services of the employer, and the name of the employee and only the last 4 digits of his or her social security number or an employee identification number other than a social security number, as specified.

Existing law, Labor Code section 226(e), states that an employee suffering injury as a result of a knowing and intentional failure of the employer to provide timely and accurate wage statements is entitled to recover the greater of (i) all actual damages or (ii) a specified sum, not exceeding an aggregate penalty of $4,000, and is entitled to an award of costs and reasonable attorney’s fees.

SB 1255, signed into law, provides some clarification as to when an employee suffers “injury.” The law now clarifies that an employee is “deemed” to suffer injury if either of the following occur: (1) the employer fails to provide a wage statement; or (2) if the employer fails to provide accurate and complete information, and the employee cannot promptly and easily determine from the wage statement alone any of the following: (a) the amount of the gross or net wages paid to the employee during the pay period, (b) the deductions the employer made from the gross wages to determine net wages, (c) the name and address of the employer, or (d) the name of the employee and the last 4 digits of his or her social security number or an employee identification number.

On a positive note for employers, the new law provides a built-in defense for employers in the event of an isolated incident by now specifying that a “knowing and intentional failure” to provide an accurate wage statement does not include an isolated and unintentional payroll error due to a clerical or inadvertent mistake.

What should a California Company do in response to this law?

First, as should already be the rule of thumb – be sure to promptly provide accurate wage statements and paystubs. It is particularly important that if you use a third party payroll processor or even a third party vendor that you ensure that the payroll company is aware of the new law and in compliance. If there are any questions about this legislation, please contact Richard Quintilone II, Esq. at req@quintlaw.com and Jesse Bablove Esq. jmb@quintlaw.com or Quintilone & Associates at 949.458.9675.

Quintilone & Associates focuses in Class Actions, Employment Law, Personal Injury, and Business Litigation in Orange County, CA area.