The California Legislature was again busy in 2012 thinking of new ways to make it more difficult to do business in the Golden State. Here’s our annual overview of key changes to employment laws in California (see last year’s summary here). Companies with operations in California should ring in the new year by ensuring their familiarity and compliance with these laws, which took effect on January 1, 2013.

  • Computing Regular Rate of Pay for Nonexempt Salaried Employees (AB 2103)AB 2103 amends the California Labor Code to provide that for the purpose of computing the overtime rate of compensation required to be paid to a salaried, nonexempt employee, the employee’s regular hourly rate shall be 1/40th of the employee’s weekly salary, regardless of any agreement between the employer and the employee to the contrary. The Legislature made clear in the bill that its intent is to overturn Arechiga v. Dolores Press (2011) 192 Cal.App.4th 567, in which a California Court of Appeal upheld a written wage agreement that predetermined a nonexempt employee’s overtime compensation and included it as part of the employee’s salary. AB 2103 means that the method of calculating overtime for salaried, nonexempt employees cannot be modified by any agreement between the employer and the employee.
  •  Wage Statement Injuries (SB 1255): California Labor Code Section 226 requires employers to provide employees with itemized wage statements containing nine specific pieces of information. In the event of a violation of this requirement, an employee who suffers an “injury” can recover up to $4,000 in statutory penalties, as well as costs and attorney’s fees. SB 1255 provides that an employee “suffers injury” if he/she does not receive a wage statement at all, or is provided an inaccurate or incomplete wage statement and cannot “promptly and easily” determine from the wage statement alone one or more of the following: (1) The gross or net wages paid to the employee during the pay period, (2) which deductions an employer made to determine net wages, (3) the name and address of the employer, and if the employer is a farm labor contractor, the name and address of the legal entity that secured the services of the employer during the pay period, (4) the name of the employee and only the last four digits of the employee’s social security number or the employee’s identification number. SB 1255 may result in an increase in wage statement lawsuits filed by employees who are paid on a piece rate or a commission basis, because employers often fail to include information on paycheck stubs for such employees that would enable them to “promptly and easily” understand the basis in which their wages are calculated.
  • Inspection of Personnel Files (AB 2674): This law requires employers to maintain personnel files for at least three years after the employment relationship ends. It also provides a current or former employee, or his/her representative, an opportunity to inspect and receive a copy of personnel records within 30 days, except during the pendency of a lawsuit filed by the employee or former employee relating to a personnel matter. The law gives employers token protection from harassing or duplicative requests by providing that employers do not need to respond to more than 50 requests per month from employee “representatives.” AB 2674 also amends the Labor Code to require that when an employee requests copies of his/her wage statements (under existing law, an employer must comply with such a request within 21 days), 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 on wage statements in California.
  • Religious Dress and Grooming Accommodation (AB 1964)AB 1964 amends the California Fair Employment and Housing Act (FEHA) to include a religious dress or religious grooming practice as a belief or observance covered by the protections against religious discrimination. FEHA already required accommodation of an employee’s religious expression, except in cases of undue hardship. The law now requires employers to accommodate religious dress, which includes the wearing or carrying of religious clothing, head or face covering, jewelry, artifacts, and any other item that is part of the religious observance, as well as religious grooming, which broadly includes all forms of head, facial or body hair related to a religious observance or creed. The new law specifies that an accommodation may not include segregating an employee from the public or other employees.
  • Breastfeeding and Related Medical Conditions (AB 2386): Under FEHA, it has long been unlawful for employers to discriminate on the basis of gender. The term “gender,” which previously included pregnancy, childbirth, and related medical conditions, now includes breastfeeding and related medical conditions.
  • Social Media Passwords (AB 1844): This legislation prohibits an employer from requiring or requesting that an employee or job applicant disclose a user name or password for the purpose of accessing personal social media. It also prohibits requiring or requesting that an employee or applicant access personal social media in the presence of the employer, or divulge any personal social media. The law prohibits retaliation against an employee or applicant for not complying with an employer’s request for such information. There are a couple of exceptions to this new law:  An employer may request that an employee divulge personal social media that the employer reasonably believes is relevant to an investigation of allegations of employee misconduct or employee violation of law, provided that the social media is used solely for purposes of that investigation. Additionally, the law does not preclude an employer from requiring or requesting that an employee disclose a user name, password or other method for the purpose of accessing an employer‑issued electronic device.
  • Written Commission Agreements: As we have highlighted in previous posts, all contracts for employment involving commissions as a method of payment must now be in writing and must set forth a method by which the commissions are required to be computed and paid. The employee must be given a signed copy, and the employer must obtain a signed receipt from the employee.