Don't Forget New-Hire Notices
California employers with nonexempt employees – including any employees who are not exempt from overtime whether paid hourly, on a piece rate, or in any other manner – must remember to comply with California Labor Code section 2810.5. This law requires employers to provide non-exempt hires a written notice describing their basic wage arrangement, which may not change without further advance notice. The notice must provide additional specific information, such as workers compensation data, plus any other information deemed "material" by the state Labor Commissioner.
This form will always be among the first items provided to every new nonexempt employee.
California's Division of Labor Standards Enforcement (the "DLSE" or "the Labor Commissioner") maintains a template for employer use. Use this form with caution: it includes items specifically required by Section 2810.5 plus various other items such as business form (e.g., "corporation" or "sole proprietor") and co-employer information.
Note: The Labor Commissioner maintains that all information on its form must be included on any employer-drafted form. The law gives this right to the DLSE but, as has been common with that agency, it did not follow the state's Administrative Procedure Act (which allows employers and other interested parties to comment before new rules are adopted) prior to including additional information on its form. It remains open to question whether the additional requirements are legally binding (but most employers choose to include all requirements anyway).
According to the DLSE, a notice may be given “reasonably close in time” to the “inception of the employment relationship.” This appears to mean that the notice could be given slightly before an employee’s first workday (for example, with an offer letter), or even a few days after the employee begins working. Second, the agency notes (but then waffles a bit) that an employer may describe how overtime will be calculated when different overtime rates are possible. Thus, if an employee sometimes receives bonuses or piece-rates, the notice can explain how overtime is calculated and that the actual overtime rate might change from time to time. (This is the approach we took in our draft form, which can be viewed here.)
Employers should remain aware of any future requirements adopted by the Labor Commissioner and ensure that forms are provided whenever required. Failure to provide a form when require may support penalties under the California Labor Code Private Attorneys General Act (“PAGA”), one of the most pervasive and expensive types of claim brought against employers today.