January 4, 2012

The California Wage Theft Prevention Act: Effective as of January 1, 2012

Holland & Knight Alert
Phillip M. Schreiber

The California Wage Theft Prevention Act (AB 469) went into effect on January 1, 2012. The new legislation criminalizes willful violations for non-payment of wages after a court judgment or final administrative order; requires restitution to the employee in addition to a civil penalty for failure to pay minimum wages; requires that specified information be provided to employees at the time of hire and in wage claim proceedings, and that employers update changes within specified periods; and extends the time period for obtaining judgments on final orders for collection of penalties by the Division of Labor Standards Enforcement (DLSE).

It also enhances bond requirements for employers with convictions or court judgments for non-payment of wages including requiring an accounting of assets upon request by DLSE or court order; establishes that penalties under the Labor Code for failure to comply with wage-related statutes are minimum penalties; and allows employees to recover attorneys’ fees and costs incurred to enforce a judgment for unpaid wages.

The new law applies to non-California employers with California employees.


Section 2810.5


Specifically, new Section 2810.5 of the Labor Code requires that employers provide notice to employees of their rate(s) of pay, designated pay day, the employer’s intent to claim allowances (meal or lodging allowances) as part of the minimum wage, and the basis of wage payment (whether paying by hour, shift, day, week, piece, etc.), including any applicable rates for overtime.

The law requires that the notice contain the employer’s “doing business as” names, and that it be provided at the time of hiring and within seven days of a change if the change is not listed on the employee’s pay stub for the following pay period. Contact information for the employer’s workers’ compensation carrier also must be provided.

The notice must be in the language the employer normally uses to communicate employment-related information to the employee. The Labor Commissioner has developed an English-language template and is in the process of developing translations into other languages.

Who Is Covered by the Notice?

All private sector employers in California are covered by the notice requirements unless there is a specified exception. The notice should be given to all new employees at the time of hire. It is the position of the California Division of Labor Standards Enforcement that the notice should be given to all current employees.

Importantly, the notice is not required for an employee who is exempt from the payment of overtime wages by California statute or the wage orders of the Industrial Welfare Commission. Employees who are subject to a collective bargaining agreement that articulates their wage rates also are not required to receive a notice.

Notes for Employers

Employers are not required to use the Labor Commissioner’s template. They can develop their own notices as long as they contain all the information required by the law, including all the information requested on DLSE’s template. Employers should keep a record of the notices provided to their employees. The notice may be provided to new hires with other new-hire materials, but the notice should be on a separate form. The notice also may be provided electronically, provided the employer has a means of tracking delivery of the notice to the new hire.

Related Insights