California Labor Commissioner Issues Another Revised Set of FAQs Concerning New Controversial Wage Notice Requirement
January 26, 2012
As of January 1, 2012, California Labor Code Section 2810.5 requires employers to provide a notice that contains very specific information, including wage rates and details regarding the employer's payday and workers' compensation carrier, to every new non-exempt employee in California. On January 23, 2012, the California Labor Commissioner's office issued yet another updated frequently asked questions (FAQ) document relating to the new wage notice requirement. The FAQs are a partial attempt to address industry questions and concerns expressed to the Division of Labor Standards Enforcement (DLSE) regarding the new requirement. The updated FAQs can be found at http://www.dir.ca.gov/dlse/FAQs-NoticeToEmployee.html.
While we cannot predict how many more versions of the FAQs the Labor Commissioner will issue, most observers believe that the most recent draft will be in place for some time. The DLSE Wage Notice form itself still raises unresolved issues, but the Labor Commissioner's FAQs provide some additional guidance to employers and should be examined closely.
On October 14, 2011,1 and January 10, 2012,2 Wilson Sonsini Goodrich & Rosati issued alerts providing background and information on the new wage notice requirement. The link to the FAQs in the January 10 alert is still the correct link, but employers should note that the actual FAQ document has been updated and now contains additional information. FAQ Nos. 16-25 are completely new, and information has been added to FAQ Nos. 2 and 12.
While the updated FAQs respond to some of the concerns raised by employers, the document does not address all of the compliance issues that have been raised. Some important items to note include the following:
- The updated FAQs do not clarify whether the Labor Commissioner found the additional requirements that appear in the Labor Commissioner's wage notice template but not in the statute to be "material and necessary." The statute sets forth the information that must be provided in the wage notice but indicates that the Labor Commissioner has the authority to require additional "material and necessary" information.
- Although the statute only requires that the wage notice be provided to new hires, updated FAQ No. 2 now states that it is a "best practice" for employers to provide the wage notice to current employees as well.
- FAQ No. 22 clarifies that instead of providing updated wage notices, employers can notify employees of changes to their workers' compensation policy information by posting the current policy information in the workers' compensation notice already required by the California Labor Code.
- The updated FAQs do not provide any additional guidance regarding the requirement that the employer identify "any other business or entity" that the company uses to "hire employees or administer wages or benefits."
Industry organizations are still urging the Labor Commissioner to further revise and clarify the wage notice template. In the interim, employers are advised to review the updated FAQs to the extent that doing so helps them comply with the wage notice requirement.
Wilson Sonsini Goodrich & Rosati is actively following these developments and participating in the industry dialogue. The firm is available to assist employers in addressing any of the issues raised by the wage notice requirement or the Labor Commissioner's template and FAQs. For more information, please contact a member of the firm's employment law practice.
1 The October 14, 2011, WSGR Alert titled "New Changes to California Employment Laws Signed by Governor Brown" can be found at http://www.wsgr.com/WSGR/Display.aspx?SectionName=publications/PDFSearch/wsgralert-california-employment-law-changes.htm.
2 The January 10, 2012, WSGR Alert titled "Wage Notice Requirement Effective January 1, 2012: Labor Commissioner Issues Controversial Template" can be found at http://www.wsgr.com/WSGR/Display.aspx?SectionName=publications/PDFSearch/wsgralert-wage-notice-requirement.htm.