In April, we addressed at length New York’s newly-enacted “Wage Theft Prevention Act.” Now, through Assembly Bill 469, California has adopted a nearly identical law, the California Wage Theft Prevention Act. Effective January 1, 2012, the law increases the penalties available under existing provisions of the California Labor Code, and adds a detailed notice requirement to employees, echoing the requirements recently imposed on employers by N.Y. Labor Law § 195. 

Codified as Cal. Labor Code § 2810.5, the California WTPA notice requirement requires private California employers of non-exempt employees not subject to certain collective bargaining agreements to provide each new hire with a notice containing:

(A) The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable.

(B) Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances.

(C) The regular payday designated by the employer in accordance with the requirements of this code.

(D) The name of the employer, including any “doing business as” names used by the employer.

(E) The physical address of the employer’s main office or principal place of business, and a mailing address, if different.

(F) The telephone number of the employer.

(G) The name, address, and telephone number of the employer’s workers’ compensation insurance carrier.

(H) Any other information the Labor Commissioner deems material and

Id. § 2810.5. (a)(1). Employers also must provide a notice to existing employees within seven days where there are any changes to the above information, unless the change is conveyed through a Cal. Labor Code § 226-compliant wage statement. 

One prominent question not addressed by the California statute is whether a mandatory or recommended notice form will issue under the new law’s notice requirement, which provides only that “The Labor Commissioner shall prepare a template that complies with the requirements [of the law].” Of course, interpretation of the notice requirement and all other provisions of the Act within the context of the California Labor Code and California law will become hotly-contested issues for California courts.

With New York Wage Theft Act compliance and issues already providing grounds for litigation, this new California law (along with California’s new written commission plan law and new legislation imposing significant damages for misclassification of individuals as independent contractors) adds yet another layer of compliance and exposure to the already difficult environment for California employers, who should strongly consider developing an action plan over the next 60-days to ensure compliance with the WTPA requirements.