A couple of important changes to the California Labor Code went into effect on January 1, 2012.

First, the Wage Theft Protection Act requires employers to provide to all new, non-exempt employees with written notice regarding how, when, and what the employees shall be paid.  Required information includes:

• The regular and overtime pay rate;
• Basis of compensation (hourly, salary, commission, etc.);
• Pay schedule;
• Allowances (if any) for travel, meals, etc.;
• The employers’ name (including all d/b/a’s), physical and mailing address, telephone number; and
• Workers compensation information, including contact information for the employer’s insurance carrier.

The California Labor Commission has provided a notice template that includes all of the information and language required by the law. A copy of the template is available here.

Employers must notify their employees of any changes to the information set forth in the notice within seven calendar days after the time of the changes, unless the changes are reflected on the wage statements that accompany the employee’s pay stub.

This Notice is NOT required for: (a) current employees; (b) employees who are exempt from the payment of overtime wages; (c) state employees; or (d) employees covered by a collective bargaining agreement that expressly provides for wages, hours of work and working conditions, and provides for premium wage rates for all overtime worked.

Second, Labor Code section 226.8 and 2753 increase the penalties against employers who “willfully misclassify” employees as independent contractors. Penalties for misclassification are now between $5,000 and $15,000, increasing up to $10,000 and $25,000 if determined to be part of a “pattern or practice” of misclassifications. Also, an offending employer must prominently display on its web site or publicly-accessible area a notice stating that the employer “has committed a serious violation of the law by engaging in the willful misclassification of employees” and directing potentially-affected employees/contractors to the California Labor and Workforce Development Agency.

These penalties also apply to any person (excluding employees and licensed and practicing attorneys) who knowingly advises an employer to misclassify an employee as an independent contractor.