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.

The DLSE form is available here, and Frequently Asked Questions are published here.

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.

2023 Employment Law Update

Our initial 2023 Employment Law Update is on January 10, 2023, in Napa, California. The presentation will cover new laws from the past year as well as recent court cases and administrative developments. Some topics include:

• Minimum wage and other wage-payment changes

• Pay data reporting and pay scale disclosure

• Leaves of absence and sick pay use

• Reproductive health decisionmaking

• Emergency condition protection

• COVID-19 exposure notification, workplace standards, Cal-OSHA regulation

• Employee and consumer privacy issues

• Specific industry regulation such as hotel, agricultural, and call-center employers

• State and federal agency changes

• Federal NLRB policies affecting non-union employers

• Recent caselaw affecting rounding, penalties, arbitration agreements and confidentiality

View a copy of the 2023 update via this link.

Cannabis: Now an Equal Employment Opportunity Issue in California

Much has already been made about California’s AB 2188, which prohibits discrimination against employees for the use of cannabis off the job and away from the workplace. The bill amends the state’s Fair Employment and Housing Act (“FEHA”), (controversially) elevating it to the same EEO status as gender, race, religion, sexual orientation, and other categories of (arguably) greater social significance.

The law contains various exceptions such as construction trade workers, employees subject to testing under other state or federal regulations (such as DOT-regulated truck drivers), and workplaces with mandated Drug Free Workplace programs. It also applies only to employers with five or more employees otherwise covered by the FEHA.

It will create difficult issues for employers, who may test for the presence of cannabis but may not rely on “nonpsychoactive cannabis metabolites.” Employers will need to use potentially more invasive “alternative tests” such as “impairment tests, which measure an individual employee against their own baseline performance and tests that identify the presence of THC in an individual’s bodily fluids.”

It is an open question whether the law will ever take effect. First, the law is not effective until January 1, 2024, leaving plenty of time for courts and the legislature to consider its validity.

Second, though mirroring state-law protection of lawful off-duty off-premises conduct, it violates state-court precedent protecting employers from requirements to accommodate cannabis. This issue was addressed more than a decade ago, when cannabis proponents argued that medical use of marijuana was protected by existing FEHA requirements. Faced with this question, the state Supreme Court held that neither the FEHA nor the state’s medical marijuana laws require employers to accommodate cannabis use because, regardless of its state-law status, the substance is unlawful under federal law. The case, Ross v. RagingWire Telecommunications, Inc., can be viewed online here.

Cannabis remains unlawful under federal law, though the bill’s proponents likely believe that more progressive administrations will argue against its preemption. This creates an interesting issue for the courts, who may need to interpret the interplay between state and federal law without clear guidance.

AB 2188 can be viewed on the California Legislative Information site by clicking here.