On January 1, 2012, several news laws will go into effect imposing new responsibilities on employers.
When an employer hires a new employee, a verbal job offer and a handshake will no longer suffice. Labor Code § 2810.5 will require employers to send a written notice to all newly hired non-exempt employees setting forth very specific information about wages and about the employer. See the “Wage and Hour Corner” for the specifics.
Labor Code § 226.8 will impose penalties ranging from $5,000 to $25,000 on businesses that “willfully misclassify” individuals as independent contractors. A “willful misclassification” is defined as “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.” In addition to the fine, for one year the employer must prominently display, i.e., on the company website, a notice that it was found to have committed a serious violation of the law by willfully misclassifying employees.
With some limited exceptions, under Labor Code § 1024.5, employers will no longer be able to run credit checks on their employees, unless the employee holds a very specific position. These positions include a managerial position; a sworn peace officer; a position involving regular access to bank or credit card account information, Social Security numbers, or dates of birth unless it is for the purpose of the routine solicitation and processing of credit card applications in a retail establishment; a position in which the employee is a named signatory on the employer’s bank or credit card account, or is authorized to transfer money or enter into financial contracts on the employer’s behalf; a position involving regular access to $10,000 or more in cash during the workday, among others.
Beginning January 1, 2012, an employer must provide an employee who is out on pregnancy disability leave with the same health insurance coverage that it would provide to the employee while working. If the employee does not return to work after her leave expires, the employer may be able to recover from the employee the premium paid by the employer while the employee was out.
Labor Code section 2812 will provide that neither the state, nor a city, county, or special district, can require an employer to use the E-Verify Program unless required by federal law, or as a condition of receiving federal funds. The E-Verify Program is a system that allows employers to electronically verify workers’ employment authorization with the federal government.
For employers in the area of agriculture, Labor Code section 226 will provide that farm labor contractors must disclose on the itemized wage statement the name and address of the legal entity that secured the employer’s services.
Finally, a law that goes into effect January 1, 2013 affects employers that pay employees on a commission basis. Labor Code section 2751 will provide that an employer that pays an employee on a commission basis must put the commission agreement in writing setting forth the method by which the commissions are to be computed and paid. The employer must give the employee a signed copy of the contract, and must obtain a signed receipt for the contract from the employee.