I am always reading about how employment law changes, and it is hard to keep up with all the requirements. What new laws should I know about for 2007?


There are some significant legislative developments and court decisions that employers should be aware of as they begin the new year. In this article, and next week’s article, we will highlight some of these changes. The highlights below do not include all changes in the law that took place in 2006. Unless noted otherwise, these new laws will take effect January 1, 2007.

Minimum Wage Increase –
The Industrial Welfare Commission also increased the allowable meal and housing amounts that may be credited against the minimum wage. Due to these changes, in 2007 employers will need to display new posters reflecting the minimum wage increase, as well as new IWC wage orders. These forms are available on the IWC web site,

Time Off for Exempt Employees –
Deductions from an exempt employee’s accrued vacation or paid time off bank for partial day absences of 4 hours or more due to reasons other than sickness or disability are now allowed. An employer may make these deductions without the risk of converting an otherwise exempt employee into a non-exempt one.

Paycheck Stubs –
Effective January 1, 2007, employers may show overtime hours worked in one pay period on the wage statement for the next regular pay period. The overtime hours must be itemized on the pay stub as corrections, so the pay stub now must have a column for corrections. The corrections must state the dates of the pay period covered, so employees can see their overtime hours and be paid for the hours in the same pay period.

Meal and Rest Periods –
Proposed meal and rest break regulations were not adopted in 2007. Therefore, as before, employers must ensure that their employees do not work for a period of more than 5 hours without a 30-minute meal period during which the employee is relieved of all duties. Employers must also permit employees to take 10-minute rest periods for every four hours of work.

Final Pay –
Employees must receive all earned and unpaid wages at the time of “discharge.” A 2006 California Supreme Court decision concluded that a discharge occurs for purposes of the “immediate payment” law not only when the employer fires an employee, but also when the employer releases an employee upon the employee’s completion of the particular job assignment or time duration for which he or she was hired.

Employee’s Child Support Obligations –
A monetary penalty will now be imposed on an employer that knowingly helps an employee or contractor with child support obligations evade meeting those obligations. Violations of this statute include hiring or employing a child support obligor without timely reporting to the Employment Development Department (“EDD”) New Employee Registry; retaining an independent contractor who is a child support obligor and not timely reporting such engagement to the EDD; and paying wages or other forms of compensation that are not reported to the EDD.

Expansion of No Smoking Law –
Smoking is not allowed in an enclosed space at a place of employment. An “enclosed space” includes lobbies, lounges, waiting areas, elevators, stairwells, and restrooms that are a structural part of the building. Employers must post “no smoking” signs at each entrance to the building. Violation of this statute is punishable by a fine not to exceed $100 for the first violation, $200 for the second within one year, and $500 for the third and each subsequent violation within one year.

Next week, we will continue our summary of some of the new laws for 2007.
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