When I was first writing about new employment laws for 2012, the notice provisions of the Wage Theft Protection Act seemed pretty dull. After all, what’s so exciting about a requirement that employers give newly hired non-union, non-exempt employees written notice of their rate or rates of pay, the basis on which the wages are to be calculated (such as hourly, piece rate, commission, etc.), the applicable overtime rates, the designated regular pay day, and the name and mailing address of the employer.
But the legislation also said that the notice would need to include: "Any other information the Labor Commissioner deems material and necessary." That’s where the fun started. For one thing, unless you spent the time between Christmas and New Year’s Eve scrutinizing the DLSE’s website, you would have missed the Labor Commissioner’s FAQs and template posted a few days before the statute took effect. These added a number of new requirements, that I wrote about at the time (Beware of Traps in DLSE Template).
Now, on January 23, 2012 (three weeks after the effective date), the DLSE has expanded the FAQs. You can read about what’s new below the picture of how I picture a "wage thief" that the Wage Theft Protection Act presumably protects against.
Here are the highlights from the new FAQs:
- The act states that the notice must be given at the time of hire. This may be different from the first day of work. If an offer’s made, the employee accepts the offer, and the employee starts work at a later time, the notice is due "reasonably close in time" to when the employee accepts the offer. Who knows what the DLSE considers "reasonably close." But if there’s more than a few days between acceptance and starting work, you may need to get the notice to the employee before he or she starts working.
- In calculating overtime, employers divide the employee’s total compensation by the number of hours worked to arrive at a "regular rate" of pay. This is not the rate that needs to be disclosed on the notice, however. That’s a good thing for employers who can’t reliably foresee the future. You only need to disclose rates that can be determined at the time the notice is given.
- It’s not sufficient to simply say that the overtime rate is 1.5 or 2 times the regular rate of pay. You need to do the math.
- The form requires employers to disclose the "Regular Pay Day." It’s not sufficient to say twice a month or bi-weekly. But you don’t need to provide a specific date. You can, for example, say "the 1st and 15th of every month" or every other Thursday starting [date]."
- The term "rate or rates of pay" is defined broadly to include all forms of pay. For example, if it’s a specific amount per hour plus a commission, you need to disclose the amount per hour and how the commission is calculated. If it’s too complicated to fit in the space provided on the form, you can use attachments.
- According to the FAQs, how you check the box for whether there’s a written or oral contract "has no legal effect" on at-will employment status. I’d take more comfort in that if the DLSE had anything whatsoever to do with those determinations. I still encourage employers to modify the notice form and address that issue in the manner discussed here.
- If workers’ compensation policy information changes, such as a change in carrier or policy number, you don’t need to issue a new notice as long as you give employees written notice of the change in some other manner.
- There is also guidance on what disclosures are required on public works projects subject to prevailing wage rates and in construction projects, where the rate of pay depends on the complexity or difficulty of the job, and employees may work on different structures at different piece rates.
Look how complicated a notice of pay practices has become.