BHGCS Blasco & Hawekotte General Counseling Services BHGCS Home Page Blasco and Hawekotte Los Angeles County Office location Blasco and Hawekotte Orange County Office location

Fall 2012

Achieving Success Together

At Blasco & Hawekotte General Counsel Services, we try to live by our motto "Achieving Success Together." We hope to accomplish this by attempting to provide you with information that benefits the businesses that we serve. In representing our clients, we recognize that while California presents many opportunities, it also presents unique risks that are different from other jurisdictions. The information that you need to manage your business is not a list of developments so comprehensive that the significant and the idiosyncratic blur together, but rather an understanding of the general changes in the law that affect all employers in California. However, every business is different, and therefore faces different challenges affecting their respective industries.

What we find assists our business clients at this time of year is an understanding of those issues that may need to be addressed before the end of the year. The following is a list of what we believe are the most important new issues to be addressed at the beginning of the new year.

Changes in the Law Affecting Employers that May Require Action

By Robert S. Hawekotte, Esq.

Review Your Commission Agreements

Labor Code §2751 was adopted in 2011, and becomes effective January 1, 2013. There are three key requirements:
(1) the commission agreement must be in writing;
(2) it must describe the method by which the commission will be calculated and paid; and,
(3) it must be signed and provided to the employee who must sign a receipt for the agreement.

Why this matters:
Unlike some issues where substantial compliance is sufficient, the employer can either produce the required signed agreement and signed receipt, or, it cannot. It is therefore important to verify that both the agreement and the receipt have been signed, and, that they are in the respective commissioned employee's personnel records.

Update Your Social Media Rules

Labor Code §980 was adopted this year, and now expressly bans California employers from asking for employee or applicant user names and passwords to their social media accounts. [I addressed the other key social media issue in our Summer Newsletter, which addressed making sure that your company owns any social media which is being used for marketing. For company owed social media, you have the right to the password and everything on the company owed social media account.]

Why this matters:
The current tendencies of the NLRB are to protect employee communications in non-company owed social media. This includes application to both union and non-union workforces.

Employees Are Entitled to Inspect and Copy Their Personnel Records

Labor Code §1198.5 requires employers to allow an employee (or his/her representative) to inspect and receive a copy of their personnel records relating to:
(1) the employee's performance; and,
(2) any grievance concerning the employee.

The law establishes a 30-day period in which employers must comply with an employee's request.

Why this matters:
The new rule imposes a $750 penalty for non-compliance per request. This can become costly if you response policy is defective.

Wage Statement and Data Collection Policies

Labor Code §226 contains a lengthy list of items that must be included in an employees pay stub. The new law clarifies these requirements.

Why this matters:
To eliminate technical violations, unlike prior law the new law allows substantial compliance by an employer, by considering whether the employer had reviewed and attempted to instituted policies that were in compliance with the new law. However, unlike the inspection of other personnel records which allows 30 days for an employer to comply with a request, this law requires employers to provide copies of or an opportunity to inspect wage-related records within 21 days of a written or oral request, and, provides for a presumed "Injury" if an employer fails to provide accurate wage information in a timely manner.

Overtime Payment Agreements

Labor Code §515 states that payment of a fixed salary to a nonexempt employee will be deemed to be payment only for the employee's regular, non-overtime hours, notwithstanding any private agreement or "explicit mutual wage agreement" to the contrary.

Why this matters:
A misclassification of an employee as exempt, when they are really nonexempt, could subject employers to significant unpaid overtime. This is in addition to accrued interest and penalties. This problem is usually compounded because when an employer misclassifies one employee; such misclassification usually applies to a number of employees.

Garnishment Exemption

The new garnishment exemption is $320 per week ($8 per hour times 40 hours per week.) Furthermore, wages above that threshold can be garnished up to 25% of the debtor's disposable income.

Why this matters:
The failure of an employer to follow the garnishment rules is a doubled edge sword. If the employer withholds to much, it is liable to the employee for any damage. If the employer withholds to little, it is liable to the judgment creditor for any damage.

Dress Code Changes

The law adds religious dress and grooming practices to the definition of protected religious beliefs and observances. It also includes wearing religious clothing and head and face coverings as protected activity.

Why this matters:
This is an amendment to California's Fair Employment and Housing
Act (FEHA) which provides for unlimited emotional distress and punitive damages. This
becomes problematic when religious observance is a potential source of conflict between
workers of different faiths. Though management may attempt to comply with this nondiscrimination
law, other employees may not feel the same on competing religious grounds.


Other New Laws Affecting Employers

By: Richard E. Blasco, Esq.

Insufficient Funds

Labor Code § 2810 expands the categories of vendors for whom a business is liable if the business "knows or should know that the contract . . . does not include funds sufficient to allow the contractor to comply with all applicable local, state and federal laws or regulations governing the labor or services to be provided." The list previously included construction, farm labor, garment manufacturers, and security guard providers. It now adds warehouse contractors to the list.

Why this matters:
Employers having vendor contracts for any of the listed services should make sure that their contracts satisfy the provisions of Labor Code § 2810. If an employer believes that they have a good vendor contract because the labor cost is substantially below that of other competitors, it may be too good to be true. The real safe-harbor is that this section does not apply to a person or entity "who executes a collective bargaining agreement covering workers employed under the contract or agreement."

Time Limit on Depositions Is Not Applicable to Employment Cases

Like the Federal Rules, California law now imposes a time limit on depositions to one seven-hour day, unless otherwise ordered by the court. However, there is an exception to this rule, which is that the time limit does not apply to "any case brought by an employee or applicant for employment against an employer for acts or omissions arising out of or relating to the employment relationship."

Why this matters:
The limitation on the length of depositions is significant for nonemployment cases, which hopefully preclude fishing expeditions. However, the new rule will not have an impact on employers when employment-related cases are brought in California.

© Blasco & Hawekotte General Counsel Services LLP 2012. All rights reserved.
No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the Blasco & Hawekotte General Counsel Services LLP.
This article is not legal advice and is not intended as legal advice. This article is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic addressed. The specific facts that apply to your matter may make the outcome different. This article is based on United States and California law. You should consult with an attorney familiar with the issues and the laws of your state. This article does not create any attorney client relationship.