California Employment Laws: Governor Brown Goes to Town

“California Governor Jerry Brown finally addressed the bulk of the labor and employment-related bills passed by the California state legislature during the first half of the 2011-2012 session … [relating] to various and diverse areas such as hiring practices, required leaves of absence, health insurance, and worker classification.” (From Governor Brown Signs Significant New Employment Laws by Sheppard Mullin Richter & Hampton LLP)

We reported earlier this week on California SB 459, recently signed into law by Governor Brown, which imposes civil penalties en employers that knowingly misclassify workers. But SB 459 is just one of the many labor and employment-related laws recently enacted in the state:

“Over the past few weeks Governor Jerry Brown signed several employment-related bills – some of which require employers of all sizes to update their policies and practices … [and] most of which will become effective January 1, 2012.” (From California Employment Laws Taking Effect In 2012 by Loeb & Loeb LLP)

For your reference, a roundup of updates on key new California labor and employment laws, from lawyers and law firms on JD Supra:

On the Use of Credit Reports to Evaluate Job Candidates and Employees…

“AB 22 strictly prohibits employers and prospective employers from using a consumer credit report for employment purposes, unless the position of the person for whom the report is sought meets [certain] criteria…” (From California Restricts Use of Consumer Credit Reports for Employment Purposes by Morrison & Foerster LLP)

“In the event an employer fails to comply with the new law, applicants or employees may bring individual suits for damages, including court costs, loss of wages, attorneys’ fees, and when applicable, pain and suffering. In addition, courts can award additional damages up to $5,000 for each violation and any other relief it deems necessary.” (From Credit Checks In California Now Tougher Than Ever by Fisher & Phillips LLP)

“We note, however, that AB 22 only applies to ‘consumer credit reports.’ It does not apply to a report that verifies income or employment as long as that report does not include credit-related information, such as a person’s credit history, credit score or credit record. AB 22 also does not apply to ‘investigative consumer reports’ which employers may obtain in performing criminal history or other background checks.” (From Significant Changes to California Employment Law Effective January 1, 2012 by Bryan Cave)

On Providing Documentation to New Hires…

The new law “requires an employer to provide each non-exempt employee at the time of hire with a written notice ‘in the language the employer normally uses to communicate employment-related information’” that includes information on rate of pay, employee allowances, paydays, and employer contact information, as well as “any other information the Labor Commissioner deems material and necessary.” (From Legal Alert: A New Document Required for California “New Hires” by Ford & Harrison LLP)

On the Payment of Commission Wages…

“… there is no indication that there is a widespread problem of wage disputes resulting from the lack of written commission-based employment contracts in California. Therefore, the manner in which this bill remedies the existing law’s constitutional infirmity creates potentially unnecessary new burdens on all businesses employing persons in California.” (From Governor Signs Bill Imposing New Requirements On In-State And Out-of-State Employers Who Pay Commissions by Allen Matkins Leck Gamble Mallory & Natsis LLP)

Related Commentary and Analysis


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