The new year will bring along a variety of new obligations for California employers. Although some of the new laws clarify existing law and provide helpful guidance, several impose additional requirements. This update highlights key provisions of some of the more notable changes taking effect in 2017. Links to the statutes and/or prior updates regarding the same are provided where applicable.
Continue Reading California Employers – New Year, New Rules in 2017
California Legislative Update
Governor Brown Signs Bill Clarifying Wage Statement Requirements for Exempt Employees
On July 22, 2015, Governor Brown signed AB 2535 that clarifies which employees for whom an employer must track hours worked and record those hours on their wage statements. The bill will become effective January 1, 2017.
Prior to this amendment, Labor Code section 226 required that an employee’s paystub include hours worked for all employees except individuals who are paid “solely” by salary and are “exempt from payment of overtime” under Labor Code section 515(a) or the governing wage order. As written, this seemed to require hours on the paystub for exempt outside sales people and executives who are not paid solely by salary but receive bonuses and stock options even though these employees do not record hours worked and hours worked is not a relevant figure when calculating their wages. In fact, in Garnett v. ADT, LLC, 139 F. Supp. 3d 1121 (2015), the district court held that exemption in Labor Code section 226 did not apply to exempt outside salespersons since they were paid solely by commission (and not salary) and, therefore, had to have their total hours worked included on their paystubs. The Garnett court noted in its decision that, “[w]hile the usefulness of reporting total hours worked for employees paid solely by commission is not entirely clear, it is nonetheless required by Labor Code Section 226 (a).”…