At the start of this year, a number of new California employment laws took effect.
Orange County Employment Lawyer Houman Fakhimi is fully aware of all the new changes, and what they will mean for both employers and employees in the coming year. Among the changes:
AB 1396, which addresses a previous challenge to California Labor Code Section 2751. The measure was found unconstitutional because it only required out-of-state employers to have written commission contracts with commissioned employees in the state, which was found to have been a violation of the Commerce Clause. As of Jan. 1, 2013, ALL employers who hire commissioned employees must have contracts (we’ll talk more about this later in the blog).
AB 2103, which addresses the issue of employers’ designation of certain workers as “salaried,” which meant they were paid a certain fixed sum for both regular and overtime hours. Following a decision in Arechiga v. Dolores Press, employers can only pay that fixed rate for hourly work. These employees must still be paid overtime for any hours worked in excess of 40 in a regular work week.
AB 1844, which addresses social media information employers can demand of workers, and can be found in California Labor Code Section 980. Essentially, it bars employers from requesting – let alone requiring – social media usernames or passwords of employees or applicants if the purpose of such action is to access the individual’s personal account or have the individual access it while the employer looks on. Further, employers can’t discipline or retaliate against employees or applicants for refusing to provide this information. The only exception would be if it is related to an investigation of misconduct or some legal violations.
AB 2674 is an update to California Labor Code Sections 226 and 1198.5. It covers the maintenance of all payroll records for at least three years, which must be made available for employee inspection. The new law enacts updated compliance timelines and revised penalties.
These are just a few of the new changes.
We’d like to explore in a little more detail the changes to commissions under AB 1396. Employers and employees must educate themselves on what this measure is going to mean for them, and what to do if your company is not already in compliance.
Basically, AB 1396 is going to require that all employers who pay commissions to their employees (we’re looking primarily at the sales industry) to enter into a written commission contract with those employees. The content of these contracts must be very specific. It must include a detailed description of the method by which commissions are figured and paid. Employers also have to provide each commissioned employee with a signed copy of that contract, and in turn get a signed receipt from the worker acknowledging this has been done.
If a contract that spells out the commissions payments expires and a new one is not enacted (yet the employee continues to work for the firm), the terms of the expired contract will apply by default until a new one is drawn up or the employment is terminated.
We understand that both employers and employees may have questions about these new laws, and we stand ready to assist employers in implementing them, as well as the rights of employees when these measures haven’t been implemented.