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California HR: Employee Terms of Employment should be presented in a Written Notice

California Governor Jerry Brown recently signed bills enacting several new employment statutes that will affect the way employers conduct business. One Statue in particular, Section 2810.5, outlines an employer’s responsibility to communicate an employee’s terms of employment in a written notice. Effective January 1, 2012, employers should present the written notice to non-exempt employees at the time of hire and communicate the content in a manner that is deemed understandable by a “reasonable” person.

The written notice should include:

  • The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable.
  • Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances.
  • The regular payday designated by the employer.
  • The employer’s name, including any “doing business as” names used by the employer.
  • The physical address of the employer’s main office or principal place of business, and a mailing address, if different.
  • The employer’s telephone number.
  • The name, address, and telephone number of the employer’s workers’ compensation insurance carrier.
  • Any other information the Labor Commissioner deems material and necessary.

Employers should notify employees in writing, within seven calendar days, if changes transpire to the information above through a written amendment, new written notice or modified paycheck stub containing the new information. Section 2810.5 does not apply to overtime exempt employees or public sector employees. Additionally, it dose not apply to employees covered by a valid collective bargaining agreement if their regular rate of pay exceeds California’s minimum wage by at least 30% and if their overtime compensation is paid at the proper premium wage rate.

The Labor Commissioner will publish a template sample of the notice in the following months for employers to customize. Employers are encouraged to use the template to ensure compliance.

What do you think about this Statue?