Laborlawupdate: what employers and their advisers need to know for 2012.

• Author: Terman, Mark

To borrow Bob Dylan's phrase, "the times they are a changin" when it comes to labor law. While our state's budget and unemployment challenges top the agenda, changes in labor laws seem to be accelerating again due, in some measure, to same political party alignment of the slate's Assembly, Senate and the new governor.

The word "employer" appeared in 346 bills introduced in the 2010-11 legislative session. While many failed to pass, several significant bills made it through the process. California regulation regarding how workers are hired, paid and treated is on the rise, including:

* limits on employer use of employee credit reports;

* Increased risks to employers and their advisers for misclassifieation of employees as independent contractors; and

* Required written wage notices and contracts for employees paid commissions.

On a federal level, the National Labor Relations Board seems to be putting employers and employees on notice that its reach also extends to non-union workplaces. And it is taking a lead in enabling employees' use of social media to communicate about their employers, wages and workplace conditions. At the same time, the U.S. Department of Labor offers a free smartphone application (www.xafepa.org/DOLapp) that allows employees to keep their own time records, which guards against employers whose record keeping and payment may not be accurate.

An overview of significant new state and federal regulation affecting private employers follows.

Getting Proper Credit

AB 22 prohibits employers and prospective employers from using consumer credit reports for employment purposes unless the job position is one of authority over people, private information or money. Written notice must be given informing the person for whom a consumer credit report will be sought of the specific reason for obtaining the report. The new law applies to credit related information, such as credit history, score or record but not to verify employment or income.

The new law permits credit searches for a position that:

* Is "managerial";

* Involves regular access to "personal information" for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment;

* Is a named signatory on the employer's bank or credit card account, or is authorized to transfer money or enter into financial contracts on the employer's behalf;

* Involves access to confidential or proprietary informadon;

* Involves regular access to $10,000 or more of cash each workday;

* The law requires such information to be disclosed or obtained; or

* Is within the California Department of Justice or law enforcement.

"Managerial" position means properly classified as an exempt employee under the executive exemption under CA Industrial Welfare Commission Wage Order 4 (which is the Wage Order applicable to accounting firms). "Personal information" means bank or credit card account information, Social Security numbers or date of birth.

Get it in Writing

The Wage Theft Prevention Act of 2011 (AB 469) requires employers to provide a written notice to each employee at the time of hiring that specifies the rate and the basis (i.e., hourly, salary; commission or otherwise) of the employee's wages and related information. In addition, within seven calendar days of any changes to the information set forth in the notice, a new notice is needed--unless the changes are reflected on a timely wage statement or another writing, The Labor Commissioner is required to make available a form of compliant notice that can be used

Look for the notice form and FAQs at www.caicpa.org/WTPA2011.

This new law does not apply to employees properly classified as exempt from the payment of overtime, covered by most collective bargaining agreements or...