A Legion of New Employment Laws Ring in the New Year

Employers seeking to successfully navigate their way through 2012 are in for some significant changes in the employment law landscape.  Compelled by these uncertain economic times, the California Legislature has enacted a myriad of laws ensuring the payment of wages, insulating most employment applicants from the impact of a negative credit score, and imposing stiff penalties on employers that willfully misclassify their employees as independent contractors.  The following is a brief summary of the changes you can expect for 2012:

Important Amendments to the Fair Employment and Housing Act

  • FEHA has been amended to include “genetic information” as a new protected category.  Also, the Legislature has changed the definition of “sex” to include “gender identity” and “gender expression.” Employers must learn what these terms mean and how these changes will affect the way they write and implement their employment policies.
  • Employers with at least 5 employees must now maintain health insurance coverage for employees on Pregnancy Disability Leave. Companies need to know how this will affect their bottom line, and how this amendment affects health care coverage for those employers covered by the Family Medical Leave Act and the California Family Rights Act.

The Wage Theft Prevention Act of 2012

  • The Labor Code has been amended to require employers to provide written notice to individuals at the time of hire about: their rates of pay, how they are paid (i.e.,  salary, commission, piece rate, etc.), assigned pay days, the company’s workers’ compensation insurance carrier, its fictitious business names and contact information.
  • Employers are now subject to new retention requirements for payroll records.
  • Employers must now put employee commission agreements in writing, and ensure these contracts contain specific terms.

Changes to the California Consumers Reporting Agencies Act Limiting Employer Access to Credit Reports

  • The California Consumers Reporting Agencies Act has been amended to limit an employer’s access to an applicant’s or employee’s credit report unless he or she meets certain criteria.  Companies need to determine if they are legally entitled to this information and the steps they must take to legally acquire it.

Cracks Downs on Willful Employee Misclassification

  • Employers must know when it is permissible to classify an individual as an independent contractor, and the factors that the state agencies enforcing these laws take into consideration in making that determination.
  • Employers are now subject to new penalties for willful misclassification, and third parties can also be held liable for advising a company to take this course of action.

Because of the numerous changes in California employment law for the upcoming year, employers are advised to consult with experienced employment counsel before revising or implementing their employment policies for the New Year.

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