California DLSE Issues Revised Wage Theft Law, FAQs provide support for ASA notice form

On Dec. 30, ASA issued an Issue Alert regarding California Labor Code section 2810.5(a), which requires that certain wage and other information be provided to each employee at the time of hire in the language the employer normally uses to communicate employment-related information. On Jan. 23, 2012, the California Division of Labor Standards Enforcement issued revised frequently asked questions (FAQs) regarding the law, which became effective Jan. 1.
The revised FAQs were issued in response to widespread criticism from employers and employer groups that DLSE had not provided adequate guidance for compliance. ASA was among the first to seek clarification regarding the law’s implementation, particularly with respect to the notice to be provided to temporary employees. In correspondence to DLSE, ASA pointed out that the model DLSE form is problematic for temporary staffing firms because it says a “work site employer” that uses another business, such as a “temporary services agency” or PEO, should provide the wage information “for the other business.” This suggests that temporary staffing firm clients would have to provide the notice to the staffing firm’s employees (and does not rule out the possibility that both the staffing firm and the client must provide the notice).
We further explained that although temporary staffing firm clients may be co-employers for some purposes, they do not hire the firm’s employeesthe staffing firm hires them. Moreover, clients are not the employer of record for the payment of wages to the staffing firm’s employees and would have no way of knowing a temporary job applicant’s potential rate or rates of pay. Nor do they provide workers’ compensation coverage to the staffing firm’s employees.
Accordingly, ASA developed a suggested notice form that reflects the practical realities of the temporary staffing business and addresses the statutory requirement that “employers must notify employees of the rate or rates of pay.” The form was developed in consultation with ASA California employment law counsel Richard Simmons of the law firm Sheppard Mullin in Los Angeles.
Although the revised FAQs do not specifically address temporary staffing, they provide support for use of the ASA notice form. For example, FAQ 16 states, “[a]n employer can modify the DLSE template or attach a sheet to the existing template with a clear reference to the attachment in the space for “Rate(s) of Pay.” The employer should specify multiple rates within a range the worker will be paid by the employer, including the basis for variation that informs the employee when certain rates within a range will apply (based upon stated criteria such as complexity/difficulty of project work).”
Therefore, staffing firms should be able to address the notice requirement by (i) providing applicants with the range of rates they can expect to earn for the type of assignments they are seeking and for which they are qualified; and (ii) providing a basis for such variation in ratesASA is seeking confirmation that a range of rates and general statement that exact wages will depend on the type, location, and length of temporary assignments, as well as the employee’s skill level, should suffice.
FAQ 17 provides further support for this approach, stating that, “[f]or a worker in a public works project, the applicable prevailing rate is dependent on the location and project work performed by the worker. Accordingly, the employer must include in the notice all rates applicable to such work that are known or can be determined at the time the notice is to be provided.” Because exact wage rates cannot be known at the time the form is provided, staffing firms should be able to specify the applicable range of rates.
Last, FAQ 19 suggests that staffing firms should list the applicable overtime rate using the lowest regular rate of pay the temporary employee can be expected to earn, and also state that this overtime rate is subject to upward adjustment depending upon the pay rate for each temporary assignment: “When providing information regarding applicable overtime rates, only rates known and determinable must be specifically provided to the employee . . . In such cases, it is sufficient that an employer provide the minimal overtime rate based upon a multiplier of 1 or double times the hourly rate and also indicate that such specified overtime rate is subject to upward adjustment when other specified forms of wages are earned during the applicable pay period.”
ASA continues to be in communication with DLSE and will provide additional information and any clarifications that become available.
Source:  American Staffing Association Issue Alert, 2/6/2012


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