California Laws on Compensation

Compensation Issues in California

By Beverly N. Dance, MBA, SPHR-CA, CCP, CEBS, I love my home state of California, but when it comes to pay and human resources issues, there is a reason California is the one and only of the 50 states that has its own separate certification exam above and beyond the national Professional Human Resources, PHR and Senior Professional Human Resources, SPHR. If you have employees in California or are considering bringing jobs to this state (PLEASE DO) here are a few new details you should know due to AB 469. (No need to mention to your employees that the legislation is called the Wage Theft Prevention Act of 2011.)

1. Non-Exempt Notice at the Time of Hire

Let’s start at the very moment you hire a non-exempt employee. You have a very specific written communications requirement you must give to him or her. That written notice must include the following:

• The rate of pay and the basis, whether hourly, salary, piece commission or otherwise, including any overtime rate.
• Allowances, if any, claimed as part of the minimum wage, including meal and lodging allowances.
• The regular designated pay day designated as required under the Labor Code.
• The name of the employer, including any “doing business as” names.
• The physical address of the employer’s main office or principal place of business and any mailing address, if different.
• The employer telephone number.

Learn More About Our Compensation Software


A template is available from the Labor Commissioner at the following link: Note not only is the template there in English, but you may also download it in Vietnamese, Chinese, Korean, Spanish, or Tagalog. It is time to rewrite those initial letters of welcome.

2. Retention of Wage Documentation

AB 469 also amends Labor Code section 226 to require that employers retain a copy of the itemized wage statement and a record of deductions for three years.

3. Penalties for Wage Violations

AB 469 adds more stringent penalties and requirements on employers with respect to wage violations. Employers must now pay restitution to any employee who has been paid a wage less than the minimum fixed by the Industrial Welfare Commission wage orders. AB 469 makes it a misdemeanor for any employer to willfully violate specified wage statutes or orders, or who willfully fails to pay wages due under a final court judgment or a final order issued by the Labor Commissioner. Additionally, this legislation gives added power to the Labor Commissioner to hold an administrative hearing to recover liquidated damages, which prior to 2012, could only be done in court.

Next month I’ll share more about those Industrial Welfare Commission wage orders. There are 17 of them and for a sneak peek, they are at

More from PayScale

Bigger and Better Raises 2012

The Pros and Cons of “Ownership Thinking”

Do Not Talk Pay with Your Competitors



Leave a Reply

Be the First to Comment!

Notify of