Laws and Regulations

Starting January 2006, new laws will be in effect in the following areas:

• Final wages may be paid by direct deposit to an employee's previously authorized account, provided that all other requirements for payment of final compensation are met.
• Hearing notices for Labor Commissioner wage claim proceedings may be served by substitute service.
• The period for filing discrimination claims by minors under the Fair Employment and Housing Act (FEHA) is extended to one year from the minor's eighteenth birthday.
• A collective bargaining agreement for employees in the motion picture or broadcast industry (covered under Wage Orders 11 or 12) that provides meal periods and a monetary remedy if a meal period required by the agreement is missed, supercedes the Labor Code and applicable Wage Orders.
• Starting June 1, 2005, a new federal law requires proper destruction of documents that contain personal information of the type obtained in credit reports.
• Starting June 10, 2005, new regulations were implemented for injured workers seeking independent medical review of diagnosis and treatment recommendations of physicians within a medical provider network.
• Starting June 10, 2005, new regulations established the permanent disability rating schedule under workers' compensation reform legislation passed in 2004.
• Starting August 1, 2005, new regulations implemented the Supplemental Job Displacement Voucher program for injured workers with permanent disabilities.
• Starting September 15, 2005, new regulations were established concerning care for injured workers by medical provider networks.
• Starting August 22, 2005, new regulations established safety guidelines for employees working outdoors who may be at risk for developing heat illness.

Significant court actions impose new responsibilities on employers:

• Failing to train managers involved in the hiring process as to when and how to make employment offers, or how to refrain from making unintended verbal offers or misstatements that can result in significant company liability.
• Rude or aggressive supervisory conduct directed at one sex more frequently than another constitutes sexual harassment, as does conduct favoring employees who engage in sexual conduct with a supervisor.
• An employer may lawfully discharge an employee for using federally prohibited drugs even if use is protected by state criminal law.
• A California court shifted to employers the burden of proving that an employee or applicant is not qualified to work because of a disability in a claim filed under FEHA.
• An employee who refuses to carry out an order he or she reasonably believes to be discriminatory is protected from retaliation even if he or she never advises her employer of that belief.
• The Age Discrimination in Employment Act (ADEA) permits lawsuits based solely on differential impact on older workers without the need to prove intent to discriminate.
• A California employer may deduct unearned commissions from future compensation advances without violating the California Labor Code.
• Corporate agents and managers acting within the scope of their agency are not personally liable under California law for their corporate employer's failure to pay its employees' wages.
• California law permits an employer to replace salary on an exempt employee's partial day off with time charged against the employee's vacation or PTO bank, provided the employee has such time available. However this appeals court decision conflicts with a position taken by the Division of Labor Standards Enforcement, which would allow employers to replace such an employee's salary during a partial from available sick leave but not from an accrued benefit that must be paid out at termination, such as vacation or PTO. Watch for possible legislative action to resolve this conflict.