As I noted in my previous blog, there are many new law changes in California. Below, I am listing four additional laws that all business owners should acknowledge. Please note that these laws apply to all size business, small and big and have taken effect on January 1, 2012.
- Labor Code added Section 226.8 to its collection. This section prevents the misclassification of individuals as Independent Contractors (1099-Subs). If an employer violates this Labor Code, a fine of $5,000 will be imposed on the business. If the Labor & Workforce Development Agency (LWDA) identifies that there is a pattern of this violation, the fines will increase dramatically to no less than 10,000 per violation. Also, the business in which the court ruled it has been at fault of violating these laws will be required to publicly, on the business website, announce that they have violated this law.
- Under Code section 12945, employers can no longer refuse to maintain and pay the health coverage under a group health plan for an eligible female employee who takes pregnancy disability leave for the duration of the leave, which is four months. If the employee, by choice and without any employer pressure, decides that they do not want to go back to work after the four month leave, the employer can recover the premium from the employee. This will not apply for female employees who are required to leave due to pregnancy disability leave or any other circumstance beyond the control of the employee.
- Employers can no longer enter into an employment contract involving commission pay base. According to Labor Code Section 2751, all employment contracts involving commissions as a method of payment need to be in WRITING, with a detailed description of how the commissions will be calculated and paid.
- Labor Code Section 2810.5 applies to all new hires at the time of hiring; an employer is required to provide all the following information:
- The compensation rate and basis, whether paid by the hour, shift, day, week, salary, piece, commission, etc. Also any rates for overtime or double time.
- Allowances, if any, claimed as part of the minimum wage, including meals or lodging allowances.
- The legal name of the employer, including any legal business name used by the employer.
- A physical address of the employer’s main office or principal place of business, and a mailing address.
- Employer’s office telephone number or any telephone number where the employer can be reached at.
- The Name, address, and telephone number, of the employer’s workers’ compensation insurance carrier.
Any changes to these codes will require the employer to notify the employee, in writing, no longer than seven calendar days after the changes come into effect. Also, any information needs to be provided to the employee by the employer in the language that the employer uses to communicate to the employee any employment related information.Written by: Adriat Markos TGG Accounting
Work Cited Department of the Treasury. “2011 Instruction for Form 1099-MISC.” Internal Revenue Service (2011). 21 Jan. 2012. http://www.irs.gov/pub/irs-pdf/i1099msc.pdf Michelle La Mar, Jon G. Daryanani, and Erin Smith. “California employment laws taking effect in 2012.” Association of Corporate Counsel (2011). 21 Jan. 2012. http://www.lexology.com/library/detail.aspx?g=f22226e6-63d3-4022-9fac-049f4d468f16