Governor Brown faced a pile of new bills last fall and signed many of them into law, including several related to employment. Here we highlight some of the most important employment-related laws that could affect your organization's compensation practices. Unless otherwise noted, the new employment-related laws signed by Gov. Brown take effect January 1, 2013.

Retirement savings plans (S.B. 1234)
Known as the California Secure Choice Retirement Savings Trust Act, S.B. 1234 creates the California Secure Choice Retirement Savings Program. It requires eligible employers to offer a payroll deposit retirement savings arrangement so eligible employees can contribute a portion of their salary or wages to an account in the program. Eligible employees must participate unless they opt out.

Employee compensation—Itemized statements (S.B. 1255)
In 2011, a California Court of Appeals ruled that the absence of one or more of nine items listed in state Labor Code Section 226(a) from an employee’s wage statement didn’t constitute the “injury” required to impose the penalty in Section 226(e) on an employer.

Under the new law, an employee is considered to have suffered the requisite injury if the employer does not provide a wage statement. An employee has also suffered injury if the employer fails to provide accurate and complete information, and the employee can’t “promptly and easily determine” from the wage statement alone the:

• Amount of gross or net wages paid to the employee during the pay period or other specified information;
• Deductions the employer made from the gross wages to determine the net wages paid to the employee during the pay period;
• Name and address of the employer, or the legal entity that secured the employer’s services (such as a farm labor contractor); and
• Name of the employee and only the last 4 digits of the employee’s Social Security number or an employee identification number.

Employment records—Right to inspect (A.B. 2674)
Existing law provides that an employee has the right to inspect the employer’s personnel records pertaining to his or her performance or to any grievance concerning the employee.

The new law requires employers to maintain personnel records for at least 3 years after termination and to provide current and former employees (or their representatives) the opportunity to inspect and receive a copy of their records within 30 calendar days of receiving a request, except while a lawsuit relating to a personnel matter is pending.

These requirements don’t apply to employees covered by a valid collective bargaining agreement that provides a procedure for inspecting and copying personnel records.

Employment contract requirements (A.B. 2675)
This law clarifies that the requirements for written commission agreements aren’t triggered by: (1) short-term productivity bonuses such as those paid to retail clerks; (2) temporary variable incentive payments that increase but do not decrease payment under the written contract; or (3) bonus and profit-sharing plans in the absence of an offer by the employer to pay a fixed percentage of sales or profits as compensation for work to be performed.

Employment—Wages and hours—Overtime (A.B. 2103)
The law provides that payment of a fixed salary to a nonexempt employee is considered to provide compensation only for the employee’s regular, nonovertime hours, notwithstanding any private agreement to the contrary.

Wage garnishment—Exempt earnings (A.B. 1775)
Federal law limits the amount of earnings subject to garnishment to 25 percent of an individual’s weekly “disposable earnings” or the amount by which the individual’s disposable earnings for the week exceed 30 times the federal minimum hourly wage (currently $7.25 per hour) in effect at the time the earnings are payable.

The new state law increases the amount of wages exempt from garnishment to the lesser of 25 percent of the individual’s weekly disposable earnings or the amount by which the individual’s disposable earnings for the week exceed 40 times the state minimum hourly wage (currently $8 per hour) in effect at the time the earnings are payable, unless an exception applies.

For any pay period other than weekly, the law requires you to use certain multipliers to determine a maximum amount subject to garnishment that is proportional in effect to a calculation based on the amount by which the individual’s earnings for a workweek exceed 40 times the state minimum wage, except as specified.

The new law, which takes effect July 1, 2013, defines “disposable earnings” as the portion of an individual’s earnings that remains after deducting all amounts required to be withheld by law.