On Sunday, September 30, Governor Jerry Brown signed Assembly Bill 2674, Assembly Bill 1744, and Senate Bill 1255 into law, thereby amending California Labor Code sections 226, 1198.5, and 2810.5, and adding section 226.1 to the Labor Code. The changes go into effect on January 1, 2013.

Section 1198.5

The bills significantly changed Labor Code section 1198.5:

• Section 1198.5(a) currently allows “every employee” to inspect the personnel records maintained by the employer and pertaining to that employee. After the amendments, section 1198.5(a) will permit “current and former employees, or his or her representative,” to inspect and receive a copy of those personnel records. “Representatives” making Section 1198.5 requests must be authorized to do so in writing by the current or former employee.
• Section 1198.5(b) currently requires employers to make the contents of personnel records available to requesting employees “at reasonable intervals and at reasonable times”. The new Section 1198.5(b)(1) specifies that the personnel records must be made available no later than 30 calendar days from the date the employer receives a written request from a current or former employee (or his or her representative) unless the employee and employer agree to extend the deadline to 35 days. The employer must also provide a copy of the personnel records by this deadline.
• Under a new Section 1198.5(b)(2)(A), all requests to inspect or receive a copy of personnel records must now be in writing.

Under the current law, employers have the option of (1) keeping a copy of personnel records at the place the employee reports to work, (2) making the records available at the place the employee reports to work within a reasonable time of the request for inspection, or (3) permitting inspection at the location where the employer stores the records.

Under the amendments, employers must:

• Maintain a copy of each employee’s personnel records for no less than three years after termination.
• Make personnel records of current employees available for inspection (and provide a copy thereof) at the place where the employee reports to work, or another location if agreed upon.
• Make personnel records of former employees available for inspection (and provide a copy thereof) at the location is where the employer stores the records, unless the parties mutually agree in writing to a different location. (A requesting employee may receive the copy by mail if he or she reimburses the employer’s postal expenses.)
  • Note that if a former employee was terminated for a violation of law or employment-related policy involving harassment or workplace violence, the employer may instead (1) make the records available at a location other than the workplace that is within reasonable driving distance of the employee’s residence; or (2) provide a copy of the records by mail.

Access to personnel record information will be restricted in certain ways:

• A former employee may only make one Section 1198.5 request per year.
• An employer must only comply with up to fifty (50) Section 1198.5 requests per month.
• Employers may take reasonable steps to verify the identity of the current or former employee or his or her representative.
• Employers may designate the person to whom a request is made.
• Employers may redact names of any nonsupervisory employees contained in the records prior to inspection or copying.

Under new Section 1198.5(k) and (l), the penalty for noncompliance is $750. An employee may also seek injunctive relief and request attorney’s fees and costs in connection with any noncompliance action. A violation of this section is no longer a misdemeanor. Where a suit is pending for noncompliance with Section 1198.5, the right of the employee or representative to inspect or copy personnel records under this section ceases during the pendency thereof if the personnel records are relevant to the lawsuit.

Finally, employees subject to certain covered collective bargaining agreements (which must contain specific information, including wages, hours of work, and working conditions, and provide a procedure for the inspection and copying of personnel records) may not make requests pursuant to Section 1198.5.

Sections 226 and 226.1

In addition to the information that was previously required to be included on itemized wage statements, Section 226(a)(9) will also require that itemized wage statements issued by  temporary service employers must include the rate of pay and total hours worked for each temporary service assignment. (The new Section 226.1 specifies that security services companies that are licensed by the Department of Consumer Affairs and solely provide security services are not bound by this new Section 226(a)(9) requirement.)

After the amendments, an employer may satisfy the record retention requirements under Section 226(a) by maintaining a copy of the itemized statement provided to an employee or a computer-generated record that accurately shows all of the information required by that section.

Finally, Section 226(e) will further define what it means for an employee to suffer an injury under this section:

• An employee suffers injury if the employer fails to provide a wage statement; or
• An employee suffers injury if the employer fails to provide accurate and complete information as required by any one or more items listed in section 226(a)(1)-(9) andthe employee cannot “promptly and easily” ascertain one or more of the following without reference to other documents or information:
  • the amount of gross wages or net wages paid during the pay period;
  • the total number of hours worked if the employee is not salaried;
  • the number of piece-rate units earned and the piece rate;
  • deductions made;
  • the dates of the pay period;
  • all applicable hourly rates in effect during that pay period;
  • the name and address of the employer (as well as certain additional information if the employer is a farm labor contractor as defined in section 1682); or
  • the name of the employee and either the last four digits of his or her social security number or an employee identification number other than the social security number.

Section 2810.5

Section 2810.5 currently requires employers to provide a written notice describing rates of pay which included the name, address, and telephone number of the employer and the employer’s workers’ compensation insurance carrier. Where the employer providing the written notice is a temporary services employer, the amended section will also require such notice to include the name, physical address of the main office, mailing address of the main office (if different from the physical address), and the telephone number of the legal entity for whom an employee performs work.