Ringing in the New Year: New California Laws Taking Effect in 2013

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As the new year rounds the corner, it is important to stay abreast of the ever-changing legal landscape in California. We’ve previously posted about some recent amendments to the California Labor Code here but here are a couple of others that take effect on January 1, 2013 that employers should keep on their radars.

Written Commission Contracts:  Labor Code Section 2751 (AB 1396)

Newly amended section 2751 of the Labor Code applies to employers who pay employees commissions for services rendered in California. Subject to a few exceptions, an employer who contracts with an employee to pay commissions must provide the employee with a signed written commission contract. The law also provides that the contract should state the “method by which the commissions shall be computed and paid,” and that employers should “obtain a signed receipt” of the contract from each employee.

The history of section 2751 explains why the California legislature chose to update the law. The original version of section 2751, which required employers to provide written commission contracts, applied only to out-of-state employers who had no fixed place of business in California. But a federal court found that section 2751’s distinction between out-of-state employers and California employers violated the Commerce Clause and Equal Protection Clause of the U.S. Constitution. Lett v. Paymentech, Inc., 81 F. Supp. 2d 992 (N.D. Cal. 1999). The California legislature updated section 2751 to address this concern.

The full text of the amended Labor Code section 2715 is available here.

Restrictions on Accessing Personal Social Media:  Labor Code Section 980 (AB 1844)

Following several other states (see previous blog post here), the California legislature passed AB 1844, which restricts employers from accessing employees’ or applicants’ personal social media accounts. Specifically, AB 1844 restricts employers from requesting that employees or applicants (1) provide their username or passwords in order to access their personal social media accounts, (2) access their personal social media in the employer’s presence or (3) divulge any personal social media. The law also prohibits employers from retaliating against employees or applicants who refuse to comply with such a request by an employer.

The upside for employers is that AB 1844 does not affect employers’ existing rights to request that an employee divulge personal social media “reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws. . . .” AB 1844 also permits employers to request that an employee disclose a username or password in order to access an employer-issued electronic device.

The full text of AB 1844 (to be chaptered as Labor Code section 980) is available here.