As an employer, there is perhaps nothing more stressful than facing potential litigation. Regardless of whether the conflict relates to an issue with a patient, an employee, or even a regulatory agency, and regardless of whether you are truly at fault, the bottom line is that the best approach to litigation is to avoid it in the first place.
Fortunately, a new law in California is helping employers to do just that when it comes to correcting employee wage statements. Assembly Bill 1506 (AB 1506) was signed by Governor Jerry Brown on October 2, 2015 and took effect immediately. The law is an amendment to the California Private Attorneys General Act (PAGA), and it provides employers with 33 days in which to "cure" certain commonly litigated defects in employee wage statements. This amendment provides employers with the opportunity to be proactive and to avoid litigation by correcting erroneous employee wage statements quickly, an action which benefits employers and employees alike. Note, however, that the cure provisions are limited in scope, applying only to two sections of the California Labor Code: (1) Section 226(a)(6), a provision which requires employers to specify the inclusive dates of the period for which the employee is paid; and (2) Section 226(a)(8), requiring employers to state the name and address of the employer’s "legal entity.”
Narrow or not, the change is a big one for employers: while the PAGA has always contained cure provisions, prior to the October 2, 2015 amendment, the cure provisions of PAGA did not extend to wage statement defects. Under the new law, an employee is not permitted to bring a civil action against the employer under the PAGA for failing to provide its employees with wage statements which list the inclusive dates of the pay period and the name and address of the legal entity that is the employer without first providing the employer with the opportunity to provide corrected statements.
Employers have 33 days from the postmark date of the notice received from the employee alleging the impropriety of his/her wage statements to remedy the statement issue. And in order to prevent the employee from bringing a civil action, the employer must provide the complaining employee with an itemized wage statement which is fully for the three-year period prior to the date of the employee's written notice. Once the employer has provided these compliant statements to the employee, the employer must give written notice by certified mail to the employee at issue (or his/her representative), as well as to the California Labor & Workforce Development Agency (LWDA). That notice must state that the alleged violation has been cured and describe the actions taken by the employer to achieve compliance. And while these steps may seem onerous, the payoff is well worth it: the employee will not be permitted to commence a civil action against the employer pursuant to section 2699 of PAGA.
Frequently Asked Questions
Q: What is Assembly Bill 1506 (AB 1506)?
A: Assembly Bill 1506, also known as AB 1506, is a law in California that provides employers with a mechanism to rectify certain common defects in employee wage statements, thereby helping them avoid litigation.
Q: When was AB 1506 signed into law?
A: AB 1506 was signed by Governor Jerry Brown on October 2, 2015.
Q: When did AB 1506 take effect?
A: AB 1506 took effect immediately upon being signed into law.
Q: What does AB 1506 amend?
A: AB 1506 amends the California Private Attorneys General Act (PAGA).
Q: What is the purpose of AB 1506?
A: The purpose of AB 1506 is to provide employers with an opportunity to promptly correct certain errors in employee wage statements, thereby reducing the likelihood of litigation related to these issues.
Q: Which specific sections of the California Labor Code does AB 1506 apply to?
A: AB 1506 applies to Section 226(a)(6) and Section 226(a)(8) of the California Labor Code.
Q: What does Section 226(a)(6) require employers to specify?
A: Section 226(a)(6) requires employers to specify the inclusive dates of the period for which the employee is paid.
Q: What does Section 226(a)(8) require employers to state?
A: Section 226(a)(8) requires employers to state the name and address of the employer’s "legal entity.”
Q: How do the cure provisions under AB 1506 benefit employers?
A: The cure provisions under AB 1506 allow employers to rectify wage statement defects within a specified timeframe, thereby avoiding potential litigation and its associated costs.
Q: What is the timeframe provided to employers to "cure" wage statement defects under AB 1506?
A: Employers have 33 days from the postmark date of the notice received from the employee alleging the wage statement impropriety to remedy the issue.
Q: What must employers provide to the complaining employee to prevent civil action under AB 1506?
A: Employers must provide the complaining employee with an itemized wage statement covering the three-year period prior to the date of the employee's written notice.
Q: What additional steps must employers take after providing compliant wage statements to the employee?
A: Employers must give written notice by certified mail to the employee at issue (or his/her representative) and to the California Labor & Workforce Development Agency (LWDA), stating that the alleged violation has been cured and describing the actions taken by the employer to achieve compliance.
Q: What is the consequence for the employee if the employer complies with the cure provisions of AB 1506?
A: If the employer complies with the cure provisions of AB 1506, the employee will not be permitted to commence a civil action against the employer pursuant to section 2699 of PAGA.
At Dental & Medical Counsel, PC, we understand navigating the legal process can be tricky. We believe every doctor deserves the best advice and service so doctors can do what they do best, treat their patients. We make their lives easier by providing expert guidance, so they can focus on their personal and professional aspirations.
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About Ali Oromchian, Esq.
In addition to practicing law for almost 20 years, Ali is also a renowned speaker, throughout North America, on topics such as practice transitions, employment law, negotiation strategies, estate planning, and more! Ali has helped hundreds of dentists realize their professional goals and looks forward to aiding you in navigating the legal landscape.
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