The Division of Labor Standards Enforcement (DLSE) oversees and enforces the wage, hour and working condition labor laws. Naturally, many employers turn to the DLSE for guidance and advice in order to stay in compliance with labor law; and are in fact encouraged to do so. Small businesses in particular frequently cannot afford a human resources department, and therefore rely heavily on the DLSE to help them comply with California’s burdensome labor laws. Yet the DLSE’s written word isn’t protecting employers. Recent California legislation is seeking to change that.
The problem:
The DLSE offers a variety of written resources for employers, including opinion letters on various topics and an enforcement manual giving its interpretation and position on these issues. These materials are very helpful to employers, especially when there is no published, on-point case available to clarify certain issues. Although employers are encouraged to comply with the DLSE’s written guidance, employers who comply in good faith with the DLSE’s written opinions or interpretations are still at risk. Should the DLSE’s advice be found to be in error in court, the employer who acted on their written advice could be held liable for the error and be subject to civil and criminal penalties, fines, and interest.
The solution:
It makes sense that an employer ought to be able to act in good faith upon the DLSE’s written word, especially small businesses. The California Chamber of Commerce is supporting legislation to protect employers who are just trying to do their job. Under this new bill (AB 2688 [Brown; D-San Bernardino]), employers will be prevented from being financially penalized if the employer relies in good faith on written advice from the DLSE, and a court ultimately determines the DLSE’s advice was wrong. This change will ease employer’s uncertainty and assist in providing a more positive and safe business environment.
The safeguards to prevent abuse:
This bill does not protect non-compliant “bad actor” employers: the bill requires the employer in question to prove that it sought out the DLSE’s written advice; provided accurate and factual information to the DLSE; conformed its conduct to comply with the DLSE’s advice; and that no facts or circumstances changed between the time the advice was received to the time of the alleged act or omission. Employers still must do their due diligence when complying with labor laws. No assumptions should be made, but rather employers should act on current, concise written communication directly from the DLSE or government-backed sources.
More information on the bill can be found at CalChamber.
