New California Law about Wage and Hour

In early August, California Governor Schwarzenegger signed into law AB 2075, which modifies Labor Code section 206.5, and makes it a misdemeanor for an employer to require an employee, as a condition of payment of wages, to sign a statement of hours worked that the employer knows is false.

The new law goes into effect on January 1, 2009 and potentially exposes some employers to new liability.

Currently, Labor Code section 206.5 prohibits employers from requiring an employee to execute a release of wage claims, unless payment of the wages has been made. A violation of this provision invalidates the release agreement and is deemed a misdemeanor.

AB 2075 amends Labor Code Section 206.5 to include a subsection (b) by defining “execution of a release” as “requiring an employee, as a condition of being paid, to execute a statement of the hours he or she worked during a pay period which the employer knows to be false.”

Employers should review their employee release agreements and time keeping records for compliance with new Section 206.5(b), prior to its implementation on January 1, 2009.