A new model wage disclosure form issued by the California Labor Commissioner may create ambiguity about whether individuals are employed “at will” or under a contract requiring good reason for termination. The problem arises in the wake of the state’s Wage Theft Prevention Act which went into effect on January 1, 2012. The law requires employers to provide employees with written notice of certain facts including the rate of pay, pay dates, name, address and phone number of the employer and its workers’ compensation carrier, as well as “any other information the Labor Commissioner deems material and necessary.”
Just before the deadline for compliance, the Department of Labor Standards Enforcement released a template and advice that while employers were not obligated to use the template, any form employers use must include all the information required by the template. Concern about the template arises because it includes check boxes to indicate whether the employee has an oral or written employment contract. Checking off either box without adding a clarifying notation that the individual is employed “at will” may create enough confusion to allow a court or jury to find that the employee was no longer “at will.”
The DLSE template has other pitfalls for employers such as using undefined terms such as “work site employer” and requiring employers to provide the names and addresses for other businesses the employer uses to administer benefits for employees. The latter category could include everything from Third Party Payroll providers to insurance carriers. Until the DLSE revises the template to clear up ambiguous terms and questions, employers are best advised to adopt their own form that uses clearer language and plainly articulates that employees are engaged on an “at will” basis.
