©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 371 employees required under the Wage Theft Protection Act.13 Employers may consider whether to use the DLSE template or to use a customized notice, but must ensure that it is disclosing all of the required information. 16.2 Retention of Independent Contractors California businesses that must file federal Form 1099-MISC must give the EDD identifying information about individual independent contractors who perform work in California and receive payment exceeding $600 or contract for such a payment. The business must provide this information to the EDD within 20 days of either making payments totaling $600 or more or entering into a contract for $600 or more with an independent contractor in any calendar year, whichever is earlier. The EDD provides a downloadable form to record basic information about the business and the independent contractor, including taxpayer identification number and the dates of the contract’s beginning and end or when calendar year payments reach $600.14 Because the law aims to enhance enforcement of child support obligations, its requirements do not apply to independent contractors that are corporations, general partnerships, or limited liability businesses.15 Failure to timely report this information triggers civil penalties, just as with respect to the failure to report new hires (see § 16.1.1), and the penalties are higher if the business and the contractor conspired not to report. 16.3 Itemized Wage Statements 16.3.1 Items the wage statement must record General requirements. When paying wages, California employers must provide employees with an “accurate itemized statement” that states such items as “gross wages earned,” “total hours worked,” specified deductions, “net wages earned,” and so on.16 Employers need not report total hours worked by exempt employees.17 Piece rates. Wage statements to piece-rate workers must disclose the piece rate and the number of piece-rate units, as well as the total hours of compensable rest and recovery periods, the rate of compensation for those periods, and the gross wages paid for rest and recovery periods during the pay period. In addition, if the employer does not pay a piece-rate employee a base hourly rate (of at least minimum wage) for all hours worked, then the employer must separately record the total hours of “nonproductive” (non-piece-rate) time, the rate of compensation for such hours, and the gross wages paid for those hours during the pay period.18 Employment agencies. If a farm labor contractor is the employer, the wage statement must contain “the name and address of the legal entity that secured the services of the employer.”19 Temporary services employers must include the “rate of pay and the total hours worked for each temporary services assignment.”20 Paid sick leave balances. Employers must show paid sick leave balances on wage statements or in a separate document presented contemporaneously (see § 2.14.1). Meal, rest, and recovery period pay. Must wage statements record premiums paid for unprovided meal, rest, or recovery breaks? One might thinkno, because premium pay is not an “earned wage.” In 2018 the California Supreme Court accepted a referral from the Ninth Circuit that raised this issue but, because of intervening developments, never reached it.21 Then in 2019 the California Court of Appeal decided that an employer was not liable for wage statements that failed to record meal premium pay. The Court of Appeal noted that the employer’s obligation is only to state “wages earned” and reasoned that the extra hour of pay owed for failing to provide breaks is not an amount earned by performing labor, but is rather a statutory remedy for employer conduct.22 But in 2022, the California Supreme Court reversed the Court of Appeal and upset employer expectations. In Naranjo v. Spectrum Security Services, the California Supreme Court held that (1) meal premium pay is an earned wage
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