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Labor Code Amendments: Farm Labor Contractors Need to Act Now to Ensure Itemized Wage Statements Satisfy New Requirements for 2012

By Michael C. Saqui and Jennifer A. Doughty, The Saqui Law Group

Amongthe long list of new employment laws scheduled to take effect on January 1, 2012 is Assembly Bill (AB) 243, which requires that farm labor contractors (FLCs) provide additional information on wage statements provided to employees. With the enactment of AB 243, farm labor contractors must now also disclose on the itemized statement the name and address of the legal entity that secured the FLC’s services. This means that the itemized statements must show, for example, other growers or FLCs that secured the employer’s services during the payroll period. A knowing and intentional violation of this new requirement is a misdemeanor.

AB 243 amends Labor Code section 226 to expand the information that must be provided on pay statements only by farm labor contractors. The plain purpose of this law is crystal clear: to impose liability for the illegal acts of a FLC on a farmer or grower. While the amended law includes language meant to appease growers about the automatic imposition of joint liability and states that the listing by an employer/FLC of the name and address of the legal entity that secured the services of the employer in the itemized statement does not create any liability on the part of that legal entity, in practical terms the law still means that employees, and employee advocate groups such as California Rural Legal Assistance (CRLA), will have a yellow brick road to what it is they seek in the first place….deeper pockets.

The CRLA successfully championed this bill through the legislature by stressing the importance of employees knowing who they are working for.   A 2006 survey of Central Valley farm workers found that 70% of farm workers could not identify the name of the farm they were working on. The CRLA argued that employees should receive information about the grower who hired the FLC because enforcement actions against the contractor are unlikely to either make the employees whole for wages owed or to have any deterrent effect at all against a grower who may, under certain circumstances, share legal responsibility for the contractor’s labor law violations.

FREQUENTLY ASKED QUESTIONS ON AB 243

  1. Are FLCs required to only give the information on the paystubs for the properties where the employees worked?

Answer: The FLCs must include the name and address of the grower or entity which secured the FLC’s services, not the physical address of where work may have taken place.

  1. Do FLCs have to provide on the wage statements the hours worked at each ranch?

Answer: The new law does not require an FLC to break down the specific hours worked at each ranch, for each respective grower on the itemized wage statement. An FLC, however, as the employer, must by law record hours worked and keep payroll records showing the hours worked each day and the wages paid to each employee. When an employee performs work for multiple growers/farmers during the same payroll period, the FLC’s records should show the days/hours worked for a specific grower. An FLC may be required to provide the daily time records that will allow an inquiring employee (or state official or the CRLA) to trace the hours worked on behalf of the grower(s) listed on an itemized wage statement.

  1. Should FLCs develop record retention policies for this since employees and DLSE can ask for it?

Answer: FLCs should develop and maintain accurate records of where work is being performed and on behalf of which company. Similarly, growers and farmers should keep records of when and where work is being performed by farm labor contractors with whom they have contracted.

  1. Our payroll software does not presently allow for a new field to be entered to include the required information. We have requested updated software, but it will not be ready for January 1, 2012. Can we include a separate document with the required information with the employee’s itemized wage statement until the computer software can be updated?

Answer: Yes. During a period of transition to update and make payroll software compatible to comply with the new requirement, FLCs should supply the appropriate information in a separate document, as long as it is provided with the itemized wage statement.

COUNSEL TO MANAGEMENT: In order to comply with new requirements under AB 243, farm labor contractors need to ensure they make technical changes to their itemized wage statements provided to employees to include the required information of the grower that secured their services during the respective pay period.