Important New Law for California Employers
The California Legislature recently enacted a new law that requires all employers to give their new, non-exempt hires written notice regarding the terms of their employment. This law went into effect on January 1, 2012. The form is accessible through this link. Keep in mind that you do not need to have your new hires fill out this form if 1) the employees are directly employed by the state or any political subdivision; 2) the employees are exempt and not entitled to overtime; or 3) the employee is covered by a collective bargaining agreement.
This law is not retroactive, so only new employees as of January 1, 2012 need to fill out this form. Be sure to keep a copy of this form in the employee’s personnel file.
What is important about this new law is that all employers must be clear about classifying their new hires as either exempt or non-exempt at the outset of their employment.
Happy Holidays! See You in ’12!
I’m taking the holidays off from the blogosphere. Make sure to check back after the 1st! Wishing you and yours all the best for the new year.
……….. I’m out!
Should You Cash a Check Marked “Payment in Full?”
Q: My customer owes me $1,000. It sent me a check for $700, marked “payment in full.” Is it OK to cash it?
A: Cashing a check marked “payment in full” will likely discharge the debtor’s obligation entirely, under the doctrine of “accord and satisfaction.” Tendering of a check marked “payment in full” or “paid in full” is an offer to settle the debt for an amount different than what the parties’ contract says. Cashing the check is considered to be acceptance of the offer, and extinguishes the debt. In order to be effective, the words must be clear and conspicuous. There must be no question that the debtor intends the check to settle the debt entirely.
My recommendation is that you only cash the check if you agree to accept this amount as payment in full. Otherwise, return it to sender along with an explanation of why you did not cash the check.
The question of whether you can just strike out the “payment in full” language and cash the check anyway is murky. Civil Code section 1526 provides that a creditor can render the language ineffective by striking it out. However, Commercial Code section 3311 provides that the “payment in full” language is binding regardless of whether the creditor strikes it out. My advice is to play it safe and not strike out the language, but rather just return the check to sender uncashed if you do not agree to accept it as payment in full.
Kring & Chung December Newsletter
The December newsletter is here, packed with informative articles on child support, divorce, safe holiday party tips, additional insurance coverage, sexual harassment training, construction defect law, and our Thanksgiving Food Drive.
California Bans Employers From Using Credit Scores in Hiring Decisions
A new California bill prohibits most employers from using credit scores and credit history in making hiring decisions. The law goes into effect on January 1, 2012. California is only the seventh state to implement such a ban. Twenty others are considering doing so.
The Society of Human Resource Management conducted a study which found that about 60 percent of companies currently use credit history as a factor in the hiring process.
There are some exceptions to this ban. For instance, banks and law enforcement agencies may have a legal necessity to conduct employee credit checks, and will not be prevented from doing so.
Supporters of the bill argued that, in this economy, many job applicants have low credit scores or poor credit history (i.e. due to home foreclosure). Labor advocates argued that a poor credit score should not prevent an otherwise qualified applicant from being able to get a job. Civil rights advocates argued that credit checks are sometimes used to disguise racial discrimination, because members of racial minorities tend to have lower credit scores.
Kring & Chung November Newsletter
The November newsletter is here, with articles on contractor liability for torts committed by their subcontractors’ employees, the Kring & Chung Newport Beach Triathlon (the longest running triathlon in America), and two employment law articles authored by me.
Consumer Product Warranties
The Magnuson-Moss Warranty Act is a federal law that was enacted by Congress in 1975. The purpose of the Act is to make warranties on consumer products more readily understood and enforceable.
The Act provides that anyone warranting a consumer product by means of a written warranty must disclose, fully and conspicuously, in simple and readily understood language, the terms and conditions of the warranty to the extent required by rules of the Federal Trade Commission. The FTC has enacted regulations governing the disclosure of written consumer product warranty terms and conditions on consumer products actually costing the consumer more than $15. The Rules can be found at 16 C.F.R. Part 700.
Any ambiguous statements in a warranty are construed against the drafter.
The Act provides that warrantors cannot require that only name brand parts be used with the product in order to retain the warranty. This is commonly referred to as the “tie-in sales” provisions, and is frequently mentioned in the context of third-party computer parts.
The Act requires that a warrantor of a consumer product:
1. must, as a minimum, remedy the consumer product within a reasonable time and without charge;
2. may not impose any limitation on the duration of any implied warranty on the product;
3. may not exclude or limit consequential damages for a breach of any written or implied warranty on the product, unless the exclusion or limitation conspicuously appears on the face of the warranty;
4, if the product, or a component part, contains a defect or malfunction, must permit the consumer to elect either a refund or replacement without charge, after a reasonable number of repair attempts; and
5. may not impose any duty, other than notification, upon any consumer, as a condition of securing the repair of any consumer product that malfunctions, is defective, or does not conform to the written warranty. However, the warrantor may require consumers to return a defective item to its place of purchase for repair.
