New California Law Further Restricts Employee Release Agreements

Governor Schwarzenegger recently signed a bill amending Labor Code Section 206.5, which restricts the enforceability of agreements purporting to release wage claims. 

Labor Code section 206.5 currently provides that an employee cannot be required to sign an agreement releasing the employer from liability for wages "unless payment of such wages has been made."  The new bill, AB 2075, amends the statute to clarify that the prohibitions on the "execution of a release” also extend to any requirement that the employee "execute a statement of hours he or she worked during a pay period which the employer knows to be false.”
 

In response to wage and hour class actions a growing number of employers have implemented policies requiring employees to sign periodic statements certifying that their wage statements are accurate.  The new statute, which takes effect January 1, 2009, appears to be aimed at preventing employers from arguing that such certifications are binding on the employee.    

 

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