AB 2688 is a proposed new law winding through the legislative process (“AB” stands for “Assembly Bill”).
This bill prevents an employer from being financially penalized through the assessment of statutory civil and criminal penalties, fines, and interest if the employer relies in good faith on written advice from the Division of Labor Standards Enforcement, and a court ultimately determines the DLSE’s advice was wrong.
Currently, employers are encouraged to refer to the DLSE’s written materials for “guidance” on these topics when there is no published, on-point case available to clearly identify how the courts will interpret the law. Employers are provided with no certainty, however, that
they will be shielded from liability if they comply in good faith with the DLSE’s written opinions or interpretations. AB 2688 eliminates this problem and provides businesses in California with the security to know that, if they seek out and receive written advice from the DLSE regarding how to comply with the law, they can actually rely upon that information.
California has unique and burdensome labor and employment laws. Small businesses that lack the financial resources to hire a human resources department or outside counsel for advice on how to comply with these labor and employment laws have only the DLSE for guidance. AB 2688, if it’s adopted in substantially its present form, will help such small businesses by encouraging them to seek out and rely upon the advice they receive from the DLSE regarding how to comply with the law. Even when you don’t have the internal resources to evaluate the
impact of a law, your attorney may want the same guidance from the DLSE.
There are various other constraints embedded in this proposed law, so even if it is adopted (as we hope will be the case), legal guidance may still be required regarding how to properly obtain the benefits of the law.
It’s worth noting that since 1947, the federal government has provided employers who rely in good faith upon the advice, opinion letters, and guidance of the U.S. Department of Labor regarding the Fair Labor Standards Act with a complete defense against liability (see 29 U.S. Code, sections 258–259).
This law, the Portal-to-Portal Act, has been in effect for more than 60 years, and there have not been any reported abuses of “bad actors” manipulating the system or process in order to gain an unfair advantage.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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