Employer good-faith reliance on government advice protected

By CMTA Staff

Capitol Update, March 23, 2012 Share this on FacebookTweet thisEmail this to a friend

Currently, when an individual or business seeks guidance from a state agency and relies on the information provided, they are given no protection or benefit if litigation is ultimately filed to challenge the agency’s advice.  SB 1374 (Tom Harman, R-Huntington Beach) will remedy this problem.

This bill will provide individuals and employers an affirmative defense when relying in good faith on an agency’s written advice regarding how to comply with California's numerous laws and regulations.  For example, the Division of Labor Standards Enforcement (DLSE) is charged with the responsibility and authority to enforce the wage, hour, and working condition labor laws. In fulfilling this responsibility, the DLSE issues opinion letters on various wage, hour, and working condition topics as well as an enforcement manual that sets forth it’s interpretation and position on these issues. 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. Without this bill, employers have no certainty that they will be shielded from liability if they comply in good faith with DLSE’s written opinions or interpretations.

Legal precedent already exists for giving protection to those who rely on the advice of government.  At the federal level, employers who rely in good faith upon the advice, opinion letters, and guidance of the Wage and Hour Division of the Department of Labor, regarding the Fair Labor Standards Act, are afforded a similar affirmative defense upon proving that their actions were based on the information received.

SB 1374 is supported by CMTA and numerous other business organizations.

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