California Attorney General Rob Bonta has been busy in recent weeks, launching an “investigative sweep” into employer compliance with the California Consumer Privacy Act (CCPA) and cautioning employers about the restrictions on employer-driven debt.
Employers in the state faced new requirements to keep the personal information of employees and applicants safe as of Jan. 1, 2023, pursuant to the CCPA.
Employees, applicants and contractors must receive notice at or before collection that discloses the categories of employment information being collected by the employer, the purposes for which it is used and information about the employer’s retention policies.
In addition to notice, employees gained other rights, such as the right to correct the personal information maintained by the employer, the right to request that the employer delete the personal information the employer has collected about them, the right to request that the employer provide them with or transmit to another entity a copy of their personal information, and the right to request that the employer limit the use and disclosure of “sensitive personal information.”
Employers have the latitude to deny a request to delete personal information that is required to carry out the employment relationship (to provide benefits or process payroll, for example) or, based on statutory requirements, to retain certain information (such as pay data disclosures).
Roughly seven months after the new requirements took effect, Bonta announced that he sent inquiry letters to large California employers requesting information on their compliance with the CCPA with respect to the personal information of employees and job applicants.
“We are sending inquiry letters to learn how employers are complying with their legal obligations,” Bonta said in a statement. “We look forward to their timely response.”
The AG noted that he is “committed to the robust enforcement of the CCPA.”
Separately, in Legal Alert OAG-2023-01, Bonta cautioned employers about state law restrictions on employer-driven debt.
The term refers to debt obligations incurred by individuals through employment arrangements, he explained, and examples include arrangements where an employer provides training, equipment or supplies to a worker but requires the worker to reimburse the employer for these expenses if the worker leaves their job before a certain date, even if the worker is fired or laid off.
Such practices—also including withholding wages, failing to reimburse necessary expenses or charging unlawful fees—may violate Labor Code Section 2802, “which mandates that employers ‘indemnify employees for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.’”
“Use of employer-driven debt products has grown substantially in recent years, potentially stifling competition in the labor market and forcing workers to remain in jobs that they would otherwise prefer to leave due to low pay or substandard working conditions,” according to the Legal Alert. “As a form of consumer debt, employer-driven debt may also expose workers to significant financial risk and predatory debt collection practices.”
Employer-driven debt has been observed in numerous industries, Bonta said, including health care, trucking, aviation, and the retail and service industries.
Workers cannot waive their legal protections via contract, the AG noted, adding that employer-driven debt practices also risk running afoul of the state’s Rosenthal Fair Debt Collection Practices Act, Consumer Financial Protection Law and/or the Unfair Competition Law.
To read Legal Alert OAG-2023-01, click here.
Why it matters
California employers are on notice that the Attorney General has begun enforcement efforts with regard to the CCPA and is monitoring employer-driven debt practices for violations of state law.