BILL ANALYSIS Ó
AB 240
Page 1
Date of Hearing: April 13, 2011
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 240 (Bonilla) - As Amended: March 8, 2011
SUBJECT : Compensation recovery actions: liquidated damages.
SUMMARY : This bill authorizes the Labor Commissioner to
recover liquidated damages for an employee who brings a
complaint alleging payment of less than the minimum wage.
EXISTING LAW :
1)Establishes the Division of Labor Standards Enforcement (DLSE)
within the Department of Industrial Relations (DIR) to enforce
minimum labor standards.
2)Creates the Labor Commissioner to serve as the Chief of DLSE
and, among other duties, adjudicate wage claims and enforce
the Industrial Welfare Commission wage orders.
3)Grants employees the right to file a civil action to recover
unpaid minimum wages.
a) Entitles employees who file a civil suit to recover
liquidated damages in an amount equal to the amount of
wages unlawfully unpaid.
4)Affords workers an alternative administrative remedy through
the Labor Commissioner to recover unpaid wages.
FISCAL EFFECT : Unknown
COMMENTS :
Under current law, California workers have two avenues to
recover unpaid minimum wages. An employee may either file a
civil action to recover unpaid wages (CA Labor Code, Section
1194) or the employee may file an administrative complaint with
the Labor Commissioner and go through what is known as the
"Berman" hearing process (CA Labor Code, Section 98). Through a
private right of action under Section 11944 of the state's Labor
Code, an employee is entitled to recover the full amount of the
unpaid balance of wages, including interest, reasonable
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attorney's fees and costs of suit. In addition, Section 1194.2
of the state's Labor Code specifically entitles an aggrieved
worker to liquidated damages in an amount equal to the wages
unlawfully unpaid and interest thereon.
In contrast, if an employee uses the administrative process to
recover unpaid wages through the "Berman" hearing process, the
Labor Commissioner does not have specific authorization to grant
liquidated damages for unpaid minimum wages. Under Section 98
of the state's Labor Code, the Labor Commissioner has the
authority to recover wages, penalties, and other demands for
compensation." State law is silent on the issue of whether an
employee can recover liquidated damages through the "Berman"
process.
According to the author, this bill will provide equity for
minimum wage workers that have been victims of wage violation by
their employers. The author states that workers who have been
victims of minimum wage violations have been particularly
unlikely to have a claim sufficient to attract an attorney,
pushing these workers to seek relief through the administrative
process. The author notes, however, that the inequity in
current law has the effect of providing less relief to these
minimum wage workers. The author asserts that minimum wage
workers deserve the same protections from wage violations as all
other employees and this bill establishes equity between wage
complain processes by clarifying existing statute to ensure that
workers receive the same relief for minimum wage violations,
regardless of whether they purse their clams administratively or
through the courts.
A 2010 report titled, "Wage Theft and Workplace Violations: The
Failure of Employment and Labor Las for Low-Wage Workers," (Wage
Theft Report) released by the Institute for Research on Labor
and Employment at the University of California, Los Angeles,
found that 29.7 percent of the Los Angeles workers sampled were
paid less than the minimum wage in the work week preceding the
survey. The Wage Theft Report notes that 63.3 percent of
workers were underpaid by more than $1.00 per hour and the
median underpayment was $1.65 per hour.
In 2009, the Bureau of Field Enforcement (BFE) conducted a total
of 9,053 inspections, resulting in a total of 4,465 citations.
According to the BFE's 2009 Annual Report on the Effectiveness
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of Bureau of Field Enforcement, there were 113 citations issued
to employers for failing to pay the minimum wage. In response
to these violations, BFE assessed $393,350 in penalties in 2009,
of which they collected $74,035.
ARGUMENTS IN SUPPORT :
In support, the California Rural Legal Assistance Foundation
(CRLAF) writes that this bill brings remedies for minimum wage
violations into accord with other Labor Code wage-related
protections. CRLAF notes that this bill is consistent with the
public policy supporting awards of liquidated damages under
other wage-related statues. The Teamsters Public Affairs
Council, writing in support of the bill, asserts that this bill
will eliminate the current disincentive for aggrieved workers to
pursue their claims administratively. In their letter of
support, the Women's Employment Rights Clinic of Golden Gate
University School of Law, write that they have represented low
wage workers for over 17 years, and one of the most difficult
things that they encounter is explaining to workers that they
cannot seek liquidated damages when they choose to pursue their
minimum wage violation claims through the simpler and less
costly administrative process established by the state's Labor
Code.
RELATED AND PRIOR LEGISLATION :
AB 448 (Arambula) of 2007 would have allowed employees to
recover liquidated damages in complaints brought before the
Labor commissioner alleging payment of less than the state
minimum wage. This bill was vetoed by the Governor. In his veto
message, the Governor wrote that he was concerned that allowing
liquidated damages on administrative claims would be harmful to
small business. The Governor also stated that he saw no reason
to expose employers to additional liabilities when other legal
avenues already exist for employees and attorneys who are intent
on seeking liquidated damages.
REGISTERED SUPPORT / OPPOSITION :
Support
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
AB 240
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California Employment Lawyers Association
California Labor Federation, AFL-CIO
California Nurses Association/National Nurses Organizing
Committee
California Official Court Reporters Association
California Rural Legal Assistance Foundation (Sponsor)
California Teamsters Public Affairs Council
Engineers and Scientist of California
Golden Gate University School of Law Women's Employment Rights
Clinic
International Longshore and Warehouse Union
National Lawyers Guild Labor & Employment Committee
Professional and Technical Engineers, Local 21
SCOPE, Laborers International Union of North America
UNITED HERE!
Utility Workers Union of America, Local 132
Worksafe, Inc.
Opposition
None on file.
Analysis Prepared by : Shannon McKinley / L. & E. / (916)
319-2091