BILL ANALYSIS Ó
AB 240
Page 1
ASSEMBLY THIRD READING
AB 240 (Bonilla)
As Amended March 8, 2011
Majority vote
LABOR & EMPLOYMENT 5-1
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|Ayes:|Swanson, Alejo, Allen, | | |
| |Furutani, Yamada | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Miller | | |
| | | | |
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SUMMARY : This bill authorizes the Labor Commissioner (LC) 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 LC 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 LC 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 (California Labor
AB 240
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Code, Section 1194) or the employee may file an administrative
complaint with the LC and go through what is known as the
"Berman" hearing process (California Labor Code, Section 98).
Through a private right of action under Labor Code Section
11944, an employee is entitled to recover the full amount of the
unpaid balance of wages, including interest, reasonable
attorney's fees and costs of suit. In addition, Labor Code
Section 1194.2 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
LC does not have specific authorization to grant liquidated
damages for unpaid minimum wages. Under Labor Code Section 98,
the LC 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
complaint processes by clarifying existing statutes 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 Law 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% 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% of workers were
underpaid by more than $1.00 per hour and the median
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underpayment was $1.65 per hour.
In 2009, the Bureau of Field Enforcement (BOFE) conducted a
total of 9,053 inspections, resulting in a total of 4,465
citations. According to the BOFE's 2009 Annual Report on the
Effectiveness of Bureau of Field Enforcement, there were 113
citations issued to employers for failing to pay the minimum
wage. In response to these violations, BOFE assessed $393,350
in penalties in 2009, of which they collected $74,035.
The California Rural Legal Assistance Foundation (CRLAF) states
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
statutes. The Teamsters Public Affairs Council asserts that
this bill will eliminate the current disincentive for aggrieved
workers to pursue their claims administratively. The Women's
Employment Rights Clinic of Golden Gate University School of
Law, states 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.
Analysis Prepared by : Shannon McKinley / L. & E. / (916)
319-2091
FN: 0000294