BILL ANALYSIS Ó
AB 240
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CONCURRENCE IN SENATE AMENDMENTS
AB 240 (Bonilla)
As Amended July 11, 2011
Majority vote
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|ASSEMBLY: |50-22|(May 5, 2011) |SENATE: |24-15|(August 18, |
| | | | | |2011) |
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Original Committee Reference: L. & E.
SUMMARY : Authorizes the Labor Commissioner (LC) to recover
liquidated damages for an employee who brings a complaint alleging
payment of less than the minimum wage and prevents a chaptering out
conflict with AB 197 (Monning) of 2011 and AB 469 (Swanson) of 2011.
The Senate amendments prevent a chaptering out conflict with AB 197
(Monning) and AB 469 (Swanson).
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.
AS PASSED BY THE ASSEMBLY , this bill authorized the Labor
Commissioner (LC) to recover liquidated damages for an employee who
brings a complaint alleging payment of less than the minimum wage.
AB 240
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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 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
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Report notes that 63.3% 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 (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: 0001633