BILL ANALYSIS Ó
AB 469
Page 1
ASSEMBLY THIRD READING
AB 469 (Swanson)
As Amended May 27, 2011
Majority vote
LABOR & EMPLOYMENT 5-1 JUDICIARY 6-3
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|Ayes:|Swanson, Alejo, Allen, |Ayes:|Feuer, Atkins, Dickinson, |
| |Furutani, Yamada | |Huffman, Monning, |
| | | |Wieckowski |
|-----+--------------------------+-----+--------------------------|
|Nays:|Miller |Nays:|Wagner, Huber, Jones |
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|Fuentes, Blumenfield, | | |
| |Bradford, Charles | | |
| |Calderon, Campos, Davis, | | |
| |Gatto, Hall, Hill, Lara, | | |
| |Mitchell, Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey, Donnelly, | | |
| |Nielsen, Norby, Wagner | | |
| | | | |
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SUMMARY : Makes a number of changes related to "theft" of wages,
employee wage claims and related provisions. Specifically, this
bill :
1)Requires an employer, at the time of hiring, to provide each
employee with a written disclosure of specified basic job
terms, including the rate of pay, the regular pay day, and the
address and phone number of the employer.
2)Requires the employer to notify employees in writing of any
changes to such terms within seven days of the change.
3)Requires the Labor Commissioner to prepare templates for
employer use in complying with the disclosure requirements.
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4)Provides that these written disclosure requirements do not
apply to the following:
a) An employee directly employed by the state or any
political subdivision thereof, including any city, county,
city and county, or special district;
b) An employee who is exempt from the payment of overtime
wages by statute or the wage orders of the Industrial
Welfare Commission; or,
c) An employee who is covered by a valid collective
bargaining agreement, as specified.
5)Requires any party that has received notice of a claim before
the Labor Commissioner (LC) to notify the LC within 10 days of
any change in the party's business or personal address.
6)Extends the time period the LC may require a wage bond from a
previously convicted employer from not more than six months to
not more than two years.
7)Provides that if an order to post a bond remains unsatisfied
for 10 days after the time to appeal has expired, the LC may
require the employer to provide an accounting of assets, as
specified.
8)Authorizes a court to request a similar accounting of assets,
as specified, in relation to bond requirements of existing law
arising after a second conviction or unsatisfied judgment
within a 10-year period.
9)Extends the time period for which an employer must maintain
pay records from two years to three years.
10)Specifies that an employer shall not prohibit an employee
from maintaining a personal record of their own hours worked
or piece-rate units earned.
11)Authorizes an employee to recover attorneys' fees and costs
incurred to enforce a court judgment for unpaid wages due.
12)Clarifies that notwithstanding any other provision of law,
the Labor Code establishes minimum penalties for the failure
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to comply with wage-related statutes and regulations.
13)Establishes criminal penalties against an employer who
willfully violates provisions of law requirement payment of
the minimum wage or overtime. If the amount of unpaid minimum
or overtime wages is less than $1,000, the bill establishes a
misdemeanor penalty and a fine of between $1,000 and $10,000.
If the amount of unpaid minimum or overtime wages is more than
$1,000, the bill establishes a misdemeanor and fine of between
$10,000 and $20,000.
14)Establishes similar criminal penalties against an employer
who willfully fails to pay and has the ability to pay a final
court judgment or final order issued by the LC for all wages
due to an employee who has been discharged or quits within 90
days of the date that the judgment was entered or the order
became final.
15)Provides that an employer found guilty of the aforementioned
crimes shall pay restitution to the aggrieved employee in an
amount equal to the amount of unpaid wages.
16)Makes other related changes.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, unknown costs, likely between $175,000 and $300,000
to the LC to prepare templates and enforce this measure.
COMMENTS : This bill proposes a number of changes aimed at
preventing or combating the intentional theft of earned wages by
unscrupulous employers.
This bill is co-sponsored by the California Labor Federation,
AFL-CIO and the California Rural Legal Assistance Foundation.
They contend that this bill is a response to widespread wage
theft in California, and draws on anti-wage theft initiatives
recently enacted in other states (e.g., New York, Illinois,
Wisconsin and Washington). This bill adapts a number of these
states' new laws to fit California's unique employment
landscape, and proposes common sense solutions to some
significant weaknesses in current state law.
The sponsors note that there is substantial evidence of
widespread theft of wages in California, particularly in the
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underground economy. The sponsors also argue that this bill is
needed because enforcement of California labor laws related to
wage violations is weak and largely ineffective. In 2009, only
216 employers in the entire state of California were cited by
the Division of Labor Standards Enforcement (DLSE) for violating
minimum wage and overtime laws. DLSE assessed $650,550 in
penalties for these violations but collected only $230,154.
During that same year, DLSE found $22,381,286 in wages due, but
recovered only $13,062,164. When these results are put in the
context of the billions of dollars stolen in the underground
economy, it is clear they are too feeble to constitute a
meaningful deterrent.
Finally, the sponsors note that other states and local
jurisdictions facing widespread non-compliance with wage laws
have also acted to strengthen both criminal and civil laws.
Specifically, they indicate that among the states that have
addressed wage theft in 2009-2010 are: New Mexico, where the
state legislature passed a bill granting treble damages to
victims of wage violations; New York, where the legislature
passed a disclosure law aimed at prevention of wage theft;
Maryland, where the Governor established a task force on
workplace fraud; and, Illinois, which increased criminal
penalties for wage violations.
Opponents argue that this bill criminalizes any employer who
"willfully fails" to pay wages due within 90 days of a voluntary
or involuntary termination of employment. They contend that the
term "willfully" is defined as "a willingness to commit the act"
but does not require intent to violate the law or injure
another. Accordingly, employers who may make an honest mistake
in calculating overtime rates or wages due could be criminally
prosecuted under this bill despite the fact that such employers
had no ill-intent to harm the employee.
Opponents also question the necessity of this bill, since
existing law requires the employer to make the employee whole
and imposes stiff penalties of varying amounts, depending on the
wage dispute at issue, when the employer fails to pay wages due.
Additionally, current criminal laws outlaw theft, which permits
prosecution of ill-intentioned employers who steal money from
their employees.
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Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN: 0000885