BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 442
                                                                  Page  1

          Date of Hearing:   April 10, 2013

                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
                               Roger Hernández, Chair
                AB 442 (Nazarian) - As Introduced:  February 19, 2013
           
          SUBJECT  :   Employees: wages.

           SUMMARY  :   Provides that a citation issued by the Labor  
          Commissioner (LC) for failure to pay minimum wage shall include  
          liquidated damages, as already available under existing law in  
          civil actions or administrative wage claim actions.

           EXISTING LAW  :

          1)Provides that an employee who receives less than the minimum  
            wage is entitled to recover in a civil action, the unpaid  
            balance of the full amount of the minimum wage, liquidated  
            damages in an amount equal to the wages unlawfully unpaid and  
            interest thereon, reasonable attorney's fees and costs of  
            suit.

          2)Provides that in a wage claim brought before the LC for  
            failure to pay minimum wage, an employee shall be entitled to  
            recover liquidated damages in an amount equal to the wages  
            unpaid and interest thereon.

          3)Provides that if the employer demonstrates to the satisfaction  
            of the court or the LC that the failure to pay minimum wage  
            was in good faith and that the employer had reasonable grounds  
            for believing that the act or omission was not a violation of  
            the law, the court or the LC may, as a matter of discretion,  
            refuse to award liquidated damages or reduce the amount of  
            liquidated damages.

          4)Provides that, in a citation for a minimum wage violation  
            issued by the LC, an employer shall be subject to a specified  
            civil penalty and restitution of wages. 

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   This bill is sponsored by the California Rural Legal  
          Assistance Foundation (CRLAF) who argues that it will provide  
          that when the Labor Commissioner, after an inspection or  
          investigation, issues a citation against an employer for failure  








                                                                  AB 442
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          to pay minimum wages to his/her employees, the LC is also able  
          to recover for those employees the unpaid minimum wage  
          "liquidated damages" available elsewhere under state law.

          Under Labor Code section 1194, an employee who receives less  
          than the minimum wage is entitled to recover in a civil action,  
          the unpaid balance of the full amount of the minimum wage,  
          liquidated damages in an amount equal to the wages unlawfully  
          unpaid and interest thereon, reasonable attorney's fees and  
          costs of suit.

          AB 240 (Bonilla) of 2011 amended Labor Code sections 1194.2 and  
          98 to authorize the Labor Commissioner to award unpaid minimum  
          wage liquidated damages in administrative wage claim hearings  
          under the same conditions that existed for allowing a court to  
          award those same damages to workers.
          CRLAF contends that this bill fills the one remaining gap in the  
          LC's authority to make workers whole in minimum wage violation  
          cases.  This bill provides that the LC may also subject the  
          minimum wage violator to payment of "liquidated damages" to the  
          employee.  CRLAF argues that this change to the law ensures that  
          regardless of where wage theft is found, employees cheated out  
          of wages will get what the law intends: restitution of the  
          amount of unpaid minimum wages AND an amount equal to the total  
          amount of unpaid minimum wages (as "liquidated damages").

          CRLAF contends that the failure to enact this bill will create  
          new costs to the Division of Labor Standards Enforcement (DLSE)  
          and cause delays for workers entitled to liquidated damages.   
          Specifically, they argue that because the award of liquidated  
          damages is mandatory when minimum wages have not been paid, the  
          failure to recover those damages for the worker after a citation  
          is issued will likely result in the worker bringing a separate  
          claim before the LC.  This adds unnecessary new costs to DLSE  
          and also adds delays for workers who have been cheated of wages  
          and deserve full compensation.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Rural Legal Assistance Foundation (sponsor)

           Opposition 
           








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          None on file.

           
          Analysis Prepared by  :    Ben Ebbink / L. & E. / (916) 319-2091