BILL ANALYSIS �
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Date of Hearing: April 24, 2013
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hern�ndez, Chair
AB 1386 (Labor Committee) - As Introduced: March 4, 2013
SUBJECT : Employee complaints: final orders.
SUMMARY : Streamlines the collection procedure for employee
wage claims that are final. Specifically, this bill :
1)Authorizes the Labor Commissioner (LC) to file, within ten
days of the order becoming final, a certified copy of the
final order with the county recorder of any county in which
the employer's property may be located.
2)Specifies that the order may be filed in any and all counties
of the state, at the LC's discretion and depending upon
information the LC obtains concerning the employer's assets.
3)Specifies that the amount found due under the order shall be a
lien in favor of the employee named in the order, and against
the personal and real property of the employer named in the
order, within the county in which the order is filed.
4)Provides that the recorder shall accept and file the order and
record it as a mortgage on real estate, shall file the same as
a security interest, and shall index the same as a mortgage on
real estate and as a security interest.
5)Provides that the recorder shall include all charges for the
services to be performed by him or her in the amount due under
the lien.
EXISTING LAW :
1)Vests with the LC the authority to hear employee complaints
regarding the payment of wages and other employment-related
issues.
2)Requires the LC to file an order, decision, or award within 15
days of hearing an employee complaint. If no party to the
action appeals the order, decision, or award within ten days
after its service, existing law provides that the order,
decision, or award becomes the final order for the action.
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3)Requires the LC to file the final order with the clerk of the
superior court of the appropriate county within ten days of
the order, decision, or award becoming the final order for the
action, unless the parties reach a settlement approved by the
LC.
4)Requires the clerk of the superior court to enter judgment in
conformity with the final order, which has the same force and
effect as a judgment entered in a civil action.
FISCAL EFFECT : Unknown
COMMENTS : This bill would streamline the collection process for
final LC orders for unpaid wages.
Under current law, an employee may bring a claim for unpaid
wages, penalties, and damages before the LC under Labor Code
Section 98. If the LC issues an order, decision or award (ODA)
in the employee's favor and against the employer and the
employer fails to appeal within 10 days, the order of the LC
becomes final. The LC is required to file a certified copy of
that order with the Superior Court to be entered as a judgment
against the employer and for the employee in the amount of the
order. A judgment is the legal determination of rights, but a
judgment, in and of itself, does not create a legal obligation
to pay the judgment amount.
To become a secured creditor, the judgment debt needs to be
recorded with the county recorder. In order to record the
judgment debt, the employee first needs to obtain an Abstract of
Judgment from the court. This process may take several weeks;
during that time the employer may have liquidated its business,
or otherwise divested itself of tangible and real property,
thereby denying the employee the opportunity to collect the
wages found due and owing by the LC. The current procedure
requires the ODA of the LC to be converted into a superior court
judgment before it can be recorded as a property lien against an
employer's property. If the employer has not appealed the ODA
within the time permitted, the employee must wait until the
clerk of the superior court has entered the ODA into the court's
judgment book or rolls. This action by the court clerk may take
several weeks, and given the effect of budget cuts on the
courts, will most likely take longer in the future. After the
judgment has been entered, a request for an Abstract of Judgment
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must be made of the same court in order to obtain a document the
county recorder will accept for filing and recording. This
two-step process results in a delay to the employee to secure
their lien to the employer's property. During this delay an
employer has the ability to divest itself of property in order
to avoid paying the employee's wages, damages, and penalties
found due.
Under the current procedure, the LC files a certified copy of
the ODA with the clerk of the superior court who then enters it
as a judgment on the judgment rolls of the court. This is a
ministerial act of the clerk and does not require any action by
the court itself in oversight or approval. The invocation of
judiciary power is minimal, yet the use of the judicial
procedure is the same as if a civil action was adjudicated.
Since both parties are entitled to judicial review of the ODA if
they so choose, the delay caused by having to use judicial
procedures in order for the employee to collect wages when
neither side desires to resort to the judicial process is
unnecessary and wasteful of executive and judicial resources.
Therefore, this bill would allow the LC to simply record a final
ODA with the local county recorder, eliminating the two-step
process requiring ministerial action by the Superior Court.
This will speed collection activity and will help ensure that
employees are able to collect on their wage claims before an
unscrupulous employer is able to move or hide their assets.
Supporters argue that this bill is an important step in the
direction of ensuring that all LC final orders, decisions and
awards are actually collected by the aggrieved workers.
REGISTERED SUPPORT / OPPOSITION :
Support
California Rural Legal Assistance Foundation
Opposition
None on file.
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Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091