BILL ANALYSIS Ó
AB 1723
Page 1
ASSEMBLY THIRD READING
AB 1723 (Nazarian)
As Introduced February 14, 2014
Majority vote
LABOR & EMPLOYMENT 5-1 JUDICIARY 7-2
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|Ayes:|Roger Hernández, Alejo, |Ayes:|Wieckowski, Alejo, Chau, |
| |Chau, Holden, | |Dickinson, Garcia, |
| |Ridley-Thomas | |Muratsuchi, Stone |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Morrell |Nays:|Gorell, Maienschein |
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|Gatto, Bocanegra, | | |
| |Bradford, | | |
| |Ian Calderon, Campos, | | |
| |Eggman, Gomez, Holden, | | |
| |Pan, Quirk, | | |
| |Ridley-Thomas, Weber | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bigelow, Donnelly, Jones, | | |
| |Linder, Wagner | | |
| | | | |
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SUMMARY : Provides that minimum wage citations issued by the
Labor Commissioner will also include any applicable "waiting
time" penalties provided for under existing law, as specified.
Specifically, this bill :
1)Provides that, in a citation by the Labor Commissioner for
failure to pay minimum wage, an employer who fails to pay the
minimum wage shall be subject to any applicable "waiting time"
penalties under existing law in addition to existing civil
penalties, restitution of wages, and liquidated damages.
2)Makes related conforming changes to existing law.
AB 1723
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill will result in special fund costs in the
range of $100,000 to $150,000 to the Department of Industrial
Relations.
COMMENTS : Under existing law, there are generally three main
avenues available under the Labor Code for the recovery of
unpaid minimum wages.
First, an employee may file an administrative wage claim with
the Labor Commissioner. (Labor Code Section 98). Existing law
provides for an administrative hearing process for the
adjudication of such claims, including wages, penalties, and
other demands for compensation, including liquidated damages.
(Labor Code Section 98). These administrative hearings are
usually referred to as "Berman hearings."
Second, an employee may file a civil action to recover the full
amount of the minimum wage, including interest, reasonable
attorney's fees and costs of suit. (Labor Code Section 1194).
In such a civil action, an employee shall also be entitled to
liquidated damages in an amount equal to the wages unlawfully
paid. (Labor Code Section 1194.2).
Third, existing law authorizes the Labor Commissioner to issue a
citation for failure to pay the state minimum wage after an
inspection or investigation. (Labor Code Section 1197.1).
Existing law provides that the employer shall be subject to a
civil penalty, restitution of wages, and liquidated damages
payable to the employee. Existing law also provides for an
administrative hearing process for a person to contest a
citation or proposed assessment of civil penalties, wages and
liquidated damages. (Labor Code Section 1197.1).
Under a different provision of existing law, when an employer
willfully fails to pay any wages of an employee who is
discharged or who quits, the wages of the employee continue as a
penalty for up to 30 days. (Labor Code Section 203). These
wages are often referred to as "waiting time" penalties and are
generally designed to ensure the prompt payment of earned wages.
Actions to recover unpaid minimum wages often include claims
for "waiting time" penalties under Labor Code Section 203.
Under existing law, the Labor Commissioner lacks the statutory
AB 1723
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authority to recover "waiting time" penalties as part of a
citation for a minimum wage violation.
This bill is sponsored by the California Rural Legal Assistance
Foundation, who argues that it will ensure that victims of wage
theft will recover any applicable "waiting time" penalties when
the Labor Commissioner issues a citation for a minimum wage
violation.
The California Association for Health Services at Home (CAHSAH)
expresses concerns about whether, under this bill, an employer
would have the same opportunity to present defenses against
"waiting time" penalties as they would under the normal "Berman
hearing" process. They state that the potential of penalties
elevates the need for a fair hearing to ensure employers have
equal protections under the law and the ability to present
information.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN: 0003605