BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 2074
          Author:   Roger Hernández (D)
          Amended:  As introduced
          Vote:     21


           SENATE LABOR & INDUST. RELATIONS COMM.  :  4-1, 6/11/14
          AYES:  Hueso, Leno, Padilla, Mitchell
          NOES:  Wyland

           SENATE JUDICIARY COMMITTEE  :  5-2, 6/24/14
          AYES:  Jackson, Corbett, Lara, Leno, Monning
          NOES:  Anderson, Vidak

           ASSEMBLY FLOOR  :  56-21, 5/15/14 - See last page for vote


           SUBJECT  :    Recovery of wages:  liquidated damages

           SOURCE  :     Author


           DIGEST  :    This bill clarifies that the statute of limitations  
          for a suit filed to pursue liquidated damages for the failure to  
          pay the minimum wage will run until the expiration of the  
          statute of limitations for the wages in which the penalties are  
          being sought.

           ANALYSIS  :    

          Existing law:

          1.Provides for a statute of limitations for the collection of  
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            wages of three years and a statute of limitations for the  
            collection of penalties of one year, unless the statute  
            imposes a different statute of limitations.

          2.Provides specified timelines for final payment by an employer  
            to an employee due to discharge, quitting employment, end of  
            temporary employment assignment, or other industry-specific  
            pay timelines.

          3.Requires that, if an employer willfully fails to pay wages due  
            to an employee who is discharge or who quits, the wages of the  
            employee shall continue as a penalty from the due date thereof  
            at the same rate until paid or until an action therefor is  
            commenced for up to 30 days.  Penalties for failure to timely  
            pay wages can be sought until the expiration of the statute of  
            limitations for the wages in which the penalties are being  
            sought.

          4.Sets a minimum wage for all employees in California, with  
            limited exceptions, and prohibits employers, unless specified,  
            from paying less than the state minimum wage.  The current  
            minimum wage is $9.00 per hour and will rise to $10.00 per  
            hour on January 1, 2016.

          5.Provides the Labor Commissioner with the authority to  
            investigate employee complaints and allows the Labor  
            Commissioner to hold a hearing in any action to recover wages.  
             The Labor Commissioner may require an award in the amount of  
            the wages owed, plus interest.  Existing Civil Code sets the  
            interest rate at 10%.

          6.Permits an individual to seek recovery through a civil suit of  
            the unpaid balance of the minimum wage, including interest,  
            attorney fees, and costs of the suit.

          7.Requires that if an employee is found to have been paid less  
            than the minimum wage, that employee must be paid liquidated  
            damages in an amount that is equal to the wages unlawfully  
            unpaid, plus interest.  Existing Civil Code sets the interest  
            rate at 10%.

          8.Provides that if an employer demonstrates to the satisfaction  
            of the court that the failure to pay the minimum wage was in  
            good faith and that the employer had reasonable grounds for  

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            believing that the act or omission was not a violation of  
            minimum wage law or regulations, the court may, in its  
            discretion, refuse to award liquidated damages or award a  
            lesser amount of liquidated damages to the employee.

          This bill clarifies that the statute of limitations for a suit  
          filed to pursue liquidated damages for the failure to pay the  
          minimum wage will run until the expiration of the statute of  
          limitations for the wages in which the penalties are being  
          sought.

           Prior Legislation
           
          AB 240 (Bonilla, Chapter 272, Statutes of 2011) authorizes the  
          Labor Commissioner to recover liquidated damages for an employee  
          who brings a complaint alleging payment of less than the minimum  
          wage.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   Local:  
           No

           SUPPORT  :   (Verified  6/26/14)

          California Conference of Machinists
          California Conference of the Amalgamated Transit Union
          California Federation of Teachers, AFL-CIO
          California Labor Federation, AFL-CIO
          California Rural Legal Assistance Foundation
          California School Employees Association, AFL-CIO
          California State Association of Electrical Workers
          California State Pipe Trades Council
          California Teamsters Public Affairs Council
          Engineers & Scientists, IFPTE Local 20
          International Longshore and Warehouse Union, Coast Division
          Professional & Technical Engineers, IFPTE Local 21
          The Communications Workers of America, District 9, AFL-CIO
          UNITE HERE
          Utility Workers Union of America, Local 132
          Western State Council of Sheet Metal Workers

           ARGUMENTS IN SUPPORT  :    Supporters note that this bill will  
          bring consistency between the statute of limitations for claims  
          of liquidated damages for minimum wage violations and claims for  
          unpaid minimum wages, and supporters argue that restricting the  

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          ability to obtain liquidated damages dilutes the deterrent  
          effect on employers who fail to pay the minimum wage.   
          Supporters further argue that a liquidated damages structure  
          that only adds an additional liquidated damages award for one  
          year of an unpaid minimum wage claim sends a statement that  
          there is no real penalty for such worker exploitation beyond one  
          year.

           ASSEMBLY FLOOR  :  56-21, 5/15/14
          AYES:  Alejo, Ammiano, Bloom, Bocanegra, Bonilla, Bonta,  
            Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,  
            Chesbro, Cooley, Dababneh, Daly, Dickinson, Eggman, Fong, Fox,  
            Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall,  
            Roger Hernández, Holden, Jones-Sawyer, Levine, Lowenthal,  
            Medina, Mullin, Muratsuchi, Nazarian, Pan, Perea, John A.  
            Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Weber,  
            Wieckowski, Wilk, Williams, Yamada, Atkins
          NOES:  Achadjian, Allen, Bigelow, Chávez, Conway, Dahle,  
            Donnelly, Beth Gaines, Gorell, Grove, Hagman, Harkey, Jones,  
            Logue, Maienschein, Melendez, Nestande, Olsen, Patterson,  
            Wagner, Waldron
          NO VOTE RECORDED:  Linder, Mansoor, Vacancy


          PQ:e  6/26/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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