BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2074| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 CONTINUED AB 2074 Page 2 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 CONTINUED AB 2074 Page 3 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 CONTINUED AB 2074 Page 4 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 **** END **** CONTINUED