BILL NUMBER: SB 919 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Wright
JANUARY 27, 2014
An act to amend Section 98 of the Labor Code, relating to
employment.
LEGISLATIVE COUNSEL'S DIGEST
SB 919, as introduced, Wright. Employees: wage disputes.
Existing law authorizes the Labor Commissioner to investigate
employee complaints and enforce statutes and orders of the Industrial
Welfare Commission that, among other things, specify the
requirements for the payment of wages by employers. Under existing
law, the Labor Commissioner is authorized to provide for a hearing
for an action to recover wages, penalties, and other demands for
compensation, as specified. Existing law requires a party who
receives actual notice of a wage dispute claim before the Labor
Commissioner to notify the commissioner in writing of any change in
the party's business or personal address, as specified, for purposes
of being served with a notice of hearing on the matter.
Existing law prohibits a default from being taken against a
defendant that fails to appear or answer within the time allowed, and
requires the Labor Commissioner to hear the evidence offered and
issue an order, decision, or award in accordance with the evidence.
This bill would provide that a party that has failed, without just
and substantial cause, to timely provide the above-described change
of address information is subject to repayment of treble the amount
of all costs incurred by the opposing party in attempting to perfect
service. The bill would allow for a default to be taken against a
defendant that has willfully evaded service of process to avoid
responsibility for unpaid wages or penalties, under specified
circumstances.
The bill also would make various technical, nonsubstantive changes
to the above provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 98 of the Labor Code is amended to read:
98. (a) (1) The Labor Commissioner is
authorized to investigate employee complaints. The Labor Commissioner
may provide for a hearing in any action to recover wages, penalties,
and other demands for compensation, including liquidated damages if
the complaint alleges payment of a wage less than the minimum wage
fixed by an order of the Industrial Welfare Commission or by statute,
properly before the division or the Labor Commissioner, including
orders of the Industrial Welfare Commission, and shall determine all
matters arising under his or her jurisdiction. It is within the
jurisdiction of the Labor Commissioner to accept and determine claims
from holders of payroll checks or payroll drafts returned unpaid
because of insufficient funds, if, after a diligent search, the
holder is unable to return the dishonored check or draft to the payee
and recover the sums paid out. Within
(2) Within 30 days of the filing
of the complaint, the Labor Commissioner shall notify the parties as
to whether a hearing will be held, whether action will be taken in
accordance with Section 98.3, or whether no
further action will not be taken on the complaint. If the
determination is made by the Labor Commissioner to hold a hearing,
the hearing shall be held within 90 days of the date of that
determination. However, the Labor Commissioner may postpone or grant
additional time before setting a hearing if the Labor Commissioner
finds that it would lead to an equitable and just resolution of the
dispute. A
(3) A party who
that has received actual notice of a claim
before the Labor Commissioner shall, while the matter is before the
Labor Commissioner, notify the Labor Commissioner in writing of any
change in that party's business or personal address within 10 days
after the change in address occurs. A party that has failed,
without just and substantial cause, to timely provide change of
address information as required by this paragraph shall be subject to
repayment of treble the amount of all costs incurred by the opposing
party in attempting to perfect service. The Labor Commissioner shall
include these costs in any order, decision, or award under this
section.
It
(4) It is the intent of the
Legislature that hearings held pursuant to this section be conducted
in an informal setting preserving the rights of the parties.
(b) When a hearing is set, a copy of the complaint, which shall
include the amount of compensation requested, together with a notice
of time and place of the hearing, shall be served on all parties,
personally or by certified mail, or in the manner specified in
Section 415.20 of the Code of Civil Procedure.
(c) Within 10 days after service of the notice and the complaint,
a defendant may file an answer with the Labor Commissioner in any
form as the Labor Commissioner may prescribe, setting forth the
particulars in which the complaint is inaccurate or incomplete and
the facts upon which the defendant intends to rely.
(d) No pleading other than the complaint and answer of the
defendant or defendants shall be required. Both the complaint
and answer shall be in writing and shall conform to the form
and the rules of practice and procedure adopted by the Labor
Commissioner.
(e) Evidence on matters not pleaded in the answer shall be allowed
only on terms and conditions the Labor Commissioner shall impose. In
all these cases, the claimant shall be entitled to a continuance for
purposes of review of the new evidence.
(f) If (1) Except as
otherwise provided in paragraph (2), if the defendant fails to
appear or answer within the time allowed under this chapter,
no a default shall not be
taken against him or her the defendant ,
but the Labor Commissioner shall hear the evidence offered and shall
issue an order, decision, or award in accordance with the evidence.
A defendant failing to appear or answer, or subsequently contending
to be aggrieved in any manner by want of notice of the pendency of
the proceedings, may apply to the Labor Commissioner for relief in
accordance with Section 473 of the Code of Civil Procedure. The Labor
Commissioner may afford this relief. No A
right to relief, including the claim that the findings or award
of the Labor Commissioner or judgment entered thereon are void upon
their face, shall not accrue to the defendant in any court
unless prior application is made to the Labor Commissioner in
accordance with this chapter.
(2) A default may be taken against a defendant that has willfully
evaded service of process to avoid responsibility for unpaid wages or
penalties. The Labor Commissioner, as a matter of a just and
reasonable inference, may exercise his or her discretion under this
paragraph to enter a default judgment against an employer, upon a
showing of both of the following:
(A) The Labor Commissioner has attempted to serve notice of a
hearing or conference by personal service, service by certified mail,
service by overnight delivery service with confirmation of delivery
provided to the Labor Commissioner by the delivery service, or in the
manner specified in Section 415.20 of the Code of Civil Procedure.
That attempted service shall have been directed to the address
included on the most recent wage statement or check issued to the
employee, the current address provided to the Labor Commissioner as a
condition of any licensing requirement, or the address for service
of process for the employer that is on file with the Secretary of
State.
(B) The Labor Commissioner has established any of the following
factors:
(i) The defendant has multiple outstanding failures to notify the
Labor Commissioner of changes to its business or personal address.
(ii) The defendant has a prior history of failure to timely notify
the Labor Commissioner or other state or local agencies of its
business or personal address change, as required by state or local
law or regulation.
(iii) The defendant refused to accept delivery of the certified
mail or overnight delivery of the notice of conference or hearing,
despite the fact that the defendant was conducting business at the
address at which delivery was attempted.
(iv) The defendant has a prior history of any of the following:
(I) Failing to satisfy judgments for wages and penalties by
evading service.
(II) Staging an artificial business shutdown.
(III) Engaging in deception with respect to the ability to pay
wages due.
(IV) Engaging in or attempting bankruptcy fraud with respect to
wages owed.
(V) Hiding, or attempting to hide, personal or business assets.
(VI) Breaching settlement agreements involving unpaid wages or
penalties.
(VII) Issuing a check for wages or penalties due to an employee
from an account with insufficient funds.
(VIII) Selling business assets, including real estate, in an
attempt to avoid paying wages or penalties pursuant to an order,
decision, award, judgment, or settlement agreement.
(v) The defendant has provided a false or misleading business or
personal address to any state or local entity.
(vi) The defendant has engaged in any unlawful conduct in avoiding
service.
(vii) The defendant has a prior history of engaging in coercion or
retaliation against current or former employees for exercising any
right provided for in this code, including the right to file a claim
for unpaid wages or penalties against the defendant or the defendant'
s business.
(3) (A) Paragraph (2) shall not be construed to alter a defendant'
s rights of de novo appeal under Section 98.2 following the issuance
of an order, decision, or award against it. If a default is taken
against a defendant and the defendant contends that it is aggrieved
by want of notice of the proceedings under this section, the
defendant may apply to the Labor Commissioner for, and the Labor
Commissioner may afford, relief in accordance with Section 473 of the
Code of Civil Procedure.
(B) No right to relief, including the claim that the findings or
award of the Labor Commissioner or the judgment entered is void upon
its face, shall accrue to the defendant in any court, unless prior
application is made to the Labor Commissioner in accordance with this
chapter.
(g) All hearings conducted pursuant to this chapter are governed
by the division and by the rules of practice and procedure adopted by
the Labor Commissioner.
(h) (1) Whenever a claim is filed under this chapter against a
person operating or doing business under a fictitious business name,
as defined in Section 17900 of the Business and Professions Code,
which relates to the person's business, the division shall inquire at
the time of the hearing whether the name of the person is the legal
name under which the business or person has been licensed,
registered, incorporated, or otherwise authorized to do business.
(2) The division may amend an order, decision, or award to conform
to the legal name of the business or the person who
that is the defendant to a wage claim, if it can
be shown that proper service was made on the defendant or
his or her its agent, unless a judgment had been
entered on the order, decision, or award pursuant to subdivision
(d) (e) of Section 98.2. The Labor
Commissioner may apply to the clerk of the superior court to amend a
judgment that has been issued pursuant to a final order, decision, or
award to conform to the legal name of the defendant, if it can be
shown that proper service was made on the defendant or his
or her its agent.