Amended in Senate August 24, 2015

Amended in Senate July 14, 2015

Amended in Senate June 29, 2015

Amended in Assembly April 15, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 970


Introduced by Assembly Member Nazarian

February 26, 2015


An act to amend Sections 558, 1197, 1197.1, and 2802 of the Labor Code, relating to employment.

LEGISLATIVE COUNSEL’S DIGEST

AB 970, as amended, Nazarian. Labor Commissioner: enforcement of employee claims.

(1) Existing law authorizes the Labor Commissioner to investigate and enforce statutes and orders of the Industrial Welfare Commission that, among other things, specify the requirements for the payment of wages by employers. Existing law provides for criminal and civil penalties for violations of statutes and orders of the commission regarding payment of wages.

This bill would, in addition, authorize the Labor Commissioner to investigate and, upon a request from the local entity, to enforce local laws regarding overtime hours or minimum wage provisions and to issue citations and penalties for violations, except when the local entity has already issued a citation for the same violation. The bill would prohibit a local entity from issuing a citation to the employer if the Labor Commissioner has already issued a citation to that employer for the same violation. This bill also would make related conforming changes. By expanding the definition of a crime, this bill would create a state-mandated local program.

(2) Existing law requires an employer to indemnify his or her employees for all that the employee necessarily expends or loses in direct consequence of the discharge of the employee’s duties or as a result of obeying the employer’s directions. Existing law provides an aggrieved employee with a private right of action to recover these expenditures.

This bill would, additionally, authorize the Labor Commissioner to enforce these provisions by issuing citations and penalties to employers for violations of this requirement, as specified.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 558 of the Labor Code is amended to
2read:

3

558.  

(a) Any employer or other person acting on behalf of an
4employer who violates, or causes to be violated, a section of this
5chapter or any provision regulating hours and days of work in any
6order of the Industrial Welfare Commission shall be subject to a
7civil penalty as follows:

8(1) For any initial violation, fifty dollars ($50) for each
9underpaid employee for each pay period for which the employee
10was underpaid in addition to an amount sufficient to recover
11underpaid wages.

12(2) For each subsequent violation, one hundred dollars ($100)
13for each underpaid employee for each pay period for which the
14employee was underpaid in addition to an amount sufficient to
15 recover underpaid wages.

16(3) Wages recovered pursuant to this section shall be paid to
17the affected employee.

P3    1(b) If upon inspection or investigation the Labor Commissioner
2determines that a person had paid or caused to be paid a wage for
3overtime work in violation of any provision of this chapter, any
4provision regulating hours and days of work in any order of the
5Industrial Welfare Commission, or any applicable local overtime
6law, the Labor Commissioner may issue a citation. The procedures
7for issuing, contesting, and enforcing judgments for citations or
8civil penalties issued by the Labor Commissioner for a violation
9of this chapter shall be the same as those set out in Section 1197.1.

10(c) In a jurisdiction where a local entity has the legal authority
11to issue a citation against an employer for a violation of any
12applicable local overtime law, the Labor Commissioner, pursuant
13to a request from the local entity, may issue a citation against an
14employer for a violation of any applicable local overtime law if
15the local entity has not cited the employer for the same violation.
16If the Labor Commissioner issues a citation, the local entity shall
17not cite the employer for the same violation.

18(d) The civil penalties provided for in this section are in addition
19to any other civil or criminal penalty provided by law.

20(e) begin deleteNothing in this end deletebegin insertThis end insertsectionbegin delete addressesend deletebegin insert does not changeend insert the
21applicability of local overtime wage laws begin delete to a state agency.end delete begin insert to any
22entity.end insert

23

SEC. 2.  

Section 1197 of the Labor Code is amended to read:

24

1197.  

The minimum wage for employees fixed by the
25commission or by any applicable state or local law, is the minimum
26wage to be paid to employees, and the payment of a lower wage
27than the minimum so fixed is unlawful.begin delete Nothing in thisend deletebegin insert Thisend insert section
28begin delete addressesend deletebegin insert does not changeend insert the applicability of local minimum
29wage lawsbegin delete to a state agency.end deletebegin insert to any entity.end insert

30

SEC. 3.  

Section 1197.1 of the Labor Code is amended to read:

31

1197.1.  

(a) Any employer or other person acting either
32individually or as an officer, agent, or employee of another person,
33who pays or causes to be paid to any employee a wage less than
34the minimum fixed by an applicable state or local law, or by an
35order of the commission shall be subject to a civil penalty,
36restitution of wages, liquidated damages payable to the employee,
37and any applicable penalties imposed pursuant to Section 203 as
38follows:

39(1) For any initial violation that is intentionally committed, one
40hundred dollars ($100) for each underpaid employee for each pay
P4    1period for which the employee is underpaid. This amount shall be
2in addition to an amount sufficient to recover underpaid wages,
3liquidated damages pursuant to Section 1194.2, and any applicable
4penalties imposed pursuant to Section 203.

5(2) For each subsequent violation for the same specific offense,
6two hundred fifty dollars ($250) for each underpaid employee for
7each pay period for which the employee is underpaid regardless
8of whether the initial violation is intentionally committed. This
9amount shall be in addition to an amount sufficient to recover
10underpaid wages, liquidated damages pursuant to Section 1194.2,
11and any applicable penalties imposed pursuant to Section 203.

12(3) Wages, liquidated damages, and any applicable penalties
13imposed pursuant to Section 203, recovered pursuant to this section
14shall be paid to the affected employee.

15(b) If, upon inspection or investigation, the Labor Commissioner
16 determines that a person has paid or caused to be paid a wage less
17than the minimum under applicable law, the Labor Commissioner
18may issue a citation to the person in violation. The citation may
19be served personally or by registered mail in accordance with
20subdivision (c) of Section 11505 of the Government Code. Each
21citation shall be in writing and shall describe the nature of the
22violation, including reference to the statutory provision alleged to
23have been violated. The Labor Commissioner promptly shall take
24all appropriate action, in accordance with this section, to enforce
25the citation and to recover the civil penalty assessed, wages,
26liquidated damages, and any applicable penalties imposed pursuant
27to Section 203 in connection with the citation.

28(c) (1) If a person desires to contest a citation or the proposed
29assessment of a civil penalty, wages, liquidated damages, and any
30applicable penalties imposed pursuant to Section 203 therefor, the
31person shall, within 15 business days after service of the citation,
32notify the office of the Labor Commissioner that appears on the
33citation of his or her request for an informal hearing. The Labor
34Commissioner or his or her deputy or agent shall, within 30 days,
35hold a hearing at the conclusion of which the citation or proposed
36assessment of a civil penalty, wages, liquidated damages, and any
37applicable penalties imposed pursuant to Section 203 shall be
38affirmed, modified, or dismissed.

39(2) The decision of the Labor Commissioner shall consist of a
40notice of findings, findings, and an order, all of which shall be
P5    1served on all parties to the hearing within 15 days after the hearing
2by regular first-class mail at the last known address of the party
3on file with the Labor Commissioner. Service shall be completed
4pursuant to Section 1013 of the Code of Civil Procedure. Any
5amount found due by the Labor Commissioner as a result of a
6hearing shall become due and payable 45 days after notice of the
7findings and written findings and order have been mailed to the
8party assessed. A writ of mandate may be taken from this finding
9to the appropriate superior court. The party shall pay any judgment
10and costs ultimately rendered by the court against the party for the
11assessment. The writ shall be taken within 45 days of service of
12the notice of findings, findings, and order thereon.

13(d) A person to whom a citation has been issued shall, in lieu
14of contesting a citation pursuant to this section, transmit to the
15office of the Labor Commissioner designated on the citation the
16amount specified for the violation within 15 business days after
17issuance of the citation.

18(e) When no petition objecting to a citation or the proposed
19assessment of a civil penalty, wages, liquidated damages, and any
20applicable penalties imposed pursuant to Section 203 is filed, a
21certified copy of the citation or proposed civil penalty, wages,
22liquidated damages, and any applicable penalties imposed pursuant
23to Section 203 may be filed by the Labor Commissioner in the
24office of the clerk of the superior court in any county in which the
25person assessed has or had a place of business. The clerk,
26immediately upon the filing, shall enter judgment for the state
27against the person assessed in the amount shown on the citation
28or proposed assessment of a civil penalty, wages, liquidated
29damages, and any applicable penalties imposed pursuant to Section
30203.

31(f) When findings and the order thereon are made affirming or
32modifying a citation or proposed assessment of a civil penalty,
33wages, liquidated damages, and any applicable penalties imposed
34pursuant to Section 203 after hearing, a certified copy of these
35findings and the order entered thereon may be entered by the Labor
36Commissioner in the office of the clerk of the superior court in
37any county in which the person assessed has property or in which
38the person assessed has or had a place of business. The clerk,
39immediately upon the filing, shall enter judgment for the state
P6    1against the person assessed in the amount shown on the certified
2order.

3(g) A judgment entered pursuant to this section shall bear the
4same rate of interest and shall have the same effect as other
5judgments and be given the same preference allowed by the law
6on other judgments rendered for claims for taxes. The clerk shall
7make no charge for the service provided by this section to be
8performed by him or her.

9(h) In a jurisdiction where a local entity has the legal authority
10to issue a citation against an employer for a violation of any
11applicable local minimum wage law, the Labor Commissioner,
12pursuant to a request from the local entity, may issue a citation
13against an employer for a violation of any applicable local
14minimum wage law if the local entity has not cited the employer
15for the same violation. If the Labor Commissioner issues a citation,
16the local entity shall not cite the employer for the same violation.

17(i) The civil penalties provided for in this section are in addition
18to any other penalty provided by law.

19(j) This section shall not apply to any order of the commission
20relating to household occupations.

21(k) begin deleteNothing in this end deletebegin insertThis end insert sectionbegin delete addressesend deletebegin insert does not changeend insert the
22applicability of local minimum wage lawsbegin delete to a state agency.end deletebegin insert to any
23entity.end insert

24

SEC. 4.  

Section 2802 of the Labor Code is amended to read:

25

2802.  

(a) An employer shall indemnify his or her employee
26for all necessary expenditures or losses incurred by the employee
27in direct consequence of the discharge of his or her duties, or of
28his or her obedience to the directions of the employer, even though
29unlawful, unless the employee, at the time of obeying the
30directions, believed them to be unlawful.

31(b) All awards made by a court or by the Division of Labor
32Standards Enforcement for reimbursement of necessary
33expenditures under this section shall carry interest at the same rate
34as judgments in civil actions. Interest shall accrue from the date
35on which the employee incurred the necessary expenditure or loss.

36(c) For purposes of this section, the term “necessary expenditures
37or losses” shall include all reasonable costs, including, but not
38limited to, attorney’s fees incurred by the employee enforcing the
39rights granted by this section.

P7    1(d) In addition to recovery of penalties under this section in a
2court action or proceedings pursuant to Section 98, the
3commissioner may issue a citation against an employer or other
4person acting on behalf of the employer who violates
5reimbursement obligations for an amount determined to be due to
6an employee under this section. The procedures for issuing,
7contesting, and enforcing judgments for citations or civil penalties
8issued by the commissioner shall be the same as those set forth in
9Section 1197.1. Amounts recovered pursuant to this section shall
10be paid to the affected employee.

11

SEC. 5.  

No reimbursement is required by this act pursuant to
12Section 6 of Article XIII B of the California Constitution because
13the only costs that may be incurred by a local agency or school
14district will be incurred because this act creates a new crime or
15infraction, eliminates a crime or infraction, or changes the penalty
16for a crime or infraction, within the meaning of Section 17556 of
17the Government Code, or changes the definition of a crime within
18the meaning of Section 6 of Article XIII B of the California
19Constitution.



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