BILL ANALYSIS Ó
AB 970
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ASSEMBLY THIRD READING
AB
970 (Nazarian)
As Amended April 15, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
|----------------+------+----------------------+--------------------|
|Labor |5-2 |Roger Hernández, Chu, |Harper, Patterson |
| | |Low, McCarty, | |
| | |Thurmond | |
|----------------+------+----------------------+--------------------|
|Appropriations |11-5 |Gomez, Bloom, Bonta, |Bigelow, Chang, |
| | |Calderon, Eggman, |Gallagher, Jones, |
| | |Eduardo Garcia, |Wagner |
| | |Holden, Quirk, | |
| | |Rendon, Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Makes a number of changes related to the citation
authority of the Labor Commissioner. Specifically, this bill:
1)Provides that, if upon inspection or investigation the Labor
Commissioner determines that a person has violated overtime
requirements of existing law, including "any applicable local
overtime law," the Labor Commissioner may issue a citation.
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2)Provides that, if upon inspection or investigation, the Labor
Commissioner determines that a person has paid less than the
minimum wage under applicable state or local law, the Labor
Commissioner may issue a citation.
3)Provides that the Labor Commissioner shall not issue a citation
against an employer for a violation of any applicable local
overtime law or local minimum wage law if the local entity with
jurisdiction in the matter has cited or has initiated an
investigation against the employer for the same violation.
4)Makes related and conforming changes.
5)Authorizes the Labor Commissioner to issue a citation against an
employer or person acting on behalf of an employer for
violations of existing law related to reimbursements for
expenses.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill will result in ongoing costs of approximately
$125,000 (special funds) to the Department of Industrial
Relations.
COMMENTS: This bill is sponsored by the California Rural Legal
Assistance Foundation (CRLAF). They note that Governor Brown
recently has signed several new statutes into law that addressed
some of the weaknesses or gaps in the Labor Commissioner's legal
authority to effectively enforce wage laws in a field
investigation or to fully adjudicate wage related claims in a
Berman administrative wage claim hearing.
They argue that this bill closes two other important gaps in the
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Labor Commissioner's field enforcement authority and will
strengthen her efforts to stop wage theft.
Existing Labor Code Section 2802 requires an employer to indemnify
his or her employees for "all necessary expenditures or losses"
incurred by the employee in direct consequence of his or her
duties. A very common violation of this provision involves
illegal charges for tools or equipment necessary to perform the
job, but which are deducted from workers' pay notwithstanding.
CRLAF states that, under current law, workers may file a civil
action to recover these illegal deductions from their pay, or may
seek to recover them in a Berman wage claim hearing. However, the
Labor Commissioner cannot issue a citation for this violation,
even if she determines upon inspection or investigation that the
charges are illegal and have not been repaid to the worker. This
bill would specifically authorize the Labor Commissioner to issue
citations in such situations.
Existing law provides a legal framework for enforcement of state
minimum wage and overtime wage requirements. However, the sponsor
states that as more local California authorities have enacted
higher minimum wage laws applicable to the lowest paid workers in
their jurisdictions, the Labor Commissioner has been processing
claims to enforce these higher wage requirements in Berman wage
hearings. They argue that this bill recognizes this evolution and
authorizes the Labor Commissioner to also issue a citation when
she determines an employer has violated an applicable local wage
law.
CRLAF contends that this bill is likely to make a significant
contribution to encouraging compliance with higher local living
wage laws by giving the Labor Commissioner the discretion to cite
when she finds violations of these laws. Employers would be
subject to the same citation amounts, and have the same appeal
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rights, as would apply if they were cited for a violation of state
minimum wage or overtime requirements. As noted above, the Labor
Commissioner has been enforcing these local wage requirements in
her wage claim hearings; this bill simply extends authority to
cite when violations are encountered in the field.
A coalition of employer groups, including the California Chamber
of Commerce, opposes this measure, stating that it will subject
employers to layers of penalties and enforcement efforts,
increased annual assessments, and a limited opportunity to appeal.
In addition, opponents state that under the citation process, an
employer challenging a citation can request an administrative
hearing to contest the citation and may only challenge the
administrative ruling pursuant to a writ of mandate. A writ of
mandate limits the superior court's scope of review of the
evidence and arguments the court may consider for purposes of
challenging the administrative ruling. Comparatively, in wage
claim adjudication through the Labor Commissioner's office, an
employer has a right to a trial de novo to superior court if the
employer wants to challenge an administrative ruling, which
provides the court with unlimited review of the underlying
complaint as well as any new issues, evidence or arguments raised
on appeal. Accordingly, to the extent the Labor Commissioner is
resolving any local minimum wage violations through the wage claim
process, that process provides a fairer opportunity for an
employer to appeal a ruling it believes was issued in error rather
than the citation process.
Analysis Prepared by:
Ben Ebbink / L. & E. / (916) 319-2091 FN: 0000189
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