BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 970 (Nazarian) - Labor Commissioner: enforcement of employee
claims.
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|Version: April 15, 2015 |Policy Vote: L. & I.R. 3 - 1 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: June 22, 2015 |Consultant: Robert Ingenito |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: AB 970 would authorize the Labor Commissioner (1) to
issue a citation to enforce local minimum wage and overtime
laws, and (2) 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
Impact: The Department of Industrial Relations (DIR) indicates
that it would incur annual ongoing costs of $125,000 (special
funds) to implement the provisions of the bill.
Background: Wage theft is a term used to describe labor law
violations such as not paying an employee minimum wages or
overtime, not paying for off-the-clock work, tip stealing, and
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not paying final wages. Under current law, when an employer
fails to pay wages due, the employee has the right to file a
claim against the employer with DIR's Division of Labor
Standards Enforcement (DLSE), which is directed by the Labor
Commissioner. After conducting an investigation, the Labor
Commissioner may hold an administrative conference or hearing,
or both. If a party is dissatisfied with the Commissioner's
decision, it can appeal to the appropriate civil court. When a
worker wins a favorable decision, the process of collecting the
award can be difficult and ineffective. Some employers may have
already hidden their cash assets, declared bankruptcy, or
otherwise become judgment-proof.
Under current law, the Labor Commissioner has the authority to
cite for violations of state minimum wage but not for higher
local minimum wage violations. The only way to address such
claims currently is through the wage claim hearing process.
A worker may also recover owed wages as a result from an
inspection from the Division of Labor Standards and
Enforcement's Bureau of Field Enforcement (BOFE) within DIR.
BOFE conducts inspections of industries to ensure compliance
with the Labor Code. While BOFE does not pursue individual wage
claims, at times the investigation results in an audit of the
employer's time and payroll records. If this occurs, the
Division will attempt to collect wages for all employees found
to have been underpaid. However, the Division cannot collect
liquidated damages.
Additionally, current law requires an employer to compensate
employees for "all necessary expenditures or losses" incurred in
direct consequence of duty. A 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. Workers may file a civil action to recover
these illegal deductions from their pay, or may seek to recover
them in a wage claim hearing.
Proposed Law: This bill would do all of the following:
Authorize the Labor Commissioner to issue a citation if,
AB 970 (Nazarian) Page 2 of
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upon inspection or investigation, it is determined that a
person has violated overtime requirements of existing law,
including any applicable local overtime law.
Authorize the Labor Commissioner to issue a citation if,
upon inspection or investigation, it is determined a person
has paid less than the minimum wage under applicable state
or local law.
Authorize 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.
Prohibit the Labor Commissioner from issuing a citation
for the above offenses if the local entity with
jurisdiction in the matter has cited or has initiated an
investigation against the employer for the same violation.
Related
Legislation:
AB 1723 (Nazarian, Chapter 886, Statutes of 2014)
authorized the Labor Commissioner to include "waiting time"
penalties in wage citations.
AB 442 (Nazarian, Chapter 735, Statutes of 2013)
authorized the Labor Commissioner to collect liquidated
damages from an employer who pays an employee less than
minimum wage.
Staff Comments: As noted above, BOFE currently engages in field
enforcement and has the authority to cite for violations of
minimum wage, but this bill would apply a local wage calculation
rather than the state minimum wage. This new authorization would
potentially require more investigative and other workload within
DIR, at an ongoing annual cost of $125,000.
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Any local government costs resulting from the mandate in this
measure are not state-reimbursable because the mandate only
involves the definition of a crime or the penalty for conviction
of a crime.
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