BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 970|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 970
Author: Nazarian (D)
Amended: 4/15/15 in Assembly
Vote: 21
SENATE LABOR & IND. REL. COMMITTEE: 3-1, 6/10/15
AYES: Mendoza, Leno, Mitchell
NOES: Stone
NO VOTE RECORDED: Jackson
SENATE APPROPRIATIONS COMMITTEE: 5-1, 6/22/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates
NO VOTE RECORDED: Nielsen
ASSEMBLY FLOOR: 48-26, 5/18/15 - See last page for vote
SUBJECT: Labor Commissioner: enforcement of employee claims
SOURCE: California Rural Legal Assistance Foundation
DIGEST: This bill authorizes the Labor Commissioner to issue a
citation to enforce local minimum wage and overtime laws, as
well as against an employer or person acting on behalf of an
employer for violations of existing law related to
reimbursements for expenses.
ANALYSIS:
Existing law:
1)Authorizes the Labor Commissioner to investigate and enforce
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statutes and orders of the Industrial Welfare Commission that,
among other things, specify the requirements for the payment
of wages by employers.
2)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,
including orders of the Industrial Welfare Commission. The
Labor Commissioner may require an award in the amount of the
wages owed, plus interest. (Labor Code §§ 98 & 98.2)
3)Sets civil penalties for any employer or other person acting
on behalf of an employer who violates, or causes to be
violated, a section of this chapter or any provision
regulating hours and days of work in any order of the
Industrial Welfare Commission ranging from $50 upon first
violation for each underpaid employee for each pay period to
$100 for subsequent violations. (Labor Code §558)
4)States that if upon inspection or investigation the Labor
Commissioner determines that a person had paid or caused to be
paid a wage for overtime work in violation of provisions
relating to hours and days of work in any order of the
Industrial Welfare Commission, the Labor Commissioner may
issue a citation. (Labor Code §558)
5)States that the minimum wage for employees fixed by the
Industrial Welfare Commission is the minimum wage to be paid
to employees, and the payment of a less wage than the minimum
is unlawful. (Labor Code §1197)
6)Provides that any employer who pays an employee a wage less
than the minimum fixed by the Industrial Welfare Commission
shall be subject to a civil penalty, restitution of wages,
liquidated damages payable to the employee, and any applicable
penalties. (Labor Code §1197.1)
7)States that if upon inspection or investigation the Labor
Commissioner determines that a person had paid or caused to be
paid a wage less than the minimum wage the Labor Commissioner
may issue a citation. (Labor Code §1197.1)
8)States that an employer shall indemnify (or compensate) his or
her employee for all necessary expenditures or losses incurred
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by the employee in direct consequence of the discharge of his
or her duties, or of his or her obedience to the directions of
the employer, even though unlawful, unless the employee at the
time of obeying the directions believed them to be harmful.
(Labor Code §2802)
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.
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)States that the Labor Commissioner shall not issue a citation
against an employer for a violation of any applicable local
overtime or 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)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 reimbursement
obligations for expenses.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee, the Department
of Industrial Relations indicates that it will incur annual
ongoing costs of $125,000 (special funds) to implement the
provisions of this bill.
SUPPORT: (Verified6/10/15)
California Rural Legal Assistance Foundation (source)
Bet Tzedek Legal Services
California Immigrant Policy Center
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California Labor Federation, AFL-CIO
California Nurses Association
Maintenance Cooperation Trust Fund
OPPOSITION: (Verified6/10/15)
Associated Builders and Contractors of California
Association General Contractors
California Association for Health Services at Home
California Automotive Wholesalers' Association
California Bankers Association
California Chamber of Commerce
California Employment Law Council
California Grocers Association
California Manufacturers and Technology Association
California New Car Dealership Association
California Pool & Spa Association
California Restaurant Association
California Trucking Association
Chamber of Commerce Mountain View
El Centro Chamber of Commerce & Visitors Bureau
Fullerton Chamber of Commerce
Greater Conejo Valley Chamber of Commerce
Greater Fresno Area Chamber of Commerce
Lake Tahoe South Shore Chamber of Commerce
National Federation of Independent Business
Palm Desert Area Chamber of Commerce
Redondo Beach Chamber of Commerce and Visitors Bureau
San Jose Silicon Valley Chamber of Commerce
Santa Clara Chamber of Commerce & Convention-Visitor's Bureau
Santa Maria Valley Chamber of Commerce Visitor and Convention
Bureau
Simi Valley Chamber of Commerce
South Bay Association of Chambers of Commerce
Western Electrical Contractors Association
ARGUMENTS IN SUPPORT: According to proponents, 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.
Proponents note that a very common violation of this provision
involves illegal charges for tools or equipment necessary to
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perform the job, but which are deducted from workers' pay
notwithstanding. Proponents note that under existing 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, proponents argue that 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 specifically authorizes the Labor Commissioner to
issue citations in such situations.
However, proponents state 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.
Lastly, proponents contend 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.
Proponents argue that employers would be subject to the same
citation amounts, and have the same appeal rights, as would
apply if they were cited for a violation of state minimum wage
or overtime requirements. Proponents note that 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.
ARGUMENTS IN OPPOSITION:A coalition of employer groups,
including the California Chamber of Commerce, opposes this bill,
stating that it will subject employers to layers of penalties
and enforcement efforts, increased annual assessments, and a
limited opportunity to appeal.
First, opponents note that beginning in 2009 the costs of state
labor law enforcement were primarily transferred from the
General Fund to private sector employers through annual
assessments on workers' compensation premiums, which are based
upon the employers' payroll. Accordingly, any increase in the
Labor Commissioner's jurisdiction will likely result in an
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increase to all employers' annual assessments. Employers
statewide should not have to pay for these increased assessments
for the enforcement of local laws where they are not located.
Lastly, 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.
ASSEMBLY FLOOR: 48-26, 5/18/15
AYES: Alejo, Bloom, Bonilla, Bonta, Burke, Calderon, Campos,
Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman,
Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Roger Hernández, Holden, Irwin,
Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin,
Nazarian, O'Donnell, Quirk, Rendon, Ridley-Thomas, Salas,
Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood,
Atkins
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,
Chávez, Dahle, Beth Gaines, Gallagher, Gray, Grove, Hadley,
Harper, Jones, Lackey, Linder, Maienschein, Mayes, Obernolte,
Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Brown, Kim, Mathis, Melendez, Perea,
Rodriguez
Prepared by:Deanna Ping/ L. & I.R. / (916) 651-1556
6/24/15 17:19:49
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