BILL ANALYSIS Ó
AB 970
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CONCURRENCE IN SENATE AMENDMENTS
AB
970 (Nazarian)
As Amended August 24, 2015
Majority vote
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|ASSEMBLY: |48-26 |(May 18, 2015) |SENATE: | |(August 31, |
| | | | |25-14 |2015) |
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Original Committee Reference: L. & E.
SUMMARY: Makes a number of changes related to the citation
authority of the Labor Commissioner.
The Senate amendments:
1)Specify that in a jurisdiction where a local entity has the
legal authority to issue a citation against an employer for a
violation of any applicable local minimum wage or overtime
law, the Labor Commissioner, pursuant to a request from the
local entity, may issue a citation against the employer.
2)Specify that if the Labor Commissioner issues a citation, the
local entity shall not cite the employer for the same
violation.
AB 970
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3)Provide that this does not change the applicability of local
minimum wage laws to any entity.
FISCAL EFFECT: According to the Senate Appropriations
Committee, the Department of Industrial Relations would incur
ongoing costs of $125,000 (special funds) to implement the
provisions of this bill.
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
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.
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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 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
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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:
0001518