BILL ANALYSIS Ó
AB 1506
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1506 (Roger Hernández)
As Amended August 31, 2015
2/3 vote. Urgency
--------------------------------------------------------------------
|ASSEMBLY: | | (May 4, 2015) |SENATE: |40-0 |(September 2, |
| |51-26 | | | |2015) |
| | | | | | |
| | | | | | |
--------------------------------------------------------------------
Original Committee Reference: L. & E.
SUMMARY: Amends the Labor Code Private Attorneys General Act of
2004 (PAGA) to provide an employer with the right to cure a
violation of failing to provide its employees with a wage
statement containing the inclusive dates of the pay period and
the name and address of the legal entity that is the employer.
The Senate amendments delete the contents of this bill and
instead:
1)Remove from PAGA's enumerated list of serious violations an
employer's failure to include in the wage statement the
inclusive dates of the period for which the employee is paid
and the name and address of the legal entity that is the
employer.
AB 1506
Page 2
2)Require an aggrieved employee to provide notice of the alleged
violations and a right to cure to the employer for failing to
detail the inclusive dates of the period for which the
employee is paid and the name and address of the legal entity
that is the employer.
3)Include in the definition of "cure" that a violation of the
detailed wage statement that fails to provide the inclusive
dates of the period for which the employee is paid and the
name and address of the legal entity that is the employer is
only considered cured upon a showing that the employer has
provided a fully compliant, itemized wage statement to each
aggrieved employee for each pay period for the three-year
period prior to the date of the employee's notice.
4)Prohibit an employer from availing himself or herself of the
notice and right to cure provisions, with respect to
allegations of failing to provide a wage statement that
details the inclusive dates of the period for which the
employee is paid and the name and address of the legal entity
that is the employer, more than once in a 12-month period for
the same violation or violations contained in the notice,
regardless of the location of the worksite.
5)Add co-authors.
6)Add an urgency clause.
EXISTING LAW:
1)Under PAGA, authorizes an aggrieved employee to bring a civil
action to recover specified civil penalties that would
otherwise be assessed and collected by the Labor and Workforce
Development Agency, on behalf of the employee and other
current or former employees for the violation of certain
provisions affecting employees. (Labor Code (LC) Section
AB 1506
Page 3
2699.)
2)Provides a list of enumerated, serious Labor Code violations
(including, but not limited to, violations of wage and hour,
overtime, child labor, agricultural, entertainment and garment
industry labor laws, and public works laws) for which an
aggrieved employee may commence a civil action for civil
penalties that could otherwise be assessed or collected by the
Labor and Workforce Development Agency (LWDA). (LC Section
2699.5.) This list includes a violation for failing to
provide an accurate itemized statement in writing detailing
specified wage, employer, and employee information. (Id.)
3)Requires an employer to provide, as specified, either as a
detachable part of the check, draft, or voucher paying the
employee's wages, or separately when wages are paid by
personal check or cash, an accurate itemized statement in
writing showing a) gross wages earned, b) total hours worked
by the employee, as specified, c) the number of piece-rate
units earned and any applicable piece rate if the employee is
paid on a piece-rate basis, d) all deductions, provided that
all deductions made on written orders of the employee may be
aggregated and shown as one item, e) net wages earned, f) the
inclusive dates of the period for which the employee is paid,
g) the name of the employee and only the last four digits of
his or her social security number or an employee
identification number other than a social security number, h)
the name and address of the legal entity that is the employer
and, if the employer is a farm labor contractor, as defined,
the name and address of the legal entity that secured the
services of the employer, and i) all applicable hourly rates
in effect during the pay period and the corresponding number
of hours worked at each hourly rate by the employee and,
beginning July 1, 2013, if the employer is a temporary
services employer as defined in Section 201.3, the rate of pay
and the total hours worked for each temporary services
assignment. (LC Section 226(a).)
4)Provides that for serious violations, including failure to
AB 1506
Page 4
provide any of the information required to be itemized above,
an aggrieved employee may bring a civil action against an
employer for civil penalties after the employee gives written
notice by certified mail to the Labor and Workforce
Development Agency and the employer of the specific provisions
alleged to have been violated, including the facts and
theories to support the alleged violation. (LC Section
2699.3(a)(1).) The aggrieved employee may commence a civil
action, after a specified waiting period, upon receiving
notice from the Agency that it does not intend to investigate
the alleged violation, or, if after an investigation, the
Agency does not intend to issue a citation. (LC Section
2699.3(a)(2).)
5)Provides that for other specified Labor Code violations or
violations not otherwise enumerated as serious violations, an
employer is entitled to notice of the violations, as
specified, and has a right to cure the violation before the
aggrieved employee may bring a civil action against an
employer for civil penalties. (LC Section 2699.3(c)(2)(A).)
However, an employer may not avail himself or herself of the
notice and cure provisions more than three times in a 12-month
period for the same violation or violations contained in the
notice, regardless of the location of the worksite. (LC
Section 26933(c)(2)(B).)
6)Defines "cure" to mean that the employer abates each violation
alleged by any aggrieved employee, the employer is in
compliance with the underlying statutes as specified in the
employee's notice, and any aggrieved employee is made whole.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: Existing law requires every employer to furnish each
of its employees with an accurate itemized statement, as
specified, that shows, among other things, the inclusive dates
of the period for which the employee is paid and the name and
AB 1506
Page 5
address of the legal entity that is the employer. (LC Section
226(a)(6), (8).) Existing law provides that all information
required to be included in the wage statement is a serious
violation subject to PAGA and does not provide an employer the
right to cure the violation before the aggrieved employee can
sue the employer for civil penalties. (LC Sections 2699.3,
2699.5.)
Proponents argue that wage statement violations are one area in
which employers have seen an increase in frivolous litigation
regarding technical violations that do not harm or injure the
employee.
Proponents note that the April 16, 2014 , Los Angeles Daily
Journal article titled "An Alternative to Employee Class
Actions," documents that PAGA lawsuits have increased over 400%
between 2005 and 2013, given the ease of filing such cases
without satisfying class action requirements and the potential
financial windfall. Proponents argue that this bill would help
curb this type of frivolous litigation under PAGA with regard to
only two sections of Labor Code Section 226, specifically
paragraphs (a)(6) (requiring the inclusive dates of the pay
period) and (8) (employer's legal name and address), by allowing
an employer 33 days to cure any alleged violation. Under PAGA,
for non-serious labor violations, the employer is entitled to
notice of the violations and a right to cure before the employee
can file the PAGA action. (LC Section 2699.3(c).) If the
employer cannot cure the violation, then the employee would
still be able to file a civil action and obtain any unpaid
wages, penalties, and attorney's fees. Proponents contend that
this bill would provide the appropriate balance of allowing an
employer to correct unintentional errors without the threat of a
multi-million dollar lawsuit that could put the employer out of
business, while still protecting the employee's ability to
obtain accurate information.
The Consumer Attorneys of California raised the concern that
this bill would allow employers to violate the wage statement
requirements, be given the opportunity to correct the wage
AB 1506
Page 6
statements, correct the wage statements, then violate the law
again. To address this concern, the bill was recently amended
to limit an employer's right to cure pay statement violations,
as specified in this bill, to one time in a 12-month period.
There is currently no opposition on file to this bill.
Analysis Prepared by:
Ben Ebbink / L. & E. / (916) 319-2091 FN:
0001754