BILL ANALYSIS Ó
AB 1506
Page 1
Date of Hearing: September 8, 2015
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hernández, Chair
AB 1506
(Roger Hernández) - As Amended August 31, 2015
SUBJECT: Labor Code Private Attorneys General Act of 2004.
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.
Specifically, this bill:
1)Removes 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.
2)Requires 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)Includes in the definition of "cure" that a violation of the
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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)Prohibits 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.
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. (Lab. Code Sec. 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). (Lab. Code
Sec. 2699.5.) This list includes a violation for failing to
provide an accurate itemized statement in writing detailing
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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 (1) gross wages earned, (2) total hours worked
by the employee, as specified, (3) the number of piece-rate
units earned and any applicable piece rate if the employee is
paid on a piece-rate basis, (4) all deductions, provided that
all deductions made on written orders of the employee may be
aggregated and shown as one item, (5) net wages earned, (6)
the inclusive dates of the period for which the employee is
paid, (7) 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, (8)
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 (9) 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. (Lab. Code Sec. 226(a).)
4)Provides that for serious violations, including failure to
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. (Lab. Code Sec.
2699.3(a)(1).) The aggrieved employee may commence a civil
action, after a specified waiting period, upon receiving
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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. (Lab. Code Sec.
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. (Lab. Code Sec.
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. (Lab. Code Sec. 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
address of the legal entity that is the employer. (Lab. Code
Sec. 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. (Lab. Code Secs. 2699.3,
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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
percent 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. (Lab. Code Sec.
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
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,
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as specified in this bill, to one time in a 12-month period.
There is currently no opposition on file to this bill.
REGISTERED SUPPORT / OPPOSITION:
Support
Air Conditioning Trade Association
Associated Builders and Contractors - San Diego Chapter
Associated Builders and Contractors of California
Associated General Contractors
Association of California Insurance Companies
Brea Chamber of Commerce
California Ambulance Association
California Apartment Association
California Asian Pacific Chamber of Commerce
California Association of Bed and Breakfast Inns
California Association of Licensed Security Agencies, Guards and
Associations
California Association of Realtors
California Bankers Association
California Business Properties Association
California Business Roundtable
California Chamber of Commerce
California Cotton Ginners Association
California Cotton Growers Association
California Defense Counsel
California Employment Law Council
California Farm Bureau Federation
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California Forestry Association
California Fresh Fruit Association
California Grocers Association
California Hotel and Lodging Association
California League of Food Processors
California Manufacturers and Technology Association
California Pool & Spa Association
California Professional Association of Specialty Contractors
California Restaurant Association
California Retailers Association
California State Council of the Society for Human Resource
Management
Camarillo Chamber of Commerce
Chambers of Commerce Alliance Ventura & Santa Barbara Counties
Civil Justice Association of California
Computing Technology Industry Association
Family Business Association of California
Goleta Valley Chamber of Commerce
Greater Bakersfield Chamber of Commerce
Irvine Chamber of Commerce
Lodi Chamber of Commerce
National Federation of Independent Business
North Orange County Chamber of Commerce
Oxnard Chamber of Commerce
Plumbing-Heating-Cooling Contractors Association of California
Rancho Cordova Chamber of Commerce
Sierra Pacific Industries
Simi Valley Chamber of Commerce
Southwest California Legislative Council
Torrance Area Chamber of Commerce
Valley Industry & Commerce Association
Verizon
Western Agriculture Processors Association
Western Electrical Contractors Association
Western Growers Association
Wine Institute
Opposition
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None on file.
Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091