BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1506


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          CONCURRENCE IN SENATE AMENDMENTS
          AB  
          1506 (Roger Hernández)


          As Amended  August 31, 2015


          2/3 vote. Urgency


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          |COMMITTEE VOTE: |6-0  |September 8,    |RECOMMENDATION:   |concur     |
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          (L. & E.)




          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  








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          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.


          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.









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          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  
            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,  








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            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 LC 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  
            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).)








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          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.  (LC Sections  
          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,  








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          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  
          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: 0002280