Amended in Assembly March 15, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1978

Introduced by Assembly Member Gonzalez

February 16, 2016

An act to amend Section begin delete 2802 end delete begin insert 90.5 end insert of the Labor Code, relating to employment.

LEGISLATIVE COUNSEL’S DIGEST

AB 1978, as amended, Gonzalez. begin delete Employee indemnification. end delete begin insert Employment: Department of Industrial Relations: wage claims and retaliation complaints. end insert

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Existing law establishes within the Department of Industrial Relations the Division of Labor Standards Enforcement, which is vested with the general duty of enforcing labor laws, including those relating to wage claims and employer retaliation. Existing law requires the Labor Commissioner, defined as the Chief of the Division of Labor Standards Enforcement, to establish and maintain a field enforcement unit in order to ensure that minimum labor standards are met. Existing law requires the commissioner to report annually to the Legislature, not later than March 1, concerning the effectiveness of the field enforcement unit, as specified.

end insert begin insert

This bill would require the Labor Commissioner to include in the commissioner’s report to the Legislature, as described above, specified information on the status of wage claims and retaliation complaints, including the average amount of time it takes for a wage claim to receive a preliminary hearing and the current backlog of claims and complaints.

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Existing law requires an employer to indemnify his or her employees for all that the employee necessarily expends or loses in direct consequence of the discharge of the employee’s duties or as a result of obeying the employer’s directions. Existing law provides an aggrieved employee with a private right of action to recover these expenditures and authorizes the Labor Commissioner to enforce these provisions by issuing citations and penalties to employers for violations of this requirement, as specified. Existing law provides for interest on awards by the court or the Division of Labor Standards Enforcement for reimbursement.

end delete begin delete

This bill would make nonsubstantive changes to those interest provisions.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 90.5 of the end insert begin insert Labor Code end insert begin insert is amended to
read: end insert

90.5.  

(a) It is the policy of this state to vigorously enforce
minimum labor standards in order to ensure employees are not
required or permitted to work under substandard unlawful
conditions or for employers that have not secured the payment of
compensation, and to protect employers who comply with the law
from those who attempt to gain a competitive advantage at the
expense of their workers by failing to comply with minimum labor
standards.

(b) In order to ensure that minimum labor standards are
adequately enforced, the Labor Commissioner shall establish and
maintain a field enforcement unit, which shall be administratively
and physically separate from offices of the division that accept
and determine individual employee complaints. The unit shall have
offices in Los Angeles, San Francisco, San Jose, San Diego,
Sacramento, and any other locations that the Labor Commissioner
deems appropriate. The unit shall have primary responsibility for
administering and enforcing those statutes and regulations most
effectively enforced through field investigations, including Sections
226, 1021, 1021.5, 1193.5, 1193.6, 1194.5, 1197, 1198, 1771,
1776, 1777.5, 2651, 2673, 2675, and 3700, in accordance with the
plan adopted by the Labor Commissioner pursuant to subdivision
(c). Nothing in this section shall be construed to limit the authority
of this unit in enforcing any statute or regulation in the course of
its investigations.

(c) The Labor Commissioner shall adopt an enforcement plan
for the field enforcement unit. The plan shall identify priorities for
investigations to be undertaken by the unit that ensure the available
resources will be concentrated in industries, occupations, and areas
in which employees are relatively low paid and unskilled, and
those in which there has been a history of violations of the statutes
cited in subdivision (b), and those with high rates of noncompliance
with Section 3700.

(d) The Labor Commissioner shall annually report to the
Legislature, not later than March 1, concerning the begin delete effectiveness end delete
begin insert following: end insert

begin insert (1) end insert begin insert   end insert begin insert The effectiveness end insert of the field enforcement unit. begin delete The end delete begin insert This
part of the end insert report shall include, but not be limited to, all of the
following:

begin delete

(1)

end delete

begin insert (A) end insert  The enforcement plan adopted by the Labor Commissioner
pursuant to subdivision (c), and the rationale for the priorities
identified in the plan.

begin delete

(2)

end delete

begin insert (B) end insert  The number of establishments investigated by the unit, and
the number of types of violations found.

begin delete

(3)

end delete

begin insert (C end insert begin insert ) end insert  The amount of wages found to be unlawfully withheld from
workers, and the amount of unpaid wages recovered for workers.

begin delete

(4)

end delete

begin insert (D end insert begin insert ) end insert  The amount of penalties and unpaid wages transferred to
the General Fund as a result of the efforts of the unit.

begin insert

(2) The status of wage claims and retaliation complaints. This
part of the report shall include, but not be limited to, all of the
following:

end insert begin insert

(A) The average amount of time it takes for a wage claim to
receive a preliminary hearing.

end insert begin insert

(B) The number of determinations issued, the number of
investigative hearings held, the number of complaints dismissed,
and the number of complaints found valid, grouped by the year in
which the complaints were filed.

end insert begin insert

(C) An update on the division’s current backlog of wage claims
and retaliation complaints.

end insert begin insert

(e) The report required by subdivision (d) shall be provided in
compliance with Section 9795 of the Government Code.

end insert

begin delete

SECTION 1.  

Section 2802 of the Labor Code is amended to
read:

2802.  

(a) An employer shall indemnify his or her employee
for all necessary expenditures or losses incurred 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 unlawful.

(b) All awards made by a court or by the Division of Labor
Standards Enforcement for reimbursement of necessary
expenditures under this section shall carry interest at the same rate
as judgments in civil actions. Interest shall accrue from the date
on which the employee incurred the necessary expenditures or
losses.

(c) For purposes of this section, the term “necessary expenditures
or losses” shall include all reasonable costs, including, but not
limited to, attorney’s fees incurred by the employee enforcing the
rights granted by this section.

(d) In addition to recovery of penalties under this section in a
court action or proceedings pursuant to Section 98, the
commissioner may issue a citation against an employer or other
person acting on behalf of the employer who violates
reimbursement obligations for an amount determined to be due to
an employee under this section. The procedures for issuing,
contesting, and enforcing judgments for citations or civil penalties
issued by the commissioner shall be the same as those set forth in
Section 1197.1. Amounts recovered pursuant to this section shall
be paid to the affected employee.

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