BILL ANALYSIS Ó
AB 2898
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2898 (Committee on Labor and Employment) - As Introduced March
1, 2016
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|Policy |Labor and Employment |Vote:|7 - 0 |
|Committee: | | | |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill extends timelines for Labor and Workforce Development
Agency (LWDA) to investigate a violation, and for an aggravated
employee to file civil action, pursuant to the Private Attorneys
General Act of 2004 (PAGA). Specifically, this bill:
1)Extends from 30 days to 45 days, the period of time for LWDA
to notify an aggrieved employee and the employer, if it
intends to investigate, an alleged violation.
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2)Extends from 158 days to 173 days, the time period for an
aggravated employee to commence a civil action under PAGA, if
the LWDA does not issue a citation.
FISCAL EFFECT:
Minor/absorbable costs to the Department of Industrial Relations
(DIR).
COMMENTS:
1)Purpose. This bill proposes minor changes to allow the LWDA
more time to investigate and consider claims before a PAGA
lawsuit may be filed. According to the author, this bill may
serve as a potential policy vehicle for further discussions as
the year progresses, depending on the outcome of budget
negotiations.
2)Background. When an employer does not pay wages as required by
law, the Labor Code allows employees to recover these wages,
either through an administrative proceeding with the LWDA or
through private legal action against the employer. SB 796
(Dunn), Chapter 906, Statues of 2003, established this private
right to action, also known as PAGA and SB 1809 (Dunn),
Chapter 221, Statutes of 2004, expanded the law to allow
employees the right to seek civil penalties from employers.
Prior to PAGA these claims could only be pursued by LWDA and
related state agencies.
The general intent of PAGA is to allow employees to pursue
civil penalties through the legal system when LWDA and related
state agencies do not have the resources to do so, with a goal
of increasing the deterrent effect of the civil penalties and
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compliance with labor law. The LWDA receives notice of an
employee's intent to pursue civil penalties under PAGA. This
allows LWDA to investigate claims that might be better handled
administratively rather than through the PAGA process, such as
when the claim overlaps with other matters already under
investigation by LWDA.
3)Governor's January Budget proposal. Since the implementation
of PAGA, resources for LWDA have not kept pace with workload.
In 2014, less than half of PAGA notices were reviewed, and
LWDA estimates that less than 1 percent of PAGA notices have
been reviewed or investigated since PAGA was implemented. When
a PAGA notice is investigated, LWDA reports that it has
difficulty completing the investigation within the timeframes
outlined in PAGA. When an investigation is not completed, or
not completed on time, the PAGA claim is automatically
authorized to proceed.
Acknowledging the additional support necessary to implement
PAGA, the Governor's January budget proposes $1.6 million in
2016-17, and $1.5 million ongoing, from the Labor and
Workforce Development Fund (LWDF) to support ten new positions
- one at LWDA and nine at the DIR. These resources would allow
for greater oversight of the PAGA process. The Assembly budget
subcommittee approved this funding and associated positions.
The Governor's January proposal also included several policy
changes. The Assembly budget subcommittee rejected the
following pieces of the Administration's proposed trailer
bill: (1) clarify that employers may request an investigation
following the receipt of a PAGA claim; (2) require
verification of PAGA notices involving more than ten
employees; and (3) grant authority to DIR to create ad hoc
employer amnesty programs under specified conditions.
The balance of the administration's proposal was held open to
allow for continued dialogue between stakeholders and the
administration. The Subcommittee plans to revisit the issue
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when the May Revision is considered.
This bill was introduced to serve as a potential policy
vehicle if the Legislature determines a policy bill is
necessary in lieu of a budget trailer bill.
Analysis Prepared by:Misty Feusahrens / APPR. / (916)
319-2081