California Legislature—2015–16 Regular Session

Assembly BillNo. 2899


Introduced by Committee on Labor and Employment (Assembly Members Roger Hernández (Chair), Chu, Low, McCarty, and Thurmond)

March 1, 2016


An act to amend Section 1197.1 of the Labor Code, relating to employment.

LEGISLATIVE COUNSEL’S DIGEST

AB 2899, as introduced, Committee on Labor and Employment. Minimum wage violations: appeal.

Under existing law, any employer or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid to any employee a wage less than the minimum fixed by applicable state or local law or an order of the Industrial Welfare Commission, is subject to a civil penalty, restitution of wages, liquidated damages payable to the employee, and any applicable specified penalties, as provided. Existing law provides notice and hearing requirements under which a person against whom a citation has been issued, can request a hearing to contest proposed assessment of a civil penalty, wages, liquidated damages, and any applicable penalties. Existing law further provides that after a hearing with the Labor Commissioner, a person contesting a citation may file a writ of mandate, within 45 days, with the appropriate superior court.

This bill would recharacterize the request for a hearing to contest the citation as a request for appeal and require a person appealing a citation to post a bond, as specified, in an amount equal to the unpaid wages assessed under the citation, excluding penalties. The bill would require that the bond be issued in favor of the unpaid employees, and ensure that the appellant makes prescribed payments pursuant to the proceedings.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P2    1

SECTION 1.  

Section 1197.1 of the Labor Code is amended to
2read:

3

1197.1.  

(a) Any employer or other person acting either
4individually or as an officer, agent, or employee of another person,
5who pays or causes to be paid to any employee a wage less than
6the minimum fixed by an applicable state or local law, or by an
7order of the commission shall be subject to a civil penalty,
8restitution of wages, liquidated damages payable to the employee,
9and any applicable penalties imposed pursuant to Section 203 as
10follows:

11(1) For any initial violation that is intentionally committed, one
12hundred dollars ($100) for each underpaid employee for each pay
13period for which the employee is underpaid. This amount shall be
14in addition to an amount sufficient to recover underpaid wages,
15liquidated damages pursuant to Section 1194.2, and any applicable
16 penalties imposed pursuant to Section 203.

17(2) For each subsequent violation for the same specific offense,
18two hundred fifty dollars ($250) for each underpaid employee for
19each pay period for which the employee is underpaid regardless
20of whether the initial violation is intentionally committed. This
21amount shall be in addition to an amount sufficient to recover
22underpaid wages, liquidated damages pursuant to Section 1194.2,
23and any applicable penalties imposed pursuant to Section 203.

24(3) Wages, liquidated damages, and any applicable penalties
25imposed pursuant to Section 203, recovered pursuant to this section
26shall be paid to the affected employee.

27(b) If, upon inspection or investigation, the Labor Commissioner
28determines that a person has paid or caused to be paid a wage less
29than the minimum under applicable law, the Labor Commissioner
30may issue a citation to the person in violation. The citation may
31be served personally or by registered mail in accordance with
32subdivision (c) of Section 11505 of the Government Code. Each
P3    1citation shall be in writing and shall describe the nature of the
2violation, including reference to the statutory provision alleged to
3have been violated. The Labor Commissioner promptly shall take
4all appropriate action, in accordance with this section, to enforce
5the citation and to recover the civil penalty assessed, wages,
6liquidated damages, and any applicable penalties imposed pursuant
7to Section 203 in connection with the citation.

8(c) (1) If a person desires to contest a citation or the proposed
9assessment of a civil penalty, wages, liquidated damages, and any
10applicable penalties imposed pursuant to Section 203 therefor, the
11person shall, within 15 business days after service of the citation,
12notify the office of the Labor Commissioner that appears on the
13citation of his or herbegin insert appeal by aend insert request for an informal hearing.
14The Labor Commissioner or his or her deputy or agent shall, within
1530 days, hold a hearing at the conclusion of which the citation or
16proposed assessment of a civil penalty, wages, liquidated damages,
17and any applicable penalties imposed pursuant to Section 203 shall
18be affirmed, modified, or dismissed.

begin insert

19(2) As a condition to an appeal, the person appealing shall first
20post a bond with the Labor Commissioner equal to the total amount
21of any minimum wages, liquidated damages, and overtime
22compensation that are due and owing as determined pursuant to
23subdivision (b) of Section 558, as specified in the citation being
24appealed. The bond amount shall not include amounts for penalties.
25The bond shall be issued by a surety duly authorized to do business
26in this state, shall be issued in favor of unpaid employees, and
27shall ensure that the appellant makes payments as set forth in this
28paragraph. If a decision is entered which affirms or modifies the
29amounts for minimum wages, liquidated damages, or overtime
30compensation, the appellant shall pay the amounts owed for the
31specified items included in a clerk’s judgment entered under
32subdivision (f) based on the decision, or pursuant to a court
33judgment in a writ of mandate proceeding under paragraph (3).
34If the appeal is withdrawn or dismissed without entry of judgment,
35the appellant shall pay the amounts owed for the specified items
36pursuant to the citation, or the administrative decision if a pending
37writ of mandate is dismissed prior to a court decision, unless the
38parties have executed a settlement agreement for payment of some
39other amount. In the case of a settlement agreement, the appellant
P4    1 shall pay the amount he or she is obligated to pay under the terms
2of the settlement.

end insert
begin delete

3(2)

end delete

4begin insert(3)end insert The decision of the Labor Commissioner shall consist of a
5notice of findings, findings, and an order, all of which shall be
6served on all parties to the hearing within 15 days after the hearing
7by regular first-class mail at the last known address of the party
8on file with the Labor Commissioner. Service shall be completed
9pursuant to Section 1013 of the Code of Civil Procedure. Any
10amount found due by the Labor Commissioner as a result of a
11hearing shall become due and payable 45 days after notice of the
12findings and written findings and order have been mailed to the
13party assessed. A writ of mandate may be taken from this finding
14to the appropriate superior court. The party shall pay any judgment
15and costs ultimately rendered by the court against the party for the
16assessment. The writ shall be taken within 45 days of service of
17the notice of findings, findings, and order thereon.

18(d) A person to whom a citation has been issued shall, in lieu
19of contesting a citation pursuant to this section, transmit to the
20office of the Labor Commissioner designated on the citation the
21amount specified for the violation within 15 business days after
22issuance of the citation.

23(e) When no petition objecting to a citation or the proposed
24assessment of a civil penalty, wages, liquidated damages, and any
25applicable penalties imposed pursuant to Section 203 is filed, a
26certified copy of the citation or proposed civil penalty, wages,
27liquidated damages, and any applicable penalties imposed pursuant
28to Section 203 may be filed by the Labor Commissioner in the
29office of the clerk of the superior court in any county in which the
30person assessed has or had a place of business. The clerk,
31immediately upon the filing, shall enter judgment for the state
32against the person assessed in the amount shown on the citation
33or proposed assessment of a civil penalty, wages, liquidated
34damages, and any applicable penalties imposed pursuant to Section
35203.

36(f) When findings and the order thereon are made affirming or
37modifying a citation or proposed assessment of a civil penalty,
38wages, liquidated damages, and any applicable penalties imposed
39pursuant to Section 203 after hearing, a certified copy of these
40findings and the order entered thereon may be entered by the Labor
P5    1Commissioner in the office of the clerk of the superior court in
2any county in which the person assessed has property or in which
3 the person assessed has or had a place of business. The clerk,
4immediately upon the filing, shall enter judgment for the state
5against the person assessed in the amount shown on the certified
6order.

7(g) A judgment entered pursuant to this section shall bear the
8same rate of interest and shall have the same effect as other
9judgments and be given the same preference allowed by the law
10on other judgments rendered for claims for taxes. The clerk shall
11make no charge for the service provided by this section to be
12performed by him or her.

13(h) In a jurisdiction where a local entity has the legal authority
14to issue a citation against an employer for a violation of any
15applicable local minimum wage law, the Labor Commissioner,
16pursuant to a request from the local entity, may issue a citation
17against an employer for a violation of any applicable local
18minimum wage law if the local entity has not cited the employer
19for the same violation. If the Labor Commissioner issues a citation,
20the local entity shall not cite the employer for the same violation.

21(i) The civil penalties provided for in this section are in addition
22to any other penalty provided by law.

23(j) This section shall not apply to any order of the commission
24relating to household occupations.

25(k) This section does not change the applicability of local
26minimum wage laws to any entity.



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