Amended in Assembly April 13, 2016

Amended in Assembly March 29, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2899


Introduced bybegin delete Committee on Labor and Employment (Assembly Membersend deletebegin insert Assembly Memberend insert Roger Hernándezbegin delete (Chair), Chu, Low, McCarty, and Thurmond)end delete

March 1, 2016


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

LEGISLATIVE COUNSEL’S DIGEST

AB 2899, as amended, begin deleteCommittee on Labor and Employmentend delete begin insertRoger Hernándezend insert. Minimum wage violations: challenges.

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 require a person seeking a writ of mandate contesting the Labor Commissioner’s ruling, to post a bond with the Labor Commissioner 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 person seeking the writ 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
P3    1than the minimum under applicable law, the Labor Commissioner
2may issue a citation to the person in violation. The citation may
3be served personally or by registered mail in accordance with
4subdivision (c) of Section 11505 of the Government Code. Each
5citation shall be in writing and shall describe the nature of the
6violation, including reference to the statutory provision alleged to
7have been violated. The Labor Commissionerbegin delete promptlyend delete shall
8begin insert promptlyend insert take all appropriate action, in accordance with this
9section, to enforce the citation and to recover the civil penalty
10assessed, wages, liquidated damages, and any applicable penalties
11imposed pursuant to Section 203 in connection with the citation.

12(c) (1) If a person desires to contest a citation or the proposed
13 assessment of a civil penalty, wages, liquidated damages, and any
14applicable penalties imposed pursuant to Section 203 therefor, the
15person shall, within 15 business days after service of the citation,
16notify the office of the Labor Commissioner that appears on the
17citation of his or her appeal by a request for an informal hearing.
18The Labor Commissioner or his or her deputy or agent shall, within
1930 days, hold a hearing at the conclusion of which the citation or
20proposed assessment of a civil penalty, wages, liquidated damages,
21and any applicable penalties imposed pursuant to Section 203 shall
22be affirmed, modified, or dismissed.

23(2) The decision of the Labor Commissioner shall consist of a
24notice of findings, findings, and an order, all of which shall be
25served on all parties to the hearing within 15 days after the hearing
26by regular first-class mail at the last known address of the party
27on file with the Labor Commissioner. Service shall be completed
28pursuant to Section 1013 of the Code of Civil Procedure. Any
29amount found due by the Labor Commissioner as a result of a
30hearing shall become due and payable 45 days after notice of the
31findings and written findings and order have been mailed to the
32party assessed. A writ of mandate may be taken from this finding
33to the appropriate superior court. The party shall pay any judgment
34and costs ultimately rendered by the court against the party for the
35assessment. The writ shall be taken within 45 days of service of
36the notice of findings, findings, and order thereon.

37(3) As a condition to filing a petition for a writ of mandate, the
38petitioner seeking the writ shall first post a bond with the Labor
39Commissioner equal to the total amount of any minimum wages,
40liquidated damages, and overtime compensation that are due and
P4    1owing as determined pursuant to subdivision (b) of Section 558,
2as specified in the citation being challenged. The bond amount
3shall not include amounts for penalties. The bond shall be issued
4by a surety duly authorized to do business in this state, shall be
5issued in favor of unpaid employees, and shall ensure that the
6petitioner makes payments as set forth in this paragraph. If a
7decision is entered which affirms or modifies the amounts for
8minimum wages, liquidated damages, or overtime compensation,
9the petitioner shall pay the amounts owed for the specified items
10included in a clerk’s judgment entered under subdivision (f) based
11on the decision, or pursuant to a court judgment in a writ of
12mandate proceeding under paragraph (2). If the request for a writ
13is withdrawn or dismissed without entry of judgment, the petitioner
14shall pay the amounts owed for the specified items pursuant to the
15citation, or the administrative decision if a pending writ of mandate
16is dismissed prior to a court decision, unless the parties have
17executed a settlement agreement for payment of some other
18amount. In the case of a settlement agreement, the petitioner shall
19pay the amount he or she is obligated to pay under the terms of
20the settlement.

21(d) A person to whom a citation has been issued shall, in lieu
22of contesting a citation pursuant to this section, transmit to the
23office of the Labor Commissioner designated on the citation the
24amount specified for the violation within 15 business days after
25issuance of the citation.

26(e) When no petition objecting to a citation or the proposed
27assessment of a civil penalty, wages, liquidated damages, and any
28applicable penalties imposed pursuant to Section 203 is filed, a
29certified copy of the citation or proposed civil penalty, wages,
30liquidated damages, and any applicable penalties imposed pursuant
31to Section 203 may be filed by the Labor Commissioner in the
32office of the clerk of the superior court in any county in which the
33person assessed has or had a place of business. The clerk,
34immediately upon the filing, shall enter judgment for the state
35against the person assessed in the amount shown on the citation
36or proposed assessment of a civil penalty, wages, liquidated
37damages, and any applicable penalties imposed pursuant to Section
38203.

39(f) When findings and the order thereon are made affirming or
40modifying a citation or proposed assessment of a civil penalty,
P5    1wages, liquidated damages, and any applicable penalties imposed
2pursuant to Section 203 after hearing, a certified copy of these
3findings and the order entered thereon may be entered by the Labor
4Commissioner in the office of the clerk of the superior court in
5any county in which the person assessed has property or in which
6the person assessed has or had a place of business. The clerk,
7immediately upon the filing, shall enter judgment for the state
8against the person assessed in the amount shown on the certified
9order.

10(g) A judgment entered pursuant to this section shall bear the
11same rate of interest and shall have the same effect as other
12judgments and be given the same preference allowed by the law
13on other judgments rendered for claims for taxes. The clerk shall
14make no charge for the service provided by this section to be
15performed by him or her.

16(h) In a jurisdiction where a local entity has the legal authority
17to issue a citation against an employer for a violation of any
18applicable local minimum wage law, the Labor Commissioner,
19pursuant to a request from the local entity, may issue a citation
20against an employer for a violation of any applicable local
21minimum wage law if the local entity has not cited the employer
22for the same violation. If the Labor Commissioner issues a citation,
23the local entity shall not cite the employer for the same violation.

24(i) The civil penalties provided for in this section are in addition
25to any other penalty provided by law.

26(j) This section shall not apply to any order of the commission
27relating to household occupations.

28(k) This section does not change the applicability of local
29minimum wage laws to any entity.



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