BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2899


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          Date of Hearing:  April 20, 2016


                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT


                               Roger Hernández, Chair


          AB 2899  
          (Roger Hernández) - As Amended April 13, 2016


          SUBJECT:  Minimum wage violations: challenges


          SUMMARY:  Establishes a wage bond requirement, as specified, for  
          the filing of a writ of mandate with the superior court by an  
          employer challenging a citation and decision by the Labor  
          Commissioner (LC) finding a violation of the law.  Specifically,  
          this bill:


          1)Provides that, as a condition to filing a petition for a writ  
            of mandate, the employer seeking the writ shall first post a  
            bond with the LC equal to the total amount of any minimum  
            wages, liquidated damages, and overtime compensation that are  
            due and owing as specified in the citation being challenged.   
            The bond amount shall not include amounts for penalties. 


          2)Specifies that the bond shall be issued by a surety duly  
            authorized to do business in this state, shall be issued in  
            favor of unpaid employees, and shall ensure that the employer  
            makes payments as specified.


          3)Contains other related and conforming changes. 









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          FISCAL EFFECT:  Unknown


          COMMENTS:  This bill would establish an "appeal bond"  
          requirement for an employer who seeks a writ of mandate  
          challenging a decision of the LC following a citation by the  
          Bureau of Field Enforcement (BOFE).  The bond established by  
          this bill would be similar to a bond required of employers who  
          appeal an adverse decision following an employee wage claim  
          filed with the LC. 


          Current Bond Requirements for Appeals of Employee Wage Claims
          
          Existing law authorizes employees (in lieu of filing a civil  
          proceeding) to file an administrative claim for unpaid wages or  
          similar damages with the LC.  This is an administrative  
          adjudicatory process often referred to as the "Berman hearing"  
          process.

          Under current law, a losing party may appeal a LC decision to  
          the superior court.  The appeal is heard by the superior court  
          on a "de novo" basis, meaning the appeal is heard "anew" as if  
          the original hearing had not taken place.

          Prior to 2000, there were complaints by some worker advocates  
          that unscrupulous employers, particularly those in the  
          underground economy, were filing "frivolous" appeals of LC  
          decisions with the superior court in an effort to drag out  
          litigation and hide assets so that workers would not be able to  
          collect on judgments, even if ultimately successful on appeal.

          In response, AB 2509 (Steinberg) of 2000 added language to Labor  
          Code section 98.2(b) that specified that "[w]henever an employer  
          files an appeal pursuant to this section, the employer shall  
          post an undertaking with the reviewing court in the amount of  
          the decision, order, or award."









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          Despite the legislative history of AB 2509, in 2006 a California  
          appellate court determined that the requirement of Labor Code  
          section 98.2(b) was merely "directory" (and not "mandatory and  
          jurisdictional.") Progressive Concrete Inc., v. Parker, 136 Cal.  
          App. 4th 540, 548 (2006).

          In response, the Legislature passed AB 2772 (Labor Committee) in  
          2010 to clarify that the bond must be filed as a condition to an  
          employer's filing of an appeal.

          No Bond Requirement for "Appeals" of BOFE Citations

          In addition to an employee filing a claim for wages through the  
          wage claim adjudication process, the LC (operating through BOFE)  
          may cite an employer for an alleged violation of the law.  A  
          person challenging a citation may request an informal hearing,  
          at the conclusion of which the citation and any proposed  
          penalties may be affirmed, modified or dismissed.  If an  
          employer wishes to challenge the decision of the LC, he or she  
          may file a writ of mandate with the appropriate superior court.

          Unlike an appeal of an employee wage claim discussed above,  
          there is no requirement that an employer filing a writ of  
          mandate to overturn a LC citation must post a wage bond.   
          Therefore, this bill would impose a similar wage bond  
          requirement on the filing of such a writ of mandate.

          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Rural Legal Assistance Foundation











                                                                    AB 2899


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          Opposition


          None on file.




          Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091