BILL ANALYSIS Ó
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Tony Mendoza, Chair
2015 - 2016 Regular
Bill No: AB 2899 Hearing Date: June 29,
2016
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|Author: |Roger Hernández |
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|Version: |May 4, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Brandon Seto |
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Subject: Minimum wage violations: challenges
KEY ISSUE
Should the Legislature require that, prior to filing an appeal
of a decision by the Labor Commissioner (LC) relating to a
violation of wage laws, employers must post a bond with the LC
which covers the unpaid wages and damages owed to employees?
ANALYSIS
Existing law
Allows employees, who claim that they have not been paid
the minimum wage, to file an administrative claim with the
LC rather than filing a civil suit. This claim can then be
heard in an administrative adjudication hearing (Labor Code
§98).
Allows the decisions of these hearings to be appealed to
the Superior Court, but employers who wish to file an
appeal in this way must first post a bond with the court
that covers the amount owed under the previous decision,
order, or award, only in those circumstances when an
AB 2899 (Roger Hernández) Page 2
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employee filed the original claim (Labor Code §98.2).
This Bill
Creates a wage bond requirement for employer appeals
challenging a citation and decision initiated by the LC,
when the LC finds a violation of wage laws.
Requires that this bond must be filed with the LC and
include the total amount of any minimum wages, liquidated
damages, and overtime compensation owed as specified in the
citation being challenged. The bond amount would not
include amounts for penalties.
Specifies that the bond shall be issued by a surety
duly-authorized to do business in the state, and in favor
of unpaid employees, thus ensuring that the employer makes
payments owed.
COMMENTS
1. Need for this bill?
According to the author, under current law, an employee may
file a wage claim with the LC for unpaid wages. If the LC
rules in favor of the employee, the employer may appeal to the
Superior Court, but must first file a wage bond for the amount
of unpaid wages owed. This preserves the ability of the
employee to collect their wages in case the employer shuts
down or hides their assets to evade payment of the judgment.
However, this same bond requirement and protection does not
exist for actions and decisions initiated by the LC involving
wage law violations. This bill would require that before
appealing a decision by the LC, whether an employee filed the
original claim or the LC issued a citation, employers must
post a bond to ensure employees receive any payments owed to
them.
2. Proponent Arguments :
The author states that, under current law, in addition to an
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employee complaint, the LC can cite an employer for unpaid
wages after an investigation. If the LC rules against the
employer, the employer may appeal to the Superior Court.
Therefore, this bill would similarly require an employer,
prior to filing such an appeal, to post a wage bond for the
amount of the unpaid wages. As a result, the author believes
that this bill helps bring consistency to the processes and
remedies regarding both employee wage claims and LC
enforcement actions.
3. Opponent Arguments :
None received.
4. Prior Legislation :
AB 2772 (Assembly Committee on Labor and Employment) Chapter
102, Statutes of 2010 - clarified that an employer wishing to
appeal a Labor Commissioner decision with the Superior Court
must first post a bond in the amount of the judgment rendered
in the administrative hearing.
SUPPORT
California Rural Legal Assistance Foundation
OPPOSITION
None on file
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