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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