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 ----------------------------------------------------------------- |Author: |Roger Hernández | |-----------+-----------------------------------------------------| |Version: |May 4, 2016 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Brandon Seto | | | | ----------------------------------------------------------------- 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 of ? 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 AB 2899 (Roger Hernández) Page 3 of ? 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 -- END --