BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2899| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2899 Author: Roger Hernández (D) Amended: 5/4/16 in Assembly Vote: 21 SENATE LABOR & IND. REL. COMMITTEE: 4-1, 6/29/16 AYES: Mendoza, Jackson, Leno, Mitchell NOES: Stone SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 52-24, 5/23/16 - See last page for vote SUBJECT: Minimum wage violations: challenges SOURCE: Author DIGEST: This bill requires 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: 1)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). AB 2899 Page 2 2)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 employee filed the original claim (Labor Code §98.2). This bill: 1)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. 2)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. 3)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 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 requires 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. AB 2899 Page 3 FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified8/2/16) California Rural Legal Assistance Foundation OPPOSITION: (Verified8/2/16) None received ARGUMENTS IN SUPPORT: The author states that, under current law, in addition to an 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. ASSEMBLY FLOOR: 52-24, 5/23/16 AYES: Alejo, Atkins, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooper, Dababneh, Daly, Dodd, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Linder, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon NOES: Achadjian, Travis Allen, Bigelow, Brough, Chávez, Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper, Jones, Kim, Lackey, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Steinorth, Wagner, Waldron, Wilk NO VOTE RECORDED: Arambula, Cooley, Eggman, Patterson AB 2899 Page 4 Prepared by:Brandon Seto / L. & I.R. / (916) 651-1556 8/3/16 18:21:30 **** END ****