BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 2899|
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                                   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). 








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           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.  









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          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







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          Prepared by:Brandon Seto / L. & I.R. / (916) 651-1556
          8/3/16 18:21:30


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