BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1342| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1342 Author: Mendoza (D) Amended: 4/12/16 Vote: 21 SENATE JUDICIARY COMMITTEE: 6-0, 4/26/16 AYES: Jackson, Anderson, Hertzberg, Leno, Monning, Wieckowski NO VOTE RECORDED: Moorlach SUBJECT: Wages: investigations: subpoenas SOURCE: Los Angeles County Board of Supervisors DIGEST: This bill specifies that a legislative body of a city or county is authorized to delegate that body's authority to issue subpoenas to a county or city official or department head and may report noncompliance thereof to the judge of the superior court of the county in order to enforce local wage laws. This bill also makes related legislative findings. ANALYSIS: Existing law: 1)Divides the state into cities and counties, and requires that the Legislature provide for the powers of cities and counties. (Cal. Const., art. XI, Secs. 1 and 2.) 2)Authorizes counties and cities to adopt a charter for their own governance, independent of the Legislative scheme. (Cal. Const., art. XI, Secs. 3-6.) SB 1342 Page 2 3)Provides for the general powers of counties and specifies that a board of supervisors may do and perform all other acts and things required by law, or which are necessary to the full discharge of the duties of the legislative authority of the county government. (Gov. Code Sec. 25200 et seq. and Gov. Code Sec. 25207.) 4)Authorizes the board of supervisors of any county to establish the office of the county hearing officer, and provides that the duties of the office are to conduct hearings for the county or any board, agency, commission, or committee of the county. (Gov. Code Sec. 27720.) 5)Provides that when a law or ordinance requires that a hearing be held or that findings of fact or conclusions of law be made by any county board, agency, commission, or committee, the county hearing officer may be authorized, by ordinance or resolution, to: 1) conduct the hearing; 2) to issue subpoenas; 3) to receive evidence; 4) to administer oaths; 5) to rule on questions of law and the admissibility of evidence; and 6) to prepare a record of the proceedings. (Gov. Code Sec. 27721.) 6)Provides for the general powers of cities including the ability to pass ordinances not in conflict with the Constitution or laws of the state, and specifies that the legislative body may issue subpoenas requiring attendance of witnesses or production of books or other documents for evidence or testimony in any action or proceeding pending before it. (Gov. Code Secs. 37100 et seq., 37104.) 7)Authorizes that, in addition to other powers, a city may perform all acts necessary or proper to carry out its powers. (Gov. Code Sec. 37112.) This bill: 1)Specifies that, in order to enforce local wage laws, a legislative body of a city or county may delegate to a county or city official or department head its authority to issue subpoenas and to report noncompliance thereof to the judge of the superior court of the county. 2)Provides that the Legislature finds and declares that the SB 1342 Page 3 provision above, does not constitute a change in, but is declaratory of, existing law. 3)Makes various Legislative findings and declarations including: statistics related to wage theft; clarifying that the authority to delegate to local officials the ability to issue subpoenas exists under current law; and encouraging cities and counties to develop and enact specific measures to target and remedy wage theft. Background Across the country, with California leading the way, cities and counties are passing their own minimum wage laws, often with significantly higher wages than currently exist at the state and federal level. In 2014, San Francisco voters overwhelmingly approved a ballot measure to gradually raise the city's minimum wage to $15 an hour by 2018. Last year the Los Angeles City Council voted to establish a city minimum wage that will reach $15 an hour by 2021, followed soon thereafter by a measure by Los Angeles County. San Jose adopted a city minimum wage in 2012 and smaller cities have recently done the same, including Oakland, Berkeley, Richmond, Sunnyvale, Emeryville, Mountain View, Santa Clara, and San Diego. Last month the Legislature, ensuring that California maintains the highest minimum wage in the country, approved a plan to raise the minimum wage of the entire state to $15 per hour over the next six years. However, delivering on the promise of higher wages rests largely on the ability of cities, counties, and the state to put enforcement systems in place and fight the wage theft that low-wage workers often experience. Wage theft, generally, is when workers are not paid the wages to which they are legally entitled. This can occur when workers receive payment at a rate below the legal hourly minimum, when employees are not paid for off-the-clock work, are not properly paid overtime, or fail to get required rest and meal breaks, among other violations. Significant and extensive minimum wage violations have been documented around the country and in cities throughout California, as described by a recent report: SB 1342 Page 4 Significant and extensive minimum wage violations have been documented around the country and in cities throughout California. An analysis of worker surveys conducted by the Census and Bureau of Labor Statistics estimates that in California, minimum wage violations occur in any given week in 11 to 12 percent of all the low-wage jobs in the state (Eastern Research Group 2014). While this estimate already represents a significant amount of wage theft, experience suggests that official government surveys undercount workers who are especially vulnerable to wage theft, such as those working off the books or who are undocumented. Other estimates come from surveys that use alternative sampling strategies much more likely to capture the full range of workers in the low-wage labor market. The best such study to date is a large representative survey of low-wage workers in Los Angeles in 2008, which found that 30 percent had been paid below the minimum wage during the previous week and 88 percent had at least one pay-related violation in the previous week. The amount of underpayment due to minimum wage violations assuming a full-year work schedule averaged $1,135 a year per worker, or 6.9 percent of earnings. Counting all pay-based violations, such as unpaid overtime and off-the-clock work, workers lost $2,070 per year, or 12.5 percent of earnings. Violations occurred across industries and occupations, with above-average rates of minimum wage violations in garment manufacturing, domestic service, building services, and department stores. (Bernhardt, Dietz, and Koonse, Enforcing City Minimum Wage Laws in California: Best Practices and City-State Partnerships, UCLA Center for Labor Research and Education and UC Berkeley Center for Labor Research and Education, Oct. 2015.) Recovery of stolen wages requires that the employee either find a private lawyer to sue the employer, or more commonly, file a complaint with a government agency charged with enforcement of labor violations. However, because low-wage workers have limited access to private attorneys, private actions have failed to address wage theft on a large scale. This is largely because the relatively low value of the average complaint dramatically reduces profit for private attorneys, even when taking 40 SB 1342 Page 5 percent of the recovery. In addition, the difficulty private attorneys face when collecting from employers jeopardizes their ability to recover their attorneys' fees and earn anything for their effort. Thus, public enforcement plays a central role in ensuring that workers receive the wages they are owed. This bill, sponsored by the Los Angeles County Board of Supervisors, seeks to ensure that cities and counties have the tools necessary to enforce wage laws by clarifying that cities and counties have the ability to delegate the authority to issue subpoenas to a county or city official or department head. FISCAL EFFECT: Appropriation: No Fiscal Com.:NoLocal: No SUPPORT: (Verified4/28/16) Los Angeles County Board of Supervisors (source) OPPOSITION: (Verified4/28/16) None received ARGUMENTS IN SUPPORT: The Los Angeles County Board of Supervisors writes in support: SB 1342 would clarify current law which allows county boards of supervisors or the legislative body of a city to delegate its administrative subpoena powers to a county department head or city official to investigate allegations of wage theft. Wage theft occurs when a worker has performed work for his or SB 1342 Page 6 her employer, but has not been paid for that work. This includes unpaid wages and overtime, minimum wage violations, and off-the-clock work. Wage theft is a statewide problem, and is prevalent among immigrant and low-wage workers. When employees are not paid for the work that they have duly performed for their employers, it not only hurts them, but their families who depend upon them for their support. Further, when workers are not paid, it not only jeopardizes their housing, but also their health as underpaid workers often forgo medical care and will work while sick to compensate for lost wages. Prepared by:Nichole Rapier / JUD. / (916) 651-4113 4/29/16 12:39:25 **** END ****