BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       SB 1342|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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                                   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.)









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          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  







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            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:








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              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  







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          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  







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             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


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