BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2509|
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THIRD READING
Bill No: AB 2509
Author: Steinberg (D)
Amended: 8/25/00 in Senate
Vote: 21
SENATE INDUSTRIAL RELATIONS COMMITTEE : 4-1, 6/28/00
AYES: Alarcon, Figueroa, Karnette, Solis
NOES: Mountjoy
SENATE JUDICIARY COMMITTEE : 5-3, 8/8/00
AYES: Escutia, O'Connell, Peace, Sher, Schiff
NOES: Haynes, Morrow, Wright
SENATE APPROPRIATIONS COMMITTEE : 7-5, 8/21/00
AYES: Johnston, Bowen, Burton, Escutia, Karnette, Perata,
Vasconcellos
NOES: Johnson, Kelley, Leslie, McPherson, Mountjoy
ASSEMBLY FLOOR : 41-32, 5/25/00 - See last page for vote
SUBJECT : Employment: remedies for employment law
violations
SOURCE : California Labor Federation
DIGEST : This bill makes various changes to the Labor
Code relative to rights, remedies, and procedures. The
bill streamlines and alters many enforcement and
administrative procedures of wage and hour laws before the
Labor Commissioner and the courts, increases civil
penalties and damages for violations.
CONTINUED
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Senate Floor Amendments of 8/25/00 delete major provisions
of this omnibus labor standards enforcement measure and
make minor amendments. These amendments delete provisions
relating to:
1. The consolidation of administrative proceedings.
2. Notice by mail as an option to subpoena.
3. Exemption from judicial arbitration.
4. Attorney's fees and costs relating to appeals.
5. Liquidated damage awards by the Labor Commissioner for
unpaid wages.
6. Wage bond requirements to include interest penalties and
other demands.
7. Shareholder liability.
8. Successor liability.
9. Increased penalties for payroll record violations
relating to each employee.
10.Right of private action in discrimination complaints.
11.Posting of violation notices.
12.Penalties relating to failure to provide necessary tools
and equipment.
ANALYSIS :
Background
Existing law provides a framework for the enforcement of
laws relating to the payment wages and overtime
compensation, and working conditions by the Labor
Commissioner, chief of the Division of Labor Standards
Enforcement (DLSE) in the State Department of Industrial
Relations (DIR).
Despite the efforts of DIR, California has a large and
growing "underground economy" of employers who are chronic
violators of wage and hour, safety, and tax laws. Such
employers pay cash under the table or with checks that
bounce, fail to report and pay employment taxes, work their
employees long hours without rest breaks, and avoid paying
wage judgments issued against them. In so doing, according
to executive orders issued by Governor's Deukmejian and
Wilson, it is estimated that the State's loss of income
taxes alone increased from $2 billion in 1986 to $3 billion
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in 1993.
Changes to existing law
1. Existing law provides that interest on all due and
unpaid wages shall accrue at the rate established in
Section 19269 of the Revenue and Taxation Code. This
section of law has been repealed.
This bill provides that the legal rate of interest on
due and unpaid wages shall be at the statutory rate
established by Civil Code Section 3289(b), which is 10
percent.
2. Existing law does not require an appellant to post a
bond as a condition of filing an appeal from an adverse
Berman hearing decision.
This bill requires employers filing an appeal of the
commissioner in a Berman hearing to post a prescribed
undertaking and provides for disposition thereof.
3. Existing law provides that an employer in the building
and construction industry is liable for a penalty of up
to 30 days' wages and fringe benefits to any employee
paid by a check, draft, or voucher that is drawn on a
nonexistent account or that is dishonored for
insufficient funds if the instrument is presented for
payment within 30 days of receipt. This penalty does
not apply if the employer can establish that the
violation was unintentional.
This bill makes this penalty applicable to all
employers, as specified, and makes related conforming
and technical, nonsubstantive changes.
4. Existing law provides that employers are required to
provide employees semimonthly, with payment of wages,
an itemized statement listing gross wages, total hours
worked of employees paid by the hour, specified
deductions, net wages, and certain other information.
Violation of these requirements is a misdemeanor.
This bill provides that total hours need not be
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disclosed for salaried employees exempt from payment of
overtime compensation.
The bill requires disclosure of the number of
piece-rate units and the applicable piece rate for
employees paid on that basis, and requires disclosure
of all applicable hourly rates and the number of hours
worked by the employee at each rate.
5. Existing law provides an employee suffering injury as
a result of the employer's knowing or intentional
failure to comply with the above disclosure requirement
is entitled to recover the greater of actual damages or
one hundred dollars ($100), plus costs and reasonable
attorney's fees.
This bill revises the liability of employers for
knowing or intentional noncompliance with this
disclosure requirement to entitle an aggrieved employee
to recover the greater of actual damages or penal
damages of $50 for the initial pay period in which a
violation occurs and $100 per employer for each
subsequent pay period in which the violation occurs up
to $4,000, plus costs and reasonable attorney's fees.
6. Existing law authorizes the Industrial Welfare
Commission to adopt orders respecting wages, hours, and
working conditions. Under this authority, IWC Wage
Orders require meal and rest periods.
Places into statute the existing provisions of the
Industrial Welfare Commission requiring employers to
provide a 10-minute rest period every four hours and a
30-minute meal period every five hours. On-duty meal
periods are permitted when the nature of the work performed
so dictates. Failure to provide such meal and rest periods
would subject an employer to paying the worker one hour of
wages for each work day when rest periods were not offered.
The option of filing a right of private action is deleted.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/8/00 - Unable to reverify due to
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time constraints)
California Professional Firefighters
Golden Gate University, School of Law, Women's Employment
Rights Clinic
Equal Rights Advocates
Legal Aid Society of San Francisco, Employment Law Center
Transport Workers Union of America
California Rural Legal Assistance Foundation
California Conference Board of the Amalgamated Transit
Union
Engineers and Scientists of California
Region 8 States Council of the United Food & Commercial
Workers
Hotel Employees, Restaurant Employees International Union
California Conference of Machinists
Service Employees International Union
California Chapters of the National Electrical Contractors
Association
California Legislative Conference of the Plumbing, Heating
and Piping Industry
Western Wall and Ceiling Contractors Association
Air Conditioning and Refrigeration Contractors Association
California Association of Sheet Metal and Air Conditioning
Contractors, National Association
American Federation of State, County and Municipal
Employees, AFL-CIO
California Teamsters, Public Affairs Council
California Labor Federation
La Raza Centro Legal, Inc.
Exotic Dancers Alliance
Asian Law Caucus
Mexican-American Legal Defense and Education Fund
Asian Pacific Legal Center of Southern California
OPPOSITION : (Verified 8/8/00 - Unable to reverify due
to time constraints)
Western Growers Association
California Retailers Association
Civil Justice Association of California
California Grocers Association
California Chamber of Commerce
Roofing Contractors Association of California Associated
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General Contractors and Associated General Contractors San
Diego
Orange County Business Council
Engineering Contractors' Association
Marin Builders' Exchange
Sacramento Builders' Exchange
Fence Contractors' Association
Flasher/Barricade Association
Seismic Gas Valve Manufacturers'
California Manufacturers and Technology Association
California Employment Law Council
San Rafael Chamber of Commerce
California Farm Bureau Federation
ASSEMBLY FLOOR
AYES: Alquist, Aroner, Bock, Calderon, Cardenas, Cardoza,
Cedillo, Corbett, Davis, Ducheny, Dutra, Firebaugh,
Floyd, Gallegos, Honda, Jackson, Keeley, Knox, Kuehl,
Lempert, Longville, Lowenthal, Machado, Migden, Nakano,
Reyes, Romero, Scott, Shelley, Steinberg, Strom-Martin,
Thomson, Torlakson, Vincent, Washington, Wayne, Wesson,
Wiggins, Wildman, Wright, Hertzberg
NOES: Aanestad, Ackerman, Ashburn, Baldwin, Bates, Battin,
Baugh, Brewer, Briggs, Campbell, Cox, Cunneen, Florez,
Granlund, House, Kaloogian, Leach, Leonard, Maddox,
Maldonado, Margett, Mazzoni, McClintock, Olberg, Oller,
Robert Pacheco, Rod Pacheco, Pescetti, Runner,
Strickland, Thompson, Zettel
NC:kb 8/28/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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