BILL ANALYSIS
AB 1133
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ASSEMBLY THIRD READING
AB 1133 (Koretz)
As Amended March 25, 2003
Majority vote
LABOR AND EMPLOYMENT 6-2
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|Ayes:|Koretz, Mullin, Chu, | | |
| |Hancock, Laird, Negrete | | |
| |McLeod | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Shirley Horton, Houston | | |
| | | | |
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SUMMARY : Imposes an automatic penalty equal to 100% of the
outstanding judgment for every six months that employers do not
pay their wage and hour judgments. Specifically, this bill :
1)Declares that, if any judgment for nonpayment of wages or
penalties remains unpaid for six months after the time to
appeal the judgment has expired or any appeal has been
concluded, the amount of the judgment shall double.
2)Provides that the amount of the judgment is again doubled for
each additional six month period for which the judgment
remains unpaid.
3)Requires a court to award attorneys' fees and costs to the
employee or the Labor Commissioner (LC) who enforces such a
judgment.
EXISTING LAW authorizes:
1)An employee to file an administrative claim with the LC or to
bring a civil action against an employer for the nonpayment of
wages and penalties. An employee who brings an action is
entitled to recover costs and attorneys' fees.
2)The LC to require an employer to deposit a bond where the
employer has failed to pay any judgment for the nonpayment of
wages for more than 10 days after the time to appeal the
judgment has expired.
AB 1133
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3)An employee, where an employer has violated the law or failed
to pay a judgment twice within a 10 year period, to bring an
action for a temporary restraining order prohibiting the
employer from doing business in the state until the employer
deposits a bond to satisfy the unpaid judgment.
FISCAL EFFECT : Unknown
COMMENTS : Supporters argue that this bill would hold employers
accountable who try to circumvent the law by not paying wage and
hour judgments lawfully entered against them. The sponsors of
the bill, Asian Pacific American Legal Center and Bet Izedek
Legal Services, state that there are many cases where employees
go through the entire wage claim adjudication process with the
LC, win their judgment and are still unable to receive their
unpaid wages or penalties because the employer simply refuses to
pay.
Since the amount of such judgments is generally not sufficient
to make collection by a collection agency profitable, workers
receive little, if any, further assistance in recovering their
owed wages or penalties.
Supporters state that this bill not only encourages employers to
pay their judgments and pay them on time, but it also increases
the incentive for collection agencies to accept low-wage
workers' cases once the penalties begin to accrue. Supporters
also point out that the provisions of this bill do not trigger
until six months after the time to appeal a judgment has
expired, or such an appeal has been concluded, when there is no
justification for an employer to refuse to satisfy the judgment.
Opponents argue that this bill is gross overkill and would set a
new and very onerous precedent for employers. Opponents state
that wage judgments should only be subject to a reasonable
penalty or a set amount of interest. Opponents also object to
the provisions of this bill allowing for the recovery of
attorneys' fees and costs. Instead, once the LC has entered a
judgment, it should be the sole responsibility of the LC to
enforce payment of the judgment.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
AB 1133
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FN: 0000515