BILL ANALYSIS
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THIRD READING
Bill No: AB 1133
Author: Koretz (D)
Amended: 8/25/03 in Senate
Vote: 21
SEN. LABOR & INDUSTRIAL RELATIONS COMMITTEE : 5-3, 7/9/03
AYES: Alarcon, Dunn, Figueroa, Kuehl, Romero
NOES: Oller, Margett, McClintock
SENATE JUDICIARY COMMITTEE : 4-0, 8/19/03
AYES: Escutia, Cedillo, Ducheny, Kuehl
NO VOTE RECORDED: Morrow, Ackerman, Sher
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 46-29, 5/29/03 - See last page for vote
SUBJECT : Employment
SOURCE : Sweatshop Watch
DIGEST : This bill provides that an employer who has
failed to satisfy judgment for unpaid wages within six
months of the conclusion of any appeal shall be required to
pay a penalty equal to the amount of the judgment. An
identical penalty could be imposed for each additional
six-month period in which the judgment remains unpaid, for
a maximum of four penalties, which will be in addition to
any interest earned on the judgment.
ANALYSIS : Existing law provides that an employee or the
CONTINUED
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Labor Commissioner (Commissioner) may bring an action
against an employer to recover unpaid wages, and for
penalties associated with the failure to pay wages.
Existing law provides that interest on the principal amount
of a money judgment remaining unsatisfied shall accrue at
an annual rate of 10 percent.
Existing law further provides that, where a judgment for
unpaid wages remains unsatisfied for 10 days after the time
to appeal has expired, and no appeal is pending, the
Commissioner may require the employer to post a bond in an
amount deemed adequate by the Commissioner and which is
conditioned upon the payment of the judgment.
Existing law further provides that, if the employer fails
to post a bond within 10 days of the Commissioner's demand,
the Commissioner may seek a court order compelling the
employer to furnish the bond or to cease doing business
until the employer has done so.
This bill provides that, if any judgment against an
employer for nonpayment of wages or associated penalties
remains unsatisfied for six months after the time to appeal
has expired, or after an appeal has been concluded, a
penalty equal to the amount of the judgment shall be
applied.
This bill provides that, for each additional six-month
period the judgment remains unsatisfied, an additional
penalty in the amount of the first penalty may be applied,
but in no case shall this penalty be applied more than four
times.
This bill provides that the penalty provided in this
section is in addition to any applicable interest provided
for under existing law.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/25/03)
American Apparel
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American Federation of State, County and Municipal
Employees
Asian Pacific American Legal Center
Bet Tzedek Legal Services
California Conference Board of the Amalgamated Transit
Union
California Conference of Machinists
California Employment Lawyers Association
California Independent Public Employees Legislative Council
California Labor Federation
California Organization of Police and Sheriffs
California Professional Firefighters
California Rural Legal Assistance Foundation
California Teamsters
Coalition for Humane Immigrant Rights of Los Angeles
Engineers & Scientists of California
Garment Worker Center
Hotel Employees, Restaurant Employees International Union
Korean Immigrant Workers Advocates
La Raza Centro Legal
Peace Officers Research Association of California
Professional and Technical Engineers, Local 20, IFPTE
United Food & Commercial Workers Region 8 States Council
OPPOSITION : (Verified 8/25/03)
California Chamber of Commerce
California Manufacturers and Technology Association
ARGUMENTS IN SUPPORT : The author states that industries
employing low-wage workers routinely flout the law by
ignoring judgments entered against them, secure in the
belief that neither the state nor the employee will have
the resources to pursue the matter to final collection.
According to the author, this belief is well-founded: The
State Department of Labor Standards Enforcement has neither
the staff nor the resources to pursue many violators, and
since wage judgments often are relatively small, private
collection agencies are uninterested in taking these cases.
As a result, many employees who have gone to hearings and
obtained judgments against their employers are unable to
actually recover the wages owed to them. This bill is
intended to improve their prospects for collection by
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adding a penalty equal to the amount of a judgment for
unpaid wages for each six-month period it remains unpaid,
as specified below.
ARGUMENTS IN OPPOSITION : The Chamber of Commerce opposes
this bill as currently drafted, asserting that its
imposition of penalties in the amount of a doubled judgment
every six months would set a "new and very onerous
precedent" in the enforcement of judgments. The Chamber
also questions why unpaid wage claims should be treated so
differently from other Labor Code violations or unpaid
judgments in other circumstances.
The California Manufacturers and Technology Association
also opposes the current bill as "gross overkill,"
asserting that "it is unconscionable to use such an
arbitrary [process as] doubling and doubling again the
amount on unpaid wages in order to enforce payment."
ASSEMBLY FLOOR :
AYES: Berg, Bermudez, Canciamilla, Chan, Chavez, Chu,
Cohn, Corbett, Correa, Diaz, Dutra, Dymally, Firebaugh,
Frommer, Goldberg, Hancock, Jerome Horton, Jackson,
Kehoe, Koretz, Laird, Leno, Levine, Lieber, Longville,
Lowenthal, Matthews, Montanez, Mullin, Nakano, Nation,
Negrete McLeod, Nunez, Oropeza, Parra, Pavley, Reyes,
Ridley-Thomas, Salinas, Simitian, Steinberg, Vargas,
Wiggins, Wolk, Yee, Wesson
NOES: Aghazarian, Bates, Benoit, Bogh, Cogdill, Cox,
Daucher, Dutton, Garcia, Harman, Haynes, Shirley Horton,
Houston, Keene, La Malfa, La Suer, Leslie, Maldonado,
McCarthy, Mountjoy, Nakanishi, Pacheco, Plescia, Richman,
Runner, Samuelian, Spitzer, Strickland, Wyland
NC:cm 8/26/03 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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