BILL ANALYSIS
SB 796
Page 1
SENATE THIRD READING
SB 796 (Dunn)
As Amended July 16, 2003
Majority vote
SENATE VOTE :21-14
JUDICIARY 9-4 LABOR AND
EMPLOYMENT 5-2
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|Ayes:|Corbett, Dutra, Hancock, |Ayes:|Koretz, Mullin, Chu, |
| |Jackson, Lieber, | |Hancock, Laird |
| |Longville, Montanez, | | |
| |Steinberg, Berg | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harman, La Malfa, |Nays:|Shirley Horton, Houston |
| |Pacheco, Spitzer | | |
| | | | |
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APPROPRIATIONS 16-7
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|Ayes:|Steinberg, Berg, | | |
| |Calderon, Corbett, | | |
| |Correa, Diaz, Goldberg, | | |
| |Leno, Nation, Negrete | | |
| |McLeod, Nunez, Pavley, | | |
| |Ridley-Thomas, Simitian, | | |
| |Wiggins, Yee | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bates, Daucher, Haynes, | | |
| |Maldonado, Pacheco, | | |
| |Runner, Samuelian | | |
| | | | |
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SUMMARY : Establishes an alternative "private attorney general"
system for labor law enforcement that allows employees to pursue
civil penalties for employment law violations. Specifically,
this bill enacts the "Labor Code Private Attorneys General Act
of 2004" which:
1) Establishes a civil penalty where one is not specifically
SB 796
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provided under the Labor Code of $100 for each aggrieved
employee per pay period for an initial violation, and $200
for each aggrieved employees per pay period for subsequent
violations. The penalty would be $500 per violation for a
violator who is not an employer.
2) Authorizes aggrieved employees to sue to recover civil
penalties under the Labor Code in an action brought on behalf
of himself or herself and other current or former employees
against whom one or more of the alleged violations was
committed. However, no private action may be maintained
where the Labor and Workforce Development Agency (LWDA) or
any of its subdivisions initiates proceedings against the
alleged violator on the same facts and theories and under the
same section or sections of the Labor Code.
3) Defines an "aggrieved employee" as any person who was
employed by the alleged violator and against whom one or more
of the alleged violations was committed.
4) Provides that civil penalties recovered against a person that
employs one or more employees shall be distributed as
follows: 50% to the General Fund (GF), 25% to LWDA for
employer and employee education; and, 25% to the aggrieved
employees. Civil penalties recovered against persons that do
not employ one or more employees are to be divided evenly
between GF and LWDA.
5) Provides for the award of reasonable attorney's fees and
costs to an aggrieved employee who prevails in such an
action. Provides that this bill is not intended to affect
the exclusive remedy provided by workers' compensation
provisions of existing law.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, potential increased penalty revenue to the GF and to
LWDA.
COMMENTS : Generally, civil enforcement statutes allow civil
penalties to be recovered only by prosecutors, not by private
litigants. Private plaintiffs who have been damaged by a
statutory violation usually are restricted to traditional damage
suits, or where damages are difficult to prove, to "statutory
damages" in a specified amount or range.
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Arguments in Support: The co-sponsors of this bill, the
California Labor Federation, AFL-CIO and the California Rural
Legal Assistance Foundation, argue that this bill will address
inadequacies in labor law enforcement in two major ways. First,
this bill assigns nominal civil fine amounts to the large number
of Labor Code provisions, which currently carry criminal, but
not civil, penalties. Second, it authorizes the filing of civil
actions to recover existing and new civil penalties by aggrieved
workers acting as private attorneys general.
The sponsors state that many Labor Code provisions are
unenforced because they are punishable only as criminal
misdemeanors, with no civil penalty or other sanction attached.
Since district attorneys tend to direct their resources to
violent crimes and other public priorities, Labor Code
violations rarely result in criminal investigations and
prosecutions. Proponents also contend that the state's current
inability to enforce labor laws effectively is due to inadequate
staffing and the continued growth of the underground economy.
This inability, coupled with the state's severe budgetary
shortfall requires a creative solution that will help the state
crack down on labor law violators. Therefore, private actions
to enforce the provisions of the Labor Code are necessary to
ensure compliance with the law.
In addition, the sponsors claim that recent hiring freezes and
elimination of vacant positions announced in response to the
budget crisis may dramatically impact LWDA and its enforcement
activities.
Arguments in Opposition: Opponents contend that this bill tips
the balance of labor law protection in disproportionate favor to
the employee to the detriment of already overburdened employers.
Several employer groups, including the California Chamber of
Commerce, cite the fact that employees are entitled to
attorney's fees and costs if they prevail in their action under
this bill, yet similar attorney's fees and costs are not
provided for prevailing employers. Additionally, opponents cite
the fact that there is no requirement imposed upon employees
prior to filing civil action such as preliminary claim filing
with the Labor Commissioner.
Opponents also expresses concern that this bill will encourage
private attorneys to "act as vigilantes" pursuing frivolous
violations on behalf of different employees. Opponents liken
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the danger of this bill to recent alleged abuse of Business and
Professions Code Section 17200.
Opponents also contend that California already has a formal
administrative procedure to handle these types of claims under
the Labor Code that is both economical and efficient.
AB 276 (Koretz), pending in the Assembly, increases various
civil penalties under the Labor Code, many of which have not
been increased for decades.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN: 0002873