BILL ANALYSIS
AB 2187
Page A
Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2187 (Arambula) - As Amended: March 24, 2010
Policy Committee: Labor and
Employment Vote: 4-2
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill increases criminal penalties for willful failure to
pay wages. Specifically, this bill:
1 Establishes a misdemeanor penalty for an employer who
willfully fails to pay all wages due to an employee who has
been discharged or who has quit within 90 days of the date
wages are due.
2)Makes the misdemeanor punishable by a fine of between $1,000
and $10,000, or by imprisonment in a county jail for not more
than six months, or both.
3)Requires an employer found guilty of the misdemeanor to pay,
in addition to any criminal fines, restitution to the
aggrieved employee in an amount equal to the total amount of
unpaid wages.
4)Requires an employer or person, upon conviction becoming
final, to pay all reasonable costs of prosecution to the
entity that prosecutes. "Conviction" is defined as a verdict
of guilty or a plea of guilty or nolo contendere.
FISCAL EFFECT
1)Local costs related to enforcing and prosecuting unpaid wage
cases would not be reimbursable.
2)Unknown, probably minor increase in penalty revenues, to the
extent the provisions result additional prosecutions, fines,
AB 2187
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and penalties.
3)Costs to the Division of Labor Standards Enforcement are minor
and absorbable.
COMMENTS :
1)Rationale . This measure is sponsored by the California Rural
Legal Assistance Foundation (CRLAF), who asserts that it will
strengthen the hands of prosecutors who take on theft of wages
cases in the future, and will make certain that restitution of
all unpaid wages to aggrieved employees is central to these
prosecutions.
2)Background . Existing law establishes misdemeanor criminal
penalties for various violations of the Labor Code, including
the willful failure to pay wages due. California's penal code
sections dealing with property crimes establish penalties for
persons who knowingly defraud any other person of money,
labor, or property. Worker advocates, however, feel that
these provisions are inadequate for several reasons, including
the fact that "theft of labor" requires proof of specific
intent and must be proven beyond a reasonable doubt, that
existing legal statutes do not address situations where
unscrupulous employer fails to pay wages that are due within a
reasonable period, and that existing statutes do not require
restitution to employees of all unpaid wages or reasonable
costs of a successful prosecution.
3)Opponents , including the California Chamber of Commerce, argue
that this bill could make into criminals employers with
legitimate disputes over wage claims. They contend that the
term "willfully fails" is vague and undefined, so it could be
construed to apply to wage disputes that are often not
resolved until long after 90 days due to, for example,
determinations by the Labor Commissioner. They also argue that
this bill could be construed to criminalize almost any
wage-based lawsuit, such as overtime and meal and rest period
class actions, that might affect whether an employee was paid
"all wages due" at the end of employment. These lawsuits have
statutes of limitation from one to three or more years and
could also be pending in the courts for years in appeals. The
threat of criminal prosecution under this bill could unfairly
force an employer to drop an otherwise reasonable defense
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against a civil action.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081