BILL ANALYSIS �
AB 2099
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Date of Hearing: March 28, 2012
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 2099 (Cedillo) - As Introduced: February 23, 2012
SUBJECT : Employment: wage, hour and working conditions
violations.
SUMMARY : Increases the fine for specified wage and hour
violations from no less than $100 to no less than $250 and makes
non substantive technical change.
EXISTING LAW states that every employer or other person acting
either individually or as an officer, agent, or employee of
another person is guilty of a misdemeanor and is, punishable by
a fine of not less than $100 or by imprisonment for not less
than 30 days, or by both, who does any of the following:
1)Requires or causes any employee to work for longer hours than
those fixed, or under conditions of labor prohibited by an
order of the Industrial Welfare Commission (IWC).
2)Pays or causes to be paid to any employee a wage less than the
minimum fixed by an order of the IWC.
3)Violates or refuses or neglects to comply with specified
provisions of the law or any order or ruling of the IWC.
FISCAL EFFECT : None
COMMENTS : According to the author's office, current monetary
penalties serve as an inadequate disincentive for wage and hour
violations by employers. Existing laws sets a fine of $100 for
employers who either require employees to work longer than fixed
hours, work under conditions prohibited by an order of the IWC,
pay employees less than minimum wage, or neglect to comply with
provisions of the Labor Code.
The author believes the fine was adequate when it was first
enacted, however it now needs to be raised to further
discouraging employers from engaging in these serious
violations.
ARGUMENTS IN SUPPORT :
AB 2099
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The California Rural Legal Assistance Foundation (CRLAF) asserts
that violations are commonly committed by unscrupulous employers
operating in the Underground Economy and the current fine amount
is too low to deter even insignificant misconduct. CRLAF
believes an increase in fines for these crimes is essential if
prosecutors are to have the tools they need to address the
massive scale of wage theft that is involved in some of these
cases. A good example is found in the recent $2.2 million
dollar settlement of a CRLAF class action brought on behalf of
thousands of seasonal agricultural workers. The employer and
labor contractor, acting as joint employers, were alleged to
have systematically cheated the workers of minimum wages and
overtime wages. For the above-stated reasons they support the
bill.
ARGUMENTS IN OPPOSITION :
A broad coalition of employer groups states that the Labor Code
provision this bill seeks to amend, already imposes a statutory
penalty, despite the lack of any specific intent on behalf of
the employer or his/her agent to violate the law. They also
state, that specifically, the penalty may be imposed simply on
the basis that the employer "neglected" to comply. "Neglect" is
one of the lowest civil standards of liability to prove and
requires no evidence of actual intent to do harm. Accordingly,
an employer who is trying to comply with California's wage and
hour laws, even seeks out direction from the Division of Labor
Standards Enforcement (DLSE) for advice on how to comply, may
still be subject to this statutory penalty if a court ultimately
determines the employer failed to comply with a duty under the
Labor Code or Wage Orders. Finally, they believe that due to
the risk of liability and litigation under this existing
provision of the Labor Code, they are opposed to any increase in
the statutory penalty that may be imposed and there is no
evidence that a stronger deterrent is needed in the Labor Code
than those that already exist.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
California Communities United Institute
AB 2099
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California Labor Federation, AFL-CIO
California Rural Legal Assistance Foundation
State Building and Construction Trades Council of California
Opposition
Air Conditioning Trade Association
Associated Builders and Contractors of California
CalChamber
California Association of Health Facilities
California Farm Bureau Federation
California Framing Contractors Association
California Grocers Association
California Independent Grocers Association
California Lodging Industry Association
California Manufacturers and Technology Association
Construction Employers' Association
Plumbing-Heating-Cooling Contractors Association of California
Western Electrical Contractors Association, Inc.
Analysis Prepared by : Lorie Alvarez / L. & E. / (916)
319-2091