BILL ANALYSIS �
AB 442
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Date of Hearing: April 16, 2013
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
AB 442 (Nazarian) - As Introduced: February 19, 2013
PROPOSED CONSENT
SUBJECT : UNPAID WAGES: LIQUIDATED DAMAGES
KEY ISSUE : SHOULD THE EMPLOYEES OF THOSE FOUND TO BE IN
VIOLATION OF MINIMUM WAGE LAWS BY THE LABOR COMMISSIONER BE
ENTITLED TO THE SAME DAMAGES ALREADY AVAILABLE THROUGH CIVIL OR
ADMINISTRATIVE WAGE CLAIM ACTIONS?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This bill seeks to extend the recovery of liquidated damages to
the affected employees of employers found by the Labor
Commissioner to have violated minimum wage laws. Liquidated
damages are already available to employees who have not been
paid minimum wage through civil actions and administrative wage
hearings before the Labor Commissioner. This bill would extend
the authority of the Labor Commissioner to award the payment of
liquidated damages to affected employees through the Labor
Commissioner citation process, in which the employer not paying
minimum wages is subject to a civil penalty and payment of
unpaid wages. Supporters argue that this bill fills the one
remaining gap in the Labor Commissioner's authority to cite and
recover from employers violating minimum wage laws. There is no
known opposition.
SUMMARY : Extends the award of liquidated damages to those
employees whose employer has been cited by the Labor
Commissioner in violation of minimum wage laws. Specifically,
this bill adds "liquidated damages" paid to the employee to the
list of things that a person who the Labor Commissioner has
determined to have paid or caused to be paid a wage less than
the minimum wage is subject to.
EXISTING LAW :
1)Provides than an employee who is paid less than the minimum
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wage may recover unpaid wages through a civil action or
administrative hearing. (Labor Code sections 98, 1193.6 and
1194.)
2)In a civil or administrative action to recover wages because
of the payment of a wage less than minimum wage, an employee
shall be entitled to recover liquidated damages in an amount
equal to the wages unlawfully unpaid and interest thereon.
(Labor Code section 1194.2.)
3)Upon inspection or investigation, the Labor Commissioner may
issue a citation to a person who is found to have paid or
caused to be paid a wage less than the minimum. The cited
violator is subject to a civil penalty and restitution of
wages payable to the employee. (Labor Code section 1197.1(a)
and (b).)
COMMENTS : Under current law, if an employer is found to have
paid an employee less than the minimum wage through a civil
action or an administrative hearing before the Labor
Commissioner, the employee is entitled to recover the unpaid
balance of the full amount of the minimum wage and liquidated
damages in an amount equal to the wages unpaid and interest
thereon. This bill extends the entitlement to liquidated
damages to those employees whose employer has been found by the
Labor Commissioner, upon inspection or investigation, to have
paid an employee less than the minimum wage.
Amendments to the Labor Code in 2011 allowed for the Recovery of
Liquidated Damages in both Civil Actions and Administrative
Hearings. Labor Code sections 1193.6 and 1194 provide that an
employee receiving less than the legal minimum wage is entitled
to recover in a civil action the unpaid balance of the full
amount of the minimum wage, including the interest. Prior to AB
240 (Bonilla) of 2011, Labor Code section 1194.2 only allowed
the recovery of liquidated damages via this civil action code
section. AB 240 amended Labor Code section 98 and 1194.2 to
authorize the Labor Commissioner to award unpaid minimum wage
liquidated damages in administrative wage claim hearings,
creating parity of entitlements from the two wage proceedings.
Employers Who Are Found in Violation of Minimum Wage Laws by the
Labor Commissioner's Citation Process Are Not Currently Subject
to Payment of Liquidated Damages to Affected Employees. After
inspection or investigation, if the Labor Commissioner
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determines that an employer is paying less than minimum wage the
Labor Commissioner may issue a citation to the person in
violation. Currently, under section 1197.1, an employer shall
be subject to a civil penalty and restitution of wages to the
employee. AB 442 adds "liquidated damages" to section 1197.1,
closing the gap of damages wronged employees are entitled to
between civil actions, administrative hearings, and Labor
Commissioner citations. The author states, this bill "ensures
that workers have the same monetary relief whether they pursue
their claims administratively, by way of the courts, or via the
Labor Commissioner's existing authority."
This Bill Does Not Expand The Class Of Employers Who Are Subject
To Pay Affected Employees Liquidated Damages. This bill uses
the Labor Commissioner's existing authority to investigate and
cite employers paying less than the minimum wage, along with the
Labor Commissioner's power to recover the penalties assessed and
wages owed to the employee, to provide equal recovery no matter
through which process a violation is found. The author contends
that this is a more efficient way of awarding damages to
affected employees. Specifically, because the award of
liquidated damages is mandatory when minimum wages have not been
paid, an employee who was awarded unpaid wages after the Labor
Commissioner's citation would then commence a civil action or
administrative hearing for liquidated damages.
Further, procedures are in place to protect employers from
unjust findings of liquidated damages. For example, Section
1197.1 provides a procedure for an alleged minimum wage violator
to contest the Labor Commissioner's citation, civil penalty, and
wage findings, including filing a writ of mandate.
Additionally, this bill subjects the Labor Commissioner's
findings of liquidated damages to section 1194.2, which gives
the court or the Labor Commissioner discretion to refuse to
award liquidated damages.
REGISTERED SUPPORT / OPPOSITION :
Support
California Rural Legal Assistance Foundation (sponsor)
Opposition
None on file
AB 442
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Analysis Prepared by : Kevin G. Baker and Kelsey Fischer/ JUD. /
(916) 319-2334