BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 442|
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THIRD READING
Bill No: AB 442
Author: Nazarian (D)
Amended: As introduced
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 4-0, 6/12/13
AYES: Monning, Leno, Padilla, Yee
NO VOTE RECORDED: Wyland
SENATE JUDICIARY COMMITTEE : 5-2, 6/25/13
AYES: Evans, Corbett, Jackson, Leno, Monning
NOES: Walters, Anderson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 5/9/13 (Consent) - See last page for vote
SUBJECT : Employees: wages
SOURCE : California Rural Legal Assistance Foundation
DIGEST : This bill authorizes the Labor Commissioner to
collect liquidated damages from an employer who pays an employee
less than minimum wage.
ANALYSIS : Existing law sets a minimum wage for all employees
in California, with limited exceptions, and prohibits employers,
unless specified, from paying less than the state minimum wage.
Existing law provides the Commissioner with the authority to
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investigate employee complaints and allows the Commissioner to
hold a hearing in any action to recover wages, including orders
of the Industrial Welfare Commission. The Commissioner may
require an award in the amount of the wages owed, plus interest.
Existing Civil Code sets the interest rate at 10%.
Existing law allows the division or department to commence and
prosecute a civil action to recover unpaid minimum wages or
unpaid overtime compensation, including interesting thereon.
Existing law provides that an employee who receives less than
the minimum wage is entitled to recover in a civil action, the
unpaid balance of the full amount of the minimum wage,
liquidated damages in an amount equal to the wages unlawfully
unpaid and interest thereon, reasonable attorney's fees and
costs of suit.
Existing law also requires that if an employee is found to have
been paid less than the minimum wage, that employee must be paid
liquidated damages in an amount that is equal to the wages
unlawfully unpaid, plus interest. Existing Civil Code sets the
interest rate at 1%.
Existing law states that if the employer demonstrates to the
satisfaction of the court or the Commissioner that the failure
to pay minimum wage was in good faith and that the employer had
reasonable grounds for believing that the act or omission was
not a violation of the law, the court or the Commissioner may,
as a matter of discretion, refuse to award liquidated damages or
reduce the amount of liquidated damages.
Existing law provides that, in a citation for a minimum wage
violation issued by the Commissioner, an employer shall be
subject to a specified civil penalty and restitution of wages.
This bill authorizes the Labor Commissioner to collect
liquidated damages from an employer who pays an employee less
than minimum wage.
Prior Legislation
AB 240 (Bonilla, Chapter 272, Statutes of 2012) amended Labor
Code sections 1194.2 and 98 to authorize the Commissioner to
award unpaid minimum wage liquidated damages in administrative
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wage claim hearings under the same conditions that existed for
allowing a court to award those same damages to workers.
AB 469 (Swanson, Chapter 655, Statutes of 2011) known as the
Wage Theft Prevention Act of 2011, the bill enacted several
anti-wage theft initiatives including extending the period
within which the division may commence a collection action from
one year to three years and in addition to being subject to a
civil penalty and makes it a misdemeanor if an employer
willfully violates specified wage statutes or orders, among
other provisions.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/12/13)
California Rural Legal Assistance Foundation (source)
AFSCME, AFL-CIO
California Federation of Teachers
ARGUMENTS IN SUPPORT : Proponents argue that this bill expands
the Commissioner's authority to help low-wage workers in wage
theft cases, ensuring that workers have the same monetary relief
whether they pursue claims through the courts or via the
Commissioner's existing authority. Proponents contend that
claims made by low-wage workers may not be sufficient enough to
attract an attorney, which leaves the worker with no alternative
other than an administrative hearing.
Lastly, proponents contend that the failure to enact this bill
will create new costs to the Division of Labor Standards
Enforcement (DLSE). Specifically, proponents argue that because
the award of liquidated damages is mandatory when minimum wages
have not been paid, the failure to recover those damages for the
worker after a citation is issued will likely result in the
worker bringing a separate claim before the Commissioner, adding
unnecessary new costs to DLSE and also adds delays for workers.
ARGUMENTS IN OPPOSITION : The Construction Employer's
Association opposes this bill and argues that this bill is
problematic because it expands the current penalties for wage
violations to add liquidated damages. Opponents contend that
while they support punishing employer that do not follow the
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wage statutes and regulations, if passed the bill would add
liquidated damages to existing civil penalties and restitution,
which sets a very bad precedent in California. Additionally,
opponents believe that the existing wage protections in
California are sufficient to protect workers. Lastly, opponents
believe that California's existing labor laws are burdensome and
impacts job creation and business expansion and relocation.
ASSEMBLY FLOOR : 75-0, 5/09/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Ch�vez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Jones,
Jones-Sawyer, Levine, Linder, Lowenthal, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Torres, Wagner, Weber, Wieckowski, Wilk, Williams,
Yamada, John A. P�rez
NO VOTE RECORDED: Donnelly, Holden, Logue, Waldron, Vacancy
PQ:d 8/13/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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