BILL ANALYSIS �
AB 1723
Page 1
Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1723 (Nazarian) - As Introduced: February 14, 2014
Policy Committee: LaborVote:5-1
Judiciary 7-2
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill provides that, in a citation by the Labor Commissioner
for failure to pay minimum wage, an employer shall be subject to
any applicable "waiting time" penalties under existing law in
addition to existing civil penalties, restitution of wages, and
liquidated damages.
FISCAL EFFECT
Special fund costs in the range of $100,000 to $150,000 to the
Department of Industrial Relations for staffing related to
appeals, training costs and updated materials. Potential future
savings to the extent the bill results in fewer administrative
hearings.
COMMENTS
1)Purpose . Under existing law, the Labor Commissioner lacks the
statutory authority to recover "waiting time" penalties as
part of a citation for a minimum wage violation. According to
the bill's sponsor, the California Rural Legal Assistance
Foundation, this bill streamlines the process for wage
recovery and could reduce subsequent administrative claims
filed to recover these penalties.
2)Background . Under existing law, there are generally three
options for the recovery of unpaid minimum wages:
a) An employee may file an administrative wage claim with
the Labor Commissioner. This process provides for an
administrative hearing for the adjudication of claims,
AB 1723
Page 2
including wages, penalties, and other demands for
compensation, including liquidated damages. These
administrative hearings are usually referred to as "Berman
hearings."
b) An employee may file a civil action to recover the full
amount of the minimum wage, including interest, reasonable
attorney's fees and costs of suit. In such a civil action,
an employee shall also be entitled to liquidated damages in
an amount equal to the wages unlawfully paid.
c) The Labor Commissioner may issue a citation for failure
to pay the state minimum wage after an inspection or
investigation. The employer is subject to a civil penalty,
restitution of wages, and liquidated damages payable to the
employee. Existing law also provides for an administrative
hearing process for a person to contest a citation or
proposed assessment of civil penalties, wages and
liquidated damages.
Under a different provision of existing law, when an employer
willfully fails to pay any wages of an employee who is
discharged or who quits, the wages of the employee continue as
a penalty for up to 30 days. These wages are often referred
to as "waiting time" penalties and are generally designed to
ensure the prompt payment of earned wages. Actions to recover
unpaid minimum wages often include claims for "waiting time"
penalties.
Currently, the Labor Commissioner lacks the statutory
authority to recover "waiting time" penalties as part of a
citation for a minimum wage violation. This bill seeks to
correct this gap.
3)Opposition . The California Association for Health Services at
Home (CAHSAH) expresses concerns about whether, under this
bill, an employer would have the same opportunity to present
defenses against "waiting time" penalties as they would under
the normal "Berman hearing" process. They state that the
potential of penalties elevates the need for a fair hearing to
ensure employers have equal protections under the law and the
ability to present information.
Analysis Prepared by : Misty Feusahrens / APPR. / (916)
319-2081
AB 1723
Page 3