BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1723 (Nazarian) - Employment: Wages
Amended: As Introduced Policy Vote: L&IR 4-1
Urgency: No Mandate: No
Hearing Date: August 4, 2014
Consultant: Robert Ingenito
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 1723 would authorize the Labor Commissioner to
include "waiting time" penalties in wage citations.
Fiscal Impact: The Department of Industrial Relations (DIR)
indicates that it would incur costs of $110,000 in the first
year and $94,000 ongoing (special funds) to implement the
provisions of the bill. Future savings could occur if the bill
were to result in fewer administrative appeals.
Background: Current law provides for three options for the
recovery of unpaid minimum wages. First, an employee may file an
administrative wage claim with the Labor Commissioner. This
process provides for an administrative hearing (usually referred
to as a "Berman hearing") for the adjudication of claims,
including wages, penalties, and other demands for compensation,
including liquidated damages. Second, 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. Using this option, an employee shall also be entitled to
liquidated damages in an amount equal to the wages unlawfully
paid. Finally, 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
AB 1723 (Nazarian)
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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.
Proposed Law: This bill would provide that minimum wage
citations issued by the Labor Commissioner will also include any
applicable "waiting time" penalties provided for under existing
law, as specified.
Specifically, this bill states that, in a citation by the Labor
Commissioner for failure to pay minimum wage, an employer who
fails to pay the minimum wage shall be subject to pay 'waiting
time' penalties - which under statute is defined as the wages of
an employee who is discharged or quits from the due date until
paid or until an action is commenced. The wages shall not
continue for more than 30 days.
Related Legislation:
AB 442 (Nazarian), Chapter 735, Statutes of 2013 -
authorized the Labor Commissioner to collect liquidated
damages from an employer who pays an employee less than
minimum wage.
AB 240 (Bonilla), Chapter 272, Statutes of 2012 -
amended Labor Code sections 1194.2 and 98 to authorize the
Labor Commissioner to award unpaid minimum wage liquidated
damages in administrative wage claim hearings under the
same conditions that existed for allowing a court to award
those same damages to workers.