BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1723|
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THIRD READING
Bill No: AB 1723
Author: Nazarian (D)
Amended: As introduced
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 4-1, 6/25/14
AYES: Hueso, Leno, Padilla, Mitchell
NOES: Wyland
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/4/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 54-24, 5/28/14 - See last page for vote
SUBJECT : Employees: wages
SOURCE : California Rural Legal Assistance Foundation
DIGEST : This bill provides that minimum wage citations issued
by the Labor Commissioner will also include any applicable
"waiting time" penalties provided for under existing law, as
specified.
ANALYSIS : Existing law:
1.Authorizes the Labor Commissioner to investigate and enforce
statutes and orders of the Industrial Welfare Commission that,
among other things, specify the requirements for the payment
of wages by employers.
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2.Provides the Labor Commissioner with the authority to
investigate employee complaints and allows the Labor
Commissioner to hold a hearing in any action to recover wages,
including orders of the Industrial Welfare Commission. The
Labor Commissioner may require an award in the amount of the
wages owed, plus interest.
3.Allows the Division of Labor Standards Enforcement or
Department of Industrial Relations to commence and prosecute a
civil action to recover unpaid minimum wages or unpaid
overtime compensation, including interesting thereon.
4.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.
5.Provides that, in a citation for a minimum wage violation
issued by the Labor Commissioner, an employer shall be subject
to a specified civil penalty and restitution of wages.
6.Provides that if an employer willfully fails to pay any wages
of an employee who is discharged or who quits, the wages of
the employee shall continue as a penalty from the due date
thereof at the same rate until paid or until an action
therefor is commenced; but the wages shall not continue for
more than 30 days.
This bill:
1.Provides 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 any applicable "waiting time"
penalties under existing law in addition to existing civil
penalties, restitution of wages, and liquidated damages.
2.Makes related conforming changes to existing law.
Prior Legislation
AB 442 (Nazarian, Chapter 735, Statutes of 2013) authorized the
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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.
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
According to the Senate Appropriations Committee, the Department
of Industrial Relations indicates that it will 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.
SUPPORT : (Verified 8/4/14)
California Rural Legal Assistance Foundation (source)
California Federation of Teachers, AFL-CIO
California Labor Federation, AFL-CIO
OPPOSITION : (Verified 8/4/14)
Air Conditioning Trade Association
Associated Builders and Contractors - San Diego Chapter
California Association for Health Services at Home
California Association of Licensed Security Agencies, Guards and
Associates
California Chamber of Commerce
California Farm Bureau Federation
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California Pool and Spa Association
California Professional Association of Specialty Contractors
California Restaurant Association
California Retailers Association
National Federation of Independent Business
Plumbing-Heating-Cooling Contractors Association of
Western Electrical Contractors Association
Western Growers Association
ARGUMENTS IN SUPPORT : Proponents argue that AB 1723 will
ensure that victims of wage theft will recover any applicable
"waiting time" penalties when the Labor Commissioner issues a
citation for a minimum wage violation. Proponents argue that the
Division of Labor Standards and Enforcement currently lack the
statutory authority to recover application "waiting time"
penalties after a citation for a minimum wage violation.
Proponents maintain that without the legal authority to recover
these monetary penalties for workers as part of a Bureau of
Field Enforcement minimum wage citation, state policy to ensure
prompt payment of wages is significantly undercut, and workers
are denied all that is due to them following a theft of their
wages. Proponents also argue that because the payment of
'waiting time' penalties, where applicable, is mandatory, of the
Labor Commissioner/Bureau of Field Enforcement does not recover
them when it cites for a minimum wage violation, workers will
simply file a subsequent "Berman hearing" administrative claim
or a civil action to recover them. Proponents contend that these
hearings will create unnecessary and completely avoidable costs
for DLSE, or the courts, and will also result in possibly
lengthy delays for workers seeking to be made whole after theft
of their wages.
ARGUMENTS IN OPPOSITION : Opponents argue that the expansion
of the capacity of investigators employed by the Labor
Commission places employers at a disadvantage because the
establishment of underpayments should remain under the purview
of an administrative hearing. Opponents note that during a
hearing the complaint, investigation, and the employer's
documentation are reviewed. Opponents contend that if the
hearing process is eliminated it is uncertain if the
investigator will have the same information. Opponents further
state that the bill also expands penalties, which include
liquidated damages, which elevates the need for a fair hearing
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to ensure employers have equal protections under the law.
Opponents also suggest the inclusion of an amendment to ensure
that an investigator properly considers the heightened standard
of "willfulness" for purposes of imposing waiting time
penalties. Opponents requested AB 1723 be amended to include
that any citation must specify in writing the basis for finding
willfulness to justify an assessment of waiting time penalties.
Opponents argue that by specifying this standard in writing, it
will provide an employer with adequate notice in order to assist
the employer in determining whether an appeal of the citation is
necessary.
ASSEMBLY FLOOR : 54-24, 5/28/14
AYES: Alejo, Ammiano, Bloom, Bocanegra, Bonilla, Bonta,
Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Chesbro, Cooley, Dababneh, Daly, Dickinson, Eggman, Fong, Fox,
Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall, Roger
Hern�ndez, Holden, Jones-Sawyer, Levine, Lowenthal, Medina,
Mullin, Muratsuchi, Nazarian, Pan, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Weber, Wieckowski,
Williams, Yamada, Atkins
NOES: Achadjian, Allen, Bigelow, Ch�vez, Conway, Dahle,
Donnelly, Beth Gaines, Gorell, Grove, Hagman, Harkey, Jones,
Linder, Logue, Maienschein, Mansoor, Melendez, Nestande,
Olsen, Patterson, Wagner, Waldron, Wilk
NO VOTE RECORDED: Frazier, Vacancy
PQ:nl 8/6/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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