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SB-524 Employment: violations: good faith defense.(2017-2018)

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Date Published: 02/16/2017 09:00 PM
SB524:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 524


Introduced by Senator Vidak

February 16, 2017


An act to add Section 98.73 to the Labor Code, relating to employment.


LEGISLATIVE COUNSEL'S DIGEST


SB 524, as introduced, Vidak. Employment: violations: good faith defense.
The Division of Labor Standards Enforcement of the Department of Industrial Relations is generally charged with enforcing employment statutes and regulations, either in administrative actions or through litigation. Under existing law, an employer may face administrative sanctions, civil fines and penalties, and criminal penalties for violations of employment statutes or regulations.
This bill would permit a person to raise as an affirmative defense that, at the time of an alleged violation of statute or regulation in a judicial or administrative proceeding, the person was acting in good faith, had sought, relied upon, and conformed with a published opinion letter or enforcement policy of the division, and had provided true and correct information to the division in seeking the opinion letter or enforcement policy. The bill would require any person who asserts the affirmative defense to post a bond as prescribed.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 98.73 is added to the Labor Code, to read:

98.73.
 (a) Any person who relies upon a published opinion letter or an enforcement policy of the division that is displayed on the Internet Web site of the division shall not be liable for costs or subject to punishment, except for restitution of unpaid wages, for a violation of a statute or regulation in a judicial or administrative proceeding if the person pleads and proves to the trier of fact that, at the time the alleged act or omission occurred, the person, acting in good faith, did all of the following:
(1) Previously sought an applicable opinion letter or enforcement policy from the division.
(2) Relied upon and conformed to the applicable opinion letter or enforcement policy published by the division.
(3) Provided true and correct information to the division in seeking the opinion letter or enforcement policy.
(b) (1) Subdivision (a) shall apply even if, after the alleged act or omission occurred, the opinion letter or enforcement policy upon which the person relied is modified, rescinded, or determined by judicial authority to be invalid or of no legal effect.
(2) Subdivision (a) shall not apply if the alleged act or omission occurred after the opinion letter or enforcement policy upon which the person relied is modified, rescinded, or determined by judicial authority to be invalid or of no legal effect.
(c) This section applies to all actions and proceedings that commence on or after January 1, 2018.
(d) Any person who asserts reliance upon an opinion letter or enforcement policy of the division as described in subdivision (a) shall post an undertaking with the reviewing court or administrative body. The undertaking shall consist of a bond issued by a licensed surety qualified to do business in this state or a cash deposit with the court or administrative body in the amount of the reasonable estimate of alleged unpaid wages resulting from that reliance. The person shall provide written notification to all parties of the posting of the undertaking. The undertaking shall be on the condition that, if any judgment is entered in favor of the employee, the person shall pay the amount owed pursuant to the judgment. If the person prevails or the case is dismissed, withdrawn, or resolved through the execution of a settlement agreement, the court or administrative body shall return the undertaking to the person within 10 business days.
(e) Nothing in this section shall be construed to give any greater legal weight to an opinion letter or enforcement policy than it would otherwise have in the absence of this section.
(f) Nothing in this section shall be construed to require the division to issue an order, ruling, approval, interpretation, or enforcement policy.
(g) Nothing in this section shall be construed to authorize the division to issue an order, ruling, approval, interpretation, or enforcement policy that is contrary to an existing state statute or regulation.