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AB-2613 Failure to pay wages: penalties.(2017-2018)

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Date Published: 05/26/2018 02:51 PM
AB2613:v97#DOCUMENT

Amended  IN  Assembly  May 29, 2018
Amended  IN  Assembly  April 09, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 2613


Introduced by Assembly Member Reyes

February 15, 2018


An act to amend Sections 1194.2 and 1197.1 of, and to repeal and add Section 210 of, the Labor Code, relating to employment.


LEGISLATIVE COUNSEL'S DIGEST


AB 2613, as amended, Reyes. Failure to pay wages: penalties.
Existing law provides for a civil penalty, in addition to, and entirely independent and apart from other penalties, on every person who fails to pay the wages of each employee, as specified, and requires the Labor Commissioner to recover that penalty. Existing law requires that a specified percentage of the penalty recovered under that provision be paid into a fund within the Labor and Workforce Development Agency dedicated to educating employers about state labor laws and that the remainder be paid into the State Treasury to the credit of the General Fund.
This bill would repeal those provisions and instead make an employer or other person acting individually or as an officer, agent, or employee of another person on behalf of an employer, as described, who fails to pay or causes a failure to pay specified wages of each employee subject to a penalty of $200, payable to each affected employee, per pay period where the wages due are not paid on time, as specified. The bill would provide that the additional penalty does not apply to the failure to pay the final wages of an employee who is discharged or quits.
Existing law makes an employer or other person acting individually or as an officer, agent, or employee of another person who fails to pay or causes a failure to pay an employee a wage less than the minimum wage subject to citation by the Labor Commissioner, a civil penalty, restitution of wages, liquidated damages, and certain other applicable penalties.
This bill would specify that those remedies also apply where when an employer or other person acting individually or as an officer, agent, or employee of another person fails to pay or causes a failure to timely pay an employee the regular wages due owed to that employee. employee when due. The bill would make other related conforming changes.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 210 of the Labor Code is repealed.

SEC. 2.

 Section 210 is added to the Labor Code, to read:

210.
 (a) An employer or other person acting individually or as an officer, agent, or employee of another person on behalf of an employer, who fails to pay, or causes a failure to pay, pay wages of each employee as provided in Sections 201.3, 204, 204b, 204.1, 204.11, 204.2, 205, 205.5, and 1197.5, and 205.5, shall be subject to a statutory penalty of two hundred dollars ($200), payable to each affected employee, per pay period where the wages due to an employee are not paid on time. For purposes of this subdivision, a “failure to pay” does not include an isolated or unintentional payroll error due to a clerical or inadvertent mistake.
(b) The penalty in subdivision (a) shall be due and payable on the calendar day after the day for which wages unlawfully withheld were to be paid pursuant to Sections 201.3, 204, 204b, 204.1, 204.11, 204.2, 205, 205.5, or 207. or 205.5. The penalty in this section cannot be waived by agreement of the employee.
(c) The penalty in subdivision (a) shall be due and payable for any pay date in any pay period as set forth in Sections 201.3, 204, 204b, 204.1, 204.11, 204.2, 205, 205.5, or 207 provided that any wages owed from prior pay periods remain unpaid.
(d) A suit or action may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise. Penalties may also be recovered in any action under Section 98, 98.3, 558, 1193.6, 1194, or 1197.1.
(e) Penalties under this section are in addition to, and entirely independent and apart from, any other damages or penalties provided for under this code. code, except an employee may not recover penalties both under this section and under Section 201.3, 204, 204b, 204.1, 204.11, 204.2, 205, or 205.5 for a failure to pay an employee on time. However, the penalties under this section shall not apply to failure to pay the final wages of an employee who is discharged or quits, for which penalties under Section 203 may be recovered.
(f) For purposes of this section, the following terms apply:
(1) “Other person acting on behalf of an employer” is limited to a natural person who is an owner, director, officer, or managing agent of the employer.
(2) “Managing agent” has the same meaning as in subdivision (b) of Section 3294 of the Civil Code.

SEC. 3.

 Section 1194.2 of the Labor Code is amended to read:

1194.2.
 (a) In any action under Section 98, 1193.6, 1194, or 1197.1, because of the payment of a wage less than the minimum wage fixed by an order of the commission or by statute, or a wage less than the regular wages owed to an employee, when due when the wages were due an employee shall be entitled to recover liquidated damages in an amount equal to the wages unlawfully unpaid and interest thereon. Nothing in this subdivision shall be construed to authorize the recovery of liquidated damages for failure to pay overtime compensation. A suit may be filed for liquidated damages at any time before the expiration of the statute of limitations on an action for wages from which the liquidated damages arise.
(b) Notwithstanding subdivision (a), if the employer demonstrates to the satisfaction of the court or the Labor Commissioner that the act or omission giving rise to the action was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of any provision of the Labor Code relating to minimum wage, or an order of the commission, the court or the Labor Commissioner may, as a matter of discretion, refuse to award liquidated damages or award any amount of liquidated damages not exceeding the amount specified in subdivision (a).
(c) This section applies only to civil actions commenced on or after January 1, 1992.

SEC. 4.

 Section 1197.1 of the Labor Code is amended to read:

1197.1.
 (a) Any employer or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid to any employee a wage less than the minimum fixed by an applicable state or local law, or by an order of the commission, or pays or causes to be paid a wage less than the regular wages owed to an employee when due, shall be subject to a civil penalty, restitution of wages, liquidated damages payable to the employee, and any applicable penalties imposed pursuant to Sections 203 and 210 as follows:
(1) For any initial violation that is intentionally committed, one hundred dollars ($100) for each underpaid employee for each pay period for which the employee is underpaid. This amount shall be in addition to an amount sufficient to recover underpaid wages, liquidated damages pursuant to Section 1194.2, and any applicable penalties imposed pursuant to Sections 203 and 210.
(2) For each subsequent violation for the same specific offense, two hundred fifty dollars ($250) for each underpaid employee for each pay period for which the employee is underpaid regardless of whether the initial violation is intentionally committed. This amount shall be in addition to an amount sufficient to recover underpaid wages, liquidated damages pursuant to Section 1194.2, and any applicable penalties imposed pursuant to Sections 203 and 210.
(3) Wages, liquidated damages, and any applicable penalties imposed pursuant to Sections 203 and 210, recovered pursuant to this section shall be paid to the affected employee.
(b) If, upon inspection or investigation, the Labor Commissioner determines that a person has paid or caused to be paid a wage less than the minimum under applicable law, or less than the regular wages owed to an employee when due, the Labor Commissioner may issue a citation to the person in violation. The citation may be served personally, in the same manner as provided for service of a summons as described in Chapter 4 (commencing with Section 413.10) of Title 5 of Part 2 of the Code of Civil Procedure, by certified mail with return receipt requested, or by registered mail in accordance with subdivision (c) of Section 11505 of the Government Code. Each citation shall be in writing and shall describe the nature of the violation, including reference to the statutory provision alleged to have been violated. The Labor Commissioner shall promptly take all appropriate action, in accordance with this section, to enforce the citation and to recover the civil penalty assessed, wages, liquidated damages, and any applicable penalties imposed pursuant to Sections 203 and 210 in connection with the citation.
(c) (1) If a person desires to contest a citation or the proposed assessment of a civil penalty, wages, liquidated damages, and any applicable penalties imposed pursuant to Sections 203 and 210 therefor, the person shall, within 15 business days after service of the citation, notify the office of the Labor Commissioner that appears on the citation of his or her appeal by a request for an informal hearing. The Labor Commissioner or his or her deputy or agent shall, within 30 days, hold a hearing at the conclusion of which the citation or proposed assessment of a civil penalty, wages, liquidated damages, and any applicable penalties imposed pursuant to Sections 203 and 210 shall be affirmed, modified, or dismissed.
(2) The decision of the Labor Commissioner shall consist of a notice of findings, findings, and an order, all of which shall be served on all parties to the hearing within 15 days after the hearing by regular first-class mail at the last known address of the party on file with the Labor Commissioner. Service shall be completed pursuant to Section 1013 of the Code of Civil Procedure. Any amount found due by the Labor Commissioner as a result of a hearing shall become due and payable 45 days after notice of the findings and written findings and order have been mailed to the party assessed. A writ of mandate may be taken from this finding to the appropriate superior court. The party shall pay any judgment and costs ultimately rendered by the court against the party for the assessment. The writ shall be taken within 45 days of service of the notice of findings, findings, and order thereon.
(3) As a condition to filing a petition for a writ of mandate, the petitioner seeking the writ shall first post a bond with the Labor Commissioner equal to the total amount of any wages, liquidated damages, and overtime compensation that are due and owing as determined pursuant to subdivision (b) of Section 558, as specified in the citation being challenged. The bond amount shall not include amounts for penalties. The bond shall be issued by a surety duly authorized to do business in this state, shall be issued in favor of unpaid employees, and shall ensure that the petitioner makes payments as set forth in this paragraph. If a decision is entered which affirms or modifies the amounts for wages, liquidated damages, or overtime compensation, the petitioner shall pay the amounts owed for the specified items included in a clerk’s judgment entered under subdivision (f) based on the decision, or pursuant to a court judgment in a writ of mandate proceeding under paragraph (2). If the request for a writ is withdrawn or dismissed without entry of judgment, the petitioner shall pay the amounts owed for the specified items pursuant to the citation, or the administrative decision if a pending writ of mandate is dismissed prior to a court decision, unless the parties have executed a settlement agreement for payment of some other amount. In the case of a settlement agreement, the petitioner shall pay the amount he or she is obligated to pay under the terms of the settlement.
(4) If the employer fails to pay the amount of wages, liquidated damages, or overtime compensation owed within 10 days of the entry of judgment, dismissal or withdrawal of writ, or the execution of a settlement agreement, a portion of the undertaking, described in paragraph (3), equal to the amount owed, or the entire undertaking if the amount owed exceeds the undertaking, shall be forfeited to the employee.
(d) A person to whom a citation has been issued shall, in lieu of contesting a citation pursuant to this section, transmit to the office of the Labor Commissioner designated on the citation the amount specified for the violation within 15 business days after issuance of the citation.
(e) When no petition objecting to a citation or the proposed assessment of a civil penalty, wages, liquidated damages, and any applicable penalties imposed pursuant to Sections 203 and 210 is filed, a certified copy of the citation or proposed civil penalty, wages, liquidated damages, and any applicable penalties imposed pursuant to Sections 203 and 210 may be filed by the Labor Commissioner in the office of the clerk of the superior court in any county in which the person assessed has or had a place of business. The clerk, immediately upon the filing, shall enter judgment for the state against the person assessed in the amount shown on the citation or proposed assessment of a civil penalty, wages, liquidated damages, and any applicable penalties imposed pursuant to Sections 203 and 210.
(f) When findings and the order thereon are made affirming or modifying a citation or proposed assessment of a civil penalty, wages, liquidated damages, and any applicable penalties imposed pursuant to Sections 203 and 210 after hearing, a certified copy of these findings and the order entered thereon may be entered by the Labor Commissioner in the office of the clerk of the superior court in any county in which the person assessed has property or in which the person assessed has or had a place of business. The clerk, immediately upon the filing, shall enter judgment for the state against the person assessed in the amount shown on the certified order.
(g) A judgment entered pursuant to this section shall bear the same rate of interest and shall have the same effect as other judgments and be given the same preference allowed by the law on other judgments rendered for claims for taxes. The clerk shall make no charge for the service provided by this section to be performed by him or her.
(h) In a jurisdiction where a local entity has the legal authority to issue a citation against an employer for a violation of any applicable local minimum wage law, the Labor Commissioner, pursuant to a request from the local entity, may issue a citation against an employer for a violation of any applicable local minimum wage law if the local entity has not cited the employer for the same violation. If the Labor Commissioner issues a citation, the local entity shall not cite the employer for the same violation.
(i) The civil penalties provided for in this section are in addition to any other penalty provided by law.
(j) This section shall not apply to any order of the commission relating to household occupations.
(k) This section does not change the applicability of local minimum wage laws to any entity.
(l) “Wages” as used in this section includes the minimum fixed by an applicable state or local law, or by order of the commission, and regular wages owed to an employee.