Senator Wiener Forges Ahead in Fight To Stop Wage Theft
SACRAMENTO – Senator Scott Wiener (D-San Francisco) announced he will seek to advance legislation allowing workers to swiftly receive justice for wage theft after corporate lobbying stalled the bill last year. Corporate lobbying against the bill remains intense.
Senator Wiener announced amendments that will ensure the bill focuses only on bad actors by limiting the bill to subsequent, willful, or intentional violations for failure to pay wages on time.
SB 310 closes a loophole in the law that has forced hundreds of thousands of Californians to suffer without justice when employers fail to pay them on time or steal their wages altogether. Under current law, employees have two options to recover the penalties for lost wages to which they are legally entitled: 1) file a wage claim with the Labor Commissioner’s Office, which typically takes workers years to even get a hearing, or 2) file a Private Attorneys General Act (PAGA) lawsuit, in which workers can only recover a fraction of the entire penalty amount. SB 310 authorizes workers to recover these penalties through an independent civil action, providing workers a path to recover the full penalties in a timely manner.
“When employers steal or delay wages, we need a system that actually holds them accountable and makes workers whole,” said Senator Wiener. “Corporate interests have tried to confuse this debate, but it comes down to one basic principle: people should be paid on time and in full for their work. These new amendments make clear we’re focused only on bad actors here, not honest mistakes. We’re forging ahead because wage theft is a major problem and workers deserve protections that work in the face of our affordability crisis.”
Wage theft is a widespread problem in California, with the State Labor Commission receiving tens of thousands of complaints each year. When employers do not pay wages on time, they cause extreme financial hardship for the many employees living paycheck to paycheck, who rely on their wages to pay for food, rent, and other daily necessities. Moreover, this delay in payment essentially amounts to an interest-free loan from the employee to the employer.
Under existing law, workers may recover their full wages through a civil suit or LCO action if an employer pays them late or does not pay them at all. However, workers do not have an effective and timely path to recover the full penalties to which they are entitled for being paid late or not at all. Additionally, recovering penalties for the impacts of the delay and/or the underpayment is extremely challenging.
Although workers may recover penalties via an LCO or PAGA action, both of these avenues have significant drawbacks that, in practice, make it very difficult for workers to recover the full penalties to which they are entitled for late payment. In a PAGA action, aggrieved workers recover only 35% of the assessed penalty amount while the remaining 65% goes to the state.
If an aggrieved worker chooses instead to pursue their claim with the Labor Commissioner, they can recover the entire penalty amount, but they typically face very long waits to even get a hearing date due to the extensive backlog of wage claims. From 2017 to 2021, the California Labor Commissioner averaged 505 days to decide an individual worker’s wage claim, which hugely exceeds the 135 days maximum set by law. With such long delays in the Labor Commissioner process, workers often lose hope or decide the wait is not worth it.
Even workers that do stick it out through the Labor Commissioner’s process face an uphill battle to recover the full penalties they are entitled to under law. Employers have more resources to fight wage theft complaints, and typically pursue yearslong appeals to court decisions. Only 1 in 7 employers who were issued court judgments in wage claim cases in 2017 paid their workers the full amount of the claims as of 2022, five years later.
SB 310 creates a better path for workers to recover all of the penalties: through a civil action. Importantly, there is no change to the amount of penalties an employer must pay for late payment of wages. A civil action would allow affected workers to recover 100% of the available penalties, and would avoid the delays of the Labor Commissioner process.
SB 310 is sponsored by the California Rural Legal Assistance Foundation, and Legal Aid at Work.
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