2020 Legislative Update: The Return of the California Labor Commissioner

California Governor Gavin Newsom recently signed bills that substantially expand the Labor Commissioner’s authority to cite employers and adjudicate employee claims:

• Senate Bill 688: Permits the Labor Commissioner to Cite an Employer for Failure to Pay Contract Wages. Generally, the Labor Commissioner has authority to investigate and cite an employer for failure to pay the applicable minimum wage. SB 688 expands the Labor Commissioner’s authority to investigate and issue a citation for failure to pay agreed upon contract wages (defined as “wages based upon an agreement, in excess of the applicable minimum wage, for regular, nonovertime hours.”)

• Assembly Bill 673: Permits Employees to Seek Penalties for Late Wages. Labor Code Sec. 210 permits the Labor Commissioner to assess penalties against an employer for failure to pay wages on regular pay days. Aggrieved employees can also pursue these statutory penalties through a Private Attorneys General Act (PAGA) claim. Assembly Bill 673 permits employees to also recover these penalties (if not already recovered by the Labor Commissioner), by filing a claim with the Labor Commissioner. To avoid double recovery, AB 673 clarifies employees may recover penalties through the Labor Commissioner, or by filing a PAGA action, but not both.

• Senate Bill 229: Expands on the Appeal and Enforcement Mechanism of Labor Commissioner Citations. Under existing law, the Labor Commissioner is authorized to investigate and issue citations for workplace retaliation or discrimination. SB 229 aims to clarify the appeals process associated with such citations. In part, SB 229 provides that once a citation becomes final, the employer must transmit within 30 days both the amount cited and a certification of compliance with any other remedies ordered. Existing law allows an employer to contest a citation within 30 days of service of the citation. SB 229 clarifies that if, following an informal hearing on the citation, the Labor Commissioner issues an order concerning an amount due, that amount must be paid within 45 days of the mailing date of the written decision.

Permitting employees to seek statutory penalties by filing a Labor Commissioner claim will require employers to essentially litigate in a forum that does not provide for the same discovery procedures that are useful in defending wage and hour lawsuits.

Given the multiple venues employees have and the Labor Commissioner’s expanding authority to cite employers, employers are advised to carefully audit their practices and train employees about breaks, record keeping, and open-door policies. These internal audits and trainings can be a useful tool in limiting and defending costly litigation and Labor Commissioner investigations.

Nicholas Kanter and Tal Burnovski Yeyni are members of our Employment Practice Group.