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The California legislature adjourned Sept. 11, 2015, giving Gov. Jerry Brown until Oct 11, 2015, to sign or veto bills passed by the lawmakers. In the days preceding that deadline, Brown signed into law several employment-related bills, including one relating to wages owed under a court judgment, and vetoed several others, including one that would have prohibited employers from requiring workers to agree to use binding arbitration to resolve employment disputes.
Brown, a Democrat, on Oct. 11 signed Senate Bill (S.B.) 588, sponsored by Senate President Pro Tempore Kevin de Leon, giving the California Labor Commissioner the authority to file a lien or levy against an employer that has failed to pay wages owed under a final court judgment.
Under the new law, an employer that fails to pay wages within 10 days of a levy will be required to stop operations or secure a surety bond of $50,000 to $150,000, depending on the size of the unpaid judgment.
“With the governor’s signature on SB 588 we are sending a message to employers around our state and around the country, California is setting the standard on protecting workers and hacking at the roots of income inequality,” de Leon said in an Oct. 12 news release.
S.B. 588 takes effect Jan. 1, 2016.
Other Bills Signed
Brown also signed:
Arbitration Mandate Vetoed
Brown vetoed A.B. 465, which would have prohibited employers from requiring workers to agree to use binding arbitration to resolve employment disputes as a condition of employment. In his Oct. 11 veto message, Brown said the bill would have made California the only state in the country with such a prohibition and, although he is concerned about unfairness in employment disputes, he was unwilling to sign such a far-reaching measure.
California courts have addressed the unfairness of employment disputes with protections such as neutrality of the arbitrator, no limits on damages or remedies, and written decisions that allow some judicial review, Brown said.
“If abuses remain, they should be specified and solved by targeted legislation, not a blanket prohibition,” he said.
Further, the blanket ban has been struck down in other states as a violation of the Federal Arbitration Act (FAA), and the U.S. Supreme Court is currently considering two cases from California involving pre-emption of state arbitration policies under the FAA, Brown said.
Other Bills Vetoed
Brown also vetoed:
The legislature will reconvene in January 2016 for the second year of its two-year session.
Joanne Deschenaux, J.D., is SHRM’s senior legal editor.
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