Gov. Brown Signs Wage Theft Bill, Other Employment Measures

By Joanne Deschenaux Oct 16, 2015
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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:

  • A.B. 621, which creates a one-year amnesty program starting Jan. 1, 2016, for trucking companies to inform the California Labor Commissioner that they wish to reclassify their drivers as employees rather than contractors and have penalties waived, signed Oct. 10.
  • A.B. 622, which prohibits employers from using E-Verify for purposes beyond those required by law, signed Oct. 9 and takes effect Jan. 1, 2016.
  • A.B. 970, which expands the labor commissioner’s authority to enforce minimum wage laws in cities and counties, signed Oct. 11 and takes effect Jan. 1, 2016.
  • A.B. 1506, which allows employers to fix errors or omissions on pay stubs regarding the pay period dates and identification of the legal entity that is the employer before employees can bring civil lawsuits against the employers, signed Oct. 2 and took effect immediately.
  • S.B. 703, which prohibits state agencies from contracting with vendors who discriminate against employees in the provision of health benefits on the basis of gender identity, signed Oct. 7 and takes effect Jan. 1, 2016.

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:

  • A.B. 676, which would have prohibited employers from discriminating against unemployed individuals in advertisements for jobs, or through job applications and interviews that ask applicants to disclose their employment status, vetoed Oct. 10.
  • A.B. 1017, which would have prohibited employers from basing current employee pay on pay in previous positions as a way to help close gender pay gaps, vetoed Oct. 11.
  • S.B. 406, which would have expanded the state’s paid family leave to apply to employers with 25 or more employees rather than the current 50 employees, vetoed Oct. 11.

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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