Bill tar­gets wage theft

State mea­sure would re­quire firms to post a $150,000 bond to­ward em­ploy­ees’ back pay.

Los Angeles Times - - BUSINESS - By Chris Kirkham chris.kirkham @la­ Twit­ter: @c_kirkham

A state mea­sure would re­quire firms to post a $150,000 bond to­ward em­ploy­ees’ back wages if the firms fail to pay what the state or­ders.

Work­ers in Cal­i­for­nia are paid less than the legal min­i­mum wage about 372,000 times ev­ery week, ac­cord­ing to the U.S. Depart­ment of La­bor.

Their em­ploy­ers are sel­dom called to ac­count. Even when em­ploy­ers are or­dered to pay back wages by the state, only a frac­tion of the em­ploy­ees ever col­lect what they are owed.

New state Se­nate leg­is­la­tion in­tro­duced Tues­day aims to give state au­thor­i­ties more power to col­lect back wages from vi­o­la­tors.

The bill, from Se­nate leader Kevin de Leon (DLos An­ge­les), would re­quire com­pa­nies to post a $150,000 bond to­ward em­ploy­ees’ back wages if the firms fail to pay what the state or­ders.

Com­pa­nies that don’t post the bond could face a stop-work or­der or a lien from the La­bor Com­mis­sioner’s of­fice that would at­tach to prop­erty owned by the em­ployer.

La­bor Com­mis­sioner Julie Su has im­proved wage col­lec­tion, De Leon said, but the mea­sure would broaden the state’s pow­ers to pur­sue scofflaws.

“She needs the tip of the spear to be sharper,” De Leon said.

The leg­is­la­tion would also al­low the state to is­sue ci­ta­tions di­rectly to busi­ness own­ers, a move in­tended to pre­vent vi­o­la­tors from form­ing shell com­pa­nies to avoid legal judg­ments.

As many as 60% of wage judg­ments is­sued by the state in­volved in­stances in which a com­pany had changed names or dis­solved, ac­cord­ing to a 2013 re­port by the UCLA La­bor Cen­ter.

The goal of the leg­is­la­tion is to “pierce the cor­po­rate veil,” said Tia Koonse, legal and pol­icy re­search manager at the UCLA La­bor Cen­ter.

“Those bad ac­tors that have out­stand­ing judg­ments can’t hide any­more,” she said.

A sim­i­lar bill to ad­dress the prob­lem of “wage theft” died in the Leg­is­la­ture last year.

That leg­is­la­tion, spon­sored by As­sem­bly­man Mark Stone (D-Scotts Val­ley), would have given em­ploy­ees greater power to file liens against their em­ploy­ers for back pay.

De Leon said there were “deep reser­va­tions” from both par­ties about giv­ing em­ploy­ees the right to file wage liens di­rectly.

He said his leg­is­la­tion strikes a bal­ance by giv­ing dis­cre­tion to the La­bor Com­mis­sioner’s of­fice.

“We take a much more tar­geted ap­proach, by zero­ing in on the bad ac­tors,” he said.

A spokes­woman for Su said the agency does not com­ment on pending leg­is­la­tion.

The 2013 UCLA La­bor Cen­ter study found that be­tween 2008 and 2011 only 17% of work­ers who ob­tained a judg­ment against their em­ployer ever col­lected any of the money.

An­other La­bor Cen­ter sur­vey of low-wage work­ers in Los An­ge­les County found that nearly 30% re­ported be­ing paid be­low the min­i­mum wage in the pre­vi­ous week.

Min­i­mum-wage vi­o­la­tions in Cal­i­for­nia drove as many as 41,000 fam­i­lies be­low the poverty line, ac­cord­ing to a De­cem­ber study by the U.S. Depart­ment of La­bor.

De Leon’s bill will be up for con­sid­er­a­tion in two Se­nate com­mit­tees next week.

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