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State wage theft law would help enforce LA's minimum wage hike

A bill that cleared the California Senate Monday would make it harder for employers to dodge out of paying back wages to workers who win a wage-theft case.
Photo by jphilipg/Flickr (Creative Commons)
A bill that cleared the California Senate Monday would make it harder for employers to dodge out of paying back wages to workers who win a wage-theft case.

As Los Angeles city council members prepare to finalize a citywide minimum wage hike, they will be watching the state legislature - there, a bill is being considered that calls for tougher enforcement on wage theft.

Known as SB 588, it would make it harder for employers who owe back wages to employees to skip out on paying them. It's sponsored by Sen. Kevin de León of Los Angeles.

After the bill cleared the state Senate in Sacramento this week, De León called it a "victory for low-wage workers...whose salaries are literally being stolen from them because they are being paid less than minimum wage." He added that some of these workers are not paid the overtime hours that they are demanded to work.

The proposed law is considered a boon to supporters of the Los Angeles city council's recent move to raise the minimum wage in the city to $15 an hour by 2020.

Enforcing the local minimum wage law would have challenges: One, that many low-wage workers, immigrants especially, are afraid to come forward and report that they are not being paid what they should. Second, that even those who take their case to the state labor commission and win don't always get their wages back.

Truck driver Tomas Gonzalez says this is what happened to him in 2009 - and he is still owed more than $30.000.

"I won my case, but until now, I haven't seen any result," Gonzalez said. "So far, they've paid me nothing, nothing, nothing."

Gonzalez, a legal resident who lives in San Bernardino, traveled with activists this week to Sacramento to rally for passage of the wage theft law. So did Alexandra Suh of the Koreatown Immigrant Workers Alliance, which represents workers in wage-theft cases.

"The problem is not that workers are unable to prove their claims," Suh said. "They are. They are just unable to collect on it."

Suh said this is because the regulations don't have teeth. Employers can easily change their name and reincorporate, for example, as one way to get out of paying.

The bill proposes giving state officials more power to collect, including a provision that would force employers who have been ordered to pay stolen wages - and don't - to put up a bond that would provide funds to pay the employee who is owed.

Those who don't comply could receive liens, or be ordered to cease operations. And business owners' names would be listed in judgments as a way of closing the name-change loophole, Suh said. If it becomes law, the bill would cost approximately up to $2.6 million to implement the first year and about $2.2 million annually after that.

De León's bill follows a more stringent wage theft proposal known as AB 2416, introduced last year by fellow Democrat Mark Stone, a state Assembly member from Central California. That bill faced opposition from business groups, including the manufacturing industry.

A spokesman for the California Manufacturers and Technology Association said there were concerns about SB 588 initially, but these were ironed out in amendments. The new bill allows employers more opportunity to appeal before lien penalties kick in.

A position paper from the association last month read that SB 588 had "no opposition but concerns have been expressed related to a few technical provisions that if fixed would make the bill better...CMTA is neutral on the measure and supports the Labor Commissioner’s ability to collect on debts owed by unscrupulous businesses operating outside of the law."

L.A . City Council member Gil Cedillo told KPCC the state bill dovetails well with the Los Angeles wage ordinance, as city officials wrangle with how the city will monitor compliance.
“It helps put more boots on the ground, as you would say," Cedillo said. "Our challenge is not just trying to make sure that everybody complies with the law, that no one takes advantage of vulnerable communities, that businesses who don't pay the minimum wage then have a competitive advantage over those who do. But our challenge is also having people to enforce it."

The state bill now heads to the Assembly. A spokeswoman for De Leon said it could be heard by a policy committee as early as next week.

This story has been updated.