Berkeley Law Center for Law and Work: The DNA of Worker Rights

JAN 2025

The DNA of Worker Rights Key Building Blocks of California’s Model Framework of Wage and Hour Standards

ABOUT THIS REPORT Author Christina N. Chung Executive Director Center for Law and Work UC Berkeley School of Law

Contributor

About the Center for Law and Work

Julia Figueira-McDonough

The Center for Law and Work (CLAW) at UC Berkeley School

Direct Care Senior Research Fellow

of Law fosters cross-disciplinary scholarship, student

Center for Law and Work

engagement, and community involvement to address

UC Berkeley School of Law

pressing and emerging labor and employment issues faced

Designer Eliza Wee Dogmo Studios

by our most vulnerable working populations. With a focus on race, class, gender, and immigration status, CLAW combines robust legal, policy, and empirical research and analysis to develop solutions to what is broken in our current structures of work, and to chart a path toward a just and equitable economy.

Acknowledgments This publication was made possible by the generous support of The James Irvine Foundation. Special thanks to the passionate and committed staff at the California Labor Commissioner’s Office. Most especially, this publication is dedicated in memoriam to Donna Chen, former Senior Deputy at the Labor Commissioner’s Office, who taught so many of us everything there is to know about the California Labor Code, and whose spark illuminated everyone around her.

The contents of this report reflect the views of the author only and do not necessarily reflect any views of the UC Berkeley School of Law, the Regents of the University of California, or The James Irvine Foundation.

TABLE OF CONTENTS FOREWORD

5

INTRODUCTION

6

BLOCK 1:

10

1|A

1|B

RIGHTS

California’s History of Sector-Based Rights: Establishing Minimum Labor Standards Through Wage Orders of the Industrial Welfare Commission TABLE 1

Industry & Occupation-Based Wage Orders of the California Industrial Welfare Commission

14

SPOTLIGHT

Minimum Wage & Overtime Standards: How California Has Raised the Floor Above Federal Labor Standards

20

California’s Modern Trend of Industry-Specific Rights: Raising & Protecting Basic Labor Standards by Selecting Certain Low-Wage Industries for Reform

22

Providing long-overdue overtime rights for domestic workers & agricultural workers

23

Increasing the minimum wage for fast food workers & workers at health care facilities

24

Tackling exploitative “sweating” practices harming garment workers & warehouse workers

25

Key California Laws Raising & Protecting Minimum Labor Standards in Low-Wage Industries (2013-2024)

26

TABLE 2

1|C

12

The Rights of Undocumented Workers: Ensuring Labor Standards Apply to Workers Regardless of Their Immigration Status

30

Prohibitions against immigration-based retaliation

33

Criminal sanctions for immigration-related threats

35

Policies shielding state labor agency enforcement efforts against ICE interference

35

Protection against public disclosure of immigration status in open court

37

Table of Contents

1

TABLE OF CONTENTS

BLOCK 1:

RIGHTS (CONT’D) TABLE 3

Key California Laws Protecting the Rights of Undocumented Workers (2013-2022)

38

SPOTLIGHT

Taking a Stand Against ICE Interference with State Enforcement of Labor Standards: The California Labor Commissioner Leads the Way

42

BLOCK 2: RESPONSIBILITIES

44

2|A

46

Protection of “Employee” Status: Holding Employers Responsible for Misclassifying Workers as Independent Contractors Penalties & damages for willful misclassification

47

Codification of the ABC test

47

TABLE 4

2|B

2

Key California Laws Combatting Misclassification of Workers & Protecting Employee Status (2011-2023)

Liability Beyond Traditional “Employer” Status: Widening the Scope of Parties Responsible for Wage & Hour Violations

49

50

Successor liability

51

Individual corporate agent liability

52

Upstream liability “Client Employer” in subcontracted industries Property services & long-term care industries Construction industry Port trucking industry Garment industry

53 53 55 55 56 58

TABLE 5

Key California Laws Expanding the Scope of Who is Liable for Wage & Hour Violations (2014-2024)

59

SPOTLIGHT

AB 633: California’s Landmark Corporate Accountability Law in the Garment Industry

64

Table of Contents

TABLE OF CONTENTS

BLOCK 3: ENFORCEABILITY

66

3|A

68

The Keystones of Administrative Enforcement: Codifying the California Labor Commissioner’s Trifecta of Adjudicatory & Investigative Powers Wage Claims Adjudication

69

Bureau of Field Enforcement (BOFE)

70

Retaliation Complaint Investigations (RCI)

72

SPOTLIGHT

3|B

3|C

California’s Private Attorneys General Act (PAGA): Promoting the Synergy of Public & Private Enforcement of Labor Standards

Administrative Enforcement Remedies: Increasing the California Labor Commissioner’s Authority to Order Monetary Relief for Workers

74

76

Minimum wages

77

Business expense reimbursement

78

Liquidated damages

78

Waiting time penalties

80

Late payment penalties

80

Compensation for paid sick leave violations

81

Willful misclassification damages

81

TABLE 6

Key California Laws Enhancing Remedies in BOFE Citations & Berman Wage Claims (2011-2023)

82

SPOTLIGHT

Leveling the Playing Field for Workers in Forced Arbitration: Free Legal Representation by the California Labor Commissioner

86

Administrative Enforcement Tools: Bolstering the California Labor Commissioner’s Wage and Hour & Retaliation Investigations of Employers

88

Evidentiary sanctions for noncompliance with BOFE investigations

89

Tolling the statute of limitations during BOFE investigations

89

Table of Contents

3

TABLE OF CONTENTS

BLOCK 3: ENFORCEABILITY (CONT’D) Citation power in retaliation investigations

90

Injunctive relief during retaliation investigations

92

Retaliation investigations without a complaint

92

Rebuttable presumption of retaliation

93

TABLE 7

Key California Laws Enhancing Enforcement Tools for BOFE & RCI (2017-2023)

94

POLICY RECOMMENDATIONS

98

4|A

Ensure any newly-created labor standards councils or the Industrial Welfare Commission, if revived, can only act to strengthen existing standards

99

4|B

Close the loophole that enables immigration-based retaliation against workers

100

4|C

Clarify the meaning of “usual course of business” to ensure the client employer law serves its original intended purpose

101

4|D

Allow liquidated damages for overtime violations

102

4|E

Create a state “hot goods” law for violations of minimum wage, overtime & child labor protections

103

4|F

Authorize BOFE to cite employers for violating the existing obligation to keep accurate payroll and time records & increase the penalty for noncompliance

104

4|G In Berman hearings, institute a rebuttable presumption of the validity of a low-wage worker’s claim for unpaid wages, damages & penalties

105

CONCLUSION

107

APPENDIX OF SAMPLE STATUTES

108

ENDNOTES

127

4

Table of Contents

FOREWORD

Far too many people in California and nationwide, including disproportionate numbers of people of color, women, and immigrants, are stuck in low-wage, dead-end jobs that don’t pay enough for food, shelter, and other basic necessities—while wage theft remains pervasive in the industries they work in, cheating them out of their hard-earned, meager wages that they can ill afford to lose. The question of how we can build and enforce an effective system of strong labor standards, one that disincentivizes breaking the law, is certainly not a new conundrum. But it has become a multibillion-dollar question (as measured by the wages stolen from workers every year) that we still struggle to answer.

In the first decade of my career, I looked for some possible answers to this question through litigation. Passionately embracing our role as underdog nonprofit attorneys up against corporate giants and their high-powered law firms, my colleagues and I found novel ways to push the boundaries on laws in the books, as part of the anti-sweatshop lawsuits we brought on behalf of low-wage, immigrant workers seeking corporate accountability for the labor abuses they had suffered. Combined with vibrant worker organizing campaigns and policy advocacy, our cases were successful and personally fulfilling. Through them, I saw how community lawyering that gives voice and agency to otherwise marginalized workers, that opens the courtroom doors to their fight for justice, and that generates public awareness and dialogue, has such a pivotal role to play in shaping and giving meaning to labor standards for workers.

But I understood that other essential, complementary answers could also be found elsewhere, including inside the halls of government. Subsequently, during my ten years directing labor and employment policies first at the California Labor Commissioner’s Office and then the state Labor and Workforce Development Agency, I had the opportunity to envision and write policies and laws promoting and protecting the rights of workers, while incorporating the oft-neglected procedures and mechanisms that are necessary to enable potent enforcement on the ground. I experienced firsthand what state labor agencies need to do their jobs and saw what effective government enforcement can look like—and what it can achieve.

With the invaluable perspectives I have gained advocating for worker justice both outside and inside government, I have come to see that any answer to the multibillion-dollar question depends on the interconnected acts, both visible and invisible, of all of us.

It depends on workers who step forward and courageously lead the way, despite all odds against them. It depends on grassroots organizations, worker centers, unions, activists, lawyers, researchers, academics, and students who stand behind workers and demand change. It depends on businesses that invest in their workforces and do not put profit over people. It depends on policymakers and public officials who are willing to take chances, be bold, and do the right thing. And it depends on the staff of government labor agencies who work day in and day out behind the scenes to implement and enforce the law. All of this has made California the premier example in the country of how we can start to craft solutions with the potential to make a difference in workers’ lives—as it also illuminates how much more we still need to do to turn that potential into reality.

Christina N. Chung Executive Director UC Berkeley Law School Center for Law and Work Foreword

5

INTRODUCTION

Every 14 minutes, a worker in California files a wage claim alleging a violation of state labor standards.1 Studies have estimated that nationwide, wage theft deprives workers of more than $50 billion a year in earned income, which surpasses all robberies, burglaries and motor vehicle thefts combined2 and exacts the heaviest toll on low-wage workers.3

Researchers have found that in four major metropolitan areas of California alone, workers lost an average of more than $2.3 billion each year from 2014 to 2023 in stolen minimum wages, representing an average loss of approximately 20 percent of their total paycheck, or nearly $4,000 in wages per year if working full-time.4 The very grim picture painted by such staggering statistics likely does not even depict the full magnitude of the crisis, given the frequent under-reporting of wage violations by workers.5 Meanwhile, the need to implement smarter, more effective enforcement of labor standards, including through strategies that promote and support partnerships between government labor agencies, workers, and community-based organizations,6 only continues to grow more compelling.

Smarter enforcement, however, ultimately depends on the foundation of underlying laws that are being enforced in the first place. Those underlying laws—which codify rights and responsibilities and the mechanisms to effectuate them—necessarily form the vehicle that drives enforcement efforts and any real potential they hold. Examining what this statutory vehicle looks like in California—the state with the largest economy in the nation (and fifth largest in the world if it were its own nation)7 and the strongest array of worker rights laws in the country8—gives us invaluable insights into what we can achieve when we invest in the well-being of workers, even as we recognize that we must continue to strive collectively to do much better.

6

Introduction

Conducting this examination is the objective of our report. From the multitude of laws that make up the California Labor Code, we map out the primary building blocks—the “DNA”—of California’s model framework of wage and hour standards. With our lens focused on low-wage workers, we present our analysis in three interconnected blocks, in which we highlight key contemporary laws that have raised wage and hour standards in low-wage industries, extended legal liability for violating standards, and instituted essential administrative enforcement remedies and tools.9 BLOCK 1: RIGHTS 1|A

California’s History of Sector-Based Rights: Establishing Minimum Labor Standards Through Wage Orders of the Industrial Welfare Commission

1|B

California’s Modern Trend of Industry-Specific Rights: Raising and Protecting Basic Labor Standards by Selecting Certain Low-Wage Industries for Reform

1|C

The Rights of Undocumented Workers: Ensuring Labor Standards Apply to Workers Regardless of Their Immigration Status

California’s development of strong labor standards for workers began with the state’s historic creation over 100 years ago of the Industrial Welfare Commission, which utilized wage boards to promulgate a concerted series of industry and occupation-based “wage orders” setting generally uniform minimum standards for workers across sectors. In conjunction with the reciprocal and sometimes overlapping provisions of the California Labor Code, the wage orders establish threshold wage and hour protections that exceed standards under federal law. California’s modern legislative strategy to elevate and protect these baseline standards has been more piecemeal, aimed at particular low-wage industries for reform.

Within the last decade, the state has championed industry-specific bills that have provided overtime rights for two groups of low-wage workers long barred from exercising the same rights as most other workers; raised the minimum wage in certain low-wage sectors while reinventing the state’s use of wage boards to boost standards; and in two other low-wage industries, addressed exploitative “sweating” practices that undermine basic labor protections. At the same time, the state has taken a more holistic approach in codifying and reinforcing the fundamental principle that labor standards apply to workers regardless of their immigration status.

Introduction

7

BLOCK 2: RESPONSIBILITIES 2|A 2|B

Protection of “Employee” Status: Holding Employers Responsible for Misclassifying Workers as Independent Contractors Liability Beyond Traditional “Employer” Status: Widening the Scope of Parties Responsible for Wage and Hour Violations

Labor standards by themselves do very little to incentivize compliance if legal responsibility for violating those standards is too limited, or if lawbreakers can easily evade liability through various forms of subterfuge. To undergird the robust wage and hour rights that the state has developed, California has passed significant legislation to combat misclassification of workers as independent contractors and hold employers accountable when they wrongfully deny workers the rights and protections of employee status. On a related front, the state has also acted to expand the scope of who is liable for noncompliance with labor standards, in order to move past the constraints of conventional “employer” definitions and reach beyond direct employment relationships. During the last decade, California has enacted laws extending legal liability to individual corporate agents and successor companies of a business that owes wages to workers, and creating up-the-chain liability for wage and hour violations in low-wage industries where labor outsourcing is routinely utilized to avoid responsibility for workers.

BLOCK 3: ENFORCEABILITY 3|A 3|B 3|C

The Keystones of Administrative Enforcement: Codifying the California Labor Commissioner’s Trifecta of Adjudicatory and Investigative Powers Administrative Enforcement Remedies: Increasing the California Labor Commissioner’s Authority to Order Monetary Relief for Workers Administrative Enforcement Tools: Bolstering the California Labor Commissioner’s Wage and Hour & Retaliation Investigations of Employers

Laws establishing strong wage and hour standards and legal responsibility for violating them are no more than paper tigers if they lack meaningful enforcement mechanisms. The ability of workers to vindicate their rights in a judicial forum is a vital part of any enforcement regime, but the doors to the courtroom are effectively shut to most low-wage workers due to their general lack of access to affordable or no-cost legal representation,10 combined with high rates of forced arbitration.11 California has increasingly invested in creating and expanding avenues of administrative enforcement of labor standards as critical alternatives to the court system. Within the past ten years in particular, the state has steadily enhanced the California Labor Commissioner’s trifecta of enforcement powers to adjudicate individual wage claims, conduct workplacewide investigations of employers for noncompliance with labor standards, and address unlawful retaliation against workers. To give more heft to these powers, the state has eliminated certain decades-long deficiencies in the Labor Commissioner’s statutory authority to order remedies when the rights of workers are violated, and codified important procedures and tools to facilitate and bolster the Commissioner’s ability to uncover and cite illegal employer practices.

8

Introduction

We center our examination on California’s modernday renaissance of wage and hour legislation that began during the second decade of this century, when the synergy of a newly-invigorated California Labor Commissioner’s Office together with a groundswell of advocacy by workers, communitybased organizations, labor unions, and businesses, helped to spur a sea change in worker rights laws in the state, as well as government enforcement initiatives aimed at promoting economic justice for workers and leveling the playing field for law-abiding employers.12 Our report concludes with a set of policy recommendations that build on the strong framework of wage and hour standards that the state has erected. We hope this landscape analysis will serve as a useful resource, both in California and other states, in devising effective strategies to improve and enforce labor standards for workers.

Introduction

9

BLOCK 1

The development of labor standards in California has a long and storied history, beginning with the state’s creation in the early 20th century of the Industrial Welfare Commission (IWC), which issued a series of sector-based “wage orders” that, together with the legislature’s enactment of complementary statutes in the California Labor Code, constitute the living body of wage and hour laws in the state.

RIGHTS

In Block 1, we begin with a brief overview of the IWC and its wage orders, which set the stage for the modern evolution of California laws strengthening the rights of workers. Next, we take a look at this evolution: the state’s contemporary focus on raising labor standards and tackling worker exploitation in certain low-wage industries, a legislative strategy that is piecemeal but still has its advantages. Third, we examine California’s leadership on a crucial intersecting issue: ensuring that labor standards apply to workers regardless of their immigration status. Recognizing that undocumented workers are vital members of our communities and that labor standards are undermined if only documented workers can enforce them, the state has necessarily embraced a holistic approach to safeguard the rights of undocumented workers.

1|A

California’s History of Sector-Based Rights:

Establishing Minimum Labor Standards Through Wage Orders of the Industrial Welfare Commission

Across the country and in varied industries, the multiple strikes and walk-outs of the “hot labor summer” of 2023 drew attention to the resurgent power of organized labor.13 Although less high-profile, excitement has also been coalescing around industry-wide labor standards boards as a tool for worker organizing and sectoral bargaining.

Government entities have developed these boards (called by different names, including “councils” or “committees”), bringing worker and employer representatives together, often with public officials, to issue recommendations for improving wages and working conditions of workers in a particular industry and jurisdiction.14 Since 2018, six states and three cities have passed laws creating such boards in at least four different industries.15

12

Block 1: Rights

1|A

This idea first took hold in California over 100 years ago,

in any industry or occupation, employee wages “may

where minimum labor standards for workers were established

be inadequate to supply the cost of proper living” or the

through the use of wage boards, a full quarter century before

“hours or conditions of labor may be prejudicial to the

the federal government enacted the Fair Labor Standards

health or welfare of employees.”26 Consisting of an equal

Act (FLSA).16 In 1913, as part of the growing number of

number of representatives of employers and employees, in

states developing minimum wage laws in response to the

addition to a representative of the IWC acting as a non-voting

poor wages and working conditions under which women

member, the wage boards considered the findings of the

and children frequently labored, the California legislature

IWC and “any such other information [the board] deem[ed]

created the Industrial Welfare Commission (IWC).17 The IWC

appropriate”27 in order to make recommendations to the

was given “broad authority” to regulate wages, hours and

Commission on the wages, hours, and working conditions

working conditions for women and children, and later for all

that would be “adequate to supply the necessary cost of

employees.18 Californians voted to amend the state constitution

proper living to, and maintain the health and welfare of

to sanction the legislature’s authority to form such a commission,

employees” in California.28 The IWC, in turn, promulgated

vested with “legislative, executive, and judicial powers” for the

and adopted regulations through a public process in which

purpose of “provid[ing] for minimum wages and for the general

the Commission was required to include any wage board

welfare of employees.”19

recommendations receiving at least two-thirds support of

A five-member appointed body comprised of two individuals representing organized labor, two representing employers, and one representing the general public,20

the board, subject to a limited exception if the Commission found there was no substantial evidence to sustain the board’s recommendation.29

the IWC operated under a “continuing [statutory] duty…to

This process resulted in a series of industry or occupation-

ascertain the wages paid to all employees in [California], to

wide “wage orders” by the IWC that set the minimum

ascertain the hours and conditions of labor and employment

wage, maximum hours of work, and conditions of labor for

in the various occupations, trades, and industries in which

workers covered under each order—and the corresponding

employees are employed in [California], and to investigate

obligations of employers.30 In 2004, the IWC was rendered

the health, safety, and welfare of those employees.”21 As

non-operational when it was defunded by the legislature.31

part of this duty, the IWC was responsible for conducting “a

But the 18 wage orders issued by the IWC remain in effect

full review of the adequacy of the minimum wage at least

today: 16 that are industry- or occupation-specific; one that

once every two years.” In order to fulfill its wide statutory

covers all employees not already included in an industry- or

mandate, the IWC was expressly empowered under the

occupation-specific wage order; and one general minimum

California Labor Code to “make and enforce rules of practice

wage order that amends all other wage orders in conformity

and procedure” and to issue “order[s] covering any

with the minimum wage that is currently fixed by the Labor

occupation, trade, or industry.”

Code.32 “[A]ccorded the same dignity as statutes,”33 the

22

23

24

Pursuant to its delegated authority, the IWC designated and convened “wage boards” throughout the state based on a process set by statute.25 Under this process, the IWC

IWC wage orders have been treated by the courts with “extraordinary deference, both in upholding their validity and in enforcing their specific terms.”34

was charged with forming such boards upon finding that

Block 1: Rights

13

Industry and Occupation-Based Wage Orders of the California Industrial Welfare Commission

TABLE 1

Wage Order

Industry or Occupation

Wage Order Definition of the Covered Industry or Occupation35

No. 136

Manufacturing Industry

Any industry, business, or establishment operated for the purpose of preparing, producing, making, altering, repairing, finishing, processing, inspecting, handling, assembling, wrapping, bottling, or packaging goods, articles, or commodities, in whole or in part (but not including activities that are covered by Wage Orders 3, 8, 12, or 13).

No. 237

Personal Services Industry

Any industry, business, or establishment operated for the purpose of rendering, directly or indirectly, any service, operation, or process used or useful in the care, cleansing, or beautification of the body, skin, nails, or hair, or in the enhancement of personal appearance or health. Examples include beauty salons, nail salons, hair salons, barber shops, bath and massage parlors, health clubs, and mortuaries.

No. 338

Canning, Freezing, and Preserving Industry

Any industry, business, or establishment operated for the purpose of canning soups, or of cooking, canning, curing, freezing, pickling, salting, bottling, preserving, or otherwise processing any fruits or vegetables, seafood, meat, poultry or rabbit product, when the purpose of such processing is the preservation of the product, and includes all operations incidental thereto.

No. 439

Professional, Technical, Clerical, Mechanical and Similar Occupations

Includes professional, semiprofessional, managerial, supervisorial, laboratory, research, technical, clerical, office work, and mechanical occupations, such as: accountants; appraisers; artists; bookkeepers; cashiers; clerks; copy readers and writers; computer programmers and operators; dispatchers; estimators; editors; graphic arts technicians; guards; inspectors; instructors; librarians; laboratory workers; mechanics; medical and dental technicians; models; nurses; photographers; process servers; printers; salespersons and sales agents; secretaries; social workers; statisticians; stenographers; teachers; tellers; ticket agents; x-ray technicians.

No. 540

Public Housekeeping Industry

Any industry, business, or establishment which provides meals, housing, or maintenance services whether operated as a primary business or when incidental to other operations in an establishment not covered by an industry order of the Commission.

Examples include restaurants, clubs, bars, cafeterias, boarding houses, and all similar establishments where food in either solid or liquid form is prepared and served to be consumed on the premises; catering and similar establishments which prepare food for consumption on or off the premises; hotels, motels, apartment houses, rooming houses, camps, office buildings, and similar establishments offering rental of living, business, or commercial quarters; hospitals, rest homes, child nurseries, child care institutions, homes for the aged, and similar establishments offering board or lodging in addition to medical, surgical, nursing, convalescent, aged, or child care; private schools, colleges, or universities, and similar establishments which provide board or lodging in addition to educational facilities; establishments contracting for development, maintenance or cleaning of grounds, facilities, and/or quarters of commercial units and living units; and establishments providing veterinary or other animal care services.

14

Block 1: Rights

TABLE 1

Wage Order

Industry or Occupation

Wage Order Definition of the Covered Industry or Occupation35

No. 641

Laundry, Linen Supply, Dry Cleaning and Dyeing Industry

Any industry, business, or establishment operated for the purpose of washing, ironing, cleaning, refreshing, restoring, pressing, dyeing, storing, fumigating, mothproofing, waterproofing, or other processes incidental thereto, on articles or fabrics of any kind (such as clothing, hats, drapery, rugs, curtains, linens, household furnishings, textiles, furs, or leather goods), including self-service laundries, self-service dry cleaning establishments, and the collection, distribution, storage, sale, or resale at retail or wholesale of the foregoing services.

No. 742

Mercantile Industry

Any industry, business, or establishment operated for the purpose of purchasing, selling, or distributing goods or commodities at wholesale or retail, or for the purpose of renting goods or commodities.

No. 843

Industries Handling Products After Harvest

Any industry, business, or establishment operated for the purpose of grading, sorting, cleaning, drying, cooling, icing, packing, dehydrating, cracking, shelling, candling, separating, slaughtering, picking, plucking, shucking, pasteurizing, fermenting, ripening, molding, or otherwise preparing any agricultural, horticultural, egg, poultry, meat, seafood, rabbit, or dairy product for distribution, including all the operations incidental thereto.

No. 944

Transportation Industry

Any industry, business, or establishment operated for the purpose of conveying persons or property from one place to another whether by rail, highway, air, or water, and all operations and services in connection therewith; also includes storing or warehousing of goods or property, and the repairing, parking, rental, maintenance, or cleaning of vehicles.

No. 1045

Amusement and Recreation Industry

Any industry, business, or establishment operated for the purpose of furnishing entertainment or recreation to the public, such as theaters, bowling alleys, skating rinks, racetracks, amusement parks, athletic fields, swimming pools, gymnasiums, golf courses, tennis courts, and carnivals.

No. 1146

Broadcasting Industry

Any industry, business, or establishment operated for the purpose of broadcasting or taping and broadcasting programs through the medium of radio or television.

No. 1247

Motion Picture Industry

Any industry, business or establishment operated for the purpose of motion picture or television film production, or primarily allied with theatrical or television, motion picture productions, including motion pictures for entertainment, commercial, religious, or educational purposes, whether made by film, tape, or otherwise.

No. 1348

Industries Preparing Agricultural Products for Market, on the Farm

Any operation performed in a permanently fixed structure or establishment on the farm or on a moving packing plant on the farm for the purpose of preparing agricultural, horticultural, egg, poultry, meat, seafood, rabbit, or dairy products for market when such operations are done on the premises owned or operated by the same employer who produced the products, and includes all operations incidental thereto.

Block 1: Rights

15

TABLE 1

Wage Order

Industry or Occupation

Wage Order Definition of the Covered Industry or Occupation35

No. 1449

Agricultural Occupations

Persons employed in: the preparation, care, and treatment of farm land, pipeline, or ditches, including leveling for agricultural purposes, plowing, discing, and fertilizing the soil; the sowing and planting of any agricultural or horticultural commodity; the care of any agricultural or horticultural commodity, including cultivation, irrigation, weed control, thinning, heating, pruning, or tying, fumigating, spraying, and dusting; the harvesting of any agricultural or horticultural commodity, including picking, cutting, threshing, mowing, knocking off, field chopping, bunching, baling, balling, field packing, and placing in field containers or in the vehicle in which the commodity will be hauled, and transportation on the farm or to a place of first processing or distribution; the assembly and storage of any agricultural or horticultural commodity, including loading, road siding, banking, stacking, binding, and piling; the raising, feeding and management of livestock, fur bearing animals, poultry, fish, mollusks, and insects, including but not limited to herding, housing, hatching, milking, shearing, handling eggs, and extracting honey; the harvesting of fish for commercial sale; and the conservation, improvement or maintenance of a farm and its tools and equipment.

No. 1550

Household Occupations

All services related to the care of persons or maintenance of a private household or its premises by an employee of a private householder, including butlers, chauffeurs, companions, cooks, day workers, gardeners, graduate nurses, grooms, house cleaners, housekeepers, maids, practical nurses, tutors, valets, and other similar occupations.

No. 1651

Certain On-Site Occupations in the Construction, Drilling, Logging and Mining Industries

All job classifications associated with construction, including work involving alteration, demolition, building, excavation, renovation, remodeling, maintenance, improvement, and repair work, and any other similar or related occupations or trades; all job classifications associated with the exploration or extraction of oil, gas, or water resources work, including installation, establishment, reworking, maintenance or repair of wells and pumps by boring, drilling, excavating, casting, cementing and cleaning for the extraction or conveyance of fluids such as water, steam, gases, or petroleum; any work for which a timber operator’s license is required, including the cutting or removal or both of timber or other solid wood forest products from timberlands for commercial purposes, together with all work incidental thereto, including construction and maintenance of roads, fuel breaks, fire breaks, stream crossings, landings, skid trails, beds for the falling of trees, and fire hazard abatement; and miners and other associated and related occupations required to engage in excavation or operations above or below ground including work in mines, quarries, or open pits, used for the purposes of exploration or extraction of nonmetallic minerals and ores, coal, and building materials such as stone, gravel, and rock, or other materials intended for manufacture or sale.

No. 1752

Miscellaneous Employees

Any industry or occupation not previously covered by, and all employees not specifically exempted in, the Commission’s wage orders or otherwise exempted by law, are covered by this order.

16

Block 1: Rights

Block 1: Rights

17

1|A

All industry or occupation-based IWC wage orders address

This shared remedial purpose is reflected in the

the same topics, including minimum wage, overtime,

corresponding enforcement scheme that California has

meal periods, rest periods, recordkeeping, uniforms and

developed. When the legislature created the IWC in 1913, it

equipment, and certain working conditions.53 Enshrining

also crafted civil, administrative, and criminal enforcement

stronger worker protections than the federal FLSA,54 the

provisions to “ensure the IWC’s wage orders would be

wage orders for the most part echo each other to create

obeyed.”64 These statutes have evolved into “[m]ore robust

uniform wage and hour standards for California workers

versions” in today’s Labor Code,65 which often expressly

across industries and occupations.55 In certain instances,

incorporates the wage orders, along with congruent

the state legislature has also acted directly to codify the

statutory standards, as the basis for rights that may be

same or higher standards (including standards on minimum

enforced. We highlight some examples below.

wage, overtime, and meal periods) or to craft new rights in the California Labor Code.56 In other cases, the legislature has left it to the wage orders to specify certain standards that are not expressly set forth in the Labor Code (including wage order provisions on split shift premiums,57 reporting time pay,58 rest periods,59 recordkeeping,60 and uniforms, tools and equipment61).

As a result, in California, labor standards have been established by “two complementary and occasionally overlapping sources of authority: the provisions of the Labor Code, enacted by the Legislature, and [the] wage orders, adopted by the IWC.”62 Under this structure, the Labor Code and IWC wage orders work in harmony for the protection of workers. As the California Supreme Court has explained: When construing the Labor Code and wage orders, we adopt the construction that best gives effect to the purpose of the Legislature and the IWC. Time and again, we have characterized that purpose as the protection of employees—particularly given the extent of legislative concern about working conditions, wages, and hours when the Legislature enacted key portions of the Labor Code. In furtherance of that purpose, we liberally construe the Labor Code and wage orders to favor the protection of employees.63

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Labor Code Section 98 creates an administrative claims procedure, including an informal hearing, before the California Labor Commissioner66 in which an employee can seek recovery of unpaid wages, liquidated damages, penalties, and other compensation owed to the employee under laws within the Commissioner’s jurisdiction, including the orders of the IWC. Labor Code Section 226.7 provides for an additional hour of pay at the employee’s regular rate of pay for each workday that a meal, rest, or recovery period is not provided as mandated by an applicable statute, regulation, standard or order including an order of the IWC. Labor Code Section 558 enables the California Labor Commissioner to issue a citation for civil penalties and restitution of wages when an employer or other person acting on behalf of an employer violates, or causes to be violated, provisions regulating hours and days of work in the Labor Code or any IWC order.

1|A

Labor Code Section 558.1 establishes that certain

Labor Code Section 1198 establishes that the maximum

individual corporate agents may be held liable as the

hours of work and the standard conditions of labor

employer for violating or causing the violation of any

fixed by the IWC are the maximum hours of work and

provision regulating minimum wages or hours and

the standard conditions of labor for employees, and

days of work in any IWC order, or specified Labor

that employment of any employee for longer hours

Code provisions.

than those fixed by an applicable IWC order or under

Labor Code Section 1193.6 authorizes the California Labor Commissioner to file a civil action for unpaid

conditions of labor prohibited by the order is unlawful.

Labor Code Section 1199 makes it a misdemeanor for

minimum and overtime wages owed to an employee

an employer or other person acting either individually

under the Labor Code or an IWC order.

or as an officer, agent, or employee of another person

Labor Code Section 1194 creates a private right of action for an employee who has received less than the legal minimum wage or overtime compensation applicable to the employee to recover those unpaid wages in a civil suit. (See related Sections 1197 and 1198 below.)

Labor Code Section 1194.2 allows an employee who is not paid the minimum wage fixed by an IWC order or by statute to recover liquidated damages in a private or administrative action.

Labor Code Section 1197 establishes that the minimum

to require or cause any employee to work for longer hours than those fixed by or under conditions of labor prohibited by an IWC order; to pay or cause to be paid to any employee a wage less than the minimum fixed by an IWC order; or to violate, refuse, or neglect to comply with an IWC order or Labor Code provision on wages, hours, or working conditions.

Today, the IWC wage orders remain a cornerstone of California wage and hour law. Developed by the IWC through wage boards that recommended a core set of minimum standards to improve wages and working

wage fixed by the IWC or any applicable state or local

conditions for California workers,67 the wage orders laid the

law is the minimum wage to be paid to employees and

foundation for important modern legislation to come.

that the payment of a lower wage is unlawful.

Labor Code Section 1197.1 enables the California Labor Commissioner to issue a citation for civil penalties, restitution of wages, liquidated damages, and applicable penalties when an employer or other person acting either individually or as an officer, agent, or employee of another person, pays or causes to be paid to any employee a wage less than the minimum fixed by an applicable state or local law or IWC order.

Block 1: Rights

19

SPOTLIGHT

Minimum Wage and Overtime Standards: HOW CALIFORNIA HAS RAISED THE FLOOR ABOVE FEDERAL LABOR STANDARDS States can create labor standards that lift the floor above the minimum requirements of the FLSA.68 We shine a light on some key aspects of California law that offer stronger protections than federal law on minimum wage and overtime compensation—two of the most basic standards that are especially critical for the lowest paid workers because they dictate how much, or how little, they earn.69

Higher minimum wage. While the federal minimum

Tips cannot count towards the minimum wage. In

wage has been stagnant for decades at $7.25 per hour,

California, the full amount of a tip left for an employee

California’s minimum wage, effective January 1, 2025,

belongs to the worker. Thus, employers cannot take any

is $16.50 per hour, adjustable annually based on a set

part of a tip, deduct an amount from an employee’s wages

formula. The state has also enacted a higher minimum

because of tips, or use an employee’s tips as a credit towards

wage for fast food restaurant workers and workers at certain

the obligation to pay at least minimum wage for each hour

health care facilities.

worked (unlike under the FLSA).76

At least minimum wage must be paid for each hour

Split shift premium pay. A split shift occurs when a workday

worked (no averaging allowed). Under California law,

is scheduled by the employer to be “split” up by a period

the minimum wage attaches to each hour worked by an

of time (that is not a meal or rest break) which is unpaid

employee. Thus, in contrast to federal law, an employer

and in which no work is performed. California law requires

may not use an agreed upon hourly rate above minimum

employees who work a split shift to be paid an additional

wage that the employer pays for time spent by the employee

“premium” of one hour at minimum wage for each shift

on certain tasks, as a credit against hours worked on other

that their daily work schedule is split.77 This minimum wage

tasks that are not paid or are paid at less than minimum

obligation for a split shift (which has no federal analogue) is

wage. It does not matter if the average rate for all hours

aimed at incentivizing employers to provide workers with

worked would be higher than minimum wage; any hour

proper notice and scheduling.78

70

71

72

73

74

worked that was not paid at minimum wage constitutes a violation of California law.75

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SPOTLIGHT

Reporting time pay. An employee who is scheduled by

laws of any state in the nation; while a handful of other states

the employer to report to work but is not put to work after

provide some form of daily overtime, no other state besides

reporting, or is provided less than half the employee’s usual

California affords workers double time protections.83

or scheduled day’s work, is entitled to “reporting time” wages under California law, subject to certain exceptions.79 The employee must be paid at their regular rate of pay (of at least minimum wage) for half the usual or scheduled day’s work. This pay must equal the employee’s wages for at least two hours of work but cannot exceed more than four hours.80 Like split shift premiums, reporting time pay (which is also not a federal requirement), encourages proper notice and scheduling by employers81 and can function as a kind of minimum wage obligation.

Overtime pay rate does not decrease with more overtime worked. California does not follow the federal method of calculating overtime compensation for an employee who is paid a fixed amount of non-overtime wages for a “fluctuating workweek” (where work hours vary from week to week). Under the federal method, the employee’s regular hourly rate for determining overtime pay is calculated by dividing the fixed wages by the total number of hours worked in a workweek (including all overtime hours).84 As a result, an employee’s hourly rate decreases as the employee

Daily (not just weekly) overtime, as well as double time

works more overtime hours. Example: $670 fixed weekly

wages. In California, most nonexempt employees are

pay divided by 45 total hours worked = $14.89 per hour; the

entitled to overtime compensation not only when they work

weekly pay divided by 50 total hours worked = $13.40 per

over 40 hours in a workweek (the FLSA standard), but also

hour. In contrast, California law requires the fixed weekly pay

when they work daily overtime (there is no daily overtime

to be divided by the number of non-overtime hours only,85

under federal law). Daily overtime wages must be paid at 1.5

so the hourly rate for calculating overtime wages does not

times the employee’s regular hourly rate for all hours worked

deflate as more overtime is worked. Example: $670 fixed

over 8 in a workday and for the first 8 hours worked on the

weekly pay, 45 total hours worked = 40 non-overtime hours

seventh day of work in a workweek; double time wages at 2

+ 5 overtime hours = $670 divided by 40 hours = $16.75

times the employee’s regular hourly rate must be paid for all

per hour; $670 fixed weekly pay, 50 total hours worked = 40

hours worked over 12 in a workday and over 8 on the seventh

non-overtime hours + 10 overtime hours = $670 divided by

day of a workweek. California has the strongest overtime

40 hours = $16.75 per hour.

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California’s Modern Trend of Industry-Specific Rights:

Raising and Protecting Basic Labor Standards

by Selecting Certain Low-Wage Industries for Reform

California has continued to build on the strong labor standards that it first established through the historic IWC wage orders, which forged a cohesive body of economic regulations spanning all industries and occupations in the state. In the decades since it defunded the IWC, California has enacted laws creating some vital new rights that apply to employees generally, such as an entitlement to paid sick leave (currently, up to 40 hours or 5 days per year) that is not sector-based.86 However, when it has come to raising and protecting the existing floor of basic labor standards like minimum wage and overtime, the legislature has adopted a more piecemeal industry-specific focus. In order to elevate minimum labor standards, the state could certainly reconstitute the IWC, with its continuing statutory duty to determine the adequacy of wages and working conditions for all California employees, and its concomitant authority to issue and amend wage orders accordingly.87 But instead, over the last ten years, California has amplified a legislative strategy selecting certain low-wage sectors for reform. To be sure, this kind of targeted approach is not without its share of legitimate criticism, especially when some low-wage workers benefit from higher standards while others do not.88 Nevertheless, an industry-specific legislative strategy also has its merits; not only can it result in much-needed policymaking attention being paid to some of the most disadvantaged workers, but the successful enactment of worker rights legislation in one sector can also generate momentum for positive change in other industries and serve as a blueprint for similar repercussive laws, both in California and other states.

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1|B We highlight how California has aimed industry-specific legislation within the past decade to improve and protect basic labor standards for workers: by providing overtime rights for domestic workers and agricultural workers long denied these rights under federal and state law; by increasing the minimum wage for fast food restaurant workers and workers in health care facilities, and promoting a new wage board model to enhance standards in the fast food industry; and by tackling exploitative “sweating” practices that undermine workplace protections for garment workers and warehouse workers.

Providing long-overdue overtime rights for domestic workers and agricultural workers Domestic workers and agricultural workers have faced a protracted history of discriminatory exclusions from basic labor rights.89 The FLSA, enacted in 1938, initially carved them out of its provisions.90 Although the statute was later amended to extend minimum wage protections to these workers (with some limited exemptions),91 the FLSA still fails to give agricultural workers and certain domestic workers any overtime rights.92 Similarly, in California, while the state minimum wage generally applies to agricultural and domestic workers,93 for decades the state perpetuated the exclusion of these workers from overtime protections it accorded to other workers. Agricultural workers were specifically exempted from overtime and other standards in the Labor Code.94 Through the applicable IWC wage order, the state eventually granted agricultural workers some diluted overtime rights (including daily overtime compensation after 10 hours worked in a day, not 8 hours like most other workers).95 Meanwhile, California continued to deny all overtime protections to domestic workers who are “personal attendants” employed by a private household to care for a child, elderly person, or person with a disability. The wholesale exclusion of these domestic workers from overtime rights (among other rights) still appears in the applicable IWC wage order.96 To address these longstanding inequities in the law, California enacted two seminal pieces of legislation.

In 2013, California became the third state in the country to pass a Domestic Worker Bill of Rights.97 Pursuant to this statute, which overrides their wage order exclusion from overtime, domestic work employees who are “personal attendants” in private households are entitled to receive overtime compensation at 1.5 times their regular rate of pay after 9 hours worked in a day or over 45 hours in a workweek.98 A “personal attendant” is defined under the law as “any person employed by a private householder or by any third-party employer recognized in the health care industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision,” when the person’s “work other than the foregoing” does not “exceed 20 percent of the total weekly hours worked.”99 Although the state has finally given this vulnerable group of domestic workers some overtime protections, they still do not possess overtime rights on par with other California workers.100 Domestic workers also remain excluded from other basic labor protections.101 In 2016, California signed into law long-overdue legislation to eliminate the exemption in the Labor Code that had barred agricultural employees from receiving the same overtime protections as most other workers in the state.102 Based on employer size, the law gradually phased in full overtime rights so that by 2025, all agricultural employees (as defined by IWC wage order 14) are now entitled to overtime wages at 1.5 times their regular rate of pay for hours worked over 8 in a day or over 40 in a week and for the first 8 hours worked on the seventh day of work in a workweek, and to double time wages at 2 times their regular rate of pay after 12 hours worked in a day and over 8 hours worked on the seventh day of a workweek.103 The law also mandated conforming amendments to the applicable wage order.104

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Increasing the minimum wage for fast food workers and workers at health care facilities

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With the federal minimum wage frozen since 2009 at $7.25 per hour,105 in 2016, California became one of the first states to legislate a higher minimum wage arising out of the “Fight for 15” campaign.106 Pressed into action by organized labor and workers, the state enacted S.B. 3, which phased in an increase to the state minimum wage for all industries until it reached $15 per hour in 2023 (adjusted annually thereafter based on the Consumer Price Index).107 At $16.50 per hour as of January 2025, the California minimum wage is currently among the highest of all states in the nation.108 Since S.B. 3, the legislature has not acted to raise the minimum wage again statewide, but recently passed two high-profile bills to increase the minimum wage for certain groups of low-wage workers buoyed by union efforts in their industries.

In 2023, California enacted a law instituting a $20 per hour minimum wage for fast food restaurant workers,109 which marked the first time that the state codified a minimum wage hike limited to one industry subsector. The law also established the close equivalent of an IWC wage board: a “Fast Food Council” comprised of fast food workers and their advocates, fast food industry representatives, a member of the general public, and government officials.110 Charged with conducting “a full review of the adequacy” of minimum “employment standards” in the fast food restaurant industry at least once every three years111 and convening public hearings on the subject,112 the Council is empowered to propose standards on wages, hours, working conditions, health and safety, and training of fast food restaurant workers113 that are “reasonably necessary or appropriate to protect and ensure the welfare, including the physical well-being and security, of fast food workers.”114 These standards may not be less protective than existing law.115 The California Labor Commissioner, in turn, is ultimately responsible for issuing the Council’s proposed standards through agency rulemaking,116 with the exception of future increases to the fast food worker minimum wage. For the latter, the Council may act directly to set such increases on an annual basis through 2029, according to the parameters specified in the statute.117 The minimum wage and other standards issued through this process must be reflected in updated IWC orders.118 By the terms of the statute, the Council’s operations will cease on January 1, 2029, but the standards adopted pursuant to the law will remain in effect.119 On the heels of the fast food worker law, California passed another sector-specific bill in 2023 to increase the minimum wage, this time for workers at certain health care facilities (including hospitals, clinics, county mental health and correctional facilities, home health agencies, skilled nursing facilities, and residential care facilities).120 Depending on the particular health care facility employer, the minimum wage is scheduled to increase up to $25 per hour in phases over different time periods, and adjusted thereafter as set forth in the statute.121 Significantly, under the law, a “covered health care employee” is broadly defined to include not only an employee of a health care facility employer who provides patient care or health care services, but also an employee of the facility who performs services supporting the provision of health care (such as food service workers, gift shop workers, call center and warehouse workers, laundry workers, housekeeping staff, janitors, and guards).122 The law also directs the publication of conforming amendments to any applicable IWC wage order.123 While perhaps not as seismic a shift as legislation that would fix a higher minimum wage across all industries in California, sectorspecific minimum wage laws may nonetheless have the ancillary effect of exerting upward pressure for a broader minimum wage solution.124 And beyond the issue of minimum wage, the fast food worker bill may also serve as a template for resuscitating the use of wage boards in California to improve labor standards for low-wage workers.125

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1|B

Tackling exploitative “sweating” practices harming garment workers and warehouse workers California has deployed an industry-by-industry legislative strategy not only to raise baseline wage and hour rights for low-wage workers, but also to take aim at deleterious business practices that undercut minimum labor standards. In another line of sector-specific bills, the state has acted to counter especially exploitative “sweating” systems of labor in the garment and warehouse industries—specifically, the use of piece rate pay and productivity quotas that maximize business output and profit at the expense of basic labor protections for workers.

In 2021, California enacted a law prohibiting garment companies from using piece rate pay126—a method of compensating workers based on the number of individual job tasks, or “pieces,” completed, which has been manipulated in low-wage industries to depress workers’ wages. In an industry of “fast fashion” that prizes rapid-fire turnaround times, piece rate pay pushes garment workers to toil long hours for wages that invariably fall far below minimum wage.127 In the preamble to the 2021 garment law, the legislature declared that “[n]ot only does utilizing…piece rate enable, and even justify, subminimum wage, but it also creates unsafe working conditions, as garment workers are forced to constantly work as quickly as possible to complete as many items as possible in a workday.”128 To prevent these harms, the law abolishes piece rate pay in the industry and requires garment manufacturers and contractors found in violation of this provision to pay compensatory damages to workers.129 Such compensatory damages may be sought by the California Labor Commissioner in a court action or citation against the manufacturer or contractor, or may be recovered by workers through the specialized administrative wage claims process created over two decades ago by the legislature to fight wage theft and create corporate accountability in the garment industry.130 In tandem with the elimination of piece rate pay, the 2021 garment law also made several improvements to the administrative claims process for garment workers and strengthened existing provisions to hold entities liable up-the-chain for wage and hour violations (as we discuss in part 2b, infra).

Also in 2021, California became the first state in the country to enact legislation directed at mitigating the harms of productivity quotas on warehouse workers.131 In passing the law, the legislature noted that technological advances and the boom of online retailing promising increasingly speedy delivery of goods to consumers have led to the growing use of such quotas, which require warehouse workers to complete a specified number of tasks (like locating, picking, and packing items) within a condensed period of time, “often measured down to the minute or second.”132 The imposition of these quotas, the legislature observed, involves the use of “algorithms and tracking systems to monitor worker productivity throughout the workday, including [an] employee’s ‘time off task.’”133 As a result, the legislature concluded, quotas perversely “incentivize unsafe work” because workers cannot take breaks and feel intense pressure to meet quotas or else face the risk of suspension, termination, or other adverse employment action.134 In addition, finding that employer manipulation of quotas “also affect[s] [employees’] compensation,” the legislature explained that “employees who work under a quota…do not receive the full benefit of minimum wages if their quota is increased to make up for the direct or indirect effect of a minimum-wage increase.”135 To address these issues, the 2021 statute places emphasis on ensuring that employers are transparent and workers are fully informed about the productivity quotas that apply to them. The law mandates that warehouse employers must provide employees with a written description of each quota, “including the quantified number of tasks to be performed or materials to be produced or handled, within the defined time period,” and establishes that employees cannot be required to meet quotas which prevent them from exercising their right to take meal and rest breaks, using the bathroom (including reasonable travel time to and from the bathroom), and working according to health and safety standards.136 The law is enforceable by the California Labor Commissioner or current or former employees who may seek injunctive relief in court to obtain compliance with the statute, as well as reasonable attorney’s fees and costs.137 Among various other provisions, the law also creates a rebuttable presumption of unlawful retaliation if an employer takes any adverse action against an employee within 90 days of the employee’s exercise of rights under the statute.138 Block 1: Rights

25

Key California Laws Raising and Protecting Minimum Labor Standards in Low-Wage Industries (2013-2024)

Issue

Stated Need for the Bill*

What the Law Does

Right to overtime pay: Domestic workers

Domestic workers as a whole have been largely excluded from some of the most basic rights afforded to most other workers. They are among the lowest paid of all workers and routinely labor under harsh and abusive conditions.

Domestic workers who are “personal attendants” have been deprived of all overtime protections.

Labor Code Section & Bill Number: Cal. Lab. Code §§ 1450-1454 Added by A.B. 241, 2013–2014 Reg. Sess.

(Cal. 2013)

Right to overtime pay: Agricultural workers Labor Code Section & Bill Number: Cal. Lab. Code §§ 857-864 Added by A.B. 1066, 2015-2016 Reg. Sess.

(Cal. 2016)

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Block 1: Rights

California is the largest agricultural producer by value in the nation, yet the workers who make the industry possible have not shared in its success. Farmworkers, who perform arduous labor under deleterious working conditions for poverty pay, have been denied the same overtime protections that are accorded to millions of other California workers.

TABLE 2

Statutorily extends some overtime rights to domestic work employees (defined with exceptions) who are “personal attendants.”

“Personal attendant” is defined as “any person employed by a private householder or by any third-party employer recognized in the health care industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision,” when the person’s “work other than the foregoing” does not “exceed 20 percent of the total weekly hours worked.”

“Personal attendants” are now entitled to overtime pay at 1.5 times their regular rate of pay for all hours worked over 9 in a day or over 45 in a week This law was initially enacted with a sunset date but became permanent in 2016.

NOTE: Domestic workers in private households who are not personal attendants have different overtime rights under IWC wage order 15 based on whether or not the worker is a live-in domestic worker. For domestic workers who do not work in private households, another set of overtime rights applies under IWC wage order 5.

Gradually phased in overtime rights, based on employer size, for all agricultural employees (as defined under IWC wage order 14), so that by 2025, they are entitled to overtime pay at 1.5 times their regular rate of pay for hours worked over 8 in a day or over 40 in a week, and for the first 8 hours worked on the seventh day of work in a workweek; and to double time at 2 times their regular rate of pay for hours worked over 12 in a day and over 8 on any seventh day of a workweek.

Also brings agricultural employees under other protections of the Labor Code that they had previously been excluded from, such as the requirement to provide a second meal period to employees when they work more than 10 hours in a day.

* As stated in either the bill’s preamble or legislative history

TABLE 2

Issue

Stated Need for the Bill*

What the Law Does

Minimum wage increase & other minimum labor standards: Fast food restaurant workers

Fast food workers are the largest and fastest growing group of low-wage workers in the state. Existing enforcement and regulatory mechanisms have not adequately protected their health and welfare. Improved sector-wide minimum labor standards are needed and should be identified by an expert body representing the demographic diversity of the state’s fast food restaurant employees and operators.

Labor Code Section & Bill Number: Cal. Lab. Code §§ 1474-1477 Added by A.B. 1228, 2023-2024 Reg. Sess.

(Cal. 2023)

* As stated in either the bill’s preamble or legislative history

Increases the minimum wage to $20 per hour for fast food restaurant employees (effective April 1, 2024), subject to certain exceptions.

Establishes a Fast Food Council with 9 voting members (2 representatives of the industry, 2 representatives of fast food restaurant franchisees or restaurant owners, 2 representatives of fast food restaurant employees, 2 representatives of advocates for fast food restaurant employees, and 1 unaffiliated member of the public), and 2 non-voting government representatives.

Charges the Fast Food Council with holding public hearings and developing and proposing minimum fast food restaurant “employment standards,” including standards on wages, hours, working conditions, and training, as are reasonably necessary or appropriate to protect and ensure the welfare, including the physical well-being and security, of fast food workers, and that are not less protective of or less beneficial to fast food workers than existing standards. Through 2029, the Council may establish annual increases to the minimum wage of fast food restaurant employees, according to parameters under the statute.

Except for the annual increases to the minimum wage which may be directly set by the Council, the statute vests the California Labor Commissioner with responsibility for considering and issuing the standards proposed by the Council, pursuant to administrative rulemaking procedures (unless the standards fall outside the Commissioner’s jurisdiction, in which case the Council must petition the state entity with purview over those standards).

Under the terms of the statute, the Council’s operations will cease on January 1, 2029, but the standards issued pursuant to the law will remain in effect.

Block 1: Rights

27

TABLE 2 Issue

Stated Need for the Bill*

What the Law Does

Minimum wage increase: Workers at health care facilities

Higher wages are essential to attract and retain employees who work in health care facilities. The growing shortage of health care workers is an urgent crisis that adversely affects the health and well-being of all Californians.

Labor Code Section & Bill Number: Cal. Lab. Code §§ 1182.14-1182.16 S.B. 525, 2023-2024 Reg. Sess. (Cal. 2023) [added §§ 1182.14, 1182.15]; S.B. 828, 2023-2024 Reg. Sess.

(Cal. 2024) [amended §§ 1182.14, 1182.15]; S.B. 159, 20232024 Reg. Sess. (Cal. 2024) [amended §§ 1182.14, 1182.15 & added § 1182.16]

Prohibition of piece rate pay: Garment workers Labor Code Section & Bill Number: Cal. Lab. Code § 2673.2 Added by S.B. 62, 2021-2022 Reg. Sess.

(Cal. 2021)

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Block 1: Rights

Existing law, A.B. 633, 1999-2000 Reg. Sess. (Cal. 1999), which established a specialized administrative wage claims process for garment workers, needs to be strengthened to combat wage theft in the apparel industry. Wage theft continues to proliferate in the industry due to contracting schemes that circumvent upstream accountability for violations of labor standards, and due to the widespread use of piece rate compensation in the industry that results in the payment of subminimum wages.

Raises the minimum wage up to $25 per hour (and adjusted thereafter as set forth under the statute) for “covered health care employees,” through separate minimum wage schedules that phase in higher wages over several years based on the nature of the health care facility (and subject to a waiver program for certain health care facilities). The minimum wage increases under the law started to phase in for certain employees on October 16, 2024.

Defines a “covered health care employee” as an employee of a health care facility who provides patient care, health care services, or services supporting the provision of health care. This includes but is not limited to nurses, physicians, caregivers, medical residents, interns or fellows, patient care technicians, janitors, housekeeping staff, groundskeepers, guards, clerical workers, nonmanagerial administrative workers, food service workers, gift shop workers, technical and ancillary services workers, medical coding and medical billing personnel, schedulers, call center and warehouse workers, and laundry workers. Contracted and subcontracted employees are also “covered health care employees” under certain specified conditions.

Subject to some exceptions, defines “covered health care facility” to include entities such as hospitals; specialty care, dialysis, psychology, rural health, community health and urgent care clinics; ambulatory surgical centers; county mental health and correctional facilities; home health agencies; and certain skilled nursing facilities and residential care agencies.

Among its provisions, prohibits piece rate pay in the garment industry, and subjects garment manufacturers and contractors that violate this prohibition to compensatory damages of $200 per employee for each pay period in which each employee is paid by piece rate.

Such compensatory damages, which are payable to the employee, may be sought by the California Labor Commissioner through a civil action or citation against the violating manufacturer or contractor, or may be recovered by a worker through the specialized administrative wage claims process established under A.B. 633.

In addition to abolishing piece rate pay, several other provisions strengthen the wage claims process for garment workers and ability to hold entities up the contracting chain liable for wage and hour violations (see Table 5, infra).

* As stated in either the bill’s preamble or legislative history

TABLE 2 Issue

Stated Need for the Bill*

What the Law Does

Disclosure of productivity quotas: Warehouse workers

Warehouse distribution centers of online retail giants have been notorious for using algorithms to track how quickly workers perform and complete tasks and for imposing crushing productivity quotas on workers. Such quotas undermine labor standards by requiring employees to work at unsafe speeds and preventing them from taking meal, rest, and bathroom breaks. Quotas can also be manipulated to undercut workers’ wages.

Employees are subject to adverse employment actions if they do not meet these quotas.

Labor Code Section & Bill Number: Cal. Lab. Code §§ 2100-2112 Added by A.B. 701, 2021-2022 Reg. Sess.

(Cal. 2021)

* As stated in either the bill’s preamble or legislative history

Requires certain warehouse employers (defined by size) to provide to each employee, upon hire, or within 30 days of the effective date of the law, a written description of each productivity quota to which the employee is subject, including the quantified number of tasks to be performed or materials to be produced or handled, within the defined time period, and any potential adverse employment action that could result from failure to meet the quota.

Establishes that a warehouse employee cannot be required to meet a quota that prevents the employee from exercising the right to take a meal or rest break, using the bathroom, or working according to occupational health and safety standards.

Prohibits warehouse employers from taking adverse action against an employee for failure to meet a quota that does not allow the worker to take a meal or rest break or to work according to occupational health and safety standards, or for failure to meet a quota that has not been disclosed to the employee as required under the statute.

Provides a current or former employee, who believes that meeting a quota caused a violation of their right to a meal or rest period or prevented compliance with health and safety standards, with a right to request and receive a written description of each quota to which the employee is subject and a copy of their personal work speed data for the most recent 90 days.

Creates a rebuttable presumption of unlawful retaliation if an employer takes any adverse action against an employee within 90 days of either: a request by the employee for information about a quota or personal work speed data pursuant to the statute; or a complaint by the employee alleging a violation of the statute.

The statute is enforceable by the California Labor Commissioner (in coordination with the Division of Occupational Safety and Health and the Division of Workers’ Compensation), or by a current or former employee in a private action. Allows the Commissioner and current or former employees to seek injunctive relief to obtain compliance with the law, as well as costs and reasonable attorney’s fees.

Block 1: Rights

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1|C

The Rights of Undocumented Workers: Ensuring Labor Standards Apply to Workers Regardless of Their Immigration Status

With the largest immigrant population in the nation,139­ California is also home to the most undocumented immigrants in the country,140 the vast majority of whom have lived in the U.S. for more than ten years.141 Their immense economic contributions—while reflecting just one dimension of their immeasurable value as vital members of our families and communities—reveal the fiction behind the increasingly dangerous political scapegoating of immigrants as presenting some grave threat to our economy and to U.S.born workers.142 Studies have shown the opposite is true.

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1|C

The Institute on Taxation and Economic Policy (ITEP) estimated

as consumers who increase demand for goods and services

that in 2022, undocumented immigrants in the U.S. paid

and as entrepreneurs who start new businesses—“creat[e] job

$96.7 billion in federal, state, and local taxes; more than a

opportunities for native and foreign workers alike” and that

third of this amount, or almost $34 billion, funded public

“many others complement the U.S.-born workforce by filling

safety net programs (like Social Security and unemployment

jobs that U.S. workers are not trained to fill or avoid due to the

insurance) that undocumented immigrants pay into yet cannot

wages or working conditions.”149 Indeed, in a 2024 survey by

benefit from because of their immigration status.143 For every

the Pew Research Center of registered voters in the U.S., three-

1 million undocumented immigrants living in the U.S., $8.9

quarters said that undocumented immigrants fill jobs that

billion in additional tax revenue flows to public services as a

citizens do not actually want.150

result of their tax contributions.144 ITEP has also noted that in 40 states, undocumented immigrants paid a higher state and local tax rate in 2022, relative to their income, than the top 1 percent of households residing in those states.145 In California alone, undocumented immigrants paid nearly $8.5 billion in state and local taxes in 2022, including personal, business, property, unemployment, and sales taxes—thus helping to support state and local services and infrastructure such as education, roads, and safety net programs that they are excluded from accessing.146

Despite their considerable economic contributions, undocumented immigrants are typically paid poverty wages for their labor. Concentrated in the lowest-paying jobs in the state and over-represented in “essential” front line industries during the COVID-19 global pandemic,151 undocumented workers were paid a median hourly wage in 2021 of only $16, versus $30 for U.S.-born workers.152 Based on data from 2015 to 2019, the Gender Equity Policy Institute found that undocumented immigrant women were paid the least compared to all other California workers, making

Beyond paying billions of dollars in taxes, undocumented

only 49 cents for every $1 dollar earned by white men—and

immigrants contribute in other significant ways to the

resulting in high rates of poverty despite their high rates of

economy. Researchers at UCLA estimated that in 2018,

participation in the workforce.153 The UC Merced Community

undocumented Californians generated $263 billion in gross

and Labor Center estimated that in 2019, almost 40% of

state product as well as $482 billion in economic output,

California workers lacking U.S. citizenship (which includes

and directly and indirectly supported over 3 million jobs in

both documented and undocumented individuals) were paid

the state.

under $25,000 in annual wages, and 35% made between

147

Noting that “immigrant workers are broadly

complementary to natives, both because immigrants work in

$25,000 to $50,000, while undocumented workers as a

occupations that serve an unusually wide range of industries,

subgroup were likely paid even less—and far below the living

and also because immigrant-intensive occupations often

wage “needed to avoid chronic and severe housing and

complement other jobs,” the Brookings Institute concluded

food insecurity.”154 Correspondingly, UCLA researchers have

in a recent analysis that “millions of immigrants work in

reported that almost half of the undocumented population

occupations that are central to the rest of the workforce,

in the state have a family income below 150% of the federal

thereby supporting millions of American jobs.”

In 2024, the

poverty level.155 In addition to such poor pay, noncitizens

Migration Policy Institute similarly observed that immigrants—

are “significantly more likely,” according to an analysis by

148

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the Economic Policy Institute, to experience minimum wage

employment and other laws. The bill codified that for

violations than either U.S.-born or naturalized citizens—

purposes of those laws,164 “a person’s immigration status

reflecting the fact that “workers who lack the protections of

is irrelevant to the issue of liability, and in proceedings or

citizenship are more easily exploited.”156

discovery undertaken to enforce those state laws no inquiry

It is against this backdrop that California policymakers have understood the critical importance of safeguarding the rights of undocumented workers, who are particularly vulnerable to labor abuses due to their immigration status. Over

shall be permitted into a person’s immigration status except where the person seeking to make this inquiry has shown by clear and convincing evidence that such inquiry is necessary in order to comply with federal immigration law.”165

two decades ago, the state passed its first major piece of

As courts have noted, S.B. 1818 was drafted to avoid a

legislation in this area, in the wake of the U.S. Supreme Court

conflict with IRCA, and specifically with Hoffman’s holding

decision in Hoffman Plastics Compounds, Inc. v. National

that prohibits back pay awards under the NLRA (for work

Labor Relations Board.

In Hoffman, the Court ruled that

not actually performed).166 Wage and hour remedies that

the NLRB was precluded from awarding “back pay” to an

compensate individuals for work already performed are

undocumented worker who was unlawfully terminated by his

distinct from the back pay awards at issue in Hoffman.167

employer for union activity.158 The Court reasoned that back

Accordingly, courts both before and after Hoffman have

pay (post-termination pay for work that would have been

consistently viewed wage and hour protections for

performed but for the unlawful termination) could not be

undocumented workers as aligned with IRCA and not

ordered as a remedy by the NLRB because the worker was

preempted by it.168 As the Second Circuit explained with

not legally authorized to work in the U.S., and that allowing

respect to the minimum wage obligations of employers

such a remedy would contravene federal policy under the

under the FLSA, ordering an employer to pay wages to

Immigration Reform and Control Act (IRCA), which generally

undocumented workers “for labor actually and already

prohibits the employment of undocumented individuals.

performed” does not conflict with federal immigration law:

In response to Hoffman, California enacted S.B. 1818,160

In such circumstances, the immigration law violation has already occurred. [Awarding unpaid wages] does not itself condone that violation or continue it.

It merely ensures that the employer does not take advantage of the violation by availing himself of the benefit of undocumented workers’ past labor without paying for it in accordance with minimum FLSA standards. Thus, a number of district courts have concluded, even after Hoffman Plastic, that IRCA does not preclude such FLSA awards.169

157

159

a landmark bill with the goal of “keep[ing] [the] state’s labor and civil rights remedies intact, and enhanc[ing] compliance” with the law.161 While S.B. 1818 stated it was declaratory of existing law,162 it erected the guardrail of explicitly proclaiming in statute that “[a]ll protections, rights, and remedies available under state law, except any reinstatement remedy prohibited by federal law, are available to all individuals regardless of immigration status who have applied for employment, or who are or who have been employed, in this state.”163 To this end, S.B. 1818 also addressed illicit attempts to make an issue of an individual’s immigration status in actions to enforce state labor and

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Hence, by S.B. 1818’s express terms, California wage and hour protections apply to workers regardless of their immigration status, which is irrelevant in determining liability for violations of those protections. And because there is no

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conflict between enforcing the obligation to pay minimum

paycheck to paycheck. Not surprisingly, the specter of

and overtime wages owed, for example, and complying with

retaliation has a substantial chilling effect on the willingness

federal immigration law, an employer would not be able to

of workers to report illegal employer conduct—thus

make the requisite showing under S.B. 1818 that inquiring

enabling unscrupulous employers to perpetrate and

into the worker’s immigration status is legally “necessary” in

get away with wage theft and other labor violations.173

any action or proceeding to enforce such payment of wages.

Employer intimidation to prevent workers from asserting

Over twenty years since its passage, S.B. 1818 remains a powerful expression of the state’s unequivocal support for the fair and equal treatment of undocumented Californians under state laws. Implicit in the bill’s passage was also the state’s recognition that ensuring labor standards apply to undocumented workers is integral to the effectiveness of those standards; without their universal application, employers would have the strong economic incentive, even if they are subject to IRCA penalties, to exploit undocumented workers precisely because they would lack labor protections, which would knock the bottom out of wage and hour standards for all workers.170 Since the enactment of S.B. 1818, the state has instituted a bulwark of laws to reinforce the foundational principle that labor standards protect workers regardless of their immigration

their rights can take a particularly pernicious turn for immigrant workers when employers report or threaten to report the worker to federal immigration authorities (Immigration and Customs Enforcement, or “ICE”). As the Ninth Circuit has observed, “While documented workers face the possibility of retaliatory discharge for an assertion of their labor and civil rights, undocumented workers confront the harsher reality that, in addition to possible discharge, their employer will likely report them to [ICE]… [and] caselaw substantiates these fears.”174 Detention, deportation, and permanent family separation can result if an employer carries out such retaliation. Because its repercussions are so severe and often irreparable, immigration-based retaliation is perhaps the most difficult kind of retaliation to meaningfully address.

status.171 We highlight key California legislation passed

As an essential correlate of laws strengthening California’s

within the last 15 years to support this principle, including

anti-retaliation protections for all employees generally,175

laws that prohibit immigration-based retaliation; expressly

the state has enacted several statutes to prohibit and deter

make immigration-related threats a crime; shield state

immigration-based retaliation by employers when workers

labor agency enforcement activities against intrusion by

seek to exercise their rights under the Labor Code. We focus

federal immigration officers; and protect against the public

on three salient statutes.176

disclosure of a person’s immigration status in open court.

Prohibitions against immigration-based retaliation Unlawful employer retaliation against workers can take many different forms, including decreased work hours, reduced wages, or termination from employment altogether.172 Such undeniably significant harms are especially devastating for low-wage workers living

In 2013, the state added Labor Code Section 244 (b),177 which expressly provides that reporting or threatening to report the suspected immigration status of a current, former, or prospective employee or their family member to a federal, state, or local agency because the employee exercises a right under the Labor Code (or other specified state codes) constitutes an adverse action for purposes of establishing a claim of unlawful retaliation. Pursuant to a recently enacted

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bill, a rebuttable presumption exists in favor of an

including equitable and injunctive relief, penalties payable

employee’s retaliation claim if the employer violates

to affected employees, and business license suspension.184

Section 244 (b) (or engages in any other adverse action

Although Sections 1019 and 244 (b) mirror each other in

against the employee) within 90 days of the worker’s

several respects, the statutes also have their differences.

exercise of any right under the Labor Code.178 Although

For example, Section 1019 is more narrow insofar as it

reporting or threatening to report the immigration status

prohibits threatening to contact or contacting “immigration

of an employee or their family member to a government

authorities,” while Section 244 (b) encompasses any

agency could have been deemed an adverse action

federal, state, or local agency that an employer may

even prior to the enactment of Section 244 (b), the law

contact or threaten to contact about an employee’s or

eliminates any potential ambiguity on this point.

family member’s immigration status.185 In other respects,

That same year, California also enacted a similar statute, Labor Code Section 1019,179 which makes it unlawful to contact immigration authorities or to threaten to do so (as one of several prohibited “unfair immigration-related practices” enumerated in the statute) with the purpose of retaliating against any person for exercising any right under the Labor Code or local ordinance applicable to

example, it protects “any person” who may be the subject of an unfair immigration-related practice for exercising protected rights (which in turn are broadly framed under the statute to include acts such as informing another person of potential rights), whereas Section 244 (b) is limited to employees and their family members.

employees.180 Section 1019 specifies that the exercise

In 2017, California buttressed the ability to hold

of such rights includes filing a complaint or informing

an employer responsible for immigration-based

any person of an alleged violation of the Labor Code or

retaliation when it amended Labor Code Section 98.7

local ordinance by an employer or other party; seeking

to authorize the Labor Commissioner to commence

information regarding whether an employer or other

and proceed with a retaliation investigation even

party is in compliance with the Labor Code or local

without a complaint, if the Commissioner suspects

ordinance; or informing a person of potential rights and

immigration-related threats in violation of Section 244

remedies under the Labor Code or local ordinance,

or Section 1019.186 This important change to the law

and assisting the person in asserting those rights.181

enables the Labor Commissioner to act on information

The statute also codifies a rebuttable presumption

such as tips (from community groups, for example) in

that threatening to contact or contacting immigration

order to address possible retaliation when workers

authorities (or engaging in another unfair immigration-

are unable or too fearful to file a formal complaint with

related practice) against a person within 90 days of the

the Commissioner—a circumstance which may be

person’s exercise of protected rights was done so in

especially likely in the context of immigration-based

retaliation for exercising those rights.

retaliation, given the heightened risks to workers.187 In

182

The immigration-based retaliatory conduct prohibited under both Sections 244 (b) and 1019 may be addressed through a civil suit or the California Labor Commissioner’s retaliation complaint process,183 with potential remedies

34

however, Section 1019 is arguably more expansive. For

Block 1: Rights

this way, the provision also strengthens the ability of the Commissioner to intercede, based on a suspected threat to contact ICE, before an employer may actually follow through on this threat.

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The enactment of statutes explicitly prohibiting immigrationbased retaliation and facilitating government investigations of potential violations without requiring a worker to step forward sends the clear message that such retaliation will

Policies shielding state labor agency enforcement efforts against ICE interference

not be tolerated. Naming this particular form of retaliation

Significantly, California has also recognized that public

and outlawing it in statute can serve an important normative

policies to ensure labor standards apply to workers

purpose. While it remains true that anti-retaliation statutes

regardless of their immigration status would only be

cannot undo the harm to a worker or family member who

thwarted if the state’s enforcement of those standards

is detained by ICE and deported as a result of unlawful

could be co-opted and turned into a pipeline for federal

employer retaliation, the strength of these statutes primarily

immigration enforcement. In January 2017, addressing

lies in the potential to deter such conduct. At the very least,

the problem of ICE interference with state and local law

such express laws, which provide for monetary penalties if

enforcement efforts grew even more urgent when the first

they are violated, may act as an impediment to any further

Trump administration issued an Executive Order greatly

harm—for example, by disincentivizing an employer from

expanding ICE detention and deportation priorities to

actually reporting the worker to ICE, or from retaliating in the

include all undocumented individuals (including long-time

future against other workers.

residents and families) and targeting states and localities

Criminal sanctions for immigration-related threats

with sanctuary policies.192 Studies discussing the impact of this federal policy documented an exponential increase in arrests and raids by ICE agents, including their use of

In addition to subjecting employers to civil liability if they

threatening, coercive, and deceptive tactics to detain

engage in immigration-based retaliation, California has also

individuals.193 News reports circulated of arrests by ICE at

explicitly extended criminal liability to employers who use

courthouses, bus stops, and schools, as well as attempts

immigration-based threats to deprive workers of their earned

by ICE agents to apprehend workers at state offices of the

wages. Under state law, such threats may form the basis of

California Labor Commissioner.194

extortion, which is defined in the California Penal Code as

In late 2017, California enacted two major laws in response.

the wrongful use of force or fear to obtain property or other consideration from another person, with consent.188 In

To prevent the “entangling [of] state and local

2013, the legislature amended the Penal Code to expressly

agencies with federal immigration enforcement

state that such fear may be caused by a threat to report the

programs,” which would erode the “relationship of

immigration status or suspected immigration status of the

trust between California’s immigrant community and

person threatened, the person’s relative or family member,

state and local agencies [that] is central to the public

or a third person.189 Thus, for example, an employer who

safety of the people of California,”195 the state passed

threatens to call ICE on a worker, unless she agrees to

S.B. 54 (also called the California Values Act).196

keep working for subminimum wages without complaint,

S.B. 54 limits the discretion of state and local law

could be found criminally liable for extortion. The crime

enforcement agencies (including the California Labor

is punishable as a felony by up to four years in prison.190

Commissioner) to cooperate with federal immigration

Attempted extortion may also result in imprisonment as well

enforcement. Among its provisions, the law prohibits

as a fine of up to $10,000.191

state and local law enforcement agencies from using

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money, facilities, property, equipment, or personnel

The same year that the state enacted the Values Act,

to investigate, interrogate, detain, detect or arrest

it also passed A.B. 450.204 Among its provisions, A.B.

persons for immigration enforcement purposes, subject

450 was concerned with ICE raids conducted without

to certain exceptions.197 Such prohibited activities

a judicial warrant.205 The bill prohibits public (and

include inquiring into an individual’s immigration

private) employers, and persons acting on their behalf,

status; providing personal information about an

from providing voluntary consent to an immigration

individual, including a home or work address, unless

enforcement agent to enter any “nonpublic areas of

that information is publicly available; making or

a place of labor,” unless the agent presents a judicial

intentionally participating in an arrest based on a civil

warrant.206 Employers who violate the statute are subject

immigration warrant; and performing the functions of

to civil penalties, ranging from $2,000 up to $10,000,

an immigration officer.198 Pursuant to the statute, the

enforceable by the California Labor Commissioner

California Attorney General was also required to publish

or Attorney General through a civil action.207 The

model policies addressing how various state and local

Attorney General has interpreted the bill’s prohibition

entities, including public schools and libraries, shelters,

as applicable to the state Labor Agency (including the

state and local health facilities, courthouses, and the

Labor Commissioner) as a public employer,208 and has

California Labor Commissioner, can lawfully act to limit

noted that “nonpublic places of labor” under the statute

their assistance with federal immigration enforcement

could include Labor Commissioner office areas that have

so that their services “remain safe and accessible to all

been designated through posted signs as restricted to

California residents, regardless of immigration status.”199

individuals filing or involved in a claim or investigation before the Commissioner (including parties, witnesses,

In addition to its symbolic importance, S.B. 54 was

representatives, family members, or persons assisting an

aimed at curbing the harmful and disruptive intrusion

individual with a claim).209

of federal immigration enforcement into state and local law enforcement activities.200 For its part, the California Labor Commissioner had already crafted and instituted internal procedures to guard against ICE interference with the agency’s mission to enforce labor standards.201 S.B. 54 encoded protections against such interference into state law, including the development and issuance of model policies by the state’s highest law enforcement official.202 The Values Act also provided an additional legal basis for the Labor Commissioner’s existing practice, consistent with S.B. 1818, not to inquire into a worker’s immigration status, as irrelevant to labor laws and the Commissioner’s enforcement efforts.203

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Prior to the bill’s passage, Labor Commissioner staff had been advised under the Commissioner’s existing internal protocols not to provide voluntary consent to ICE agents attempting to enter the Commissioner’s offices and waiting rooms—where their presence would intimidate workers participating in the Commissioner’s enforcement efforts and disrupt those efforts—and to ask agents if they had a judicial warrant for entry.210 With the passage of A.B. 450, the legislature backed a key piece of the Commissioner’s policy to protect its enforcement activities against encroachment by ICE.

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Protection against public disclosure of immigration status in open court

The Evidence Code statute works in conjunction with

In the context of civil discovery, the Ninth Circuit has

failed to pay minimum and overtime wages owed, the

discussed the harms of permitting an employer to use the

worker’s immigration status is irrelevant to the issue

civil court system as a forum to seek and expose evidence

of the employer’s liability for these violations—as S.B.

about a worker’s immigration status. Enabling this, the court

1818 expressly reaffirmed218—and evidence relating to

observed, “would allow [employers] to raise implicitly the

immigration status is therefore clearly inadmissible in that

threat of deportation and criminal prosecution every time

context. The Evidence Code provision adds a procedural

a worker, documented or undocumented, reports illegal

hurdle against the employer attempting anyway to make

practices”—which would deter workers from bringing

an issue of the worker’s immigration status (including for

meritorious claims.

purposes of determining the amount of wages, damages,

211

As the court further explained, “[e]ven

existing protections codified under S.B. 1818.217 Thus, for example, in a civil suit by a worker alleging an employer

documented workers may be chilled” because they “may

and penalties owed), as the statute does not allow the

fear that their immigration status would be changed, or that

employer to question or discuss the immigration status of

their status would reveal the immigration problems of their

the worker or any witness in open court without the court’s

family or friends,” while “new legal residents or citizens may

permission, and requires the employer to request a non-

[similarly] feel intimidated by the prospect of having their

public hearing on the matter.219 In such a hearing, there

immigration history examined in a public proceeding.”

would be no legal basis for the employer to prevail since the

212

In 2018, in the wake of media reports of ICE agents targeting immigrants at courthouses, the California legislature underscored the need to create “extra procedural safeguards” to “help all Californians feel more secure

employer would not be able to show, as S.B. 1818 requires, that in relation to these unpaid wages, inquiring into the worker’s immigration status is “necessary in order to comply with federal immigration law.”220

participating in the legal system.”213 With this goal, the legislature added a provision to the state Evidence Code that prohibits parties in a civil action from disclosing evidence of a person’s immigration status in open court, subject to certain exceptions.214 The provision requires a party seeking such disclosure to request a court hearing in camera (privately in the judge’s chambers), in which the judge must first determine that such evidence is admissible.215 If the judge rules it is not, then any evidence and discussion about whether to admit it cannot be revealed in open court.216

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Key California Laws Protecting the Rights of Undocumented Workers (2013-2022)

Labor Code Section & Bill Number

TABLE 3

Key Provisions

Protection: Prohibitions Against Immigration-Based Retaliation Cal. Lab. Code § 244; Cal. Bus. & Prof. Code § 494.6 Added by S.B. 666, 2013-2014 Reg. Sess.

(Cal. 2013)

Cal. Lab. Code § 1019

Added by A.B. 263, 2013-2014 Reg. Sess.

(Cal. 2013); amended

by A.B. 2751, 20132014 Reg. Sess. (Cal. 2014)

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Reporting or threatening to report the suspected citizenship or immigration status of an employee (current, former, or prospective) or of the employee’s family member to a federal, state, or local agency because the employee exercises a right under the Labor Code (and other specified Codes) is an adverse action, for purposes of establishing a violation of the employee’s rights under the state’s anti-retaliation laws.

A “family member” is defined as a spouse, parent, sibling, child, uncle, aunt, niece, nephew, cousin, grandparent, or grandchild related by blood, adoption, marriage, or domestic partnership.

Under a related provision of the Labor Code (Section 98.6), there is a rebuttable presumption in favor of the employee’s retaliation claim if an employer engages in the conduct prohibited by Section 244 (b) (or any other adverse action against the employee) within 90 days of the worker’s exercise of protected rights.

This prohibition against immigration-based retaliation is enforceable through a civil suit or the California Labor Commissioner’s retaliation complaint process (see Labor Code Sections 98.6, 98.7, 98.74, 1102.5). Remedies could include injunctive relief and penalties of up to $10,000 per employee for each act of unlawful retaliation, payable to the employee who suffered the violation.

A related provision of S.B. 666 allows for business license suspension or revocation for a violation of Section 244 (b) (see Business & Professions Code Section 494.6).

Makes it unlawful for an employer or any other person or entity to engage in, or to direct another person or entity to engage in, an “unfair immigration-related practice” against any person for the purpose or with the intent of retaliating against any person for exercising any right protected under the Labor Code or any local ordinance applicable to employees.

Specifies that such an exercised right includes filing a complaint or informing any person of an alleged violation of the Labor Code or local ordinance by an employer or other party; seeking information regarding whether an employer or other party is in compliance with the Labor Code or local ordinance; or informing a person of potential rights and remedies under the Labor Code or local ordinance, and assisting the person in asserting those rights.

Under the statute, an “unfair immigration-related practice” means threatening to contact or contacting immigration authorities, as well as certain other specified conduct.

Creates a rebuttable presumption that engaging in an unfair immigration-related practice against a person within 90 days of the person’s exercise of protected rights was done so in retaliation for the exercise of those rights.

Provides that an employee or other person who is the subject of an unfair immigration-related practice, or their representative, may bring a civil action for equitable relief (which may include business license suspension), any applicable damages or penalties, and reasonable attorney’s fees and costs. The California Labor Commissioner may also enforce this prohibition (see Labor Code Sections 98.7, 98.74).

TABLE 3

Labor Code Section & Bill Number

Key Provisions

Protection: Prohibitions Against Immigration-Based Retaliation (cont’d) Cal. Lab. Code § 98.7

Amended by S.B. 306, 2017-2018 Reg. Sess. (Cal. 2017)

Authorizes the California Labor Commissioner to initiate and proceed with a retaliation investigation and enforcement of the Labor Code’s anti-retaliation protections, even when the Commissioner has not received a complaint, if the Commissioner suspects immigration-related threats in violation of Sections 244 or 1019, and in other specified instances.

Protection: Criminal Sanctions for Immigration-Related Threats Cal. Penal Code § 519

Amended by A.B. 524, 2013-2014 Reg. Sess. (Cal. 2013)

Expressly states that the wrongful use of fear under the crime of extortion may be induced by a threat to report the immigration status or suspected immigration status of the person threatened (or the person’s relative, family member, or other person). Under the Penal Code, extortion is the wrongful use of force or fear to obtain property or other consideration (defined to mean anything of value) from another person, with the person’s consent.

Extortion is punishable as a felony, by up to four years in prison. Attempted extortion may also result in imprisonment as well as a fine up to $10,000.

Protection: Shielding Against ICE Interference with State Labor Agency Enforcement Efforts Cal. Gov’t. Code §§ 7284-7284.12

Added by S.B. 54, 2017-2018 Reg. Sess.

(Cal. 2017)

Subject to certain exceptions, limits the discretion of state and local law enforcement agencies (including the California Labor Commissioner) to cooperate with federal immigration enforcement. This includes, inter alia, prohibiting state and local law enforcement agencies from using money, facilities, property, equipment, or personnel to investigate, interrogate, detain, detect, or arrest persons for immigration enforcement purposes—such as by inquiring into an individual’s immigration status; providing personal information about an individual including the individual’s home address or work address unless that information is available to the public; making or intentionally participating in arrests based on civil immigration warrants; or performing the functions of an immigration officer.

Requires the California Attorney General, in consultation with stakeholders, to publish model policies on how various state and local entities (including public schools and libraries, shelters, state and local health facilities, courthouses, and the Labor Commissioner), can lawfully limit assistance with immigration enforcement, in order to ensure their services remain safe and accessible to all California residents regardless of immigration status. In the case of the Labor Commissioner, encourages but does not mandate adoption of this model policy.

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TABLE 3

Labor Code Section & Bill Number

Key Provisions

Protection: Shielding Against ICE Interference with State Labor Agency Enforcement Efforts (cont’d) Cal. Gov’t. Code § 7285.1 Added by A.B. 450, 2017-2018 Reg. Sess.

(Cal. 2017)

Prohibits public (and private) employers, or a person acting on behalf of the employer, from providing voluntary consent to an immigration enforcement agent to enter any nonpublic areas of a place of labor, unless the agent provides a judicial warrant, and except as otherwise required by federal law.

Subjects an employer who violates this statute to a civil penalty, from $2,000 to $10,000, enforceable by the California Attorney General or Labor Commissioner in a civil action.

The statute has been interpreted by the Attorney General as applicable to the state Labor Agency (including the Labor Commissioner) as a public employer. The Attorney General has noted that “nonpublic places of labor” under the statute could include Labor Commissioner office areas that have been designated through posted signs as restricted to individuals filing or involved in a claim or investigation before the Commissioner (including parties, witnesses, representatives, family members, or persons assisting an individual with a claim).

Protection: Prohibition Against Public Disclosure of Immigration Status in Open Court Cal. Evid. Code § 351.3 Added by S.B. 785, 2017-2018 Reg. Sess. (Cal. 2018); reenacted by S.B. 836, 2021-2022 Reg. Sess. (Cal. 2022)

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Block 1: Rights

In a civil action, prohibits disclosure in open court of evidence of a person’s immigration status by a party or their attorney unless the judge presiding over the matter first determines that the evidence is admissible in an in camera hearing requested by the party seeking disclosure. (An analogous provision for criminal actions was also added.)

Limited exceptions to the statute include its inapplicability to cases in which a person’s immigration status is necessary to prove an element of a claim or an affirmative defense (which could not be shown in wage and hour cases for unpaid wages, for example).

Expressly states that it does not impact existing law under S.B. 1818 that a person’s immigration status is irrelevant to the issue of liability for purposes of enforcing state labor, employment, civil rights, consumer protection, and housing laws, and that in proceedings or discovery to enforce those laws, no inquiry shall be permitted into a person’s immigration status unless the person seeking to make this inquiry shows by clear and convincing evidence that it is necessary to comply with federal immigration law.

SPOTLIGHT

Taking a Stand Against ICE Interference with State Enforcement of Labor Standards: THE CALIFORNIA LABOR COMMISSIONER LEADS THE WAY Laws safeguarding the rights of workers regardless of their immigration status are indispensable in maintaining the integrity and effectiveness of labor standards for all workers. But just as vital are the programs and procedures instituted by state labor agencies to ensure that government enforcement efforts are truly accessible to all workers.

The California Labor Commissioner has been a trailblazer

started showing up at Labor Commissioner offices—likely

in devising and implementing proactive measures aimed

the result of employer retaliation against workers, which had

at protecting workers who are participating in agency

increased four-fold compared to the year before—to seek

investigations or proceedings and whose immigration status

out workers who had filed claims with the Commissioner.223

makes them particularly vulnerable to employer abuse. Over a

To prevent the substantial harm to workers and the Labor

decade ago, the Labor Commissioner was one of the first state

Commissioner’s enforcement mission if labor agency offices

labor agencies in the nation to develop protocols for issuing

could be used as a site of federal immigration enforcement,

U visa certifications in support of immigrant workers who

the Commissioner provided formal guidance to staff on how

are the victims of certain workplace crimes detected by the

to respond in such situations, including recommended scripts

Commissioner in the course of its enforcement efforts.

to follow.224 Staff were advised to tell an ICE agent attempting

221

More

recently, the Commissioner was reportedly the first state agency

to enter agency offices that “the Labor Commissioner’s

to provide a “Statement of Interest,” submitted on behalf of

Office is a state law enforcement agency that investigates and

immigrant workers who were involved in a Commissioner

prosecutes labor law violations,” that the agent’s “presence

investigation, that successfully resulted in a grant of “deferred

is interfering with [the] ability to enforce state labor laws,”

action”—a discretionary decision not to deport an individual

and that “[i]t is the Labor Commissioner’s general policy not

for a specific period of time that also enables the individual

to permit such interference with…state law enforcement

to request work authorization—from the U.S. Department of

duties.”225 Accordingly, staff were instructed to ask the ICE

Homeland Security under the Biden administration.222

agent “to leave [the] office, including the waiting room,”

In 2017, the Labor Commissioner issued one of its most groundbreaking protocols when federal immigration agents

42

Block 1: Rights

and to inform the agent that the Labor Commissioner “does not consent to entry or search of any part of [the agency] office.”226 The guidance further informed staff that an ICE

SPOTLIGHT agent would need to present a valid judicial warrant to lawfully

Documents that are not judicial warrants do not give

enter and search Labor Commissioner offices.227 Moreover,

ICE agents legal authority to enter and search Labor

staff were directed not to provide personal information about

Agency facilities. For example, an ICE administrative

a worker, including the worker’s address or phone number, or

“warrant” does not require immediate compliance.

to disclose scheduling information about agency proceedings

Labor Agency staff shall inform an ICE officer who has

involving the worker.

an administrative warrant that the Labor Agency cannot

Firmly rooted in constitutional principles,228 the Labor Commissioner’s ICE protocols modeled how state labor agencies could formulate and take a decisive stance against ICE attempts to commandeer state government offices and enforcement activities for immigration enforcement purposes. The protocols were subsequently reflected in A.B. 450’s prohibition against the provision of voluntary consent by an employer, including public entities like the Labor Commissioner, to the entry of ICE agents into “nonpublic areas of a place of labor” without a judicial warrant. The protocols

respond to the warrant until after legal counsel has reviewed it. In addition, a “notice to appear” does not require Labor Agency staff to take any action, nor to cooperate with the delivery or service of the notice to the person named in it. If the ICE officer has a federal judicial warrant to enter and search a Labor Agency facility, prompt compliance usually is required, but where feasible, Labor Agency staff should consult with legal counsel before responding.233 Labor Agency facilities should develop policies and

were also incorporated by the California Attorney General into

practices to enhance the privacy of individuals they

model guidance, issued pursuant to the California Values Act,

serve, and to ensure the Agency remains accessible

that sets forth “foundational elements reflecting the minimum

to and safe for workers who seek to enforce

that should be present in the policies adopted by any Labor

their labor rights and who may be the subject of

Agency” to limit interference by federal immigration agents

immigration enforcement actions.234 The Labor

with the state agency’s law enforcement efforts.229 Toward this

Agency should consider which areas of Agency offices

end, the model policies and supporting recommendations

should have restricted access and clearly designate

from the Attorney General include the following:230

those areas through mapping, signage, locks or other

The Labor Agency should acknowledge that immigration enforcement activities, and threats of such activities, interfere with its mission. If an immigration officer visits Labor Agency facilities, Labor Agency staff shall ask the officer to leave the premises immediately because their presence is disruptive to the agency’s business.231 If an ICE officer asks to enter and search a Labor Agency facility, Labor Agency staff should not provide consent to the officer to enter the facility or otherwise assist with any search or arrest. Staff shall verbally inform the

access restrictions.235 Other recommended protocols to ensure worker safety in accessing Agency services include not posting hearing calendars in waiting areas or online; using case numbers, not party names, when hearings are called; providing secure waiting rooms for employers and workers; and permitting remote appearances at proceedings.236 The Labor Agency should provide staff training on how to respond to situations involving immigration enforcement officers, as well as requests for Labor Agency records that may include worker information.237

officer that the Labor Agency does not consent to such

Shaped and informed by the protocols first developed by the

entry. But if the officer orders staff to provide immediate

Labor Commissioner, the Attorney General’s model guidance

access to the facility, staff should not refuse the officer’s

is a prime example of how state labor agencies can and should

order. Staff should also not attempt to physically interfere

be on the front lines of conceptualizing and propelling policies

with the officer, even if the officer may be acting beyond

to effectuate the fundamental principle that labor standards

their legal authority and without consent.

apply to workers regardless of their immigration status.

232

Block 1: Rights

43

BLOCK 2

In low-wage industries, attempts to limit or altogether avoid legal responsibility for labor standards have taken different forms, including the pervasive use of contractual and other arrangements to outsource labor. In one form of outsourcing, businesses misclassify employees as independent contractors in order to benefit financially from ignoring their obligations as employers.238 In another form, businesses sandwich one or more layers of entities between themselves (at the top of the outsourcing chain) and the workers (at the bottom of the chain) who perform the labor that generates their profits, and then claim that the entity with a more direct relationship to the workers, often a contractor or subcontractor, is their sole employer.239 Businesses that do happen to get caught for breaking the law frequently play corporate shell games; facing potential monetary liability for violating the rights of workers, they shut down rather than pay what is owed, only to resume operations under a different company name or nominal change in ownership.240

RESPONSIBILITIES

During the last fifteen years, California has stepped up its efforts to address the various schemes utilized in low-wage industries to evade the state’s workerprotective laws. In Block 2, we focus on California legislation in two principal areas that are an essential counterpart to the establishment of robust labor standards: protecting “employee” status by holding employers accountable for misclassification of workers as independent contractors; and expanding the scope of who is liable when standards are violated, beyond the constraints of traditional “employer” status.

Block 2: Responsibilities

45

2|A

Protection of “Employee” Status:

Holding Employers Responsible for Misclassifying Workers as Independent Contractors

In the seminal case Dynamex Operations West, Inc. v.

Superior Court,241 the California Supreme Court noted that the proper classification of workers as employees (versus independent contractors) is the “single most important factor” in determining whether workers are protected by wage and hour laws.242 The risk of misclassification, the Court explained, is “significant in light of the potentially substantial economic incentives” for businesses to deny that workers are their employees—including “the unfair competitive advantage the [misclassifying] business may obtain over competitors that properly classify similar workers as employees and that thereby assume the fiscal and other responsibilities and burdens that an employer owes to its employees.”243 As a result, the Court observed, “[i]n recent years, the relevant regulatory agencies of both the federal and state governments have declared that the misclassification of workers as independent contractors rather than employees is a very serious problem, depriving federal and state governments of billions of dollars in tax revenue and millions of workers of the labor law protections to which they are entitled.”244

46

Block 2: Responsibilities

2|A

To combat misclassification and ensure workers are not unlawfully denied the rights and protections of employee

Codification of the ABC test

status, California first passed a bill over a decade ago that

Under the willful misclassification law, the legislature did not

targets “willful” misclassification by imposing monetary

attempt to prescribe any particular standard for determining

sanctions on individuals or entities who engage in the

whether a worker is an employee or independent

practice. More recently, the state passed legislation that

contractor. As a result, the case-by-case multifactor, “all the

sweeps more broadly to prevent illegal misclassification of

circumstances” test articulated by the California Supreme

workers by expressly codifying the worker-protective “ABC

Court in S.G. Borello & Sons, Inc. v. Department of Industrial

test” as the standard to determine employee status for

Relations250 remained as the operative standard to resolve

purposes of the entire state Labor Code.

questions of employee status under the California Labor Code.251 But subsequent court decisions examining the

Penalties and damages for willful misclassification

unique interrelationship between the Labor Code and the IWC wage orders—and the meaning of the terms

In 2011, California made it unlawful for “any person

“employ” and “employer”—ended up transforming the

or employer” to “willfully misclassify” a worker as an

legal landscape, culminating in the California Supreme

independent contractor, or to charge the misclassified

Court’s watershed Dynamex opinion252 and the legislature’s

worker a fee or make deductions from the worker’s pay

codification of the ABC test for determining employee status.

when doing so would be unlawful if the worker had been

All IWC wage orders define the term “employer” as “any

properly classified as an employee.245 The law defines “willful misclassification” as “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.”

246

A person

or employer who violates the law is subject to a penalty of $5,000 to $15,000 for each violation, or a higher penalty of $10,000 to $25,000 per violation if there is a pattern or practice of violations, as well as other remedies (such as disciplinary action by the state licensing board if the violator is a licensed contractor).247 Willful misclassification penalties under the statute were originally cast as civil penalties only (belonging to the state), but the law was amended in 2023

person…who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person.”253 In turn, the wage orders define the term “employ” as “to engage, suffer, or permit to work.”254 Reading these definitions together, the California Supreme Court held in Martinez v. Combs, eight years before Dynamex, that the IWC wage order definition of “employ” has any one of three meanings: 1.

to exercise control over wages, hours, or working conditions;

to allow such penalties to be recoverable in the alternative as

2. to suffer or permit to work; or

damages payable to employees.248 Enforceable by the Labor

3. to engage, thereby creating a common law

Commissioner (or a public prosecutor as specified under

employment relationship.255

the 2023 amendment),249 the willful misclassification law was California’s first major legislative foray into deterring the growing problem of misclassification.

Block 2: Responsibilities

47

2|A

The first two meanings expand the scope of what constitutes

IWC wage orders, and state Unemployment Insurance Code,

“employment”—and who counts as an employee and

a person who is paid to provide labor or services “shall be

employer—beyond the constraints of the common law,

considered” an employee of the hiring entity.263 A hiring entity

in order to reach “workers whose employment status the

claiming that the person is instead an independent contractor

common law did not recognize.”256

has the burden of demonstrating all of the following “ABC”

In contrast to the IWC wage orders, the California Labor Code—which serves to enforce the standards in the

factors, in order to rebut the presumption of employee status: A. The person is free from the control and direction of

wage orders, while it also overlaps with and has added to

the hiring entity in connection with the performance

them

of the work, both under the contract for the

—does not for the most part expressly define the

257

terms “employ,” “employer,” or “employee.” In the absence of such definitions in the Labor Code, California courts have found the IWC definitions of employment apply to claims brought under the Code that “aris[e] out of California wage orders.”

258

In Dynamex, the California Supreme Court

performance of the work and in fact; and B. The person performs work that is outside the usual course of the hiring entity’s business; and C. The person is customarily engaged in an independently established trade, occupation, or

focused on one of the IWC employer definitions, “to suffer

business of the same nature as that involved in the

or permit to work,” and held that it should be interpreted as

work performed.264

the “ABC test” to determine a worker’s classification as an employee or independent contractor, for purposes of Labor Code claims that “derive” from or “rest” on an obligation imposed by the applicable wage order.259 After Dynamex, however, legal questions remained over which Labor Code sections would be viewed by the courts as sufficiently related to the wage orders such that the ABC test applied to those sections to resolve any issue of employee status.260 In 2019, the California legislature passed A.B. 5

The ABC test is meant to have broad reach, in order “to include within the covered ‘employee’ category all individual workers who can reasonably be viewed as working in the [hiring entity’s] business.”265 In Dynamex, the Court emphasized the advantages of the ABC test, including that its streamlined nature would “provide greater clarity and consistency, and less opportunity for manipulation, than a test or standard that invariably requires the consideration

to

and weighing of a significant number of disparate factors

definitively settle the matter. Perhaps the most closely

on a case-by-case basis” (like the Borello standard or the

watched workers’ rights legislation the state has enacted,

federal “economic realities” test).266 Indeed, one of the main

A.B. 5 was crafted to “ensure workers who are currently

reasons that A.B. 5 is so powerful is the statute’s presumption

exploited by being misclassified as independent contractors

of employee status, which holds true if the hiring entity

instead of recognized as employees have the basic rights

fails to demonstrate any one of the ABC test’s three parts,

and protections they deserve under the law.”

evaluated in any order.267 Although the ABC test has its share

261

262

To this end,

A.B. 5 codified and expanded the application of the ABC test

of constructive critiques,268 A.B. 5 will likely remain one of

set forth in Dynamex. Subject to certain exemptions, the bill

the most consequential pieces of labor and employment

established that for purposes of the entire state Labor Code,

legislation of the modern era.269

48

Block 2: Responsibilities

Key California Laws Combatting Misclassification of Workers and Protecting Employee Status (2011-2023) Issue

Key Provisions

Willful Misclassification

Labor Code Section & Bill Number: Cal. Lab. Code § 226.8

Added by S.B. 459, 2011-2012 Reg. Sess. (Cal. 2011); amended by A.B. 594, 2023-2024 Reg. Sess. (Cal. 2023)

Worker Classification Standard

Labor Code Section & Bill Number: Cal. Lab. Code §§ 2775 – 2787 A.B. 5, 2019-2020 Reg. Sess. (Cal. 2019) [added Cal. Lab. Code § 2750.3]; A.B. 2257, 2019-2020 Reg. Sess.

(Cal. 2020) [repealed § 2750.3 & replaced it with §§ 2775 - 2787]

TABLE 4

Establishes that it is unlawful for “any person or employer” to engage in “willful misclassification” of an individual as an independent contractor, which is defined as “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.”

Makes it unlawful to charge an employee who has been willfully misclassified a fee or to make any deductions from that employee’s compensation for any purpose (including for goods, materials, space rental, services, government licenses, repairs, equipment maintenance, or fines arising from the individual’s employment), where any such charge or deduction would have violated the law if the individual had not been misclassified.

Sets forth that a person or employer who has violated the statute is subject to the following: (1) civil penalties (ranging from $5,000 to $15,000 for each violation, and increasing to $10,000 to $25,000 for each violation if the California Labor Commissioner or a court issues a determination that the person or employer has or is engaged in a pattern or practice of violations), which may be recovered in the alternative as damages payable to employees; (2) an order to publicly display a notice, as specified, that the person or employer has violated the statute; and (3) disciplinary action by the contractors’ state license board if the violator is a licensed contractor.

Provides that any civil penalty, damages, or disciplinary action remains in effect against any successor corporation, owner, or business entity, where the successor meets certain criteria.

Authorizes the Labor Commissioner to enforce the law through its various enforcement arms. Also authorizes a public prosecutor, as defined, to enforce the statute by seeking damages payable to employees that may be recovered as an alternative to civil penalties when the law is violated. (See also Table 6, infra.)

For purposes of the California Labor Code, IWC wage orders, and Unemployment Insurance Code, creates a rebuttable presumption that a person providing labor or services for renumeration is an employee, and not an independent contractor, unless the hiring entity demonstrates all of the following conditions: (A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; (B) The person performs work that is outside the usual course of the hiring entity’s business; and (C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Preserves existing exceptions to employment status and extensions of employer status or liability that are expressly made by a provision of the Labor Code, IWC wage order, or Unemployment Insurance Code.

Sets forth certain exemptions from the ABC test with respect to specified occupations, industries, and contracting relationships; for most exemptions, codifies use of the multifactor test under S.G. Borello & Sons, Inc. v. Department of Industrial Relations270 instead of the ABC test and requires the hiring entity seeking the exemption to demonstrate specific threshold criteria that overlap with Borello factors, in order for the exemption from the ABC test to apply.

States that the Attorney General, district attorney, or city attorney, as specified, may file a court action for injunctive relief to prevent the continued misclassification of employees as independent contractors, in addition to any other remedies available.

Block 2: Responsibilities

49

2|B

Liability Beyond Traditional “Employer” Status:

Widening the Scope of Parties Responsible for Wage and Hour Violations

As California has taken historic action to curb misclassification so that workers are not illegally deprived of employee rights and protections, the state has also enacted legislation on another equally significant front: to broaden the scope of liability for wage and hour violations in order to reach entities and individuals beyond direct employment relationships and conventional definitions of who is an “employer.” Over the past decade, the state has passed key laws that seek to effectuate the rights of workers by holding successor entities and individual corporate agents legally liable for wage violations when the employer business shuts down or otherwise becomes judgment-proof, and by establishing up-the-chain liability in low-wage industries where labor outsourcing is prevalent. In enacting these laws, the legislature has recognized that labor standards by themselves do very little to incentivize compliance and deter unlawful conduct if entities that violate them can easily avoid accountability, or if the universe of legally responsible parties is too circumscribed.

50

Block 2: Responsibilities

2|B

The successor employs as a managing agent any person

Successor liability

who directly controlled the wages, hours or working conditions of the affected workforce of the predecessor

Low-wage workers who try to collect on judgments for unpaid wages too often find the businesses that employed them have closed and vanished or reopened as a new corporate entity.271 In one study, the National Employment Law Project and UCLA Labor Center found that in over 60% of cases where the California Labor Commissioner determined a worker was owed wages, the employer’s business status

judgment debtor.278 The successor operates a business in the same industry and the business has an owner, partner, officer, or director who is an immediate family member of any owner, partner, officer or director of the predecessor judgment debtor.279

was “non-active”—either suspended, forfeited, cancelled,

Section 200.3, which expressly preserves “other means

or dissolved according to state records—potentially resulting

of establishing successor liability,”280 is more limited in

in “nearly insurmountable barriers to collection of a wage

some ways than its antecedent industry-specific successor

judgment due to unavailability of assets.”272

liability statutes. For example, unlike the latter, Section

As one approach to this problem, the state has enacted a series of bills specific to various low-wage industries— garment, carwash, agricultural, and janitorial—that hold a “successor” liable for the wages owed by a predecessor employer to its former employees, if any one of certain

200.3 expressly requires a “final judgment” against the predecessor employer.281 The new successor liability statute also takes a narrower view of some of the criteria establishing successorship. For example, it requires a managing agent of the successor to have exercised “direct control” over the wages, hours or working conditions of the predecessor’s

statutorily-enumerated criteria is satisfied.273 In 2020,

workforce, whereas the industry-specific successor liability

California expanded on these industry-specific laws by

provisions also allow for “indirect control.”282 At the same

creating new Labor Code Section 200.3.274 Under this

time, however, Section 200.3 is broader than the industry-

statute, a “successor” to a “judgment debtor” is liable

specific successor liability laws. Section 200.3 not only

for any wages, damages, and penalties owed to the predecessor judgment debtor’s former workforce pursuant to a final judgment (after the time to appeal has expired and there is no appeal pending).275 Such “successorship” may be established based on any one of the following factors:

creates a catch-all successor liability provision that is not limited by industry,283 but liability under the statute also may not necessarily depend on an employment relationship between the predecessor judgment debtor and its workforce; in contrast to the industry-specific successor

The successor uses substantially the same facilities or

liability laws, the new statute omits altogether the term

substantially the same workforce to offer substantially the

“employer” in relation to the predecessor and avoids the

same services as the predecessor judgment debtor.

term “employee.”284 Furthermore, in addition to wages

The successor has substantially the same owners or

and penalties, successors under Section 200.3 are liable

276

managers that control labor relations as the predecessor

for damages, which is not the case in the industry-specific

judgment debtor.

provisions except for the janitorial statute.285

277

Block 2: Responsibilities

51

2|B Individual corporate agent liability Wage and hour standards are rendered largely illusory when businesses that break the law can escape responsibility for their violations, including by hiding assets or declaring bankruptcy to avoid paying a judgment for wages owed to workers—and when the individuals who are in charge of the business also remain out of reach, protected by the corporate form. Because a corporation is ordinarily treated as a legal

rest breaks, the payment of “final” wages,289 business expense reimbursement, or itemized wage statements.290 As the employer, such individual corporate agents jointly share legal responsibility with the business for wages, compensation, damages and penalties (including liquidated damages for minimum wage violations,291 damages for the failure to provide an itemized wage statement,292 and waiting time penalties for the failure to pay final wages293) that are due to workers for such violations.

entity that is separate and distinct from its owners, officers or

Although Section 558.1 thus requires some showing that

directors, such individuals acting on behalf of the business

the individual either violated or “caused” a violation of the

are normally insulated from personal liability for the business’s

law, and proof of causation is not without its challenges,

debts, except when the “corporate veil” can be “pierced”

this requirement is still less burdensome than establishing

to establish the individual should be held liable as an “alter

alter ego liability. Before Section 558.1 was enacted, the

ego” of the business.286 Since the corporate form will be

power to hold individual corporate agents liable for violating

disregarded “only in narrowly defined circumstances,”287 the

labor standards without having to pierce the corporate veil

alter ego exception is typically very difficult to prove.

was confined to citations issued by the California Labor

To strengthen the enforcement of labor standards including the ability of workers to secure meaningful remedies if standards are contravened, California enacted Labor Code Section 558.1 in 2015.288 Under this law, any “person acting on behalf of an employer”—defined as an individual who is an owner, director, officer, or managing agent of the employer—“may be held liable as the employer” if the individual violates or causes a violation of laws regulating minimum wage, overtime, reporting time pay, meal and

52

Block 2: Responsibilities

Commissioner’s Bureau of Field Enforcement (BOFE), as authorized under various statutes.294 The same power was not accorded in administrative wage claims (also called “Berman” claims) filed by workers with the Labor Commissioner or in a civil action.295 Significantly, Section 558.1 addressed this disjunction by creating a parallel form of individual corporate agent liability applicable outside the BOFE context that improves the ability to enforce basic wage and hour standards.296

2|B test—that, if satisfied, trigger upstream liability for wage

Upstream liability

and hour violations. With the exception of a seminal statute

Through a battery of pivotal laws, California has taken aim at one of the most formidable barriers to effective enforcement of wage and hour protections in low-wage industries: the use of intermediaries (including contractors, subcontractors, staffing agencies, or other labor providers) by upstream

that created a new and potentially expansive “employer” category called a “client employer,” California’s up-the-chain liability laws do not use the term “employer” in relation to the liable upstream entity—thus signaling the legislature’s willingness to move outside the confines of restrictive “employer” definitions in order to more effectively address

businesses seeking to distance themselves from direct

violations of labor standards in low-wage industries.

control over the workers whose labor they nonetheless depend on—and to shield themselves, they hope, from any liability for downstream workplace violations.297 In an effort to counter such schemes, which perpetuate the proverbial

“CLIENT EMPLOYER” IN SUBCONTRACTED INDUSTRIES

race to the bottom that pressures entities to ignore labor

In 2014, California passed A.B. 1897,304 a pioneering law

standards,298 the California legislature has crafted innovative

aimed at achieving corporate accountability in subcontracted

laws to hold upstream entities jointly and severally liable

low-wage industries. A.B. 1897 added Labor Code Section

with the direct employer for wages, damages, and penalties

2810.3, and with it, a new “employer” classification called

owed to workers. These bills embody twin public policy

a “client employer.” Under the law, a “client employer” is

goals. First, their purpose is to ensure that labor standards do

defined as a “business entity, regardless of its form, that

not become empty promises for workers when downstream

obtains or is provided workers to perform labor within its usual

violators shut down, abscond, or become insolvent. Second,

course of business from a labor contractor.”305 A business

they seek corporate accountability of businesses that

entity can only be a “client employer” if it has a workforce of

ultimately profit from the race to the bottom that they fuel

25 or more workers (including workers hired directly by the

and have the economic power to prevent.

business and those provided by any labor contractor), and if

299

In supporting the passage of these bills, worker advocates have underscored that establishing up-the-chain liability for labor violations based on a “joint employer” theory typically involves fact-intensive, expensive, and protracted litigation.300 Litigating such a suit, especially without an attorney, is simply not an option for most low-wage

the business entity has at least six workers “supplied by a labor contractor or labor contractors to the [business] at any given time.”306 The state and its political subdivisions are excluded from the definition, and some exceptions to liability apply, including carve-outs for individual homeowners and certain motor carriers.307

workers.301 Moreover, the prospects of prevailing on a

A “labor contractor,” in turn, is defined under the statute as

theory of upstream liability even under the IWC employer

an “individual or entity that supplies, either with or without

definitions that are more worker-protective than the

a contract, a client employer with workers to perform labor

common law or the FLSA302 may be dim in light of California

within the client employer’s usual course of business,” subject

Supreme Court precedent.303 As a result, California’s modern

to certain exclusions (e.g., bona fide labor organizations,

corporate accountability laws have attempted to dismantle

apprenticeship programs, and hiring halls operated pursuant

roadblocks to liability by expressly setting forth certain

to a collective bargaining agreement are excepted from the

streamlined statutory definitions or criteria—developed to

definition).308 Meanwhile, the “usual course of business” of

supplant any need to prove an onerous “joint employer”

a client employer—the phrase which primarily determines

Block 2: Responsibilities

53

2|B liability under the statute—is defined as the “regular and

amended in 2012 to include the warehouse industry,316

customary work of a business, performed within or upon the

and in 2024 to include the port trucking industry.317 Section

premises or worksite of the client employer.”309

2810 allows an aggrieved employee to file an action for

If the statute’s somewhat circular definitions are satisfied, then client employer liability attaches.310 Under the statute, a client employer “shares” with the labor contractor “all civil legal responsibility and civil liability” for the payment of “wages”— defined broadly to include “all sums payable to an employee or the state based upon any failure to pay wages”—and for the failure to secure valid workers’ compensation insurance.311 Implementing regulations promulgated by the California Labor Commissioner explain that “wages” under the statute include any minimum, regular, overtime or other premium wages that are due to the worker (for example, premium pay due for meal or rest break violations); any damages and penalties that are due to the worker based upon any failure to pay wages (such as liquidated damages for minimum wage violations, damages for the failure to provide wage

damages and injunctive relief in court, and provides for reasonable attorney’s fees and costs if the worker prevails.318 Significantly, S.B. 179 forged a new statutory mechanism for seeking corporate accountability in heavily subcontracted low-wage industries characterized by rampant wage theft, and recognized the “unfair economic leverage” of upstream businesses in these industries which compels labor contractors to enter into agreements “that are financially inadequate to permit the contractor to comply” with labor standards.319 Even though Section 2810 was drafted to avoid the proof problems of a joint employer standard of liability, demonstrating a violation under the statute can be burdensome and difficult since it may require expert testimony and involve some knotty evidentiary issues around actual or constructive knowledge of the contract’s insufficiency.320

statements, waiting time penalties, and other late payment

Like S.B. 179, A.B. 1897 rejected the “easily manipulated”

penalties); civil penalties due to the state based upon any

joint employer test,321 as the legislature endeavored to

failure to pay wages; and any applicable interest.312 The

formulate a new, “simple and straightforward rule” to

statute provides that in addition to regulations, the Labor

establish upstream liability in subcontracted low-wage

Commissioner “may adopt…rules of practice and procedure

industries.322 With Section 2810.3, the legislature sought

necessary to administer and enforce” client employer

to eliminate any need to prove that the upstream entity had

obligations, and also expressly incorporates a private right of

“any control over the worker’s payments or performance of

action for workers.

services,” or even “any knowledge of the worker’s presence

313

A.B. 1897 approached the problem of subcontracting in low-wage industries from a different angle than S.B. 179, an important law passed by the legislature over twenty years ago.314 S.B. 179 created Labor Code Section 2810, which made it unlawful for a person or entity to enter into a contract or agreement for labor or services with a contractor in the construction, farm labor, garment, janitorial, or security guard industry, “where the person or entity knows or should know that the contract or agreement does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided.”315 The law was subsequently

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Block 2: Responsibilities

on the job or that the party who hired the worker had failed to make wage payments.”323 Once the statute’s definitional terms are met, joint and several liability for downstream labor violations can flow upstream to the “end-user” client employer,324 no matter how many layers of middlemen exist between the client employer and the labor contractor.

Although in one recent case the Ninth Circuit has narrowly interpreted the scope of client employer liability, the law still holds much promise as a potent tool for the enforcement of basic wage and hour standards in subcontracted low-wage industries,325 and remains one of the most significant worker rights laws that California has enacted.

2|B PROPERTY SERVICES & LONG-TERM CARE INDUSTRIES

CONSTRUCTION INDUSTRY

In 2015, the legislature took another cut at addressing the

codify more simplified mechanisms of upstream liability,

use of subcontracting as a means to shirk legal responsibility

the legislature passed a bill to hold general contractors in

for labor standards. As part of the larger bill that added the

the construction industry liable for the downstream wage

Labor Code section on individual corporate agent liability, the

violations of its subcontractors in private works projects.333

legislature also focused on the issue of upstream liability in the

The Senate Judiciary Committee described the problem that

property services and long-term care industries.326 Among its

the legislation addressed as follows:

various provisions, the bill created new Labor Code Section 238.5, which facilitates the ability to enforce wage and hour protections for workers who perform janitorial, security guard, valet parking, landscaping, gardening or long-term care services.327 Under the law as later amended, “[a]ny individual, business entity, or public entity” (defined as not including the state), “regardless of its form, that, as part of its business, contracts for [these] services” is jointly and severally liable with the downstream employer for any unpaid wages, plus interest, for services performed under the contract.328 The law has certain limited exceptions.329 For liability to attach under Section 238.5, the upstream contracting party must be provided with notice of a Berman wage claim, BOFE proceeding, or civil action by the Labor Commissioner in which the employer is found liable for unpaid wages and upstream liability is being determined.330 Similar to the client employer law, liability under Section 238.5 is not based on a joint employer standard. For example, there is no need to demonstrate that the upstream individual, business, or public entity exercised any control over wages or the services performed. Instead, Section 238.5 simply turns on whether the individual or entity contracted for property or long-term care services “as part of its business”—an undefined phrase which arguably sets a lower bar than the “usual course of business” definition under the client employer law. However, unlike the client employer law, joint and several liability under Section 238.5

In 2017, continuing with an industry-specific push to

Most large, modern construction projects involve a cascading chain of entities, each responsible for providing some element of the overall project, bound together by contracts. At the top of this cascade is the general contractor (also known as a ‘direct contractor’), who is ultimately responsible for delivering the completed project to the person or business who ordered it built. In the middle are the subcontractors, who agree to perform discrete tasks within the overall project, either by carrying out the task themselves, or divvying up the task into still further pieces and hiring another ‘tier’ of subcontractors to complete those parts. At the far end of the cascade are the workers that the various subcontractors employ to get the job done. If all goes well, those workers are paid promptly for their labor and any fringe benefits they have been promised. If the workers belong to a union, the subcontractor who employed them also sends dues contributions to the corresponding labor trust fund.

This bill is about what happens when all does not go well. Under current law, if a subcontractor on a private construction project fails to pay all of the wages, fringe benefits, and contributions to which the workers are lawfully entitled, the primary recourse for the workers and the labor trust fund is to seek payment from the subcontractor who stiffed them. Alternatively, the workers may engage in the sometimes lengthy, costly, and not always successful process of trying to impose a mechanics lien on the project. Either way, the workers and the trust funds may find themselves going unpaid for some time or even not getting paid at all.334

is limited on its face to unpaid wages (though this term is not defined),331 and while it specifies enforcement by the Labor

The Judiciary Committee further explained the legislature’s

Commissioner, the statute does not expressly contain a

view that “a general contractor’s responsibility to all workers

private right of action.

on the jobsite should not necessarily be limited by the fact

332

Block 2: Responsibilities

55

2|B that the general contractor did not directly hire the worker”

fringe or other benefit payments or contributions on a

or directly control the work performed, and that “layers of

worker’s behalf, or a joint labor-management cooperation

contractual relationships should not shield an entity from

committee, may also enforce the statute by bringing a

the basic responsibility to ensure that workplace rights are

civil action in which reasonable attorney’s fees and costs,

upheld when that entity effectively controls the worksite.”335

including expert witness fees, may be awarded to the

Accordingly, the 2017 bill added Labor Code Section 218.7, which provided that a general contractor (called a “direct contractor” in the statute) “making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work” is liable for any unpaid wages and fringe or other benefit payments or contributions, plus interest, owed to a worker or third party on the worker’s behalf by a subcontractor “at any tier,” for work performed under the contract.336 The statute thus made the general contractor “the backstop that ensures workers and trust funds are not left holding the bag.”337 In line with California’s other up-the-chain liability laws, no proof of control or other indicia of joint employer status is required to establish upstream liability of the general contractor for unpaid wages, fringe benefits or other contributions.

prevailing plaintiff.340

PORT TRUCKING INDUSTRY In 2018, California enacted S.B. 1402, opening up a significant new avenue of upstream liability for wage and hour violations in the port trucking (also called “port drayage”) industry.341 The bill was motivated by the legislature’s concern that truck drivers in the industry are “routinely misclassified as independent contractors when they in fact work as employees” and are deprived of remedies because port trucking companies “that commit violations go out of business and are replaced by others that repeat the pattern.”342 Observing that customers of port trucking services “are some of the world’s largest retail and manufacturing companies,” the legislature declared that “[a]fter more than a decade of rulings, media stories,

In 2021, the legislature enacted Labor Code Section 218.8

and independent reports, [these customers] should be

to extend liability of the general contractor beyond unpaid

aware of the widespread labor violations in the drayage

wages, fringe benefits or other contributions to include

industry”343 and “have the market power to exert meaningful

associated penalties and liquidated damages owed by the

change in the…industry that has eluded California drivers

subcontractor, if the general contractor either had knowledge

for more than a decade.”344 Thus, the legislature concluded,

of the subcontractor’s failure to pay wages, fringe benefits

imposing upstream liability on customers that use port

or other contributions, or failed to comply with certain

trucking companies with unsatisfied judgments for labor

requirements set forth under the statute (such as conducting

law violations “will exert pressure across the supply chain to

a periodic review of the subcontractor’s payroll records and

protect…drivers from further exploitation”345 and “better

“diligently” taking corrective action upon “becoming aware”

enable labor law enforcement” in the industry.346

of the subcontractor’s violations).338 Hence, the statute is not as expansive as the client employer law, which in contrast allows upstream entities to be held liable for damages and penalties in addition to wages without requiring any form of knowledge about the wage violation.

With this purpose, S.B. 1402 codified new Labor Code Section 2810.4. Among its provisions, this section charges the California Labor Commissioner with creating and posting a public list on its internet webpage of “the names, addresses, and essential information” of port drayage

Section 218.8 specifies enforcement by the Labor

motor carriers with an unsatisfied final court judgment,347

Commissioner through the Berman wage claims process, a

tax assessment, or tax lien finding the motor carrier failed

BOFE citation, or a civil action.

to pay wages or engaged in other illegal conduct.348 This

339

56

Block 2: Responsibilities

A third party that is owed

2|B information may not be posted by the Commissioner until

vehicle by a commercial driver on a for-hire or not-for-hire

the period for all judicial appeals has expired, except for

basis” to perform port trucking services; or “an entity or

information relating to “prior offenders.”349 Section 2810.4

individual who succeeds in the interest and operation of a

also requires the Labor Commissioner to give advance

predecessor port drayage motor carrier.”355 Subject to some

notice to the port trucking companies that will be included

limited exceptions, the term “customer” is in turn defined

on the public list, and sets forth certain removal criteria and

broadly as any private sector “business entity, regardless of

procedures (e.g., if the Commissioner determines there has

its form, that engages or uses a port drayage motor carrier

been full payment of an unsatisfied judgment or an approved

to perform port drayage services on the customer’s behalf,

settlement dispensing of the judgment).350

whether the customer directly engages or uses a port

Upstream liability as originally crafted under S.B. 1402 depends on the Labor Commissioner’s list. Pursuant to the

drayage motor carrier or indirectly engages or uses a port drayage motor carrier through the use of an agent.”356

statute, a “customer” that “as part of its business, engages or

In addition to specifying enforcement by the Labor

uses” a port drayage motor carrier on the list shares with the

Commissioner through the Berman wage claims process,

motor carrier, or the motor carrier’s successor, “all civil legal

a BOFE citation, or a civil action, Section 2810.4 expressly

responsibility and civil liability owed to a port drayage driver

accords drivers a private right of action to enforce upstream

or to the state for port drayage services obtained after the

liability under the law.357 Like its sister joint liability statutes,

date the motor carrier appeared on the list.”351 The statute

Section 2810.4 does not require proof of joint employer

specifies that this shared responsibility—modeled after the

status to find upstream “customers” liable. Instead, the statute

client employer law

—means the customer and motor

utilizes the mechanism of a public list that exposes the identity

carrier are jointly and severally liable for the full amount

of downstream labor violators and that results in up-the-chain

of any minimum, regular, and overtime or other premium

liability if a customer directly or indirectly “engages or uses”

wages that are unpaid by the motor carrier (including, for

a listed violator “as part of its business”—terms which are not

example, premium pay for meal or rest period violations);

defined but may be broadly construed. Moreover, such a list

unlawful deductions from wages or unreimbursed business

is not even needed for customer liability to attach in cases

expenses; damages or penalties that are due to the driver or

where drivers have been misclassified (which over time may

the state based upon the failure to pay wages (including, for

prove to be the most common type of case under the statute,

example, waiting time penalties or liquidated damages due

given the high rates of misclassification in the industry358), thus

to workers, and civil penalties due to the state for minimum

greatly facilitating the ability to move liability up-the-chain

wage or overtime violations); and other enumerated

when wages, penalties, damages, and other compensation

352

penalties and liabilities, as well as applicable interest.

are owed to drivers or the state due to misclassification. In

In 2024, the legislature amended the statute to extend

situations not involving misclassification, however, Section

upstream liability to customers even if the motor carrier it

2810.4 is more limited than some of the state’s other corporate

engages or uses is not on the Labor Commissioner list, in

accountability laws. Since customer liability in such cases is

cases involving driver misclassification.

tethered to the Labor Commissioner list, there is no upstream

353

354

A “port drayage motor carrier” is defined under the law as either “an individual or entity that hires or engages” commercial port trucking drivers; a “registered owner, lessee, licensee, or bailee of a commercial motor vehicle… that operates or directs the operation of a commercial motor

liability under the statute for the violations of a motor carrier that is not listed, and even if a motor carrier is listed due to an unsatisfied final court judgment, no customer can be held responsible for that outstanding judgment. Rather, upstream liability only flows prospectively to amounts owed for services obtained from the motor carrier after it appears on the list.

Block 2: Responsibilities

57

2|B Under the law, brand guarantors are jointly and severally

GARMENT INDUSTRY

liable with the garment manufacturers and contractors in the In 2021, California passed legislation to enhance the upstream liability provisions of a seminal law, A.B. 633,

contracting chain for the unpaid minimum, regular, overtime 359

and other premium wages, expense reimbursement, and

that had been enacted over 25 years ago to combat

any other compensation, including interest, that are due to

sweatshops in the garment industry. S.B. 62,

garment workers for any violation of the Labor Code; the

360

also a

groundbreaking law in several respects, was crafted

worker’s reasonable attorney’s fees and costs (as specified

to “restore the purpose” of A.B. 633 “by clarifying

under the law); and civil penalties for the failure to secure

ambiguities in the original language” that had impeded

valid workers’ compensation insurance.368 Such liability

the effectiveness of the administrative wage claims

runs from the downstream garment factory (a “contractor”

process originally created for garment workers under the

including a subcontractor) upstream to “garment

statute.

manufacturers” and “brand guarantors” if the statutory

361

Explaining that A.B. 633 “sought to ensure that

persons who contracted to have garments manufactured

definitions of these terms are satisfied.369 Like the other joint

were liable as guarantors for the unpaid wages and

liability statutes that California has enacted, upstream liability

overtime of the workers making their garments,”

362

the

legislature stated this “wage guarantee” was frustrated

under the garment law is not based on proving indicia of joint employment.

by garment companies that have “creat[ed] layers of subcontracting” in order to claim the law does not apply

While the guarantor liability provisions under the statute

to them because they are retailers and not “garment

still cannot be enforced in a private suit except in certain

manufacturers.”363 The legislature further declared that

limited circumstances (as was the case under A.B. 633),370

these “[s]o-called retailers…dictate the pricing structure

S.B. 62 incorporated some other meaningful measures

that causes wage violations,” which “leads to a vicious

to strengthen the wage guarantee and improve the

price competition, resulting in garment workers being

administrative wage claims process for garment workers.

paid an average of $5.15 per hour, well below minimum

Among its various provisions, such improvements include

wage.”364 Upstream “guarantor” liability is essential, the

not only clarifying that A.B. 633’s wage guarantee extends

legislature concluded, because without it, “manufacturers

to “brand guarantors,” but also expanding the guarantee

have no incentive to ensure safe conditions or the proper

to encompass wages and compensation owed to workers

minimum wage and overtime payments for the workers

beyond minimum and overtime wages;371 additionally

producing their garments.”365

holding garment manufacturers and contractors jointly liable for any damages and penalties that are due to workers for

Accordingly, S.B. 62 amended the law “to make clear that

a violation of the Labor Code;372 eliminating the previous

a person contracting to have garments made” is legally

statutory requirement under A.B. 633 to prove bad faith on

responsible for the full amount of unpaid wages and other

the part of the manufacturer in order to assess liquidated

compensation owed to workers who make those garments

damages against the manufacturer for the contractor’s

“regardless of how many layers of contracting that person

failure to pay minimum wages or overtime;373 instituting

may use.”

the presumption that a worker’s claim of liability of a brand

366

The statute now specifies that such liability

extends upstream to a “brand guarantor,” defined as

guarantor or garment manufacturer is valid if the worker

“any person contracting for the performance of garment

provides clothing labels or “other credible information

manufacturing” (which includes “licensing of a brand or

about work performed,” which may be rebutted only if

name”), irrespective of “whether the person with whom they

the brand guarantor, manufacturer, or contractor presents

contract performs the manufacturing operations or hires

“specific, compelling, and reliable written evidence to the

contractors or subcontractors to perform [them].”367

contrary”;374 and prohibiting piece rate pay.375

58

Block 2: Responsibilities

Key California Laws Expanding the Scope of Who is Liable for Wage and Hour Violations (2014-2024)

Form of Liability

Key Provisions

Successor Liability

Labor Code Section & Bill Number: Cal. Lab. Code § 200.3

Added by A.B. 3075, 2019-2020 Reg. Sess.

(Cal. 2020)

Individual Corporate Agent Liability Labor Code Section & Bill Number: Cal. Lab. Code § 558.1 Added by S.B. 588, 2015-2016 Reg. Sess.

(Cal. 2015)

TABLE 5

Provides that a successor to a judgment debtor is liable for any wages, damages, and penalties owed to any of the judgment debtor’s former workforce pursuant to a final judgment, after the time to appeal the judgment has expired and no appeal is pending.

An entity is a successor under the law if it meets any one of the following criteria: (1) It uses substantially the same facilities or substantially the same workforce to offer substantially the same services as the judgment debtor; (2) It has substantially the same owners or managers that control the labor relations as the judgment debtor; (3) It employs as a managing agent any person who directly controlled the wages, hours, or working conditions of the affected workforce of the judgment debtor; or (4) It operates a business in the same industry and the business has an owner, partner, officer, or director who is an immediate family member of any owner, partner, officer, or director of the judgment debtor.

Does not limit other means of establishing successor liability.

Establishes that a person acting on behalf of an employer who violates or causes a violation of laws regulating minimum wage, overtime, reporting time pay, the payment of “final” wages, meal and rest breaks, business expense reimbursement, or itemized wage statements may be held liable as the employer for such violation. As the employer, such individual corporate agents are jointly and severally liable with the business for wages, damages, and penalties that are due to workers for these violations.

Defines the term “person acting on behalf of an employer” as “limited to a natural person who is an owner, director, officer, or managing agent of the employer.”

Creates a form of individual corporate agent liability that does not require piercing the corporate veil, and that may be utilized in Berman wage claims or in a civil action, similar to the statutory authority that the California Labor Commissioner may exercise in BOFE citations to hold individual corporate agents liable for wage and hour violations .376

Block 2: Responsibilities

59

TABLE 5

Form of Liability

Key Provisions

Upstream Liability: Client Employer in Subcontracted Industries

Labor Code Section & Bill Number: Cal. Lab. Code § 2810.3

Added by A.B. 1897, 2013-2014 Reg. Sess.

(Cal. 2014)

60

Creates a new employer category called a “client employer,” defined as “a business entity, regardless of its form, that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.” A client employer does not include: a business entity with a total workforce of fewer than 25 workers (including workers hired directly by the client employer and workers provided by any labor contractor), or with 5 or fewer workers supplied by a labor contractor or labor contractors “at any given time”; or the state or its political subdivisions.

Defines a client employer’s “usual course of business” as “the regular and customary work of [the] business, performed within or upon the premises or worksite of the client employer.”

Defines “labor contractor,” subject to certain exclusions, as “an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business.”

Establishes that a “client employer” is jointly and severally liable with a “labor contractor” for the unpaid “wages” of all workers supplied by the labor contractor, and for the failure to secure valid workers’ compensation coverage.

Defines “wages” to include “all sums payable to an employee or the state based upon any failure to pay wages,” which thus includes damages, penalties, and interest due for wage violations (as further explained by the California Labor Commissioner in implementing regulations).

Authorizes the Labor Commissioner to adopt regulations and rules of practice and procedure necessary to administer and enforce client employer obligations that are under the Commissioner’s jurisdiction. Also expressly allows for private suits by workers to enforce client employer liability under the statute if prior notice (as specified in the statute) is provided to the client employer.

Sets forth some carve-outs to the imposition of liability under the statute, including for individual homeowners for labor or services received at the home, certain motor carriers of property, certain household movers of goods, and other exceptions.

Block 2: Responsibilities

TABLE 5

Form of Liability

Key Provisions

Upstream Liability: Property Services & Long-Term Care Industries

Labor Code Section & Bill Number: Cal. Lab. Code § 238.5

Added by S.B. 588, 2015-2016 Reg. Sess.

(Cal. 2015); amended

by A.B. 520, 20232024 Reg. Sess. (Cal. 2023)

Upstream Liability: Construction Industry

Labor Code Section & Bill Number: Cal. Lab. Code §§ 218.7, 218.8

A.B. 1701, 2017-2018 Reg. Sess. (Cal. 2017) [added § 218.7]; S.B. 727, 2021-2022 Reg. Sess. (Cal. 2021) [amended § 218.7 & added § 218.8]; A.B. 2696, 2023-2024 Reg. Sess. (Cal. 2024) [amended § 218.8]

Establishes that any individual, business entity, or public entity (defined in the statute to exclude the state), regardless of its form, that as part of its business, contracts for long-term care services or property services is jointly and severally liable for any wages owed (plus interest) for services performed under the contract. Such liability only attaches if the individual, business entity, or public entity has been provided with notice of the California Labor Commissioner proceeding or investigation in which the employer is found liable for those unpaid wages.

Specifies that joint and several liability under the law may be determined either in the Labor Commissioner’s Berman wage claims process, where the contracting individual, business entity, or public entity is provided notice in the complaint alleging such liability and named as a defendant in the claim; or in a BOFE proceeding or civil action by the Commissioner, if the contracting individual, business entity, or public entity is provided with preliminary notice by the Commissioner of joint and several liability under the statute at least 30 days prior to issuance of the BOFE citation or filing of the court action; or by a court in a de novo appeal of a Berman wage claim decision by the Commissioner.

Defines property services as janitorial, security guard, valet parking, landscaping, and gardening services.

Requires an employer that contracts to provide services in the property services or long-term care industries to provide written notice, as specified under the statute, of any unsatisfied final judgment against the employer for unpaid wages, both to prospective and existing contracting parties. But states that failure of the employer to provide such notice is not a defense to joint and several liability under the statute.

Includes some limited carve-outs to the imposition of liability under the statute, such as for property services provided to an individual homeowner or the owner of a home-based business under specified circumstances.

Establishes that for contracts entered into on or after January 1, 2022, a general contractor (called a “direct contractor” under the statute), making or taking a contract in the state on a private construction project is liable for unpaid wages, fringe or other benefit payments or contributions, and interest owed to a worker for labor performed on that project, or owed to a third party on the worker’s behalf, by a subcontractor at any tier acting under, by, or for the direct contractor.

Extends the direct contractor’s liability under the statute to include associated penalties and liquidated damages owed by the subcontractor for failing to pay wages or fringe or other benefit payments or contributions, only if the direct contractor had knowledge of the subcontractor’s failure to pay the specified wage, fringe or other benefit payment or contribution, or if the direct contractor fails to comply with an enumerated list of requirements under the statute (including monitoring the payment by the subcontractor of wages, fringe or other benefit payments or contributions, through periodic review of the subcontractor’s payroll records, and diligently taking corrective action upon becoming aware of the failure of the subcontractor to pay wages, fringe or other benefit payments or contributions).

Specifies that direct contractor liability under the statute may be enforced by the California Labor Commissioner in a Berman wage claim, BOFE citation, or civil action, upon the provision of notice to the direct contractor and subcontractor as specified in the statute.

Also provides that a third party owed fringe or other benefit payments or contributions on a worker’s behalf, or a joint labor-management cooperation committee as specified in the statute, may bring a civil action to enforce the law, in which reasonable attorney’s fees and costs, including expert witness fees, may be awarded to the prevailing plaintiff.

Block 2: Responsibilities

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TABLE 5

Form of Liability

Key Provisions

Upstream Liability: Port Trucking Industry

Labor Code Section & Bill Number: Cal. Lab. Code § 2810.4 Added by S.B. 1402, 2017-2018 Reg. Sess.

(Cal. 2018); amended

by S.B. 338, 20212022 Reg. Sess. (Cal. 2021) & A.B. 2754, 2023-2024 Reg. Sess.

(Cal. 2024)

62

Requires the California Labor Commissioner to publish on its webpage a list of “the names, addresses, and essential information” of port drayage motor carriers (as defined in the statute) with an unsatisfied final court judgment, tax assessment, or tax lien finding the motor carrier has engaged in illegal conduct such as the failure to pay wages or remit payroll taxes, to the extent such information is publicly disclosable under federal and state laws. Specifies this information may not be posted by the Commissioner until the period for all judicial appeals has expired.

Also requires the Commissioner to post a list of port drayage motor carriers that are “prior offenders” (as defined in the statute) with a subsequent judgment, ruling, citation, order, decision, or award finding that the motor carrier has violated a labor or employment law, even if all appeal periods have not expired.

Additionally requires that the Commissioner provide advance notice (as specified in the statute) to port drayage motor carriers that will be included on the public list, and sets forth certain criteria and procedures for removing motor carriers from the list.

Establishes that if a “customer” engages or uses, as part of its business, a port drayage motor carrier that is on the Labor Commissioner list, the customer is jointly and severally liable, with the motor carrier or motor carrier’s successor, for the full amount of any unpaid wages, unreimbursed expenses, damages, penalties, and other civil liabilities, including applicable interest, that are owed to a driver or the state for port drayage services obtained after the date the motor carrier appeared on the Labor Commissioner list.

But effective January 1, 2025, in cases where the motor carrier has misclassified a driver as an independent contractor, attaches joint and several liability to a customer regardless of whether or not the motor carrier is on the Labor Commissioner list, for all amounts owed to the driver or the state arising out of the motor carrier’s misclassification of the driver. Specifies there is no customer liability in this situation if the motor carrier uses its own employee drivers or bona fide independent contractors to perform services for the customer.

Subject to certain exclusions (including a small business exception), broadly defines “customer” as a private sector “business entity, regardless of its form, that engages or uses a port drayage motor carrier to perform port drayage services on the customer’s behalf, whether the customer directly engages or uses a port drayage motor carrier or indirectly engages or uses a port drayage motor carrier through the use of an agent.”

Specifies that customer liability is enforceable by the Labor Commissioner in a Berman wage claim (including any appeal in court of a wage claim decision by the Commissioner), BOFE citation, or civil action filed by the Commissioner or by a driver or their representative (where notice of potential joint and several liability is provided to the customer prior to filing the civil action).

Requires a port drayage motor carrier to provide written notice to customers (as specified in the statute) of any unsatisfied final judgment or order (as specified) against the motor carrier.

Failure of the motor carrier to provide such notice is not a defense to joint and several liability under the statute.

Block 2: Responsibilities

TABLE 5

Form of Liability

Key Provisions

Upstream Liability: Garment Industry

Labor Code Section & Bill Number: Cal. Lab. Code §§ 2670, 2671, 2673, 2673.1, 2673.2

S.B. 62, 2021-2022 Reg. Sess. (Cal. 2021) [amended §§ 2670, 2671, 2673, 2673.1 & added § 2673.2]; S.B. 191, 2021-2022 Reg. Sess. (Cal. 2022) [amended §§ 2671, 2673.1]

Amends existing corporate accountability law in the garment industry, A.B. 633, to clarify that “a person contracting to have garments made” is legally responsible for the full amount of unpaid wages and other compensation owed to workers who make those garments “regardless of how many layers of contracting that person may use.”

Specifies that such liability extends upstream to a “brand guarantor,” a new term created under the law and defined as “any person contracting for the performance of garment manufacturing” (which includes “licensing of a brand or name”), regardless of “whether the person with whom they contract performs the manufacturing operations or hires contractors or subcontractors to perform [them].”

If the statutory definitions are satisfied, holds a brand guarantor jointly and severally liable with the garment manufacturers and contractors in the contracting chain for the full amount of unpaid minimum, regular, overtime, and other premium wages, expense reimbursement, and any other compensation, including interest, that are due to garment workers for any violation of the Labor Code; the worker’s reasonable attorney’s fees and costs (as specified); and civil penalties for the failure to secure valid workers’ compensation insurance. This expands A.B. 633’s upstream “wage guarantee” to include wages and compensation owed to workers beyond the minimum and overtime wages originally guaranteed under A.B. 633.

Provides that garment manufacturers and contractors are also jointly and severally liable for any damages and penalties that are due to workers for a violation of the Labor Code, and eliminates A.B. 633’s previous requirement to prove the manufacturer acted in bad faith in order to assess liquidated damages against the manufacturer for the contractor’s failure to pay minimum wages or overtime.

Addresses certain evidentiary barriers faced by garment workers in A.B. 633’s specialized administrative wage claims process, including by incorporating a new presumption that a worker’s claim of liability of a brand guarantor or garment manufacturer is valid if the worker provides garment labels or “other credible information about work performed.” This presumption may be rebutted only if the brand guarantor, manufacturer, or contractor presents “specific, compelling, and reliable written evidence to the contrary.”

Abolishes piece rate pay in the garment industry, and subjects a garment manufacturer or contractor that violates the piece rate pay prohibition to compensatory damages payable to the worker.

Maintains the status quo under A.B. 633 that garment workers can only enforce the statute by filing a wage claim with the Labor Commissioner (subject to one existing limited exception under A.B. 633 granting workers a private right of action if a contractor fails to register with the Labor Commissioner as required by law), but expressly adds that the law may also be enforced through BOFE citations.

Block 2: Responsibilities

63

SPOTLIGHT

A.B. 633: CALIFORNIA’S LANDMARK CORPORATE ACCOUNTABILITY LAW IN THE GARMENT INDUSTRY In 1999, the state passed A.B. 633,377 a bill seeking economic justice for garment workers in an industry where sweatshops first got their name.

Just four years before, the nation had witnessed the shocking discovery in El Monte, California, of over 70 Thai workers who had been held captive— under armed guard in an apartment compound enclosed by razor wire—and forced to work day and night making clothes for popular apparel companies.378 A.B. 633 was enacted in response to mounting concerns that sweatshops were proliferating unchecked in our own backyard.379

With the goal of establishing corporate accountability

statute’s definitional terms (revolving around what it means

of upstream retailers and manufacturers that contract for

to be “a person engaged in garment manufacturing”) are

garment production, demand rock bottom contract prices

met.381 Before A.B. 633’s “wage guarantee” was codified,

and lightning-quick turnaround times, and then profit from

garment workers were essentially left without a remedy for

the sweatshops that result,

wage violations when fly-by-night garment sweatshops shut

380

the bill created a specialized

administrative wage claims process for garment workers.

down and disappeared. By creating up-the-chain liability

This process enabled workers to file a complaint with

for wage violations without the need to prove the upstream

the California Labor Commissioner to hold an upstream

entity was a joint employer, A.B. 633’s wage guarantee

“guarantor” that contracts to have clothes produced,

was a monumental victory for workers, even though its

together with the downstream garment factory that directly

enforcement was generally confined to an administrative

employs the workers who make the clothes, jointly liable

wage claims process.

for any unpaid minimum and overtime wages as long as the

64

Block 2: Responsibilities

SPOTLIGHT

To effectuate its wage guarantee, A.B. 633 also included

guarantor,” defined as any person contracting for the

critical provisions to lessen unfair evidentiary burdens on

performance of garment manufacturing, no matter how

garment workers, in recognition of the routine falsification of

far removed that person is in the contracting chain from the

payroll and time records by garment contractors attempting

entity actually performing the manufacturing operations.385

to conceal wage theft. The law, for instance, codified the

Significantly, too, S.B. 62 also enhanced various provisions

presumption that an employee’s claim of hours worked

of A.B. 633 by expanding the scope of the wage guarantee

and wages due is valid, unless the contractor provides

and strengthening the wage claims process for garment

“specific, compelling, and reliable written evidence to the

workers in several other respects.386

contrary” and produces records “that are accurate and contemporaneous, itemized wage deduction statements…, bona fide complete and accurate payroll records, and evidence of the precise hours worked by the employee for each pay period during the period of the claim.”382 If the Labor Commissioner found falsification by the contractor of payroll records submitted for any pay period of the claim, any other payroll records submitted by the contractor would also be presumed false and disregarded.383

A.B. 633, like most laws, had its limitations, as S.B. 62 made plain. But even so, the historic importance of A.B. 633 cannot be overstated. The first bill of its kind in California and the nation, A.B. 633 took on the subcontracting schemes used to skirt legal responsibility for labor standards in a low-wage industry particularly notorious for exploiting workers; created a wage claims process dedicated to the enforcement of upthe-chain liability in the industry, without the major pitfalls of a joint employer standard of liability, so that workers would

Although A.B. 633 was meant to reach upstream entities

have some recourse if their basic wage and hour rights were

even when they did not control or supervise garment

violated; and introduced the powerful tool, novel for its time

workers, such entities managed to undercut the law by

in California wage and hour law, of a statutory presumption

inserting multiple layers of middlemen between themselves

in favor of a worker’s claim for unpaid wages. Ultimately, A.B.

and the garment sweatshop at the bottom of the contracting

633—and the El Monte workers who courageously stepped

chain—and by arguing they were not “persons engaged

forward to tell their stories, helping to raise public awareness

in garment manufacturing” who were covered by the

and ignite a national anti-sweatshop movement387—

law.384 Consequently, in 2021, California enacted S.B. 62

trailblazed the path for modern corporate accountability

to clarify that liability under the statute extends to a “brand

statutes and reform efforts in other low-wage industries.

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BLOCK 3

A statutory structure that incorporates both private and public enforcement options is essential in forming and supporting robust labor standards.

The California legislature has expressly provided workers with private rights of action to enforce some basic standards such as the right to minimum wage and overtime compensation and to hold entities up-the-chain liable for wage violations in certain low-wage industries.388 However, especially in light of the prevalence of mandatory arbitration,389 and the fact that not all Labor Code sections explicitly grant workers the right to sue in a judicial forum,390 government enforcement avenues have become even more vital, particularly for low-wage workers who typically cannot afford or access an attorney to file a lawsuit in the first place.391

ENFORCEABILITY

The California Labor Commissioner (the division within the state labor agency responsible for implementing California wage and hour laws392) offers administrative alternatives to the court system to enforce worker rights and protections under the Labor Code. Critically, the Labor Commissioner provides the free assistance of department deputies and attorneys who have the statutory authority to investigate noncompliance with labor standards, issue orders and citations against violating businesses and individuals, and award various remedies for workers. The Commissioner provides these services through three principal units established under the Labor Code: (1) Wage Claims Adjudication; (2) the Bureau of Field Enforcement (BOFE); and (3) Retaliation Complaint Investigations (RCI).393 For many decades, however, the Labor Commissioner’s enforcement authority was limited by statute. Certain forms of compensatory relief for workers could not be ordered by the Labor Commissioner. In addition, the lack of some basic enforcement tools for the BOFE and RCI units hampered their investigations and ability to hold violators accountable. In the last fifteen years, a wave of legislation was enacted to rectify these statutory deficiencies that had long hamstrung the Commissioner’s enforcement efforts.

In Block 3, we first provide an overview of the Labor Commissioner’s trifecta of enforcement powers exercised through its Wage Claims, BOFE, and RCI units.

Next, we focus on some key contemporary bills augmenting the remedies that the Labor Commissioner can order for the failure to comply with labor standards. We end with a discussion of some instrumental laws that have been passed within the last decade to improve enforcement by the BOFE and RCI units in particular.

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The Keystones of Administrative Enforcement:

Codifying the California Labor Commissioner’s Trifecta of Adjudicatory and Investigative Powers

Through the Labor Commissioner’s statutory power to adjudicate individual wage claims, conduct workplace-wide wage and hour inspections of employers, and investigate retaliation complaints, the legislature has built the essential keystones of an administrative enforcement scheme that highlights the crucial role the government plays in vindicating both the rights of workers and the interconnected public interest in maintaining a strong system of labor standards.

While severe and chronic staffing shortages have resulted in extreme delays in the Commissioner’s administrative proceedings,394 such delays do not diminish the tremendous importance of the agency’s enforcement role. Rather, they underscore the urgent need to invest sufficient resources into the Commissioner’s Office so that its various arms can operate as the legislature intended: as expeditious and accessible means to address violations of the Labor Code and ensure that breaking the law has real consequences.395

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Wage Claims Adjudication

policy.401 After a worker files a claim,402 the Commissioner

Workers who have been victimized by wage theft and other

If the parties do not settle, the Commissioner prepares a

violations of their rights under the California Labor Code

complaint form with the worker and sets a hearing before

can file a claim before the Labor Commissioner through an

the Commissioner.404 In contrast to litigation, there are no

administrative mechanism commonly called the “Berman”

pleadings other than the complaint and non-mandatory

process (named after the legislator who authored the bill

answer, and there is no discovery.405 Although the formal

creating it).

rules of evidence do not apply in Berman hearings,406 the

396

The California Supreme Court has explained

typically schedules and conducts a settlement conference.403

that the Berman process provides the Commissioner with

parties testify under oath and may bring witnesses and

“broad authority to investigate employee complaints and

documents in support of their case.407 Each party can also

to conduct hearings in actions to recover wages, penalties,

cross-examine the opposing party and witnesses and rebut

and other demands for compensation.”397 Heralded as

evidence.408 A Deputy Labor Commissioner presides over

an alternative to litigation that benefits both workers and

the hearing, controls the order of presentation of evidence,

employers, the Berman process offers an “accessible,

and directs and rules on matters concerning the conduct of

informal, and affordable mechanism for laypersons to seek

the hearing.409 After the hearing, the Commissioner issues a

resolution” of their claims

written “Order, Decision or Award” (ODA), which includes

398

and helps “to avoid recourse to

costly and time-consuming judicial proceedings in all but the

the wages, damages, and penalties that are due to the

most complex” cases.399 Indeed, Berman claims, as the Court

worker if a violation of the Labor Code is found.410

has expounded, possess “various features designed to lower the costs and risks for employees in pursuing wage claims,

Any party may appeal the Commissioner’s ODA in state

including procedural informality, assistance of a translator,

superior court, within the time period prescribed by the

use of an expert adjudicator who is authorized to help the

statute.411 An employer filing an appeal must first post either

parties by questioning witnesses and explaining issues and

an appeal bond or cash deposit with the court in the amount

terms, and provisions on fee shifting, mandatory undertaking,

of the ODA, as a form of security to ensure the worker is paid

and assistance of the Labor Commissioner as counsel to help

if a judgment is subsequently entered in the worker’s favor,

employees defend and enforce any award on appeal.”400

if the appeal is withdrawn or dismissed without entry of judgment, or if the case settles.412 An ODA that is not timely

Established in 1976, the Berman process is set forth in Labor

appealed becomes a final decision and is entered in court

Code Sections 98 through 98.2, supplemented by the Labor

as an enforceable judgment.413 If a party appeals the ODA,

Commissioner’s promulgation of a handful of regulations

the appeal is heard de novo, in which the Commissioner’s

and adoption of certain other procedures as a matter of

hearing decision “is entitled to no weight whatsoever” as if

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the matter “had never been before” the Commissioner.414 In a de novo appeal, workers who are financially unable to

Bureau of Field Enforcement (BOFE)

afford counsel can request free legal representation in court

While Berman claims enable workers to seek individual relief

by the Commissioner’s attorneys, and the Commissioner

for violations of their rights, the Labor Commissioner also has

is required to represent the worker if the employer is the

the power, through its Bureau of Field Enforcement (BOFE)

appealing party and the worker is not objecting to any part of

unit, to seek redress on behalf of an entire workforce when

the Commissioner’s ODA.415 In addition, the Commissioner

labor standards have been contravened. Statutorily created

possesses the right to intervene in the appeal proceedings

over thirty years ago under Labor Code Section 90.5 with a

“where questions of the interpretation of statutes or

focus on low-wage sectors and occupations, BOFE conducts

administrative regulations are present.”416

workplace-wide investigations of employers for potential violations of wage and hour laws in industries including

The Labor Code sets forth certain timeframes according to

agriculture, auto repair, carwash, construction, garment,

which the Commissioner or parties must act as part of the

hotel, janitorial, nail salon, residential care, restaurant, retail,

Berman claims process including any appeal. However, the

security guard, and warehouse.423

Commissioner is statutorily permitted to “postpone or grant additional time before setting a hearing.”417 The California

BOFE investigations may be instigated by leads or complaints

Supreme Court has observed that the Berman process “often

from workers, other individuals, or organizations.424 Utilizing

takes significantly longer than [the] 145 days” indicated

a number of investigative techniques, including payroll audits

under the law as the “maximum period” from the filing of

and off-site worker interviews, BOFE engages in “active

a claim to any de novo appeal of a Commissioner hearing

collaboration with key partners on the ground,” such as

decision on the claim.418 In a recent report, the California

community-based groups and industry associations, which

State Auditor found that as of the end of fiscal year 2022-

has enabled the Bureau to better target scofflaw businesses

2023, the Commissioner took a median of 854 days to issue

and conduct more effective, in-depth investigations that

an ODA, resulting in an extensive backlog of claims, due

successfully uncover violations.425 As a result, according to the

primarily to inadequate staffing at the agency.419

Commissioner’s most recent report to the legislature, while BOFE “performed fewer inspections overall [in fiscal year

Despite these long delays, the Berman process remains a

2020-2021] than in prior years,” the Bureau “continues to find

primary forum for workers seeking to enforce their rights

more wages owed to workers in California than at any time in

and is especially critical for low-wage workers, who are

BOFE’s history.”426

disproportionately harmed by wage theft

420

and typically

cannot access or afford an attorney to litigate a lawsuit in

Along with its investigatory powers, BOFE is authorized

court.421 In fiscal year 2022-2023, the Labor Commissioner’s

under the Labor Code to issue citations against employers or

Wage Claims Adjudication unit, the largest within the

other persons acting on behalf of an employer who violate

Commissioner’s Office, received 39,000 Berman claims.422

or cause a violation of laws regulating minimum wage, any provision on hours and days of work (such as overtime,

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reporting time pay, or meal and rest period laws), or business

a dismissal or withdrawal of the citation appeal in court, or

expense reimbursement obligations.427 BOFE’s citation

the execution of a settlement agreement, then a portion of

authority has evolved over time, to enable BOFE to issue

the appeal bond equal to the amount owed, or the entire

citations to enforce additional laws (including the state’s

bond if the amount owed exceeds the bond, is forfeited to

paid sick leave law) and to order a full range of remedies

the Labor Commissioner for appropriate distribution.434

for workers if violations are found (as we discuss in part 3b, below). Furthermore, BOFE can cite lawbreaking employers for civil penalties that are due to the state pursuant to various provisions of the Labor Code.428

BOFE’s power to conduct workplace-wide investigations and to cite violating employers and individual corporate agents is an indispensable complement to the Berman wage claims process. Because BOFE citations are issued without an

The Labor Code specifies the procedures for issuing and

advance hearing, they may offer a faster means of recovering

contesting BOFE citations.

unpaid wages, damages, and penalties for workers than

429

If an employer or person

against whom a citation is issued timely contests it, the Labor

either the Berman process or a civil action filed by the

Commissioner holds an informal hearing on the citation

Commissioner.435 Moreover, if a BOFE citation is appealed,

(pursuant to applicable procedures for administrative

the Commissioner’s hearing decision on the citation can

agencies under the California Government Code), and must

be designated as an administrative “precedent decision,”

issue a written hearing decision, including findings and an

which has the added benefit of allowing the Commissioner

order, to either affirm, modify, or dismiss the citation.

The

to officially set forth its view on important legal issues.436

Commissioner’s resulting hearing decision may be appealed

Significantly, too, in contrast to a worker who has filed a

in court, if the employer or person first posts a bond with

Berman claim but may be compelled to arbitrate it under a

the Commissioner equal to the total amount of wages and

valid agreement,437 BOFE is not legally bound by a worker’s

damages (but not penalties) that are due to workers as

arbitration agreement with an employer. This is because

set forth under the citation.

BOFE has independent authority under the Labor Code to

430

431

The Labor Code specifies

the circumstances when the citation or any subsequent

investigate and cite employers in order to protect the public

administrative hearing decision affirming or modifying the

interest in the vigorous enforcement of labor standards438—

citation becomes final, including if the employer or person

including by seeking relief that BOFE has been statutorily

against whom the citation is issued does not contest the

authorized to obtain for workers when labor standards are

citation in time, or does not timely appeal the administrative

violated—and because the Labor Commissioner is not a

decision.

party to a private arbitration agreement between the worker

432

Any such final citation or administrative hearing

decision of the Labor Commissioner, once filed with the

and the employer.439

court, will result in entry of judgment for the state in the amount of the Commissioner’s citation or decision.433 If the employer or person fails to pay the wages and damages owed to the workers within 10 days of the entry of judgment,

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Retaliation Complaint Investigations (RCI)

that labor standards—and the avenues to enforce them

Employer retaliation poses a very real existential threat to

serious consequences for retaliation and provide

the strong labor standards that California has created. In

workers harmed by it with some recourse. The Retaliation

a 2022 survey of 1,000 workers in the state, the National

Complaint Investigations (RCI) unit is thus one of the Labor

Employment Law Project found that almost 40% had

Commissioner’s most critical enforcement arms, responsible

experienced a workplace violation, but almost half did not

for implementing more than 45 provisions of the Labor Code

report the violation to anyone; of the workers who reported

that make various forms of retaliation and discrimination

the violation to a government agency or their employer, more

against workers unlawful.445 Such statutes, for example,

than half responded that they were retaliated against by their

prohibit adverse action against workers because they

employer.

have made a written or oral complaint for unpaid wages,

440

including Berman wage claims and BOFE investigations and citations—become barren without laws that impose

In addition, 51% responded that “concern about

employer retaliation would influence their decision about

participated in a BOFE investigation, or otherwise exercised

whether or not to report a workplace violation in the future.”

their rights under the Labor Code;446 prohibit retaliation

Similarly, in a 2024 survey by the Shift Project of over 900

against workers who use or attempt to use accrued paid sick

workers employed in California’s service sector, researchers

days, or file a complaint or cooperate in an investigation or

found that over 4 in 10 workers reported being victims of some

prosecution of an alleged violation of the state’s paid sick

form of wage theft (such as the failure to receive minimum

leave law;447 and prohibit retaliation against workers for

wage or overtime); however, fewer than 1 in 4 workers who

disclosing information to a government or law enforcement

experienced an apparent labor standards violation reported or

agency, or to a person with authority over the worker or

made a complaint about it.

authority to investigate, discover, or correct the violation,

441

442

Of the workers who did report

or complain about a violation, more than half responded that

or for providing information to or testifying before any

their employer retaliated against them (including through

public body conducting an investigation, hearing or inquiry,

reductions in work hours, worse schedules, and assignment to

where the worker has reasonable cause to believe that such

unsafe job tasks).

information reveals a violation of local, state, or federal laws

443

California has enacted a raft of laws that embody the clear

or regulations.448

public policy goal of “prohibit[ing] retaliation against

Under Labor Code Section 98.7, the Commissioner is

employees who exercise their rights” and “encourag[ing]

charged with investigating retaliation complaints. Workers

employees to come forward and report employer

have a statute of limitations of one year to file a complaint

violations of the Labor Code.”444 The state has recognized

with the Commissioner, subject to an extension for good

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cause.449 After an investigation, which may include a

Determinations issued by the RCI unit are final and generally

hearing at the Commissioner’s discretion, the RCI unit can

not subject to administrative appeal.457 However, workers

issue a formal “determination” or a citation.450 Pursuant to

have the right to bring an action in court if they disagree

the “determination” process, the Commissioner must first

with a determination that no violation has occurred.458

issue a finding as to whether illegal retaliation has occurred

Furthermore, workers can file a retaliation case in court

and notify the parties involved.451 If the RCI unit determines

based on the same or similar facts as alleged before

that an employer has engaged in unlawful retaliation, the

the Commissioner, without needing to first exhaust

Commissioner must order the employer to cease and desist

administrative remedies or procedures.459

from violating the law and “take any action deemed necessary to remedy the violation, including, where appropriate, rehiring or reinstatement, reimbursement of lost wages and interest thereon, payment of penalties, payment of reasonable attorney’s fees associated with any hearing held by the Labor Commissioner in investigating the complaint, and the posting of notices to employees.”452 If the employer does not comply with the Commissioner’s order within 30 days after notification of the Commissioner’s determination, the Commissioner must bring an action in court against the employer to seek appropriate remedies, which may include injunctive relief, and can recover reasonable attorney’s fees incurred in prosecuting a successful action.453 In any such action, the court may permit the worker to intervene as a party plaintiff.454 Should the Commissioner fail to “promptly” file suit to enforce its order against the employer, the worker can

Although Section 98.7 incorporates some timeframes for the Labor Commissioner to act,460 the legislature has recognized that the Commissioner’s determination and order process has been subject to delays that can result in the inability to meaningfully redress the harms of retaliation experienced by workers.461 Thus, in addition to providing the Commissioner with new authority to proceed with a retaliation investigation even without a complaint,462 the legislature has made some other significant improvements to speed up and strengthen the Commissioner’s power to enforce anti-retaliation laws.

Under recent changes to the Labor Code, the RCI unit can now issue a citation similar to a BOFE citation, in lieu of utilizing the determination and order process under Section 98.7. We discuss this and other enhanced tools of the RCI unit in part 3c, below.

go to court to compel the Commissioner to bring the action and can seek reasonable attorney’s fees and costs if the worker prevails.455 An employer who refuses to comply with a court order pursuant to Section 98.7 is subject to penalties payable to the affected employees of $100 per day for each day the employer continues to be noncompliant, up to a maximum penalty of $20,000.456

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SPOTLIGHT

California’s Private Attorneys General Act (PAGA): PROMOTING THE SYNERGY OF PUBLIC AND PRIVATE ENFORCEMENT OF LABOR STANDARDS California has long understood the need to leverage both public and private enforcement pathways as part of tackling the enormous problem of wage theft and other labor violations experienced at alarming rates by workers in the state, particularly workers in low-wage industries.463 The state has codified key administrative enforcement powers of the Labor Commissioner and made them more robust over time,464 authorized the Commissioner’s enforcement of local labor standards,465 increasingly expanded government prosecution of labor violations beyond enforcement by the Labor Commissioner, 466 and expressly granted workers private rights of action under certain provisions of the Labor Code.467 One law that has been integral to California’s enforcement regime—the Private Attorneys General Act (PAGA)— enables workers to bring Labor Code enforcement suits in court on behalf of the state’s resource-strapped labor agency. With PAGA, the legislature recognized that private and public enforcement efforts could be harnessed together to better protect the rights of workers and deter unlawful employer conduct.

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SPOTLIGHT In addition to damages and “statutory” penalties that are

source of revenue for the state which has been utilized, for

owed to workers when certain Labor Code sections are

example, to support community education and outreach

violated, employers may be held liable for civil penalties that

efforts to workers and employers), with the purpose of

are owed to the state.

“supplement[ing] and not supplant[ing]” state funding

468

Until California passed PAGA over

20 years ago, only the state could seek such civil penalties

for the agency; the remainder goes to the aggrieved

from an employer.

employees.481 In fiscal year 2022-2023 alone, PAGA cases

469

PAGA transformed this limitation into an

opening for workers to hold employers legally responsible for breaking the law, by authorizing workers to act as private “attorneys general” who could obtain civil penalties through a court action brought on behalf of themselves and other current and former employees.470 Enacted in response to the insufficient enforcement resources of the state labor agency,471 PAGA allows a worker to stand in the shoes of the agency as its “proxy or agent.”472 PAGA also created a new default civil penalty for all provisions of the Code that did not already specifically provide for one.473

resulted in over $200 million in funds for the labor agency.482 For several decades since its passage, PAGA has been one of the most potent mechanisms for workers to hold employers responsible for unlawful conduct, and has served as an essential counterpart to government enforcement efforts which have been chronically under-resourced.483 With the proliferation of forced arbitration, PAGA has been especially vital for workers seeking corporate accountability in a judicial forum when labor standards have been violated, since PAGA plaintiffs may still be able to litigate representative

An employee may file a PAGA suit only after notifying the

PAGA claims for their co-workers even if they are ordered to

employer and the state labor agency of the Labor Code

arbitrate their own individual claims.484 Moreover, because

violations that form the basis of the PAGA claim, along with

the state labor agency must be given notice of a PAGA claim,

the facts and theories supporting the alleged violations.

PAGA cases also provide a rich source of information about

The agency is given the first opportunity to take on the

potential Labor Code violations, which aids government

case; if the agency decides not to investigate the alleged

enforcement strategies and enables limited agency

violations, determines it will not issue a citation or does

resources to be deployed more effectively.485

474

not issue a timely one, or fails to provide timely notice to the employer and PAGA plaintiff of its decision, then the worker may proceed with bringing the PAGA action in court.475 A worker who prevails in a PAGA action is entitled to reasonable attorney’s fees and costs.476 Any proposed settlement of a PAGA case must be submitted to the agency, and a court must review and approve of any settlement.477

Vigorously opposed by business groups since its inception, the PAGA statute was “reformed” in July 2024 as part of a legislative compromise, in which certain changes to the statute were made486 in exchange for the withdrawal of a ballot initiative sponsored by corporate interests that would have repealed the statute and also threatened to decimate the Labor Commissioner’s enforcement powers in various

Civil penalties recoverable under PAGA are intended to

ways.487 The full effects of these amendments are yet to be

“punish the employer for wrongdoing”478 and “remediate

seen, while the PAGA law also continues to be the subject of

present violations and deter future ones, not to redress

hotly-contested litigation shaping the statute’s contours. But

employees’ injuries.”479 A PAGA suit “is fundamentally a law

whatever the ultimate outcome of PAGA reform and ongoing

enforcement action” that is “designed primarily to benefit

court battles, PAGA’s enactment over two decades ago will

the general public, not the party bringing the action.”480

stand as a model of creative economic justice legislation

The majority of civil penalties recovered through a PAGA

that opened up new ways to approach and strengthen the

action are paid to the state labor agency (an important

enforcement of labor standards.

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Administrative Enforcement Remedies:

Increasing the California Labor Commissioner’s Authority to Order Monetary Relief for Workers

The ubiquity of wage theft in low-wage industries in part reflects the crude calculation by labor law violators that the odds are they won’t get caught—and that even if their unlawful conduct is ultimately brought to light, they may be able to quickly pay off any resulting claim for a bargain. For many decades, the Labor Code made it easy for employers to avoid meaningful legal consequences for breaking the law. This was because the laws in the books did not provide the Labor Commissioner with the statutory authority to order certain monetary relief for workers in BOFE citations or Berman claims, or made some remedies available through one enforcement arm but not the other.

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Within the last fifteen years, the terrain of administrative

This had perverse effects. BOFE citations—even if they

enforcement has shifted dramatically, as the legislature has

might offer a more expeditious enforcement route than

prioritized the need to address the stark deficiencies and

a Berman wage claim or litigation490—could amount to

inconsistencies in the Labor Commissioner’s enforcement

no more than a half measure for minimum wage workers

authority, and accordingly, made some simple yet powerful

who assisted BOFE with an investigation. Although a

changes to the law. Various bills were passed to enhance

resulting minimum wage citation could serve to penalize

the Commissioner’s ability to remediate violations of the

an employer for violating wage standards, the workers

Labor Code and to erase the decades-long disadvantages

themselves could not receive the same relief through a

to workers of administrative enforcement avenues that

BOFE citation that was available to them in a successful

were intended to be more accessible than the court system.

Berman claim or lawsuit, which allow for the recovery

Compared to other legislation the state has enacted,

of unpaid wages. While workers were technically

these bills have received very little attention, but they are

not precluded by a BOFE civil penalty citation from

nonetheless significant.

independently pursuing a Berman claim or civil suit to

Minimum wages

seek their wages, requiring any such separate action by workers to remedy the wage violation that BOFE had

Over forty years ago, the legislature created Labor Code

already investigated and cited made no real practical

Section 1197.1, authorizing BOFE to issue a citation imposing

sense. Instead, the disequilibrium in the availability of

civil penalties (which, if recovered, go to state coffers)

remedies between enforcement mechanisms only served

against an employer or other person acting on behalf of an

to block the ability of the Commissioner, potentially

employer who pays or causes to be paid a wage less than the

on behalf of an entire workforce, to fully and efficiently

minimum wage to an employee. For several decades after its

address wage theft experienced by workers who were

enactment, Section 1197.1 remained exclusively a civil penalty

not even paid minimum wage.

statute. It did not enable the Labor Commissioner to seek recovery of unpaid minimum wages for workers as part of a BOFE citation. This was the case even though another statute subsequently adopted in 1999, Labor Code Section 558, authorized BOFE to issue a citation for violations of provisions regulating hours and days of work (such as overtime, reporting time pay, and meal and rest period requirements) and expressly included “an amount sufficient to recover underpaid wages” to be paid “to the affected employee.”488 Because Section 1197.1, in contrast, did not incorporate this language, when BOFE investigated a workplace and found minimum wage violations, the Bureau could not include the amount of unpaid minimum wages for workers in its citation of the employer.489

In 2011, the legislature amended Section 1197.1 to

expressly authorize BOFE to issue citations for unpaid minimum wages as restitution for workers, in addition to any civil penalties that are paid to the state.491 The citation may be issued against an employer or other person acting either individually or as an officer, agent, or employee of another person, who pays an employee less than minimum wage or causes the violation.492 Subsequent amendments to the Labor Code further strengthened BOFE’s remedial powers by explicitly adding local minimum wage (and local overtime) laws as a basis for a BOFE citation,493 and enabling BOFE to also recover “contract wages” (wages above the minimum wage for non-overtime hours) owed by employers.494

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Business expense reimbursement

Liquidated damages

Like minimum wage recovery, the restitutionary remedy for

In 1991, California created a state liquidated damages

workers set forth in Labor Code Section 2802 remained

provision for minimum wage violations, Labor Code Section

outside the scope of BOFE’s citation power until more

1194.2, that was modeled in part after the federal FLSA501

recent legislation encompassed it. Under Section 2802, an

and initially enabled enforcement through a civil action

employer must “indemnify” an employee “for all necessary

brought either by a worker or the Labor Commissioner.502

expenditures or losses incurred by the employee in direct

Under Section 1194.2, a minimum wage violation triggers

consequence of the discharge” of the employee’s duties.

liquidated damages equal to the amount of unpaid minimum

The statute “protects workers from having to bear the cost

wages (plus interest), effectively doubling an employer’s

of any work-related expense,”

liability for the violation.503 Like the FLSA’s liquidated damages

495

496

such as the cost of tools

or equipment needed to perform the job or work-required

provision, Section 1194.2 damages are compensatory in

vehicle expenses.

nature, intended to make workers whole for the serious harm

497

Courts have recognized that imposing

such expenses on workers effectively deprives them of wages

suffered when they are not paid even the barest of wages.504

and can thus constitute a wage violation, in some cases even

At the same time, liquidated damages also serve an important

“driv[ing] workers’ wages below the minimum wage.”

“behavior-shaping” purpose of encouraging compliance with

While Section 2802 remedies could be sought in a Berman

basic wage standards, since there may be no incentive for

claim or a civil action, BOFE lacked statutory authority to

some employers to pay wages in full or on time if the failure to

enforce the section through its citation procedures.

do so is not met with monetary consequences beyond having

498

In 2015, the legislature amended Section 2802 as part

to pay the wages originally due.505

of the bill that expressly authorized BOFE to enforce

For decades, however, Section 1194.2 expressly made

local minimum wage and overtime standards.

liquidated damages recoverable only in a civil action, and not

Section 2802 now empowers BOFE to issue a citation

through Berman claims or BOFE citations. This meant that

in the amount determined to be due to an employee

minimum wage workers deprived of their wages could not

when an employer or other person acting on behalf of

be made whole through the Labor Commissioner’s principal

the employer “violates reimbursement obligations”

avenues of enforcement, and also diminished the deterrent

under the statute.

effect of such damages. Beginning in 2011, California enacted

499

500

successive changes to the law to rectify this problem.

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LIQUIDATED DAMAGES IN BERMAN WAGE CLAIMS

STATUTE OF LIMITATIONS FOR LIQUIDATED DAMAGES CLAIMS

In 2011, the legislature amended Section 1194.2 and

In 2014, California amended the liquidated damages

the statute that created the Berman process so that they

provision again in order to fully effectuate its compensatory

expressly authorize the Commissioner to order liquidated

and behavior-shaping purposes.509 In response to a state

damages in administrative wage claims as a remedy for

appellate court opinion that interpreted Section 1194.2 as

minimum wage violations,

thus greatly enhancing the

having a statute of limitations of only one year—even though

Commissioner’s ability to enforce basic wage standards.

the limitations period in California for the failure to pay wages

In 2015, the state boosted the Commissioner’s power

is generally three years—the legislature amended Section

to award liquidated damages in Berman claims when it

1194.2 to clarify that “suit may be filed for liquidated damages

enacted Section 558.1, which extended employer liability

at any time before the expiration of the statute of limitations

for such damages to individual corporate agents (i.e.,

on an action for wages from which the liquidated damages

owners, directors, officers, or managing agents) who violate

arise.”510 Underscoring why statutes of limitation matter, the

minimum wage obligations or cause them to be violated.507

legislator who authored the amendment observed that if

506

“the worker can only recover liquidated damages for a one

LIQUIDATED DAMAGES IN BOFE CITATIONS

year period of time” even though an employer has failed to pay minimum wages for three years, this results in “no real

In 2013, California brought the remedies that BOFE could

penalty for the employer for years two and three” of the

seek through citations for minimum wage violations into

wage violation and therefore “dilutes the deterrent effect

closer alignment with the remedies available in Berman

of liquidated damages for minimum wage violations.”511

claims and civil actions. The liquidated damages statute and

Concomitantly, a truncated limitations period also interferes

BOFE’s citation authority under Labor Code Section 1197.1

with the compensatory goal of such damages. By explicitly

were amended so the Bureau could include liquidated

setting the statute of limitations for liquidated damages so it

damages in a citation when an employer, or other person

is coextensive with the underlying minimum wage claim, the

acting either individually or as an officer, agent, or employee

legislature gave more teeth to minimum wage enforcement

of another person, pays an employee less than minimum

and to the series of statutory changes aimed at enhancing the

wage or causes a minimum wage violation.

Labor Commissioner’s enforcement powers.512

508

This change

to the law augmented BOFE’s authority under Section 1197.1 to seek restitution of unpaid minimum wages for workers (as discussed above) and to assess civil penalties for minimum wage violations.

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Waiting time penalties

Late payment penalties

California’s “waiting time penalties” law, Labor Code Section

While waiting time penalties are triggered by the failure to

203, has been in the books for decades. The law’s purpose

pay the “final” wages of a discharged or quitting employee,

is to ensure that employees who are discharged or who quit

a separate penalty under Labor Code Section 210 may be

are paid all the wages that are due to them at termination

imposed for any pay period in which an employee is not paid

of employment, according to the payment timeframes that

when wages are legally due. Unlike waiting time penalties,

are set forth in other provisions of the Code. Under Section

Section 210 penalties were originally fashioned as a civil

203, an employer who willfully fails to timely pay these

penalty payable to the state and were not recoverable by a

“final” wages must pay the terminated employee a statutory

worker who experienced the late payment violation.

penalty of up to 30 days’ worth of wages, until the overdue wages are paid or a civil action is filed. As with liquidated damages, the Labor Commissioner did not initially have the statutory authority to recover waiting time penalties for workers through a BOFE citation. Such penalties could only be recovered through a Berman claim or a civil action.

In 2019, the legislature converted Section 210 penalties so that, at a worker’s election, the penalties can serve a compensatory function similar to waiting time penalties.514 Under the 2019 amendment to the law, an employee may seek late payment penalties through a Berman wage claim, in which the penalty is

As part of the string of bills creating more parity in the

deemed a “statutory penalty” payable to the worker;

remedies available to workers through BOFE citations,

in the alternative, the Labor Commissioner may seek

Berman claims, and civil suits, California amended

the late payment penalties through a BOFE citation or

Labor Code Section 1197.1 again in 2014, in order to

civil action, in which the penalty remains a civil penalty

include waiting time penalties within BOFE’s citation

payable to the state,515 or the worker may enforce the

authority for minimum wage violations.513 Thus, if BOFE

civil penalty through a PAGA suit, in which the worker

determines that an employer, or other person acting

is entitled to receive a portion of penalties collected.516

either individually or as an officer, agent, or employee of

Section 210 penalties are two-tiered: for any initial

another person, paid an employee less than minimum

violation, the penalty is $100 for each failure to timely

wage or caused the minimum wage violation, and the

pay each employee; and for each subsequent violation,

violation also constituted a willful failure to pay the final

or any willful or intentional violation, the penalty is $200

wages of an employee as required by law, then the

for each failure to timely pay each employee, plus 25

Bureau can assess waiting time penalties for the worker

percent of the amount unlawfully withheld.517

as part of its citation against the employer or person.

This is in addition to the amount of wages and liquidated damages owed to the worker, as well as any civil penalties that are due to the state.

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Compensation for paid sick leave violations

Willful misclassification damages

When workers lack access to paid sick time, they must either

the law prohibiting willful misclassification of workers as

work when they are ill and risk their well-being and the health

independent contractors,523 a violation of the statute triggered

of their co-workers, or lose wages and risk losing their jobs

a civil penalty (ranging from $5,000 to $15,000 for each

if they cannot work. California was one of the first states in

violation, or $10,000 to $25,000 for each violation when

the nation to require employers to provide paid sick leave to

there is a pattern or practice of such violations).524 Aimed at

employees, when it enacted the Healthy Workplaces, Healthy

sanctioning and deterring violators, the penalty was a remedy

Families Act of 2014.

that belonged to the state; as such, while BOFE could issue a

518

The Act also established various

In 2011, when California enacted Labor Code Section 226.8,

compensatory remedies for workers if their rights under the

citation for the penalty, this did not compensate workers for

law are violated, including the payment of sick days unlawfully

the harms of misclassification.

withheld and an additional “administrative penalty” in amounts specified under the statute.519 However, the law only authorized the Labor Commissioner to order such relief after a hearing (e.g., a Berman hearing or RCI investigative hearing), or required a civil action by the Commissioner or Attorney General to obtain this relief.520 The Act did not explicitly authorize BOFE citations (which are issued without an advance hearing) for this purpose.

In 2020, as part of a bill to provide supplemental paid sick leave to workers during the COVID-19 pandemic,

In 2023, the legislature amended Section 226.8 so that the Labor Commissioner (or a public prosecutor, as defined) can, in the alternative, recover the amount due for violating the statute as damages payable to the misclassified worker.525 Thus, for example, such damages may be sought in a Berman claim or assessed in a BOFE citation instead of the penalty.526 Workers are entitled either to recover these damages or to enforce the amount due as civil penalties through a PAGA action (and receive a percentage of penalties collected).527

the state broadened the Labor Commissioner’s authority to enforce the paid sick leave law by expressly adding the BOFE citation process as one of the mechanisms of administrative enforcement.521 Accordingly, BOFE can cite employers for violating the statute and include monetary remedies that are due to employees for such violations.522

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Key California Laws Enhancing Remedies in BOFE Citations and Berman Wage Claims (2011-2023)

Labor Code Section & Bill Number

TABLE 6

Enhancement to BOFE Citations or Berman Wage Claims

Remedy: Restitution of Minimum Wages Cal. Lab. Code § 1197.1 Amended by A.B. 469, 20112012 Reg. Sess. (Cal. 2011)

BOFE may issue a citation to recover unpaid minimum wages as restitution for employees.

The citation may be issued against an employer or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid to any employee a wage less than the minimum wage.

Previously, a BOFE citation for a minimum wage violation was limited to civil penalties owed to the state for the violation.

Remedy: Local Minimum Wage and Overtime Cal. Lab. Code §§ 1197, 1197.1, 558

Amended by A.B. 970, 20152016 Reg. Sess. (Cal. 2015)

The Labor Code now expressly states that the minimum wage to be paid to employees may be fixed by any applicable local law (or any applicable state law or IWC order), and accordingly, that BOFE may issue a citation against an employer, or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid to any employee a wage less than the minimum wage fixed by an applicable state or local law or IWC order.

In a jurisdiction where a local entity has legal authority to issue a citation against the employer for a violation of an applicable local minimum wage law, BOFE may instead issue a citation upon request by the local entity if the entity has not already cited the employer for the same violation.

BOFE has also been provided with analogous citation authority for violations of applicable local overtime laws.

Remedy: Restitution of Contract Wages Cal. Lab. Code § 1197.1

Amended by S.B. 688, 20192020 Reg. Sess. (Cal. 2019)

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If BOFE determines an employer has paid or caused to be paid a wage less than the wage set by contract that is in excess of the applicable minimum wage, BOFE may issue a citation to the employer to recover the unpaid contract wages.

Previously, BOFE’s citation power under this statute was limited to minimum wage recovery.

TABLE 6

Labor Code Section & Bill Number

Enhancement to BOFE Citations or Berman Wage Claims

Remedy: Business Expense Reimbursement Cal. Lab. Code § 2802

Amended by A.B. 970, 20152016 Reg. Sess. (Cal. 2015)

BOFE may issue a citation to recover unreimbursed business expenses determined to be due to an employee.

The citation may be issued against an employer or other person acting on behalf of the employer who violates reimbursement obligations under the statute.

Previously, BOFE did not have this citation power.

Remedy: Liquidated Damages for Minimum Wage Violations Cal. Lab. Code §§ 98, 1194.2, 558.1 A.B. 240, 2011-2012 Reg. Sess.

(Cal. 2011) [amended §§ 98, 1194.2]; S.B. 588, 2015-2016 Reg. Sess. (Cal. 2015) [added § 558.1] Cal. Lab. Code §§ 1194.2, 1197.1 Amended by A.B. 442, 20132014 Reg. Sess. (Cal. 2013)

Cal. Lab. Code § 1194.2

Amended by A.B. 2074, 20132014 Reg. Sess. (Cal. 2014)

Liquidated damages for minimum wage violations may be awarded to employees in Berman wage claims.

Previously, the liquidated damages statute only expressly authorized such damages in a civil action.

Without having to pierce the corporate veil, liquidated damages may also be awarded in Berman claims (or civil actions) against individuals acting on behalf of an employer (i.e., owners, directors, officers, or managing agents) who violate minimum wage obligations or cause them to be violated.

BOFE may issue a citation to recover liquidated damages due to an employee for minimum wage violations.

The citation may be issued against an employer or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid to the employee a wage less than the minimum wage.

This amendment augmented BOFE’s citation authority when minimum wage violations are found.

In Berman wage claims and BOFE citations (as well as civil actions under the Labor Code), the statute of limitations on a liquidated damages claim is the same as the limitations period for the underlying minimum wage claim.

This clarified any potential ambiguity as to the applicable limitations period for liquidated damages claims.

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TABLE 6 Labor Code Section & Bill Number

Enhancement to BOFE Citations or Berman Wage Claims

Remedy: Waiting Time Penalties Cal. Lab. Code § 1197.1

Amended by A.B. 1723, 20132014 Reg. Sess. (Cal. 2014)

BOFE may issue a citation to recover waiting time penalties (of up to 30 days’ worth of wages) for a discharged or quitting employee who is not timely paid “final” wages pursuant to Labor Code Section 203.

The citation may be issued against an employer or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid to the employee a wage less than the minimum wage, when the violation also constitutes a willful failure to timely pay the “final” wages of the employee.

Previously, BOFE’s citation authority for minimum wage violations did not include recovery of associated waiting time penalties.

Remedy: Late Payment Penalties Cal. Lab. Code § 210

Amended by A.B. 673, 20192020 Reg. Sess. (Cal. 2019)

An employee may recover a late payment penalty (in amounts set forth in the statute) as a “statutory penalty” payable to the employee, through a Berman wage claim against any person who fails to pay the employee’s wages on time (according to the applicable provision of the Labor Code setting forth when wages are legally due). In the alternative, the Labor Commissioner may recover the late payment penalty as a civil penalty through a BOFE citation or civil action, or the worker may enforce the late payment penalty as a civil penalty through a PAGA action.

Previously, late payment penalties were cast solely as a civil penalty that belonged to the state.

Remedy: Compensation for Paid Sick Leave Violations Cal. Lab. Code § 248.5

Amended by A.B. 1867, 20192020 Reg. Sess. (Cal. 2020)

BOFE may cite employers for violating the paid sick leave law and include monetary relief that is due to employees for such violations, including the payment of sick days unlawfully withheld and an additional administrative penalty (as specified in the statute) payable to the worker.

Previously, such monetary relief due to workers when their paid sick leave rights were violated could only be ordered by the Labor Commissioner after a hearing (BOFE citations are issued without an advance hearing), or in a civil action brought by the Commissioner or Attorney General.

Remedy: Willful Misclassification Damages Cal. Lab. Code § 226.8

Amended by A.B. 594, 20232024 Reg. Sess. (Cal. 2023)

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The Labor Commissioner (or a public prosecutor, as defined in the statute) can recover as damages payable to an employee misclassified as an independent contractor, the statutory amounts due from a person or employer who violates the willful misclassification statute. (See Table 4 of this publication, supra.) Thus, for example, such damages may be recovered in a Berman wage claim or BOFE citation.

An employee is entitled either to recover as damages the statutory amounts due or to enforce them through a PAGA action as civil penalties.

Previously, the statutory amounts due for willful misclassification were solely civil penalties that did not compensate employees for the harms of misclassification.

SPOTLIGHT

Leveling the Playing Field for Workers in Forced Arbitration: FREE LEGAL REPRESENTATION BY THE CALIFORNIA LABOR COMMISSIONER The use of forced arbitration by employers—as a condition of employment and ultimately as a means to stamp out worker complaints—continues to skyrocket. According to an analysis by the Center for Popular Democracy and Economic Policy Institute (EPI), more than 80 percent of private sector, nonunion workers were projected by 2024 to be subject to mandatory arbitration agreements.528 The EPI has found that forced arbitration is “massively less favorable to employees than are the courts,”529 with much lower win rates and damages awards for employees in arbitration than in court,530 and employers of the lowest-paid workforces the most likely to utilize mandatory arbitration.531 The National Employment Law Project estimated that in 2019, forced arbitration effectively blocked private sector, nonunion workers earning below $13 per hour from recovering more than $9.2 billion in owed wages; of this amount, California workers lost more than $850 million in stolen wages.532

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SPOTLIGHT

Although states are generally prohibited due to the Federal

held in a judicial or arbitral forum.”538 Second, in the situation

Arbitration Act from enacting laws that “disfavor” arbitration

where the worker is “unable to have their claim adjudicated

agreements as compared to other contracts,533 California has

and decided by the Labor Commissioner…as the result of

shown that states still have the ability to craft legislation to

entry of a court order compelling arbitration,” the worker may

mitigate some of the harms of forced arbitration on workers.

request representation by the Commissioner in the arbitral

The laws that created PAGA and the Labor Commissioner’s

proceeding; the Commissioner must represent the worker in

BOFE unit have established critical mechanisms for

such a proceeding if the worker cannot afford counsel and the

enforcing labor standards, potentially workplace-wide, that

Commissioner has determined after an informal investigation

employers may not easily sidestep through a mandatory

that the worker’s claim has merit.539 Third, upon the worker’s

arbitration agreement.534 In addition, California has passed

request, the Commissioner has the right to represent the

legislation to address some discrete issues in the arbitration

worker “in proceedings to determine the enforceability of

process that have particularly disadvantaged workers (and

the arbitration agreement, notwithstanding whether the

consumers), such as protracted delays caused by the failure

adjudication of the enforceability of the arbitration agreement

of the party imposing arbitration to pay the fees and costs

is conducted in a judicial or arbitral forum.”540

required to initiate arbitral proceedings,535 or by automatic stays of trial court proceedings during the appeal of a court order dismissing or denying a petition to compel arbitration.536 Although the legal validity of such laws is invariably challenged on federal preemption grounds, they provide important examples of how to push the boundaries of permissible state efforts to blunt the pernicious effects of forced arbitration on workers.

S.B. 1384 was motivated by the legislature’s concern that it is “harder and harder for employees to successfully bring wage claims against their employers for violations” because forced arbitration has become “standard across numerous industries.”541 As the state senator who authored the bill observed, “[A] wage claimant forced to arbitrate a wage claim, and prohibited from having the claim heard and decided by the Labor Commissioner, is deprived of the right

A lesser-known law enacted by California in 2020, S.B. 1384,

to no-cost representation” and thus, workers “who cannot

deserves some special attention.

afford private counsel face a higher prospect of a defeat

537

The bill took a pragmatic

approach to counter the growing use of forced arbitration

in arbitration or settlement of their claim at a substantial

in low-wage industries to prevent workers from enforcing

discount.”542 The bill’s amendment to Section 98.4 takes an

their rights. Through an amendment to Labor Code Section

important “step toward balancing the power in employment

98.4, which for many decades had authorized the Labor

arbitration,”543 which otherwise “favors employers and

Commissioner to provide no-cost legal representation to

exacerbates the inherent resource disadvantage present

indigent workers when a Berman hearing decision is appealed

in an employee-employer relationship.”544 By providing

in court, S.B. 1384 extended the Commissioner’s free legal

low-wage workers in arbitral proceedings with access to free

assistance to cover workers in arbitral proceedings, in three

legal representation by Labor Commissioner attorneys, who

ways. First, the Commissioner is now authorized to represent

are trained experts in enforcing the Labor Code, S.B. 1384

a worker who is financially unable to afford counsel and

showcases one promising approach to help level the playing

requests representation in an appeal of a Berman hearing

field when workers are forced to arbitrate their wage claims.

decision, “notwithstanding whether such proceedings are

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Administrative Enforcement Tools:

Bolstering the California Labor Commissioner’s Wage and Hour & Retaliation Investigations of Employers

Along with the simple yet significant statutory changes that have been made to provide the Labor Commissioner with more authority to order monetary relief for workers when their rights have been violated, the legislature has also focused within the past decade on codifying key tools to strengthen the enforcement capabilities of the Commissioner’s BOFE and RCI units. These units are uniquely positioned in California’s labor standards enforcement scheme because they are empowered to conduct investigations of employers to uncover violations and have the ability to remediate harms workplace-wide.

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Evidentiary sanctions for noncompliance with BOFE investigations

Tolling the statute of limitations during BOFE investigations

As part of its investigations of employers, BOFE conducts

The principal purpose of statutes of limitation is “to prevent

audits of payroll and time records that employers are

plaintiffs from asserting stale claims” in which evidence is

required by law to keep for a period of at least three years.

no longer fresh or available.550 Statutes of limitation set forth

Until more recently, nothing in the law deterred employers

the time period in which an action must “commence” after a

from withholding such records or providing incomplete

cause of action has accrued. For unpaid wages, a “separate

or piecemeal payroll information in order to drag out the

and distinct cause of action accrues on each payday”

investigation and delay issuance of a BOFE citation. An

when wages first become legally due, “triggering on each

employer engaging in such dilatory tactics could also later

occasion the running of a new period of limitations.”551

contest the citation by producing a surprise set of records,

Starting from the date on which an action for unpaid wages

which the Bureau did not have an opportunity to examine,

is deemed to have “commenced” (for a Berman wage

for the first time at the employer’s administrative appeal of

claim, this is the date the employee files the claim form), the

a BOFE citation—thus potentially undermining BOFE’s case

length of the limitations period is used to count backwards;

against the employer.

this serves as the measure for determining how far back in

545

In 2017, California enacted new Labor Code Section 1174.1 to address this issue.546 The statute creates an evidentiary sanction that can be invoked by the Commissioner in an administrative appeal of a BOFE citation, or in a subsequent civil court appeal of the Commissioner’s administrative decision on the citation. In such proceedings, Section 1174.1 precludes an employer

time the claim can extend to calculate the amount of unpaid wages that are recoverable.552 The more time that lapses after each payday when wages become legally due and before an action for unpaid wages commences, the more the limitations clock runs down, and the lower any ultimate wage recovery will be (down to no recovery at all if the limitations period completely expires before any action commences).553

or other person or entity that may be liable for a Labor

Until recently, the Labor Code was silent as to whether

Code violation from introducing into evidence any

the statute of limitations on claims that BOFE could

payroll, time, or employment records that are required

remediate through its citations kept ticking during the

by law to be maintained by the employer but were not

BOFE investigation preceding the citation. Employers

provided to the Commissioner within the time specified

seeking to cut off their monetary liability for violating

for production by the Commissioner in a duly served

labor standards could attempt to run out the limitations

written request.

clock, first by refusing to cooperate with BOFE in order to

547

The law allows for some exceptions

(including when the person or entity opposes the record

impede the investigation and issuance of a citation, and

request in court prior to the issuance of a BOFE citation

then by arguing that the date of the citation—not any earlier

and a court determines that production of records is not

date when the employer was made aware of the BOFE

required),

548

as well as certain extensions on the time for

investigation—was the date a BOFE action had commenced

production.

Importantly, Section 1174.1 is directed at

for statute of limitations purposes. The Labor Code’s lack

549

disincentivizing obstructionist conduct by employers and

of an express provision on this point opened the door to

facilitating BOFE’s ability to conduct more efficient and

such an argument, even though the primary goal behind

effective investigations.

limitations periods—preventing old claims that cannot be

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defended against because evidence has been lost—was

employer or other person or entity subject to the BOFE

not really served in this situation. This is because employers

investigation as well as the time period covered by the

control payroll and time records that would ostensibly be

investigation, and include a reference to Section 90.6

central to their defense, and are aware that such records

“that shall constitute notice of the potential claims under

(which they are required by law to accurately maintain for

the identified investigation.”558 After the 12-month

at least three years554) are at issue when BOFE requests

tolling period, “the time under the applicable statute of

them in an audit. Although the Labor Commissioner could

limitations will resume running.”559 This effectively gives

attempt to negotiate a tolling agreement with an employer

BOFE a full year after providing notice of an investigation

to stop any applicable limitations clock from running during

to issue a citation before the applicable limitations clock

a BOFE investigation, such volitional agreements ultimately

starts ticking again and might reduce the monetary

depend on the good will of an employer that may have

amounts assessed in the citation. With Section 90.6,

broken the law and would only benefit from protracting

BOFE proceedings are thus better shielded from

BOFE proceedings as much as possible. Alternatively,

attempts by unscrupulous employers to minimize or

relying in any given case on a legal argument that the

extinguish their liability for violations of the Labor Code.

statute of limitations should have been equitably tolled while BOFE was conducting its investigation could be risky.

In 2017, when the legislature instituted evidentiary sanctions for employer noncompliance with BOFE investigations, it also enacted a complementary provision, Labor Code Section 90.6, to toll statutes of limitation during BOFE investigations.555 Section 90.6 expressly states that the date of a written notice by the Labor Commissioner to an employer, or other person or entity that may be held liable for a violation of the Code, that a BOFE investigation has commenced shall be deemed the date “an action has commenced for purposes of any statute of limitations applicable to determining the period of time for which wages, penalties, damages, or other amounts” (as indicated in the statute) may be assessed in a BOFE citation.556 Any applicable limitations period is then “tolled” (or suspended) for twelve months.

557

The written notice

provided by the Commissioner must identify the

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Citation power in retaliation investigations When the legislature initially created the Labor Commissioner’s administrative procedures for investigating retaliation complaints, it did not incorporate citation authority for the Commissioner. Instead, if RCI found after an investigation that the employer unlawfully retaliated against a worker, it had to first issue a determination to that effect and notify the parties; order the employer to cease and desist its prohibited conduct and remedy the violation; wait 30 days following notification of the RCI determination to see if the employer would comply with the order; and finally, if the employer failed to comply, file an action in court against the employer.560 This time-consuming process can simply take too long to help workers who are the victims of retaliation.

In 2017, the legislature passed S.B. 306 to make several important changes to the Labor Commissioner’s retaliation complaint and investigation process.561 One

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of the most significant improvements was adding Labor

the requisite appeal bond.566 Once filed with the court,

Code Section 98.74, which authorizes the RCI unit to

the Commissioner’s final citation or hearing order will

issue a citation if it determines after an investigation

result in entry of a final court judgment in favor of the

that a worker has experienced unlawful retaliation.

state for the total monetary amount in the citation or

Citations may be utilized as an alternative to issuing

order, as well as injunctive and other nonmonetary relief

a determination and order and bringing an action in

upon the Commissioner’s petition to the court for such

court if the employer fails to comply with the order. The

relief unless the employer can show the Commissioner

citation must describe the nature of the violation and the

abused its discretion.567 In addition to monetary,

amount of wages and penalties due, and include any

injunctive, or other appropriate relief, an employer who

other appropriate relief (such as directing the employer

refuses to comply with a final order is subject to statutory

to cease and desist from violating the law and to take any

penalties of $100 per day for each day the employer

action necessary to remedy the violation).562

fails to follow the order, up to a maximum penalty of

Section 98.74 (as amended) also specifies the procedures for an employer to contest the citation

$20,000.568 Such penalties are payable to the affected employees.569

and generally mirrors the procedures under BOFE

Providing the Labor Commissioner with citation

citations.

authority in retaliation cases has the potential to

563

The employer can seek administrative

review of the citation by requesting an informal hearing

expedite enforcement efforts. Significantly, in contrast

before the Labor Commissioner. After the hearing, the

to the “wait-and-see” approach of the determination

Commissioner must issue a written hearing decision

process, the RCI citation process under Section 98.74

and order, which may be appealed by the employer in

does not allow the violating employer to simply ignore

court, but only if the employer first posts a bond with

the Commissioner’s citation without facing more

the Commissioner that is “equal to the total amount

immediate legal consequences. Instead of requiring the

of any penalties, lost wages and interest thereon,

Commissioner to bring a civil suit if the employer does

liquidated damages, and any other monetary relief

not comply with the Commissioner’s determination

that are due and owing.”

and order, the citation process requires the employer to

564

A reviewing court must

uphold the findings in the Commissioner’s hearing

act if it objects to the citation; the employer’s failure to

decision unless the court determines they are “not

timely contest it will result in a final citation and, in turn,

supported by substantial evidence in the light of the

a final court judgment. A quicker path to an enforceable

whole record.”

judgment after an investigation has uncovered

565

The citation, or the Commissioner’s

hearing order on a contested citation, will become

retaliation is especially critical since the lack of swift

final under various scenarios set forth in the statute,

enforcement action can enable pernicious conduct to

including if the employer fails to timely appeal the

continue unchecked and may make any meaningful

citation or hearing order, or if the employer fails to post

remediation of harms practically impossible.

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Injunctive relief during retaliation investigations

their rights under those laws.”574 Pursuant to the statute,

Prior to the passage of S.B. 306, the RCI unit could not

that an employee has been discharged or subjected to

petition a court for injunctive relief during a retaliation

adverse action for raising a claim of retaliation or asserting

investigation. Rather, the Labor Commissioner was required

rights under any law under the jurisdiction of the Labor

to wait until after it issued a determination of unlawful

Commissioner.”575 The court may also subsequently

retaliation and the violator refused to comply with the

issue a permanent injunction that it finds just and proper,

Commissioner’s subsequent order to remedy the violation,

and any injunctive relief granted pursuant to the section

before RCI could bring a court action seeking injunctive

is not stayed pending an appeal.576 Critically, the 2017

(and monetary) relief. The legislative history of S.B. 306

amendment to Section 98.7 empowers RCI to move

reveals the legislature’s concern that “even in the best of

earlier in a retaliation case to obtain injunctive relief in

circumstances, [this process] takes a considerable amount

court, which may help to curtail or even prevent any

of time.”570 When the Commissioner’s determination finally

ongoing retaliation against a worker as well as more

results in some resolution, the legislature observed, a

widespread intimidation of the workforce.577

worker experiencing retaliation may have “already suffered irreparable harm.”571 Such retaliation may also “have broader consequences, including chilling the willingness of other employees to exercise their rights or to come forward and report other employer violations of the law.”572 In addition to authorizing citations in retaliation cases

“on a showing that reasonable cause exists to believe

Retaliation investigations without a complaint California’s anti-retaliation laws have been enacted to protect the ability of workers to assert their rights and to encourage the reporting of violations.578 Nevertheless, high rates of

to enable the RCI unit to act faster after an investigation,

employer retaliation and the tremendous fear it generates

S.B. 306 amended Labor Code Section 98.7 to

among workers have resulted in very low rates of workers

authorize the Labor Commissioner to petition a court

who actually step forward when their rights are violated.579

for temporary or preliminary injunctive relief during the course of a retaliation investigation, if the Commissioner finds “reasonable cause to believe that any person has engaged in or is engaging in” unlawful retaliation.573 In determining whether temporary injunctive relief is “just and proper,” a court must consider not only “any harm resulting directly to an individual from a violation of any law under the jurisdiction of the Labor Commissioner” but also “the chilling effect on other employees asserting

92

the court is required to order appropriate injunctive relief

Block 3: Enforceability

S.B. 306 crafted another major improvement to the Labor Commissioner’s retaliation investigation powers by amending Section 98.7 to generally authorize the Commissioner to commence an investigation of an employer with or without receiving a complaint, if the Commissioner suspects the employer “discharged or otherwise discriminated against an individual in violation of any law under the jurisdiction of the Labor Commissioner.”580 The amendment specifies that the

3|C

Commissioner can proceed without a complaint in

In 2023, the legislature passed S.B. 497, which

instances where suspected retaliation has occurred

amended Section 98.6 to create a rebuttable

during the Berman wage claims process or a BOFE

presumption of retaliation.586 Under the amendment,

investigation, or in instances of suspected immigration-

if an employer takes any adverse action against an

related threats.581 Significantly, the RCI unit can now act

employee within 90 days of the worker’s exercise of

on its own initiative to address employer retaliation when

protected activity under the section, then a rebuttable

workers are unable or too fearful to file a complaint, or

presumption exists “in favor of the employee’s claim.”587

when they are unaware of their rights under the law.

As the Senate Judiciary Committee explained in its

Rebuttable presumption of retaliation

analysis of S.B. 497, this means that the employer’s motivation behind the negative employment action

Labor Code Section 98.6, the anti-retaliation law that has

is presumed to be retaliatory, “without the need for

most frequently formed the basis of retaliation complaints

evidence of it, at least until the employer offers a

before the Labor Commissioner,582 prohibits discharging

different, non-retaliatory basis for its action.”588 The

an employee or in any manner discriminating, retaliating, or

rebuttable presumption thus shifts the burden onto

taking any adverse action against an employee or applicant

the employer to first demonstrate such a valid, non-

for employment because the employee or applicant engaged

retaliatory basis.589

in protected activity, such as making a written or oral complaint for wages, participating in a BOFE investigation, or exercising any other right afforded to them under the Labor Code.583 Placing the initial burden of proof on the worker to prove causation—i.e., that the employer acted adversely because the worker exercised a protected right—makes it extremely difficult for workers to hold employers accountable when they have engaged in unlawful retaliation.584 Worker advocates have pointed out that this evidentiary burden “creates a perverse incentive for employers to stall instead of cooperating with [the Labor Commissioner’s retaliation] investigations” because “they know that workers lack access

California has utilized rebuttal presumptions in various provisions of the Labor Code, including other antiretaliation measures, where it has recognized that placing the initial burden of proof on workers could prevent meritorious claims from proceeding.590 By incorporating a rebuttable presumption into Section 98.6, the legislature underscored the importance of enhancing retaliation protections for workers through procedural tools that “allow the Labor Commissioner to identify retaliation more quickly and prevent lawbreaking employers from avoiding accountability.”591

to the evidence needed to prove retaliation.”585

Block 3: Enforceability

93

Key California Laws Enhancing Enforcement Tools for BOFE and RCI (2017-2023)

Enforcement Tool

Summary of Tool

Evidentiary sanctions for noncompliance with BOFE investigations

Labor Code Section & Bill Number: Cal. Lab. Code § 1174.1

Added by S.B. 96, 2017-2018 Reg. Sess. (Cal. 2017)

Tolling the statute of limitations during BOFE investigations Labor Code Section & Bill Number: Cal. Lab. Code § 90.6 Added by S.B. 96, 2017-2018 Reg. Sess. (Cal. 2017)

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Block 3: Enforceability

TABLE 7

In an administrative hearing to contest a BOFE citation, or appeal in court of the Labor Commissioner’s hearing decision on the citation, an employer or other person or entity who may be liable for a Labor Code violation is precluded from introducing into evidence any payroll, time, or employment records that are required to be maintained by the employer under existing law but were not provided to the Commissioner pursuant to a duly served written request by the Commissioner, within the time specified for production.

Certain exceptions to the application of the law are allowed (such as when the person or entity opposes the record request in court prior to the issuance of a BOFE citation and a court determines that production of records is not required, or a clerical mistake has been made causing an unintended delay in production that is subsequently corrected).

The Commissioner must consider a reasonable request from the person or entity for an extension on the time for production of the records requested, and must grant an automatic extension of 15 days if the person or entity provides a timely good faith response to the Commissioner that additional time is needed to gather the requested records.

The date of a written notice by the Labor Commissioner to an employer, or other person or entity that may be held liable under the Labor Code, that a BOFE investigation has commenced shall be deemed the date an action has commenced for purposes of any statute of limitations applicable to determining the period of time for which wages, penalties, damages, or other amounts may be assessed in a BOFE citation.

Any applicable statute of limitations is then tolled (suspended) for 12 months, after which the time under the applicable limitations period will resume running.

The written notice must identify the employer or other person or entity subject to the BOFE investigation, the time period covered by the investigation, and a reference to Section 90.6 that shall constitute notice of the potential claims under investigation.

The statute lists that it applies to the following: unpaid minimum or overtime wages; any applicable IWC wage order; any applicable local minimum wage or overtime law; wages exceeding minimum wages; waiting time penalties; liquidated damages for minimum wage violations; itemized wage statement requirements; meal, rest, and recovery periods; compensation for rest and recovery periods and nonproductive time for piece rate employees; expense reimbursements; and claims under the client employer law.

TABLE 7

Enforcement Tool

Summary of Tool

Citation authority in retaliation investigations

Labor Code Section & Bill Number: Cal. Lab. Code § 98.74 Added by S.B. 306, 20172018 Reg. Sess. (Cal. 2017); amended by S.B. 229, 20192020 Reg. Sess. (Cal. 2019)

The Labor Commissioner may issue a written citation if the Commissioner determines after an investigation that unlawful retaliation has occurred.

Such a citation may be utilized by the RCI unit as an alternative to the time-consuming determination and order process (in which RCI issues a determination as to whether a person engaged in illegal retaliation and if so, orders the person to cease and desist the prohibited conduct and to remedy the violation; must wait 30 days, following notification to the person of the determination, to see if the person complies with the Commissioner’s order; and if the person does not timely comply, must then file an action in court against the person).

RCI citations must describe the nature of the violation, the amount of wages and penalties due, and include any other appropriate relief. Appropriate relief as specified by the statute may include directing the person cited to cease and desist from the violation and to take any action necessary to remedy the violation, including rehiring or reinstatement, reimbursing lost wages plus interest, and posting notices to employees.

Certain procedures and timeframes are specified for the person cited to contest the citation by requesting an informal hearing before the Commissioner, and to file a court appeal if the person disagrees with the Commissioner’s written decision and order that must be issued by the Commissioner after the hearing on the contested citation. To file the court appeal, the person must first post a bond with the Commissioner equal to the total amount of any penalties, lost wages and interest, liquidated damages, and any other monetary relief owed. The bond is used to satisfy any final amount that the person is ordered to pay or agrees to pay in a settlement, should the person fail to timely pay that amount as set forth in the statute.

In a court appeal of the Commissioner’s hearing decision on a contested citation, judicial review of the Commissioner’s decision is subject to an abuse of discretion standard, in which the Commissioner’s findings must be upheld unless the court determines they are not supported by substantial evidence in light of the whole record.

The Commissioner’s citation or hearing order on a contested citation will become final and enforceable under various circumstances specified in the statute, including if the person fails to file a timely appeal of the citation or order, or fails to post the requisite appeal bond.

Once filed with the court, the Commissioner’s final citation or hearing order will result in entry of a final court judgment in favor of the state for the total monetary amount in the citation or order, as well as for injunctive and other nonmonetary relief upon the Commissioner’s petition to the court for such relief unless the person can show the Commissioner abused its discretion.

In addition to any other appropriate relief, an employer who willfully refuses to comply with a final order to hire, promote, or otherwise provide relief to an employee or former employee, or who refuses to comply with an order to post a notice to employees or otherwise cease and desist from the violation, is subject to a penalty of $100 per day for each day the employer continues to be in noncompliance with the order, up to a maximum penalty of $20,000. Such penalties are payable to the affected employees.

Block 3: Enforceability

95

TABLE 7

Enforcement Tool

Summary of Tool

Injunctive relief during retaliation investigations

Labor Code Section & Bill Number: Cal. Lab. Code § 98.7 Amended by S.B. 306, 20172018 Reg. Sess. (Cal. 2017)

Retaliation investigation without complaint

Labor Code Section & Bill Number: Cal. Lab. Code § 98.7

The Labor Commissioner may petition a court for temporary or preliminary injunctive relief during the course of a retaliation investigation, if the Commissioner finds there is reasonable cause to believe that a person has engaged in or is engaging in unlawful retaliation.

Before this amendment, the Commissioner could only seek injunctive relief after concluding the lengthy determination and order process.

A court determining whether temporary injunctive relief is just and proper is required to consider the chilling effect of the retaliation on other employees asserting their rights, in addition to any harm resulting directly to an individual from a violation of any law under the jurisdiction of the Labor Commissioner.

A court is required to order appropriate injunctive relief if it is shown that reasonable cause exists to believe an employee has been discharged or subjected to adverse action for raising a claim of retaliation or asserting rights under any law under the jurisdiction of the Labor Commissioner.

Temporary injunctive relief ordered by the court may be followed by a preliminary or permanent injunction.

Any injunctive relief granted pursuant to the statute is not stayed pending an appeal.

The Labor Commissioner may commence a retaliation investigation of an employer with or without receiving a complaint, if the Commissioner suspects the employer discharged or otherwise discriminated against workers in violation of any law under the Commissioner’s jurisdiction.

The statute specifies that the Commissioner can proceed without a complaint in instances where suspected retaliation has occurred during the Berman wage claims process or a BOFE investigation, or in instances of suspected immigration-related threats.

Amended by S.B. 306, 20172018 Reg. Sess. (Cal. 2017)

Rebuttable presumption of retaliation

Labor Code Section & Bill Number: Cal. Lab. Code § 98.6

Amended by S.B. 497, 20232024 Reg. Sess. (Cal. 2023)

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Block 3: Enforceability

There is a rebuttable presumption in favor of an employee’s retaliation claim if the employer takes any adverse action against the employee within 90 days of the worker’s exercise of protected activity, such as making a written or oral complaint for wages, participating in a BOFE action, or exercising any other right afforded to the worker under the Labor Code.

The presumption in favor of the employee’s claim means the employer’s motivation behind the adverse action is presumed to be retaliatory. The presumption operates to shift the initial burden onto the employer to first demonstrate a legitimate, non-retaliatory basis for having taken the adverse action against the worker.

4 California has been a national leader in envisioning and enacting laws that promote and protect the rights of workers. The state has created a framework of strong wage and hour standards and has steadily developed enforcement mechanisms that are essential in effectuating those standards. But labor standards and their enforcement remain a constant work in progress.

As such, we recommend some steps that California can take—using existing laws and approaches as the springboard—to build up the building blocks of the model framework that the state has put into place.

Our recommendations embrace larger policy goals while they also address some technical aspects to the policies discussed that give them actual teeth.

POLICY RECOMMENDATIONS

4|A

Ensure any newly-created labor standards councils or the Industrial Welfare Commission, if revived, can only act to strengthen existing standards

California’s recent establishment of the Fast Food

provisions as applicable, and any and all Code sections

Council, bringing together workers, their advocates,

that incorporate or serve to enforce any preceding

industry representatives, fast food restaurant owners, and

standard, including any applicable IWC wage order

government representatives to set minimum wage increases

standard, that the new standard supersedes shall be

and propose improvements to minimum labor standards for

read as incorporating and enforcing the new standard.

fast food restaurant workers, may be the harbinger of a new trend (albeit one that harkens back to the IWC wage boards).

If California replicates the Fast Food Council model to form new councils charged with raising labor standards in other sectors, the following issues should be clearly addressed in the statute creating the council: The statute should expressly state that any standards

As an alternative to establishing new labor standards councils, California could revive the IWC to convene wage boards charged with recommending sector-based improvements to labor standards, and issue amended wage orders accordingly.595 There are advantages to taking this route.

The IWC already has an existing statutory mandate as well as operating and rulemaking procedures set out under the Labor

issued by the council (if it has authority to directly

Code, which were successfully utilized to issue the state’s

set standards) or recommended by it to some other

historic wage orders that have withstood legal challenges.596

rulemaking entity (if it plays a role similar to the IWC wage boards, which recommended standards to the IWC, the actual standard-setting body) cannot be less protective of or less beneficial to workers than existing state law and regulations, including the IWC wage orders.592 Under existing provisions, the Labor Code expressly incorporates the standards of the IWC wage orders, which are interwoven into the Code’s enforcement sections.593 The statute creating the new council should ensure that any higher standards issued or recommended by the council are also brought into the Code’s enforcement scheme. There are different

If the IWC is reconstituted, California should simultaneously amend the Labor Code to expressly state that existing IWC wage orders constitute the floor on labor standards, and any new wage orders issued by the IWC can only raise that floor. This change is a straightforward and necessary one to preserve the legislature’s original purpose in creating the IWC—to strengthen labor standards and not dilute them— and to guard against a repeat of history, when the IWC was used to rescind certain wage order provisions in an attempt to take away existing rights and the legislature interceded to require the IWC to readopt them.597

ways this could be done.594 One approach is to create a catch-all provision in the statute to expressly state that any new standards are enforceable under the

See Appendix A for sample language

Code’s administrative, civil, and criminal enforcement

to amend the statute creating the IWC

Policy Recommendations

99

4|B

Close the loophole that enables immigration-based retaliation against workers

Under existing California statutes prohibiting immigration-

If ICE enters or attempts to enter an office of the California

based retaliation, an employer’s adverse act of contacting

Labor Commissioner or Division of Occupational

ICE or threatening to do so, if it occurs within 90 days of

Safety and Health, or contacts any personnel of the

the worker’s exercise of protected rights (such as filing a

Commissioner, the Division or Department of Industrial

wage claim or participating in an investigation of workplace

Relations, in order to inquire about an employee who

violations), creates a rebuttable presumption that the act

has exercised a protected right by filing or participating

was perpetrated by the employer in order to retaliate against

in an administrative claim, complaint, proceeding or

the worker for exercising those rights.

598

These laws still

action that is pending before the Commissioner or

hinge on some initial showing that the adverse act occurred,

Division against the employer, or by assisting with or

which may be difficult, if not impossible, to prove in certain

participating in a current investigation of the employer by

instances of immigration-based retaliation. For example, to

the Commissioner or Division.

retaliate against a worker for talking with a BOFE investigator,

If ICE conducts a worksite enforcement action at

an employer may contact ICE in an attempt to shut down

the workplace of an employee who has exercised a

the investigation—potentially resulting in the worker’s

protected right by filing or participating in a claim,

detention or deportation—without any preceding threat that

complaint, proceeding or action that is pending before

the worker or another person has heard or witnessed. This

a government agency or in court against the employer

renders the rebuttable presumption of retaliatory motive

to enforce any provision of the Labor Code or local

essentially moot in such cases if there is insufficient evidence

ordinance applicable to employees, or by assisting

of the adverse act itself.

with or participating in a current investigation of the

There is nothing in current law that should prevent the use of circumstantial evidence to establish in any given case whether an employer perpetrated the adverse act of contacting ICE to

employer by a government agency or public prosecutor to enforce any provision of the Labor Code or local ordinance applicable to employees.

squash the worker’s exercise of protected rights. But in light of

The employer may rebut the presumption by establishing

the especially grave consequences that could ensue from this

with clear and convincing evidence that the employer did not

form of retaliation, California should not leave this loophole

in fact contact ICE (or direct any other person or entity to do

open for possible manipulation. The state should enact a

so), or that the employee’s exercise of the protected right was

provision that codifies the circumstances when the rebuttable

not a motivating factor in contacting ICE. Violating the law

presumption that already exists with respect to retaliatory

would subject the employer to a substantial penalty payable

motive would also extend to create a presumption that the

to the worker, to the worker’s family member if the employee

employer did in fact contact ICE. This further application of

cannot be located or contacted or is unable to receive

the rebuttable presumption should occur in the following

payment, or the employee’s lawful representative who has

situations in which it is not unreasonable to infer that the

been designated by the employee to receive payment. The

employer instigated a retaliatory ICE action against a worker

penalty would be deposited into a state fund that is used to

for exercising a protected right:

satisfy unpaid judgments for workers if neither the worker nor a family member or lawful representative can be located.

See Appendix B for sample language

100

Policy Recommendations

4|C

Clarify the meaning of “usual course of business” to ensure the client employer law serves its original intended purpose California’s “client employer” law, Labor Code Section

The Marketers, the court found, did not possess such control

2810.3, was meant to create a new, streamlined test of up-

and hence were not the workers’ client employer. According

the-chain liability in subcontracted industries that does not

to the court, this interpretation reflected the legislature’s

require proof of “any control over the worker’s payments

intent in passing the statute, which the court stated was

or performance of services.”

Under the statute, an entity

“to impose liability on entities who could reasonably be

can be held liable as a client employer if, subject to certain

expected to be able to prevent labor violations” because

exceptions, it is a “business entity, regardless of its form,

they “exercise[] sufficient control over the premises.”608

599

that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.”600 In turn, the phrase “usual course of business” is defined by the statute to mean the “regular and customary work of a business, performed within or upon the premises or worksite of the client employer.”601 However, “regular and customary work of a business” and “premises or worksite of the client employer” are not defined by the law.

But inserting any element of control into the client employer statute—whether it is framed as control over the workers or control over the premises or worksite—undermines the law’s actual purpose to hold upstream entities responsible for violations when these entities “outsourc[e] work through multilayered contracting” and other machinations aimed at obviating the need to exercise control over workers and the essential work they perform for the entity.609 The legislature should clarify the

In a case decided in 2023, Morales-Garcia v. Better Produce,

meaning of “usual course of business” under Section 2810.3 in

Inc., the Ninth Circuit narrowly construed these terms. The

order to better effectuate this central goal of the law.

court ruled that marketing companies (“Marketers”) that cooled and sold berries to retail grocery chains were not the client employers of plaintiff farmworkers who picked the berries they sold.602 The court’s decision was based on its view that the workers were “not doing the work of the Marketers’ business”603 and did not work on the “premises or worksite” of the Marketers, who had “their own places of business”604 separate from “the farms maintained and operated by the Growers” where the workers picked berries.605 The court reasoned that the client employer law “does not go so far as to extend liability for the wages of workers performing work elsewhere, even if the workers are producing a product necessary to that company’s business.”606 While acknowledging that the word “control” does not appear anywhere in the statute, the court nonetheless ruled that control of the farmland, including the right to direct the harvesting work performed on the land, determined whether it constituted the “premises or worksite” of the Marketers under the client employer law.607

“Regular and customary work of a business” should be expressly defined as work that is not sporadic and infrequent and that is part of operating, conducting, or maintaining the business. “Premises or worksite of the client employer” should be expressly defined to mean any location that is owned, leased, rented, or occupied by the client employer, or any location where a good is produced or a service is provided that is integral or necessary to the business of the client employer.

The statute should make clear that satisfying the definitional elements of “usual course of business”—the “regular and customary work” of the client employer and its “premises or worksite”—does not require the actual exercise of any control, or any right to exercise it, by the client employer, either over the location where work is performed, over the workers performing work at the location, or over how the work is performed.

See Appendix C for sample language Policy Recommendations

101

Allow liquidated damages for overtime violations

The federal Fair Labor Standards Act provides that an employer who violates the law’s minimum wage or overtime provisions “shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation…and in an additional equal amount as liquidated damages.”610 In contrast, California’s liquidated damages statute, Labor Code Section 1194.2, only allows for such damages in an amount equal to any unpaid minimum wages (plus interest)—and expressly excludes damages for any failure to pay overtime wages.611 Liquidated damages are intended to compensate workers for the very serious harm caused by the failure of an employer to adhere to basic wage standards612 and also serve an important deterrent function.613 The absence of liquidated damages for overtime violations creates a perverse financial incentive to ignore the law; unscrupulous employers bank on the fact that any failure to pay overtime will only result at most in having to pay the wages originally due, perhaps several years after the fact, if they are even held to account at all.

The exclusion in the Labor Code of liquidated damages for overtime violations—a stark departure from federal law—is one of California’s most egregious public policy failures for low-wage workers. From 2017-2021, the Labor Commissioner’s BOFE investigations alone uncovered an average of almost $7 million per year in unpaid overtime for workers in various low-wage industries.614 California should amend the state’s liquidated damages statute so it includes damages if overtime is not paid when due, in an amount equal to the unpaid wages plus interest.

See Appendix D for sample language

102

Policy Recommendations

4|D

4|E

Create a state “hot goods” law for violations of minimum wage, overtime, and child labor protections The U.S. Department of Labor (USDOL) has the power to

deemed an “employer” responsible for the wage violations

seek a court order preventing the shipment in interstate

under the FLSA.623 In 2024, the hot goods provision received

commerce of “hot goods”—goods that were “produced”

renewed attention due to USDOL’s effective use of it in cases

in violation of the minimum wage, overtime, or child labor

to combat child labor.624

protections of the FLSA.615 Under the federal law, “an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any closely related process or occupation directly essential to the production thereof, in any State.”616 The USDOL has explained that such goods can include “manufactured goods, agricultural goods or any other product sold or shipped in interstate commerce.”617 An employer or other entity that receives or ships hot goods may be asked by the Department “to voluntarily refrain from shipping [them] until legally required wages have been paid and until other remedies or agreements are in place that the Department deems necessary to ensure future compliance with the law.”618 If no such agreement is reached, the USDOL

In 1980, California created a version of the FLSA’s “hot goods” provision that is applicable to the garment industry.

Under specified circumstances, the Labor Commissioner is statutorily authorized to confiscate garments made in violation of the state’s minimum wage, overtime, child labor, or business registration laws.625 In 1999, the state amended the Labor Code to further enable the Commissioner to confiscate “the means of production” of garment contractors that are repeat violators of business registration requirements and have previously had apparel confiscated due to the failure to comply with such requirements.626 California should adopt a generally applicable hot goods provision, mirroring the FLSA provision, for goodsproducing industries.

Like the FLSA’s hot goods provision, the state hot

may file a civil action to obtain a court order prohibiting

goods statute should prohibit the transportation,

shipment, which “can encompass all persons or firms that

shipment, delivery, or sale in California of any goods

may ship the goods, including manufacturers and retailers,

“produced” in the state in violation of state or local

unless a statutory exception applies.”619 The law’s exceptions

minimum wage or overtime laws, or child labor

include a carve-out for “good faith purchasers” as set forth in

protections. The definition of “produced” should echo

the statute.620 The Department has also noted that when hot

the FLSA’s broad definition of the term.627

goods “are on a retailer’s shelves and/or in the possession

Certain exceptions to the provision could apply, similar

of the ‘ultimate consumer,’” the goods are “no longer in the

to the FLSA. Even with these exceptions, a state hot

flow of commerce” and can ordinarily be sold legally.621

goods provision would still have the potential to be one

Although the FLSA’s hot goods provision has its weaknesses and there have been contentious efforts to stymie its use,622 it remains an extremely powerful enforcement

of the strongest mechanisms to incentivize compliance with the state’s labor standards and to spur swifter remediation of harms when laws are broken.

tool. Manufacturers and retailers, for example, may be incentivized to remedy wage violations in order to prevent or end a hot goods injunction, even if they might not be

See Appendix E for sample language

Policy Recommendations

103

4|F

Authorize BOFE to cite employers for violating the existing obligation to keep accurate payroll and time records, and increase the penalty for noncompliance

The legislature has consistently recognized the

violating the requirements of Section 1174, does not specify

fundamental importance of an employer’s obligation to

an administrative enforcement mechanism and triggers a

maintain accurate and complete payroll and time records

very low penalty of only $500, despite clear legislative intent

of employees. One recordkeeping statute, Labor Code

to deter recordkeeping violations. Although other sections

Section 1174, requires employers to “[k]eep, at a central

of the Labor Code provide for civil penalties when an

location in the state or at the plants or establishments at

employer violates certain recordkeeping obligations, these

which employees are employed, payroll records showing

other sections either do not address daily time records,630 or

the hours worked daily by and the wages paid to, and the

pertain to a particular industry only.631

number of piece-rate units earned by and any applicable piece rate paid to, employees employed at the respective plants or establishments.”628 An accurate record of hours worked, including daily hours worked, matters in particular for low-wage workers who are generally not salaried employees or exempt from overtime; the number of hours worked determines the total amount of minimum and

To create meaningful legal consequences for violating Section 1174’s recordkeeping requirements, Section 1174.5 should be amended as follows: The civil penalty amount should be increased so it serves as an effective deterrent.

The statute should expressly provide that BOFE may

overtime wages (including daily overtime) they must be

issue a citation for the civil penalty. This amendment

paid. This is precisely why falsified or incomplete payroll

would also serve to clearly inform employers of

and time records are a typical means of perpetrating—and

the procedures for contesting a BOFE citation and

obscuring—wage theft in low-wage industries.

subsequent appeal rights, consistent with existing

629

Section 1174 is a key provision due to its reach across

statutory procedures.

industries and its specific requirement that employers maintain daily time records of employees. However, Section 1174.5, the provision setting forth a civil penalty for willfully

104

Policy Recommendations

See Appendix F for sample language

4|G

In Berman hearings, institute a rebuttable presumption of the validity of a low-wage worker’s claim for unpaid wages, damages, and penalties

The severe backlogs in the California Labor Commissioner’s

burden of proof in a wage claim—even when the employer has

administration of Berman claims have recently been the

ignored its recordkeeping obligations—to present “sufficient

subject of legislative scrutiny, culminating in an analysis

evidence” from which “just and reasonable inferences” may

by the California State Auditor that identified insufficient

be drawn to show the amount and extent of uncompensated

staffing as the primary cause.

work performed.635 But workers may not have any supporting

632

At the same time that the

Labor Commissioner’s staffing crisis must be prioritized

documentary evidence or witnesses who can appear at a

and addressed, it also remains vital for policymakers and

hearing on the claim. Although “imprecise” evidence by the

stakeholders to examine the Berman process itself, in order

worker should be enough to satisfy this burden,636 a worker’s

to identify how to make it a more nimble and expeditious

verbal testimony alone, without additional evidence, may

means of resolving wage claims. One improvement that

nonetheless not be viewed as sufficient in a given case. For

should be considered is a rebuttable presumption of the

one thing, the passage of time between the filing of the claim

validity of a low-wage worker’s claim for unpaid minimum,

and any hearing on it—especially given current backlogs—

overtime, or contract wages and associated damages and

could make it difficult for a worker to recollect hours and days

penalties.

Instituting such a presumption would help

worked (particularly if variable hours were worked), which

mitigate a significant problem faced by workers in low-

employers could exploit and hearing officers could mistake

wage industries: the failure of employers to comply with

as indicating a lack of credibility. In some cases, this could

recordkeeping obligations, which both enables wage theft

result in a decision against the worker, or an order substantially

and makes it unfairly burdensome and difficult for workers to

reducing the amount originally claimed, essentially penalizing

prove it has occurred.

workers for not keeping their own contemporaneous time

633

While employers are required by law to keep accurate and complete payroll and time records,634 the worker still has the

records even though it is the employer’s legal obligation to maintain these records in the first place.

Policy Recommendations

105

4|G

In the context of a Berman hearing on a claim of unpaid

This rebuttable presumption would apply to claims

minimum, overtime, or contract wages in a low-wage industry,

filed by workers in low-wage industries which generally

California should codify a rebuttable presumption in favor of

mirror those that have been prioritized by BOFE, and

the validity of the employee’s claim and expressly place the

in any other industry or occupation designated by the

burden of proof on the employer to disprove the claim:

Labor Commissioner.638

The worker’s claim against the employer that minimum,

The use of a rebuttable presumption so that the initial burden

overtime or contract wages have not been paid as

of proof falls on the employer has ample precedent in other

required by law and/or that liquidated damages,

parts of the Labor Code, including a similar presumption

waiting time or late payment penalties are owed for

that has been in place for decades as part of the specialized

the failure to pay such wages, including all factual

administrative wage claims process for garment workers.639

allegations made in support of such claims, as indicated

Indeed, California has incorporated rebuttable presumptions

in the worker’s complaint

where it has recognized that placing the initial burden of

637

should be presumed valid,

subject to any amendment to this information that the

proof on workers, especially those in low-wage industries,

worker has the option to present through testimony or

could erect unfair evidentiary hurdles for workers that are

other evidence at the hearing.

exploitable by employers.640 However, the legislature has not

The employer would have the initial burden of rebutting

applied a rebuttable presumption more generally in relation

the presumed validity of the worker’s claim by providing

to an employer’s basic legal obligation to maintain accurate

specific, compelling, and reliable evidence to the

payroll and time records. Such a presumption would reinforce

contrary, including bona fide complete, accurate, and

this obligation and help level the playing field for low-wage

contemporaneous payroll and time records for each

workers seeking to recover their unpaid wages. Moreover,

pay period of the claim. An employer’s failure to present

a rebuttable presumption utilized in this way has the added

such evidence would result in a hearing decision in the

value of potentially streamlining and shortening some Berman

worker’s favor with respect to the claim or part thereof

hearings, particularly in instances when employers have not

that is unrebutted. If the employer presents sufficient

kept or do not submit payroll or time records.

evidence to satisfy its burden to rebut the presumption, the worker would have an opportunity to counter the employer’s evidence. The Labor Commissioner’s initial determination that the employer presented sufficient evidence to rebut the presumption would not preclude the Commissioner, in weighing all the evidence and drawing all just and reasonable inferences, from ultimately finding that the worker’s evidence, including the worker’s verbal testimony alone, is sufficient to counter the employer’s evidence.

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Policy Recommendations

See Appendix G for sample language

CONCLUSION

With its sheer size and diverse and vibrant working communities, California is both an economic powerhouse and a stronghold of worker rights. Staking its ground on the cutting edge of pro-worker laws and policies, the state stands as proof of concept that investing in workers and forging a thriving economy can and should go hand in hand. Over the past decade, the state has increasingly focused its legislative attention on low-wage industries to elevate labor standards for workers. Through an industry-specific approach, with its potential to generate larger ripple effects including across sectors, California has raised the minimum wage, provided overtime protections long denied to some of the most vulnerable workers, and targeted “sweating” systems of labor. The state has also recognized the central importance of ensuring labor standards apply to workers regardless of their immigration status. And as a necessary component of strong standards, California has enacted laws creating legal accountability for violating those standards—by making it more difficult to get away with misclassifying workers so that businesses take responsibility for their employees, and by expanding the scope of liability beyond direct employment relationships and conventional “employer” definitions so that the rights of workers do not become hollow.

While laws establishing robust rights and responsibilities are the bones of a healthy body of labor standards, laws crafting effective enforcement mechanisms are the muscles that help animate those standards. California has understood that developing such enforcement muscle depends on enabling both private and public enforcement options, since neither operating alone is sufficient.

The state has expressly incorporated private rights of action into various provisions of the Labor Code, although it could certainly do more to provide greater access to the court system. But with mandatory arbitration steadily erasing the rights of workers to a judicial forum—when most low-wage workers already cannot access the services of an attorney to enter that forum to begin with— California has increasingly bolstered administrative avenues for enforcing labor standards.

Within the last two decades, the state has passed laws that have buttressed the California Labor Commissioner’s trifecta of enforcement powers: individual wage claims adjudication; workplace-wide investigations and citations by BOFE; and retaliation investigations and citations by the RCI unit. A series of easily overlooked yet significant bills have helped to bring the Commissioner’s administrative remedies for workers in line with judicial remedies, so that workers can be made whole and are no longer put at a serious disadvantage when they participate in administrative enforcement efforts. The state has also enacted legislation to institute new and improved procedures and tools aimed at strengthening and expediting the Commissioner’s investigations of potential violations and ability to cite lawbreakers.

And yet, even with the many pacesetting worker justice policies that California has enacted, we are not close to solving the massive problem of wage theft and other forms of worker exploitation that have become synonymous with low-wage industries.

Addressing the huge scale of this crisis requires ongoing deep commitment and unified action on many fronts—including adequately staffing and resourcing labor enforcement agencies, increasing education and outreach to workers and employers, and forging better enforcement partnerships between workers and their representatives, businesses, and government actors. All of this, of course, is much easier said than done. At the same time, the laws that we write, enact, and implement—existing at the center of any effective labor standards system—must also continue to evolve to be relevant and meaningful for workers, especially as industry and business practices morph, highlighting the need to address newly emerging issues or to try different approaches to unresolved problems. But even as the path to economic justice is ever-evolving, California’s leadership in the field of worker rights has already provided vital insights into how we can begin to put the key building blocks of a model labor standards framework into place. It remains our collective job—and moral imperative—to keep building.

Conclusion

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APPENDIX A [INDUSTRIAL WELFARE COMMISSION] Section 1178 of the Labor Code is amended to read: (a)

If after investigation the commission finds that in any occupation, trade, or industry, the wages paid to employees may be inadequate to supply the cost of proper living, or that the hours or conditions of labor may be prejudicial to the health, morals, or welfare of employees, the commission shall select a wage board to consider any of such matters and transmit to such wage board the information supporting its findings gathered in the investigation. Such investigation shall include at least one public hearing. In no event shall the commission select a wage board to consider any matter for the purpose of proposing or issuing any regulation or order that is less protective of or less beneficial to employees than existing state law or regulations, including but not limited to existing provisions of this code and orders of the commission.

Section 1178.5 of the Labor Code is amended to read: (a)

If the commission finds that wages paid to employees may be inadequate to supply the cost of proper living, it shall select one wage board composed of an equal number of representatives of employers and employees, and a nonvoting representative of the commission, designated by the commission, who shall act as chairperson. The wage board shall consider the findings of the commission and such other information it deems appropriate and report to the commission its recommendation of a minimum wage adequate to supply the necessary cost of proper living to, and maintain the health and welfare of employees in this state, and its recommendations on such other matters related to the minimum wage on which the commission has requested recommendations.

(b)

If the commission finds that hours or conditions of labor may be prejudicial to the health or welfare of employees in any occupation, trade, or industry, it shall select a wage board composed of an equal number of representatives of employers and employees in the occupation, trade, or industry in question, and a nonvoting representative of the commission, designated by the commission, who shall act as chairperson. The wage board shall consider the findings of the commission and such other information it deems appropriate and report to the commission its recommendation as to what action should be taken by the commission with respect to the matter under consideration.

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(c)

The wage board shall only make recommendations to the commission that are more protective of or more beneficial to the wages, hours, or working conditions of employees than existing state law or regulations, including but not limited to existing provisions of this code and orders of the commission.

(c) (d) Prior to amending or rescinding any existing order or adopting any new order, and after receipt of the wage board report and recommendation, the commission shall prepare proposed regulations with respect to the matter under consideration.

The proposed regulations shall include any recommendation of the wage board which received the support of at least two-thirds of the members of the wage board and that conforms with subdivision (c) of this section. A public hearing on the proposed regulations shall be held in each of at least three cities in this state, except when the proposed regulations would affect only an occupation, trade, or industry which is not statewide in scope, in which case a public hearing shall be held in the locality in which the occupation, trade, or industry prevails. The proceedings shall be recorded and transcribed and shall thereafter be a matter of public record.

Section 1182 of the Labor Code is amended to read (a)

After receipt of the wage board report and the public hearings on the proposed regulations, the commission may, upon its own motion, amend or rescind an existing order or promulgate a new order. However, with respect to proposed regulations based on recommendations supported by at least two-thirds of the members of the wage board and conforming with subdivision (c) of section 1178.5 of this code, the commission shall adopt such proposed regulations, unless it finds there is no substantial evidence to support such recommendations. The commission shall only amend or rescind an existing order or provision therein or promulgate a new order if doing so is more protective of or more beneficial to the wages, hours, or working conditions of employees than the existing order or provision therein.

(b)

If at any time the federal minimum wage applicable to employees covered by the Fair Labor Standards Act of 1938, as amended, prior to February 1, 1967, is scheduled to exceed the minimum wage fixed by the commission, the provisions of Sections 1178 and 1178.5 pertaining to wage boards shall be waived and the commission shall, in a public meeting, adopt an order fixing a new minimum wage at the scheduled higher federal minimum wage. The effective date of such order shall be the same as the effective date of the federal minimum wage, and such order shall not become operative in the event the scheduled increase in the federal minimum wage does not become operative.

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APPENDIX B [IMMIGRATION-BASED RETALIATION] Section 1019.5 is added to the Labor Code to read: (a) (1) There shall be a rebuttable presumption that an employer contacted, or directed, asked or induced another person or entity to contact, a federal immigration agent in order to unlawfully retaliate against an employee for exercising a protected right under this section, in either of the following circumstances: (A) A federal immigration agent enters or attempts to enter any office of the Labor Commissioner or the Division of Occupational Safety and Health, or contacts any personnel of the Commissioner, the Division or the Department of Industrial Relations, in order to inquire about an employee who has exercised a protected right by— (i)

Filing or participating in an administrative claim, complaint, proceeding or action that is pending before the Commissioner or Division against the employer, including any appeal of an administrative decision or citation, or any action to enforce a judgment; or

(ii) Assisting with or participating in a current investigation of the employer by the Commissioner or Division.

(B) Federal immigration agents conduct a worksite enforcement action at the workplace of an employee who has exercised a protected right by— (i)

Filing or participating in a claim, complaint, proceeding or action, including any appeal or action to enforce a judgment, that is pending before a government agency or in court against the employer to enforce a provision of this code or local ordinance applicable to employees; or

(ii) Assisting with or participating in a current investigation of the employer by a government agency or public prosecutor to enforce a provision of this code or local ordinance applicable to employees.

(2) An employer may rebut the presumption set forth under paragraph (1) of this subdivision by establishing any one of the following by clear and convincing evidence: (A) The employer did not contact, or direct, ask or induce any other person or entity to contact, either directly or indirectly, a federal immigration agent; or (B) The employee’s exercise of a protected right as set forth under subparagraphs (A) or (B) of paragraph (1) was not a motivating factor for the employer to contact, or direct, ask or induce any other person or entity to contact, a federal immigration agent. (b)

An employer who fails to rebut the presumption under subdivision (a) shall be deemed to have engaged in an act of unlawful retaliation against the employee and shall be subject to a penalty of twenty-five thousand dollars ($25,000) for each such unlawful act against each employee, that is in addition to any other penalty or relief that is provided for by law. The penalty shall be paid to the affected employee, the employee’s family member if the employee cannot be located or contacted or is unable to receive payment, or the employee’s lawful representative who has been designated by the employee to receive payment.

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(c)

This section is enforceable by the Labor Commissioner under sections 98.3, 98.7 and 98.74 of this code, or by a public prosecutor, through all means available to seek the penalty under subdivision (b) in addition to all other appropriate relief including but not limited to injunctive and equitable relief. An action of a public prosecutor under this section shall be limited to redressing violations occurring within the public prosecutor’s geographic jurisdiction, unless the public prosecutor has statewide authority or has enforcement authority pursuant to Section 17204 of the Business and Professions Code.

If the Commissioner or public prosecutor is a prevailing party in any civil action or proceeding to enforce this section, the Commissioner or public prosecutor shall be entitled to recover reasonable attorney’s fees and costs incurred in enforcing the section. An employee who is the subject of unlawful retaliation under this section, the employee’s family member, or a lawful representative of the employee may also enforce this section by bringing a civil action for the penalty set forth under subdivision (b) and any other appropriate relief including injunctive and equitable relief, and shall be entitled to attorney’s fees and costs if they are the prevailing party.

(d) (1) When the Labor Commissioner or public prosecutor enforces this section, the Commissioner or public prosecutor may collect the penalty under subdivision (b) of this section on behalf of the affected employee without assignment of such penalty to the Commissioner or public prosecutor.

(2) Notwithstanding Section 1519 of the Code of Civil Procedure, if the Commissioner or public prosecutor has made a diligent effort to locate an employee on whose behalf the penalty has been collected pursuant to this section, the employee’s family member if the employee cannot be located or contacted or is unable to receive payment, and any lawful representative of the employee designated to receive payment, but is unable to locate any of the foregoing for a period of one year after the date the penalty has been collected, then the Commissioner or public prosecutor shall deposit the penalty recovered into one of the following funds, to be used for the purpose of satisfying the monetary claims of employees as set forth under each respective fund.

(A) If the affected employee worked in the agricultural industry, the penalty recovered shall be deposited into the Farmworker Remedial Account as established under Sections 1684 and 1698 of this code.

(B) If the affected employee worked in the garment industry, the penalty recovered shall be deposited into the Garment Worker Special Account as established under Section 2675.5 of this code.

(C) If the affected employee worked in the car wash industry, the penalty recovered shall be deposited into the Car Wash Worker Restitution Fund as established under Section 2065 of this code.

(D) If the penalty was recovered on behalf of an employee working in any other industry or occupation, the penalty recovered shall be deposited into the Industrial Relations Unpaid Wage Fund as established under Section 96.7 of this code. (e) The Labor Commissioner may adopt all rules and regulations necessary to enforce this section.

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APPENDIX B

(f) For purposes of this section, the following definitions apply: (1) “Employer” includes any individual or entity acting on behalf of the employer, and liability under this section extends to any such individual or entity.

(2) “Family member” means a spouse, parent, sibling, child, uncle, aunt, niece, nephew, cousin, grandparent, or grandchild related by blood, adoption, marriage, or domestic partnership.

(3) “Federal immigration agent” means a person who works for the U.S. Department of Homeland Security to enforce federal immigration laws, or any person working on behalf of, in coordination with, or at the direction of the Department to enforce federal immigration laws.

(4) “Lawful representative” means any person or entity that has been given the legal authority to act on behalf of the employee.

(5) “Office” includes but is not limited to waiting rooms, conference rooms, hearing rooms, meeting rooms, attorney offices, inner office suites and the hallways connecting them, and any other office area or part thereof designated by the Labor Commissioner or Division of Occupational Safety and Health that is used for the purpose of conducting agency affairs.

(6) “Public prosecutor” has the same meaning as under section 180 of this code.

(7) “Worksite enforcement action” means the entry of one or more federal immigration agents into a workplace to question workers and/or detain individuals they believe are not lawfully present in the United States.

Section 244 of the Labor Code is amended to read: … (b)

Reporting or threatening to report an employee’s, former employee’s, or prospective employee’s suspected citizenship or immigration status, or the suspected citizenship or immigration status of a family member of the employee, former employee, or prospective employee, to a federal, state, or local agency because the employee, former employee, or prospective employee exercises a right under the provisions of this code, the Government Code, or the Civil Code constitutes an adverse action for purposes of establishing a violation of an employee’s, former employee’s, or prospective employee’s rights.

As used in this subdivision, “family member” means a spouse, parent, sibling, child, uncle, aunt, niece, nephew, cousin, grandparent, or grandchild related by blood, adoption, marriage, or domestic partnership. Where the adverse act under this subdivision is found to be the basis of unlawful retaliation by a person against a current, former, or prospective employee, the penalty against the person in violation shall be the same as that set forth in subdivision (b) of section 1019.5 of this code, notwithstanding paragraph (3) of subdivision (b) of section 98.6 of this code, and is recoverable by the same persons, in the same manner, and for the same purposes as set forth under subdivisions (c) and (d) of section 1019.5.

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Section 1019 of the Labor Code is amended to read: … … … (d) (1) An employee or other person who is the subject of an unfair immigration-related practice prohibited by this section, or a representative of that employee or person, may bring a civil action for equitable relief and any applicable damages or penalties, including a penalty for a violation of this section that shall be the same as that set forth in subdivision (b) of section 1019.5 of this code, and that is recoverable by the same persons, in the same manner, and for the same purposes as set forth under subdivisions (c) and (d) of section 1019.5. … … …

Section 98.7 of the Labor Code is amended to read: (a) (1) Any person who believes that they have been discharged or otherwise discriminated against in violation of any law under the jurisdiction of the Labor Commissioner may file a complaint with the division within one year after the occurrence of the violation. The one-year period may be extended for good cause. The complaint shall be investigated by a discrimination complaint investigator in accordance with this section. The Labor Commissioner shall establish procedures for the investigation of discrimination complaints, including, but not limited to, relief pursuant to paragraph (2) of subdivision (b). A summary of the procedures shall be provided to each complainant and respondent at the time of initial contact. The Labor Commissioner shall inform complainants charging a violation of Section 6310 or 6311, at the time of initial contact, of the complainant’s right to file a separate, concurrent complaint with the United States Department of Labor within 30 days after the occurrence of the violation.

(2)

The division may, with or without receiving a complaint, commence investigating an employer, in accordance with this section, that it suspects to have discharged or otherwise discriminated against an individual in violation of any law under the jurisdiction of the Labor Commissioner. The division may proceed without a complaint in those instances where suspected retaliation has occurred during the course of adjudicating a wage claim pursuant to Section 98, or during a field inspection pursuant to Section 90.5, in accordance with this section, or in instances of suspected immigration-related threats or acts in violation of Section 244, 1019, or 1019.1, or 1019.5.

… … …

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APPENDIX C [CLIENT EMPLOYER] Section 2810.3 of the Labor Code is amended to read: (a) As used in this section: (1) (A) “Client employer” means a business entity, regardless of its form, that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.

(B) “Client employer” does not include any of the following: (i)

A business entity with a workforce of fewer than 25 workers, including those hired directly by the client employer and those obtained from, or provided by, any labor contractor.

(ii) A business entity with five or fewer workers supplied by a labor contractor or labor contractors to the client employer at any given time. (iii) The state or any political subdivision of the state, including any city, county, city and county, or special district.

(2) “Labor” has the same meaning provided by Section 200.

(3) “Labor contractor” means an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business. “Labor contractor” does not include any of the following: (A) A bona fide nonprofit, community-based organization that provides services to workers.

(B) A bona fide labor organization or apprenticeship program or hiring hall operated pursuant to a collective bargaining agreement.

(C) A motion picture payroll services company, as defined in subparagraph (A) of paragraph (4) of subdivision (f) of Section 679 of the Unemployment Insurance Code.

(D) A third party who is a party to an employee leasing arrangement, as defined by Rule 4 of Section V of the California Workers’ Compensation Experience Rating Plan-1995 (Section 2353.1 of Title 10 of the California Code of Regulations), as it read on January 1, 2014, except those arrangements described in subrule d of Rule 4 of Section V, if the employee leasing arrangement contractually obligates the client employer to assume all civil legal responsibility and civil liability under this act.

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(4) “Wages” has the same meaning provided by Section 200 and all sums payable to an employee or the state based upon any failure to pay wages, as provided by law.

(5) “Worker” does not include an employee who is exempt from the payment of an overtime rate of compensation for executive, administrative, and professional employees pursuant to wage orders by the Industrial Welfare Commission described in Section 515.

(6) (A) “Usual course of business” means the regular and customary work of a business, performed within or upon the premises or worksite of the client employer.

(B) “Regular and customary work of a business” means work that is not sporadic and infrequent and that is part of operating, conducting, or maintaining the business. Work may constitute the regular and customary work of a business regardless of whether the business engages in other operations distinct from that work and whether the business exercises or has the right to exercise control over the work performed, including but not limited to how the work is performed and the quantity and quality of the work performed, or over the workers performing the work, including but not limited to their wages, hours, working conditions, or terms and conditions of employment.

(C) “Premises or worksite of the client employer” means any location that is owned, leased, rented, or occupied by the client employer, or any location where a good is produced or a service is provided that is integral or necessary to the business of the client employer. A location may be the premises or worksite of a client employer regardless of whether the client employer exercises or has the right to exercise control over the location, the work performed there, or the workers performing work at the location, and regardless of whether the client employer has a principal or other location where it conducts or operates its business.

(D) “Produce” means to make, manufacture, handle, or in any other manner to work on a good, or in any closely related process or occupation directly essential to the production of the good.

(E) “Good” means a ware, product, commodity, merchandise, or article or subject of commerce of any character, or any part or ingredient thereof. … … …

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APPENDIX D [LIQUIDATED DAMAGES FOR OVERTIME] Section 1194.2 of the Labor Code is amended to read: (a)

In any action under Section 98, 558, 1193.6, 1194, or 1197.1 to recover wages because of the payment of a wage less than the minimum wage or overtime compensation required fixed by an order of the commission or by statute any applicable state or local law, an employee shall be entitled to recover liquidated damages in an amount equal to the wages unlawfully unpaid when due and interest thereon. Nothing in this subdivision shall be construed to authorize the recovery of liquidated damages for failure to pay overtime compensation. A suit may be filed for liquidated damages at any time before the expiration of the statute of limitations on an action for wages from which the liquidated damages arise.

(b)

Notwithstanding subdivision (a), if the employer demonstrates to the satisfaction of the court or the Labor Commissioner that the act or omission giving rise to the action was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of any provision of the Labor Code relating to minimum wage or overtime compensation, or an order of the commission, the court or the Labor Commissioner may, as a matter of discretion, refuse to award liquidated damages or award any amount of liquidated damages not exceeding the amount specified in subdivision (a).

(c)

This section applies only to civil actions commenced on or after January 1, 1992.

Section 98 of the Labor Code is amended to read: (a)

The Labor Commissioner is authorized to investigate employee complaints. The Labor Commissioner may provide for a hearing in any action to recover wages, penalties, and other demands for compensation, including liquidated damages if the complaint alleges payment of a wage less than the minimum wage or overtime compensation required fixed by an order of the Industrial Welfare Commission or by statute any applicable state or local law, properly before the division or the Labor Commissioner, including orders of the Industrial Welfare Commission, and shall determine all matters arising under his or her jurisdiction. The Labor Commissioner may also provide for a hearing to recover civil penalties due pursuant to Section 558 against any employer or other person acting on behalf of an employer, including, but not limited to, an individual liable pursuant to Section 558.1. It is within the jurisdiction of the Labor Commissioner to accept and determine claims from holders of payroll checks or payroll drafts returned unpaid because of insufficient funds, if, after a diligent search, the holder is unable to return the dishonored check or draft to the payee and recover the sums paid out.

Within 30 days of the filing of the complaint, the Labor Commissioner shall notify the parties as to whether a hearing will be held, whether action will be taken in accordance with Section 98.3, or whether no further action will be taken on the complaint. If the determination is made by the Labor Commissioner to hold a hearing, the hearing shall be held within 90 days of the date of that determination. However, the Labor Commissioner may postpone or grant additional time before

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setting a hearing if the Labor Commissioner finds that it would lead to an equitable and just resolution of the dispute. A party who has received actual notice of a claim before the Labor Commissioner shall, while the matter is before the Labor Commissioner, notify the Labor Commissioner in writing of any change in that party’s business or personal address within 10 days after the change in address occurs.

It is the intent of the Legislature that hearings held pursuant to this section be conducted in an informal setting preserving the rights of the parties. … … …

Section 558 of the Labor Code is amended to read: (a) Any employer or other person acting on behalf of an employer who violates, or causes to be violated, a section of this chapter or any provision regulating hours and days of work in any order of the Industrial Welfare Commission shall be subject to a civil penalty as follows: (1) For any initial violation, fifty dollars ($50) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages and any liquidated damages due to the employee.

(2) For each subsequent violation, one hundred dollars ($100) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages and any liquidated damages due to the employee.

(3) Wages and any liquidated damages recovered pursuant to this section shall be paid to the affected employee. (b)

If upon inspection or investigation the Labor Commissioner determines that a person had paid or caused to be paid a wage for overtime work in violation of any provision of this chapter, any provision regulating hours and days of work in any order of the Industrial Welfare Commission, or any applicable local overtime law, the Labor Commissioner may issue a citation. The procedures for issuing, contesting, and enforcing judgments for citations or civil penalties issued by the Labor Commissioner for a violation of this chapter shall be the same as those set out in Section 1197.1.

(c)

In a jurisdiction where a local entity has the legal authority to issue a citation against an employer for a violation of any applicable local overtime law, the Labor Commissioner, pursuant to a request from the local entity, may issue a citation against an employer for a violation of any applicable local overtime law if the local entity has not cited the employer for the same violation. If the Labor Commissioner issues a citation, the local entity shall not cite the employer for the same violation.

(d)

The civil penalties provided for in this section are in addition to any other civil or criminal penalty provided by law.

(e)

This section does not change the applicability of local overtime wage laws to any entity.

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APPENDIX E [HOT GOODS] Part 10.5 [“Hot Goods”] is added to Division 2 of the Labor Code, with Section 2668.5 added to read: (a) (1) It shall be unlawful for any person to transport, ship, deliver, or sell in commerce, or to offer to transport, ship, deliver, or sell in commerce, any goods produced in an establishment in this state that are “hot” goods due to any of the following— (A) An employee producing the goods was not paid minimum wage or overtime as required by this code, any applicable order of the Industrial Welfare Commission, or any other applicable state or local law or regulation on minimum wage or overtime; or (B) A Class “A” child labor violation, as set forth under Section 1288 of this code, or any other child labor violation that the Department of Industrial Relations or the Labor Commissioner determines is dangerous to the health, safety, or security of minors, occurred in connection with the establishment where the goods were produced, under either of the following circumstances: (i)

The minor performed job duties on the premises of the establishment, regardless of whether the minor was employed by the actual owner or operator of the establishment; or

(ii) The minor performed job duties in close proximity to the establishment regardless of whether the minor physically entered the establishment to perform those duties, and the minor’s occupation was directly related to the activities undertaken in the establishment.

(2) In the case of goods produced in violation of minimum wage or overtime laws, as set forth under subparagraph (A) of paragraph (1), such goods are “hot” as soon as they are produced. Proof that an employee was employed in any establishment in this state where such hot goods were produced, within ninety (90) days prior to the removal of the goods from the establishment, shall be prima facie evidence that the employee was engaged in the production of such goods.

(3) In the case in which a child labor violation occurred in connection with the establishment where the goods were produced, as set forth under subparagraph (B) of paragraph (1), such goods are “hot” if within thirty (30) days prior to their removal from the establishment, the child labor violation occurred. Such goods are hot regardless of whether the minor or minors in question worked directly on the goods themselves, and regardless of the producer’s knowledge or lack thereof that a minor was performing work in violation of child labor laws.

(4) For purposes of this section, removal of goods from the establishment occurs as soon as they are physically moved from the establishment, including but not limited to transporting the goods for immediate shipment in commerce as well as moving goods from the establishment for a purpose other than immediate shipment in commerce, such as for storage or processing prior to their shipment.

(5) Where a hot good constitutes a component of another product, the product is also a hot good. Commingling of hot goods with other goods will make all the commingled goods hot, unless the person in possession is able to clearly separate the hot goods and maintain their separation.

(6) Notwithstanding the foregoing, the transportation, shipment, delivery, or sale of hot goods by a purchaser who acquired them in good faith in reliance on written assurance from the producer that the goods were produced in compliance with applicable minimum wage, overtime, and child labor laws, and who acquired such goods for value without notice of any violation of such laws, shall not be deemed unlawful. This good faith defense cannot be claimed by a purchaser that

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does not satisfy all of the foregoing requirements, as in instances including but not limited to the following: the purchaser owned the goods at the time of production when the violation of applicable minimum wage, overtime, or child labor laws took place; the purchaser did not receive actual written assurance of compliance, as set forth herein, from the producer; the purchaser received written assurance of compliance but only after acquiring the hot goods; the purchaser relied on a written assurance of compliance with respect to the future production of goods only and not the current goods that are hot; or the purchaser completed the transaction for goods after receiving notice that the goods were not produced in compliance with applicable minimum wage, overtime, and child labor laws. A purchaser’s reliance is also not in good faith if the purchaser knew or had reason to know that the written assurance was inaccurate or if it was not objectively reasonable for the purchaser to believe that the written assurance was true, including but not limited to if the purchaser had prior knowledge or reason to know that the producer has transported, shipped, delivered, or sold hot goods in the past but the purchaser failed to take reasonable steps to ensure that the current goods acquired from the producer are not hot.

(7) No liability shall be imposed under this section upon any common carrier for the transportation in commerce in the regular course of its business of any goods not produced by such common carrier, and no provision of this section shall excuse any common carrier from its obligation to accept any goods for transportation. (b) The Labor Commissioner may enforce this section through any or all of the following means: (1) Upon finding that goods were produced in violation of minimum wage or overtime laws as set forth under subparagraph (A) of paragraph (1) of subdivision (a), or that a child labor violation occurred in connection with the establishment where the goods were produced as set forth under subparagraph (B) of paragraph (1) of subdivision (a), the Labor Commissioner may obtain, at any time during the course of an investigation, a temporary restraining order or preliminary injunctive relief to enjoin the transportation, shipment, delivery, or sale of such hot goods by any person in possession of the goods.

(A) The Commissioner may request that the person in possession of such hot goods voluntarily refrain from transporting, shipping, delivering, or selling them until the Commissioner has determined that all necessary remedies are in place, including but not limited to the payment of all legally required wages, as well as any other measures the Commissioner deems necessary to ensure future compliance with the law. The Commissioner shall provide written notice of the foregoing to the person, which explains the findings of minimum wage, overtime, or child labor violations and informs the person that if they do not voluntarily agree to withhold transportation, shipment, delivery, or sale of the hot goods, the Commissioner may seek a court order against the person to stop the movement of the goods and may notify any person who may receive or purchase the hot goods of such restrictions and that any further transportation, shipment, delivery, or sale of those goods may violate this section.

(B) If the person in possession of hot goods does not voluntarily agree to withhold the goods from transportation, shipment, delivery, or sale, the Labor Commissioner may petition the superior court in any county in which the person resides or transacts business, or in which the goods were found by the Commissioner to have been produced in violation of applicable minimum wage, overtime, or child labor laws, for a temporary restraining order or preliminary injunctive relief to prevent any transportation, shipment, delivery, or sale of the hot goods, and to require the person to perform specified acts in support of the order. Upon the filing of such a petition, the court shall have jurisdiction to grant all relief that the court determines to be just and proper.

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(i)

In assessing the likelihood that the Commissioner will prevail on the merits for purposes of determining whether temporary injunctive relief is appropriate, the court shall consider as sufficient prima facie evidence any affidavit of the Commissioner, or testimony of the Commissioner if a hearing is required, explaining the basis of the Commissioner’s finding that the goods are hot, and shall not require the affidavit or testimony of any worker or minor. In the case of goods found by the Commissioner to have been produced in violation of minimum wage or overtime laws as set forth under subparagraph (A) of paragraph (1) of subdivision (a), the court shall also give weight to any finding by the Commissioner that complete and accurate payroll and time records were not maintained as required under Sections 226 and 1174 of this code, any applicable order of the Industrial Welfare Commission, or any other applicable recordkeeping regulation or order, by drawing the negative inference that minimum wage or overtime violations occurred as found by the Commissioner.

(ii) Appropriate relief as ordered by the court may include requiring the person to promptly identify to the Commissioner any other person or entity to whom the person has transported, shipped, delivered, or sold any of the hot goods at issue, including by providing any and all documentation or records within the person’s possession, custody, or control that indicate the person’s transfer of such goods. (iii) Any temporary injunctive relief ordered by the court shall remain in effect until such time that is set by the court in consideration of the Commissioner’s recommendation as to the period of time needed to ensure all appropriate remedies are in place, including but not limited to the payment of all legally required wages and associated damages and penalties as well as any other measures the Commissioner deems necessary to ensure future compliance with the law. Following any temporary injunctive relief that is ordered by the court, the Commissioner may also obtain a permanent injunction against the person if it is shown to be just and proper.

(2) Upon finding that a person has violated subdivision (a), the Labor Commissioner may obtain, at any time during the course of an investigation, a court order against the person to disgorge all profits that the person has gained from the violation of subdivision (a). The Commissioner may petition the superior court in any county in which such person resides or transacts business, or in which the goods were found by the Commissioner to have been produced in violation of applicable minimum wage, overtime, or child labor laws, for such relief. Upon the filing of this petition, the court shall have jurisdiction to grant all relief that the court determines to be just and proper.

(A) In determining whether to order disgorgement, the court shall consider as sufficient prima facie evidence any affidavit or testimony of the Commissioner explaining the basis of the Commissioner’s finding that the goods are hot and that the person violated subdivision (a), and shall not require the affidavit or testimony of any worker or minor. In the case of goods found by the Commissioner to have been produced in violation of minimum wage or overtime laws as set forth under subparagraph (A) of paragraph (1) of subdivision (a), the court shall also give weight to any finding by the Commissioner that complete and accurate payroll and time records were not maintained as required under Sections 226 and 1174 of this code, any applicable order of the Industrial Welfare Commission, or any other applicable recordkeeping regulation or order, by drawing the negative inference that minimum wage or overtime violations occurred as found by the Commissioner.

(B) If the court determines that disgorgement is proper, the person shall be required to provide to the Commissioner any information and records within the person’s possession, custody, or control that are necessary to calculate the amount

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to be disgorged, such as a record of all revenues and expenses indicating the profits gained as a result of a violation of subdivision (a), and to post a bond in the amount of the Commissioner’s preliminary calculation or estimate of the appropriate disgorgement amount, pending final determination by the court.

(C) In the case of a violation under subparagraph (A) of paragraph (1) of subdivision (a), the disgorged profits of the person shall be used to satisfy any minimum or overtime wages, as well as any damages and penalties for the failure to pay minimum or overtime wages, that are owed and remain unpaid to any and all affected employees. After any such amounts are fully satisfied, any remaining amount of disgorged profits shall be deposited by the Commissioner into one of the following funds, to be used for the purpose of satisfying the monetary claims of employees as set forth under each respective fund: (i)

If the affected employees produced agricultural goods, the Commissioner shall deposit the remaining amount into the Farmworker Remedial Account as established under Sections 1684 and 1698 of this code.

(ii) If the affected employees produced apparel, the Commissioner shall deposit the remaining amount into the Garment Worker Special Account as established under Section 2675.5 of this code. (iii) If the affected employees produced goods in any other industry or occupation, the Commissioner shall deposit the remaining amount into the Industrial Relations Unpaid Wage Fund as established under Section 96.7 of this code.

(D) In the case of a violation under subparagraph (B) of paragraph (1) of subdivision (a), the disgorged profits of the person shall be deposited into the Child Labor Remediation and Prevention Fund, which is hereby established and shall be administered by the Department of Industrial Relations to disburse grants or other funds, in appropriate amounts as determined by the Department, with the primary purpose of ensuring the health, safety, and security of the minors affected by the violation, and the secondary purpose of promoting the enforcement of child labor laws generally, including through the provision of community education and outreach on such laws. Disbursements from the Child Labor Remediation and Prevention Fund shall be made to affected minors or their lawful representatives, or to bona fide nonprofit community-based organizations that provide services to minors. The Department of Industrial Relations shall promulgate regulations in furtherance of the administration of this Fund.

(3) A penalty may also be assessed by the Labor Commissioner in a citation against any person in violation of subdivision (a).

(A) (i)

In the case of a violation under subparagraph (A) of paragraph (1) of subdivision (a), for each employee who was not paid minimum wage or overtime as required by law, the penalty shall be in an amount up to fifteen thousand dollars ($15,000) per employee in any first citation, and up to twenty thousand dollars ($20,000) per employee in any second or subsequent citation.

(ii) In the case of a violation under subparagraph (B) of paragraph (1) of subdivision (a), for each minor affected, the penalty shall be in an amount up to thirty thousand dollars ($30,000) per minor in any first citation, and up to forty thousand dollars ($40,000) per minor in any second or subsequent citation.

(B) In determining the total amount of the penalty, the Commissioner may consider the appropriateness of the penalty amount in relation to the size of the business, among other factors that the Commissioner deems appropriate.

(C) Upon request by the Commissioner, the person shall provide to the Commissioner any records and information within the person’s possession, custody, or control that the Commissioner deems necessary to determine the penalty amount. Upon request, these records shall be made available promptly for inspection, and the Commissioner shall be permitted to copy them.

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(D) Any penalties collected under this paragraph shall be deposited into the funds indicated under subparagraphs (C) or (D) of paragraph (2) of this subdivision, as applicable based on the violation, and utilized in the same manner and for the same purposes as set forth therein.

(E) The procedures for issuing, serving, contesting, and enforcing judgments for citations by the Labor Commissioner under this section shall be the same as those set forth in subdivisions (b) through (k), inclusive, of Section 1197.1 of this code.

(4) The relief provided for under this section is in addition to any other remedies available to employees or to the state for a violation of any applicable minimum wage, overtime, or child labor laws.

(5) The Labor Commissioner may promulgate regulations in furtherance of this subdivision. (c) For purposes of this section, the following definitions apply: (1) “Commerce” means the act or process of trading, purchasing or selling commercial goods within the state or between the state and any place outside thereof, including any transportation, transmission, or communication involved in such act or process. Goods are no longer moving in commerce once they have reached their final destination with the ultimate consumer.

(2) “Establishment” means any physical place where goods are produced, regardless of size or whether it is a permanently fixed or temporary location.

(3) “Goods” means wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, including but not limited to food; apparel; machinery; printed materials; intangibles such as news, ideas, or intelligence; and any raw materials, parts, or ingredients that will be used, processed, or converted into a new product.

“Goods” does not include any items after their delivery into the actual physical possession of the ultimate consumer.

(4) “Person” means any individual, partnership, association, corporation, business trust, or legal representative who engages in the business of producing, purchasing, selling, trading, distributing, delivering, or dealing in goods. The term “person” does not include an employee who produces the goods; a bona fide labor organization or apprenticeship program or hiring hall operated pursuant to a collective bargaining agreement; a bona fide nonprofit, community-based organization that provides services to workers; or the ultimate consumer.

(5) “Produce” means making, manufacturing, mining, processing, handling, transporting, or in any other manner working on goods, including but not limited to transforming raw materials or semi-finished goods into new or different items, as well as sorting, storing, packing, handling, or labeling goods that have already been manufactured. For purposes of this section, an employee shall be deemed to have been engaged in the “production” of goods if such employee was employed in producing, manufacturing, mining, processing, handling, transporting, or in any other manner working on such goods, or in any closely related process or occupation directly essential to the production thereof.

(6) “Purchaser” means a person who buys goods from a person who produces them.

(7) “Sale” or “sell” includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition of goods.

(8) “Ship” includes physically transporting goods directly without the use of any other party for transportation; providing the goods to a distributor or other party for transportation; or having the goods transported by a third-party common carrier or delivery service.

(9) “Ultimate consumer” means an individual or entity who purchases the goods for personal or private use and not for the purpose of engaging in the business of producing, selling, trading, distributing, transporting, shipping, delivering, or in any other manner dealing commercially with the goods purchased.

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APPENDIX F [CIVIL PENALTY FOR RECORDKEEPING VIOLATIONS]

Section 1174.5 of the Labor Code is amended to read: (a) Any person employing labor who willfully fails to maintain the accurate and complete records required by subdivisions (c) and (d) of Section 1174 or accurate and complete records required by subdivision (d) of Section 1174, or to allow any member of the commission or employees of the d Division to inspect or make copies of records pursuant to subdivision (b) of Section 1174, shall be subject to a civil penalty of five hundred dollars ($500). as follows: (1) For any failure to allow inspection and/or copying of records pursuant to subdivision (b) of Section 1174, a total penalty of ten thousand dollars ($10,000) in an initial citation, and twenty thousand dollars ($20,000) in any subsequent citation.

(2) For any failure to maintain accurate and complete records pursuant to subdivision (c) of Section 1174, a total penalty of ten thousand dollars ($10,000) in an initial citation, and twenty thousand dollars ($20,000) in any subsequent citation.

(3) For any failure to maintain accurate and complete payroll and time records as required by subdivision (d) of Section 1174, including in accordance with any recordkeeping requirements under any applicable order of the commission, a penalty of one thousand dollars ($1,000), in an initial citation, for each employee for whom accurate and complete records were not maintained for any pay period; a penalty of two thousand dollars ($2,000), in any second citation, for each employee for whom accurate and complete records were not maintained for any pay period; and for any third and subsequent citation, a penalty amount increased by an additional one thousand dollars ($1,000) from the previous citation amount, for each employee for whom accurate and complete records were not maintained for any pay period. The penalty amount shall be calculated based on the number of employees for whom accurate and complete records were not maintained, regardless of the number of pay periods for which there was a failure to maintain such records. (b) If, upon inspection or investigation, the Labor Commissioner determines that a person employing labor has violated subdivisions (b), (c) or (d) of Section 1174, the Labor Commissioner may issue a citation to the person in violation, in the amounts set forth under subdivision (a) of this section. The procedures for issuing, serving, contesting, and enforcing judgments for citations by the Labor Commissioner for a violation of Section 1174 shall be the same as those set out in Section 1197.1 of this code. (c) The penalties under this section are in addition to any other statutory, civil, or criminal penalty provided by law.

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APPENDIX G [REBUTTABLE PRESUMPTION IN BERMAN HEARINGS] This is one recommendation to improve the Berman wage claims process for low-wage workers. It would be important to additionally consider other changes to the statute, which may alter the suggested language below.

Section 98 of the Labor Code is amended to read: (a) The Labor Commissioner is authorized to investigate employee complaints. The Labor Commissioner may provide for a hearing in any action to recover wages, penalties, and other demands for compensation, including liquidated damages if the complaint alleges payment of a wage less than the minimum wage fixed by an order of the Industrial Welfare Commission or by statute, properly before the division or the Labor Commissioner, including orders of the Industrial Welfare Commission, and shall determine all matters arising under his or her jurisdiction. The Labor Commissioner may also provide for a hearing to recover civil penalties due pursuant to Section 558 against any employer or other person acting on behalf of an employer, including, but not limited to, an individual liable pursuant to Section 558.1. It is within the jurisdiction of the Labor Commissioner to accept and determine claims from holders of payroll checks or payroll drafts returned unpaid because of insufficient funds, if, after a diligent search, the holder is unable to return the dishonored check or draft to the payee and recover the sums paid out. Within 30 days of the filing of the complaint, the Labor Commissioner shall notify the parties as to whether a hearing will be held, whether action will be taken in accordance with Section 98.3, or whether no further action will be taken on the complaint. If the determination is made by the Labor Commissioner to hold a hearing, the hearing shall be held within 90 days of the date of that determination. However, the Labor Commissioner may postpone or grant additional time before setting a hearing if the Labor Commissioner finds that it would lead to an equitable and just resolution of the dispute.

A party who has received actual notice of a claim before the Labor Commissioner shall, while the matter is before the Labor Commissioner, notify the Labor Commissioner in writing of any change in that party’s business or personal address within 10 days after the change in address occurs.

It is the intent of the Legislature that hearings held pursuant to this section be conducted in an informal setting preserving the rights of the parties. (b) When a hearing is set, a copy of the complaint, which shall include the amount of compensation requested, together with a notice of time and place of the hearing, shall be served on all parties, personally or by certified mail, or in the manner specified in Section 415.20 of the Code of Civil Procedure. (c) Within 10 days after service of the notice and the complaint, a defendant may file an answer with the Labor Commissioner in any form as the Labor Commissioner may prescribe, setting forth the particulars in which the complaint is inaccurate or incomplete and the facts upon which the defendant intends to rely. (d) No pleading other than the complaint and answer of the defendant or defendants shall be required. Both shall be in writing and shall conform to the form and the rules of practice and procedure adopted by the Labor Commissioner. (e) Evidence on matters not pleaded in the answer shall be allowed only on terms and conditions the Labor Commissioner shall impose. In all these cases, the claimant shall be entitled to a continuance for purposes of review of the new evidence. (f) If the defendant fails to appear or answer within the time allowed under this chapter, no default shall be taken against him or her, but the Labor Commissioner shall hear the evidence offered and shall issue an order, decision, or award in accordance

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with the evidence. A defendant failing to appear or answer, or subsequently contending to be aggrieved in any manner by want of notice of the pendency of the proceedings, may apply to the Labor Commissioner for relief in accordance with Section 473 of the Code of Civil Procedure. The Labor Commissioner may afford this relief. No right to relief, including the claim that the findings or award of the Labor Commissioner or judgment entered thereon are void upon their face, shall accrue to the defendant in any court unless prior application is made to the Labor Commissioner in accordance with this chapter.

Notwithstanding the foregoing, when a claimant in a low-wage industry, as specified in paragraph (7) of subdivision (g), has filed a claim for unpaid minimum, overtime or contract wages, liquidated damages under section 1194.2 of this code, and/ or waiting time or late payment penalties for the failure to pay minimum, overtime or contract wages under section 203 or 210 of this code, and the employer fails to appear at the hearing, then the employer shall be deemed to have failed to rebut the presumption of validity of such claim(s) as set forth under paragraph (1) of subdivision (g) and the Commissioner shall issue an order, decision, or award on such claim(s) in accordance with paragraph (3) of subdivision (g). (g) All hearings conducted pursuant to this chapter are governed by the division and by the rules of practice and procedure adopted by the Labor Commissioner. For hearings on claims by employees for unpaid minimum, overtime or contract wages, liquidated damages under section 1194.2 of this code, and/or waiting time or late payment penalties for the failure to pay minimum, overtime or contract wages under section 203 or 210 of this code, in any of the industries in paragraph (7) of this subdivision, the following procedures shall additionally apply: (1) The employee’s claim(s) against the employer that minimum, overtime or contract wages have not been paid as required by law and/or that liquidated damages, waiting time or late payment penalties are owed for the failure to pay such wages, including all factual allegations made in support of such claim(s), as indicated in the complaint served on all parties pursuant to subdivision (b), shall be presumed valid. The employee shall not be required as an initial or preliminary matter at the hearing to offer any evidence, including any testimony, witnesses, or documents, to establish the hours worked for the employer and not paid, the amount of any wages received and due, or any other element of such claims against the employer.

(2) Instead, the employer shall have the initial burden of presenting specific, compelling, and reliable evidence sufficient to rebut the presumption of validity of the employee’s claim(s), including all factual allegations made in support of such claim(s) in the complaint. Such sufficient evidence must include, for each pay period at issue, bona fide complete, accurate, and contemporaneous payroll and daily time records that the employer is required to maintain under Sections 226 and 1174 of this code and any applicable order of the Industrial Welfare Commission. Nothing in this subdivision shall preclude the Labor Commissioner from finding that the employer has rebutted the presumption as to a certain claim or factual allegation in whole or in part, including certain pay periods, but not as to others. However, if the Commissioner finds falsification by the employer of payroll or time records presented for any pay period of the claim, then any other payroll and time records presented by the employer shall be presumed false and disregarded.

(3) If the employer fails to present specific, compelling, and reliable evidence sufficient to rebut the presumption of validity of the employee’s claim(s) or any part thereof, as determined by the Labor Commissioner pursuant to paragraph (2), then the employer shall be found liable for such unrebutted claim(s) or any part thereof, and the Commissioner’s order, decision or award pursuant to section 98.1 of this code shall be issued in favor of the employee against the employer accordingly. If the complaint names an individual or entity as a defendant that the employee alleges is liable based on section 218.8, 238.5, 558.1, 2810.3, or 2810.4 of this code, then the employer’s failure, including through a failure to appear at the hearing, to rebut the presumption of validity of the employee’s claim(s) that minimum, overtime or contract wages have not been paid as required by law and/or that liquidated damages, waiting time or late payment penalties are owed for the failure to pay such wages, including supporting factual allegations made in the complaint as to hours worked by the employee and Appendix

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the amount of any wages received and due, shall be deemed to establish the foregoing matters in the employee’s favor as applicable in determining the individual’s or entity’s liability, unless the individual or entity provides specific, compelling, and reliable evidence to the contrary. The amount of the Commissioner’s order, decision, or award against the employer and/or any individual or entity found liable shall be consistent with any unrebutted claim(s) and supporting factual allegations in the employee’s complaint, except that the amount ordered by the Commissioner may differ from the amount claimed in the complaint as long as the Commissioner’s order reflects the proper calculation of the amount due to the employee under applicable law.

(4) If the employer presents specific, compelling, and reliable evidence sufficient to rebut the presumption of validity of the employee’s claim(s) or any part thereof, as determined by the Labor Commissioner pursuant to paragraph (2), the employee shall have an opportunity to counter any such evidence presented by the employer. The Commissioner shall draw all just and reasonable inferences from all the evidence presented. The Commissioner’s initial determination that the employer presented specific, compelling, and reliable evidence sufficient to rebut the presumption of validity of the employee’s claim(s), or any part thereof, shall not preclude any ultimate finding by the Commissioner, in weighing all the evidence, that the employee’s evidence, including the employee’s verbal testimony alone, is sufficient to counter the employer’s evidence, and that the employee’s best estimate or recollection of hours worked for the employer and any wages received is the most reliable basis to ascertain any amount of wages, damages, or penalties found due to the employee in the Commissioner’s order, decision, or award.

(5) Notwithstanding the foregoing, the employee shall be given the opportunity during the hearing to amend any claim or factual allegations in the complaint in support of the employee’s claim(s). The employee’s verbal testimony alone, from which the Commissioner shall draw all just and reasonable inferences, may be sufficient for any such amendment.

The employer shall have the opportunity to present evidence to disprove the employee’s claim(s), subject to the same requirements for sufficient evidence under paragraph (2) of this subdivision. The employee shall have an opportunity to counter any such evidence presented by the employer, and the Commissioner shall weigh all the evidence presented, as set forth under paragraph (4) of this subdivision.

(6) The employer has the ultimate burden to prove by specific, compelling, and reliable evidence that the employee has not in fact performed work for which the employee was not properly compensated.

(7) Paragraphs (1) through (6) of this subdivision shall apply to claims made in the agriculture, carwash, construction, hotel, residential care, restaurant, retail, trucking, warehouse, property services and long-term care industries (as defined in section 238.5 of this code), and in any other industry or occupation designated by the Labor Commissioner.

(8) The procedures under paragraphs (1) through (6) of this subdivision do not affect the Labor Commissioner’s determination of whether an employment relationship exists if such issue is raised by the defendant. (h) (1) Whenever a claim is filed under this chapter against a person operating or doing business under a fictitious business name, as defined in Section 17900 of the Business and Professions Code, which relates to the person’s business, the division shall inquire at the time of the hearing whether the name of the person is the legal name under which the business or person has been licensed, registered, incorporated, or otherwise authorized to do business.

(2) The division may amend an order, decision, or award to conform to the legal name of the business or the person who is the defendant to a wage claim, if it can be shown that proper service was made on the defendant or his or her agent, unless a judgment had been entered on the order, decision, or award pursuant to subdivision (d) of Section 98.2. The Labor Commissioner may apply to the clerk of the superior court to amend a judgment that has been issued pursuant to a final order, decision, or award to conform to the legal name of the defendant, if it can be shown that proper service was made on the defendant or his or her agent.

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ENDNOTES 1

This figure is an average based on data from fiscal year 2022-2023, in which approximately 39,000 wage claims were filed with the California Labor Commissioner’s Office, the state agency charged with enforcing California wage and hour laws. See Cal. State Auditor, Report Number: 2023-104, The California Labor Commissioner’s Office: Inadequate Staffing and Poor Oversight Have Weakened Protections for Workers 3, 12 (2024), https://www.auditor.ca.gov/ reports/2023-104/#summary.

2

See Brady Meixell & Ross Eisenbrey, Economic Policy Inst., An Epidemic of Wage Theft is Costing Workers Hundreds of Millions of Dollars a Year 2 (2014), https://www. epi.org/publication/epidemic-wage-theft-costing-workers-hundreds/.

3

See David Cooper & Teresa Kroeger, Economic Policy Inst., Employers Steal Billions from Workers’ Paychecks Each Year 8, 13-15 (2017), https://www.epi.org/ publication/employers-steal-billions-from-workers-paychecks-each-year/; Alejandro Lazo, Jeanne Kuang, Lil Kalish & Erica Yee, When Employers Steal Wages from Workers, CalMatters (July 26, 2022), https://calmatters.org/explainers/when-employers-steal-wages-from-workers/?series=unpaid-wages-california-workers.

4

Daniel J. Galvin, Jake Barnes, Janice Fine & Jenn Round, Workplace Justice Lab@Rutgers University, Wage Theft in California: Minimum Wage Violations, 2014-2023 1-5 (2024), https://smlr.rutgers.edu/sites/default/files/Documents/Centers/WJL/California_MinimumWage_Study_May2024.pdf. The report examined the San Francisco, Los Angeles, San Diego, and San Jose metro areas. The $2 billion estimate of minimum wages stolen is based on the state minimum wage rate; the estimate rises above $4.5 billion in stolen minimum wages if the local minimum wage is factored into the analysis. See id.

5

See Tsedeye Gebreselassie, Nayantara Mehta & Irene Tung, Nat’l Employment Law Project, How California Can Lead on Retaliation Reforms to Dismantle Workplace Inequality 4-5 (2022), https://www.nelp.org/insights-research/how-california-can-lead-on-retaliation-reforms-to-dismantle-workplace-inequality/ (finding almost half of workers who experienced a workplace violation did not report it to anyone); Daniel Schneider, Elizabeth Kuhlman, Kristen Harknett & David Weil, The Shift Project, Compliance and the Complaint Gap: Labor Standards Violations in the California Service Sector 9 (2024), https://shift.hks.harvard.edu/compliance-andthe-complaint-gap/ (finding fewer than 1 in 4 workers who experienced a wage violation make a report or complaint).

6

See Rachel Deutsch & Terri Gerstein, Economic Policy Inst. & Harvard Ctr. for Lab. & A Just Economy, Power in Partnership: How Government Agencies and Community Partners are Joining Forces to Fight Wage Theft (2023), https://www.epi.org/publication/community-enforcement-partnerships/.

7

See Gov. Gavin Newsom, Press Release, California’s Economy Leads the Nation (July 15, 2024), https://www.gov.ca.gov/2024/07/15/californias-economyleads-the-nation/.

8

See Oxfam Am., Best and Worst States to Work in the U.S. 2024, https://www.oxfamamerica.org/explore/issues/economic-justice/workers-rights/best-statesto-work/#table (among the 50 states, ranking California as the top “best state to work” based on wages, worker protections, and the right to organize).

9

The goal of this report is to provide a general rubric for understanding the modern development of California wage and hour laws, with high-level snapshots of select statutes. An in-depth examination and evaluation of the impact and effectiveness of the statutes discussed are beyond the scope of this publication. We also do not discuss the related but complex issue of judgment enforcement. This critical topic has been addressed in other reports, including a recent analysis by the Cal. State Auditor. See supra note 1, at 39-47. Finally, we note that within the broad spectrum of rights and protections that could be encompassed under the term “labor standards,” our focus is on wage and hour laws (and not, for example, on health and safety standards, anti-discrimination protections, or collective bargaining rights).

10

See Karen Sloan, Civil Legal Aid Attorneys in Short Supply, ABA Report Finds, Reuters (Nov. 30, 2023), https://www.reuters.com/legal/government/civil-legalaid-attorneys-short-supply-aba-report-finds-2023-11-30/ (discussing findings of American Bar Association report that for every 10,000 Americans living in poverty, fewer than three civil legal aid attorneys are available to provide free legal assistance); Legal services corp., The Justice Gap: The Unmet Civil Legal Needs of Low-Income Americans 35, 38, 45, 52 (2022), https://justicegap.lsc.gov/the-report/ (finding almost a quarter of low-income households experienced a civil legal problem related to employment, such as difficulty getting paid; employment problems were among the top problems that stood out as impacting low-income individuals the most; 80% experiencing an employment problem did not seek legal help; and 53% of low-income individuals do not know if they would be able to find a lawyer they could afford if they needed help with a serious civil legal problem).

11

See Alexander J.S. Colvin, Economic Policy Inst., The Growing Use of Mandatory Arbitration: Access to the Courts is Now Barred for More Than 60 Million American Workers 5-9 (2018), https://www.epi.org/publication/the-growing-use-of-mandatory-arbitration-access-to-the-courts-is-now-barred-for-more-than-60million-american-workers/.

12

See generally Cal. Lab. Comm’r, A Report on the State of the Division of Labor Standards Enforcement (2013) (on file with author).

13

See, e.g., Olivia Luppino, 12 of the Biggest Strikes During This Hot Labor Summer, Salon (Sept. 4, 2023), https://www.salon.com/2023/09/04/12-of-the-biggest-strikes-during-this-hot-labor-summer/.

14

See Aurelia Glass & David Madland, Ctr. for American Progress, Momentum for Worker Standards Boards Continues to Grow (2023), https://www. americanprogress.org/article/momentum-for-worker-standards-boards-continues-to-grow/.

15

See id.

16

The Fair Labor Standards Act, enacted in 1938, is the federal law that sets standards on minimum wage, overtime, recordkeeping, and the employment of minors. See 29 U.S.C. § 201 et seq.

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127

17

See Martinez v. Combs, 49 Cal.4th 35, 53-55 (2010). In 1911, the tragic Triangle Shirtwaist Factory fire in New York City, which killed 146 garment workers, mostly women, girls, and immigrants, brought to light the abysmal and dangerous working conditions in the industry and sparked the enactment of new labor reforms and protections for workers. See Howard Markel, How the Triangle Shirtwaist Factory Fire Transformed Labor Laws and Protected Workers’ Health, PBS News (Mar. 31, 2021), https://www.pbs.org/newshour/nation/how-the-triangle-shirtwaist-factory-fire-transformed-labor-laws-and-protected-workers-health. Before 1912, no state mandated a minimum wage; by the end of 1913, nine states (including California) had passed minimum wage laws. See Martinez, 49 Cal.4th at 53-55.

18

See Martinez, 49 Cal.4th at 54-55. Originally limited to the regulation of wages and working conditions for women and children, the IWC’s jurisdiction was subsequently broadened to include all employees, after passage of Title VII of the Civil Rights Act of 1964 prohibiting employment discrimination because of sex. See id. at 55.

19

See id. at 54-55; Cal. Const. art. XIV, § 1, added by Assemb. Const. Amend. No. 40, 1975–1976 Reg. Sess., as approved by voters (Prop. 14), Prim. Elec.

(June 8, 1976).

20

Cal. Lab. Code §§ 70, 70.1.

21

Cal. Lab. Code § 1173.

22

Id.

23

Cal. Lab. Code § 1177.

24

Cal. Lab. Code § 1173.

25

See Cal. Lab. Code §§ 1178, 1178.5.

26

Id.

27

Cal. Lab. Code § 1178.5.

28

Cal. Lab. Code § 1178.5 (a), (b).

29

Cal. Lab. Code §§ 1178.5 (c), 1182 (a).

30

See Cal. Code Regs. tit. 8, §§ 11010-11170 (codifying the industry and occupation orders of the IWC); Indus. Welfare Comm’n v. Superior Court, 27 Cal.3d 690, 700-02 (1980) (discussing history of the IWC and its promulgation of wage orders).

31

See Murphy v. Kenneth Cole Prods., Inc., 40 Cal.4th 1094, 1102 n.4 (2007); Jeanne Kuang, Is California Using an Old Labor Board to Get Around a Fast Food Industry Referendum?, CalMatters (June 27, 2023), https://calmatters.org/politics/2023/06/california-fast-food-council/ (reporting that the IWC was defunded by the legislature because labor groups argued the Commission was not fulfilling its mandate to protect workers). See also note 56, infra.

32

See Martinez, 49 Cal.4th at 57. California recently raised the minimum wage in certain low-wage sectors (fast food and health care). See discussion in part 1b of this publication, infra. The higher minimum wage for these sectors is reflected in supplements to the general minimum wage order. For current official postings of the minimum wage order and supplements, as well as the IWC’s industry and occupation-based wage orders, see Industrial Welfare Commission Wage Orders, Cal. Dep’t of Indus. Rels., https://www.dir.ca.gov/iwc/wageorderindustries.htm (last visited Jan. 15, 2025).

33

Brinker Rest. Corp. v. Superior Court, 53 Cal.4th 1004, 1027 (2012).

34

Martinez, 49 Cal.4th at 61.

35

While each IWC wage order defines the covered industry or occupation, each order also further specifies its scope of application, including any exemptions that apply.

36

Cal. Code Regs. tit. 8, § 11010.

37

Id., § 11020.

38

Id., § 11030.

39

Id., § 11040.

40

Id., § 11050.

41

Id., § 11060.

42

Id., § 11070.

43

Id., § 11080.

44

Id., § 11090.

45

Id., § 11100.

46

Id., § 11110.

128

Endnotes

47

Id., § 11120.

48

Id., § 11130.

49

Id., § 11140.

50

Id., § 11150.

51

Id., § 11160.

52

Id., § 11170.

53

See, e.g., Cal. Code Regs. tit. 8, § 11010.

54

State wage and hour laws may be more protective of workers than the FLSA. See 29 U.S.C. § 218; Ramirez v. Yosemite Water Co., Inc., 20 Cal.4th 785, 795 (1999) (noting that the “FLSA explicitly permits greater employee protection under state law”).

55

A comparison of the wage orders reveals their identical structure and generally analogous provisions. Compare, e.g., Cal. Code Regs. tit. 8, § 11010 [Wage Order No. 1, Manufacturing Industry] with Cal. Code Regs. tit. 8, § 11090 [Wage Order No. 9, Transportation Industry]. This is not to say that the wage orders are exactly the same, as some important differences exist. For example, in one glaring exception to the otherwise largely consistent standards that the wage orders establish as a whole across industries and occupations, agricultural workers and certain domestic workers for many decades were denied the same overtime protections that applied to other workers in California. The state has more recently enacted laws aimed at course correcting such longstanding discriminatory policies. See discussion in part 1b of this publication, infra.

56

The legislature has stepped in to directly codify certain worker rights, including before the IWC became defunct in 2004. In the late 1990s, the IWC acted against its worker-protective mandate when it rescinded daily overtime provisions in five of its existing wage orders. See Brinker, 53 Cal.4th at 1037-38. To counter the IWC’s attempt to weaken labor standards, the legislature passed a bill to restore daily overtime through an amendment to the Labor Code and required the IWC to readopt conforming orders; as part of the same bill, the legislature also codified meal period obligations of employers, which before had been solely regulated by the IWC in its wage orders. See id. at 1036–38 (discussing evolution of meal period requirements, which are now overlapping between the Labor Code and wage orders). Similarly, while the IWC wage orders originally set the minimum wage, see Martinez, 49 Cal.4th at 56-57, the minimum wage has since evolved through statute. In 1996, California voters approved a ballot measure that wrote a minimum wage hike into the Labor Code and directed the IWC to issue wage orders reflecting the increase. See Cal. Lab. Code § 1182.11. In the early 2000s after defunding the IWC, the legislature enacted a new statute to increase the minimum wage statewide; this statute has since been amended twice to the current rate. See Cal. Lab. Code § 1182.12.

The legislature concurrently required the republication of wage orders consistent with the minimum wage statute. Cal. Lab. Code § 1182.13 (b). Subsequently, the legislature also amended the Labor Code to expressly declare the minimum wage to be paid to employees is that fixed by the IWC or any applicable state or local law. Cal. Lab. Code § 1197 (emphasis added). More recently, the minimum wage for certain groups of low-wage workers was increased again by statute. See discussion in part 1b of this publication, infra. In addition to setting minimum wage, overtime, and meal period requirements in the Labor Code, the legislature has codified some important new rights for California workers including, for example, an entitlement to paid sick leave. See Cal. Lab. Code § 246. However, the legislature’s recent creation of the “Fast Food Council,” which is empowered to recommend improvements to labor standards for fast food restaurant workers—similar to the role previously played by IWC wage boards—may augur the revival of wage boards in the state as a means to improve wages and working conditions in low-wage industries. See discussion in part 1b of this publication, infra.

57

Split shift premium pay, a minimum wage obligation, is only specified in the wage orders. See, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 4(C). For a description of the split shift premium in California, see “Spotlight – Minimum Wage and Overtime: How California Has Raised the Floor Above Federal Labor Standards,” infra.

58

Reporting time pay is only specified in the wage orders. See, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 5. For a description of reporting time pay in California, see “Spotlight - Minimum Wage and Overtime: How California Has Raised the Floor Above Federal Labor Standards,” infra.

59

The frequency and duration of rest breaks that employers must provide are exclusively set forth in the wage orders; both the wage orders and Labor Code require premium pay for the failure to comply with the rest period obligations of the wage orders. See, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 12. See also Brinker, 53 Cal.4th at 1028-31 (discussing rest period duties as defined solely by the wage order); Cal. Lab. Code § 226.7.

60

While employers are obligated under the Labor Code to maintain accurate payroll and time records, the wage orders contain some more specific recordkeeping provisions. Compare Cal. Lab. Code § 1174 (requiring “payroll records showing the hours worked daily” by employees) with, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 7 (requiring employers to keep time records “showing when the employee begins and ends each work period” as well as meal periods and split shift intervals).

61

Under the Labor Code, an employee may seek reimbursement for certain business expenses. This may include expenses for uniforms, tools, and equipment, though the statute is more generally stated. See Cal. Lab. Code § 2802 (requiring an employer to “indemnify” an employee “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer”). The wage orders specify certain employer obligations to provide and maintain uniforms, tools, and equipment for employees. See, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 9.

62

Brinker, 53 Cal.4th at 1026.

63

Augustus v. ABM Security Servs., 2 Cal.5th 257, 262 (2016) (internal citations omitted).

64

See Martinez, 49 Cal.4th at 56. Courts have held that wage orders are not independently actionable. See Thurman v. Bayshore Transit Mgmt., Inc., 203 Cal. App.4th 1112, 1132 (2012) (stating that “[t]he IWC has not created, and has no power to create, a private right of action for violation of a wage order, and we are aware of no statute that creates a private right of action for a violation of an IWC wage order when the violation at issue is not also a violation of the Labor Code”), disapproved on another ground in ZB, N.A. v. Superior Court, 8 Cal.5th 175 (2019).

Endnotes

129

65

See Martinez, 49 Cal.4th at 56 (citing as examples Cal. Lab. Code § 1193.5 [administrative enforcement provision], §§ 1193.6, 1194, 1194.2 [provisions relating to civil actions], § 1199 [provision on criminal liability]); see also Dynamex Operations W., Inc. v. Superior Court, 4 Cal.5th 903, 942 (2018) (stating that plaintiffs’ Labor Code claims for failure to pay overtime and to provide accurate wage statements rest on obligations imposed by the applicable wage order).

66

The California Labor Commissioner is often referred to in statute as the Division of Labor Standards Enforcement. Along with the Division of Workers’ Compensation and the Division of Occupational Safety and Health (also known as Cal/OSHA), the Labor Commissioner is part of the Department of Industrial Relations, one of seven departments and boards that constitute the state labor agency, which is called the California Labor and Workforce Development Agency. For a discussion of the California Labor Commissioner’s role in enforcing labor standards, see part 3a of this publication, infra.

67

The California Supreme Court has observed that the “industry-wide minimum requirements [of the IWC wage orders] are intended to create a level playing field among competing businesses in the same industry in order to prevent the type of ‘race to the bottom’ that occurs when businesses implement new structures or policies that result in substandard wages and unhealthy conditions for workers.” Dynamex, 4 Cal.5th at 960.

68

See note 54, supra.

69

In addition to higher minimum wage and overtime standards, California has developed other essential standards for workers such as meal and rest break rights which do not have a federal analogue. See Cal. Lab. Code §§ 512, 226.7, and e.g., Cal. Code Regs. tit. 8, § 11010, sec. 11, 12.

70

See Minimum Wage, U.S. Dep’t of Lab., Wage & Hour Div., https://www.dol.gov/agencies/whd/minimum-wage (last visited Jan. 5, 2025).

71

IWC Minimum Wage Order 2025; Cal. Lab. Code § 1182.12.

72

See discussion in part 1b of this publication, infra.

73

See Armenta v. Osmose, Inc., 135 Cal.App.4th 314, 323-24 (2005).

74

Id.

75

Id. California law also requires that employees paid on a piece-rate basis must be compensated for “nonproductive time” (when a worker is performing work but not on piece-rate tasks) and for rest and recovery periods at an hourly rate that is not less than the applicable minimum wage. This is an extension of the principle under California law that for each hour worked, an employee must be paid at least minimum wage. See Cal. Lab. Code § 226.2 (codifying the holdings in Gonzalez v. Downtown LA Motors, 215 Cal.App.4th 36 (2013), and Bluford v. Safeway Stores, Inc., 216 Cal.App.4th 864 (2013)).

76

See Cal. Lab. Code § 351.

77

See, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 4 (C).

78

See Murphy, 40 Cal.4th at 1111-12 (citation omitted).

79

See, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 5. What it means for an employee to “report to work” can take different forms as directed by the employer, such as physically appearing at the workplace, logging onto a computer remotely, or telephoning prior to a work shift. See Ward v. Tilly’s, Inc., 31 Cal. App.5th 1167, 1185 (2019).

80

See, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 5.

81

See Murphy, 40 Cal.4th at 1111-12 (citation omitted).

82

Cal. Lab. Code § 510. Different overtime rules have applied to agricultural workers and domestic workers. See discussion in part 1b of this publication, infra.

83

See State Minimum Wage Laws, U.S. Dep’t of Lab., Wage & Hour Div., https://www.dol.gov/agencies/whd/minimum-wage/state (last visited Jan. 5, 2025).

84

See Skyline Homes, Inc. v. Dep’t of Indus. Rels., 165 Cal.App.3d 239, 244-49 (1985), disapproved on another ground in Tidewater Marine W., Inc. v. Bradshaw, 14 Cal.4th 557 (1996).

85

Id.; Cal. Lab. Code § 515 (d).

86

See infra note 518 and accompanying main text.

87

In 2023, the state budget bill included funding for the IWC to reconvene. See Budget Act of 2023, A.B. 102, 2023-2024 Reg. Sess., Sec. 215 (Cal. 2023).

However, the legislature later reversed course as part of a legislative compromise involving a law to raise the minimum wage for fast food restaurant workers.

See note 110 and discussion of the fast food worker law, infra.

88

See, e.g., Mackenzie Mays, Fast-food Workers Make $20 an Hour. California’s Other Low-Wage Earners Ask: What About Us? Los Angeles Times (May 9, 2024), https://www.latimes.com/california/story/2024-05-09/fast-food-workers-now-make-20-an-hour-californias-other-low-wage-earners-ask-whatabout-us. See also Tanya Goldman & David Weil, Who’s Responsible Here? Establishing Legal Responsibility in the Fissured Workplace, 42 Berkeley J. Emp. & Lab. L. 55, 86-88 (2021) (arguing that industry-specific approaches are important but not broad enough to address larger structural problems and are vulnerable to certain drawbacks).

89

For a discussion of this history, see Daiquiri J. Steele, Enduring Exclusion, 120 Mich. L. Rev. 1667, 1677-84 (2022).

90

Id.

130

Endnotes

91

For the law’s carve-outs from minimum wage protections, see 29 U.S.C. § 213. For an overview of changes to the FLSA’s minimum wage coverage, see Steele, supra note 89 at 1677-82; History of Changes to the Minimum Wage Law, U.S. Dep’t of Lab., Wage & Hour Div., https://www.dol.gov/agencies/whd/ minimum-wage/history (last visited Jan. 5, 2025). For an explanation of the U.S. Department of Labor’s regulations implementing the exemption of domestic workers employed to provide “companionship services” from the FLSA’s minimum wage (and overtime) requirements, see Domestic Service Final Rule Frequently Asked Questions (FAQs), U.S. Dep’t of Lab., Wage & Hour Div., https://www.dol.gov/agencies/whd/direct-care/faq#g5 (last visited Jan. 5, 2025).

92

For the law’s exemptions from overtime requirements, see 29 U.S.C. § 213. See also Steele, supra note 89 at 1679-82; Domestic Service Final Rule Frequently Asked Questions (FAQs), U.S. Dep’t of Lab., Wage & Hour Div., supra note 91 (explaining that an individual, family, or household employing a domestic worker to provide companionship services to an elderly person or person with an illness, injury or disability, or employing a live-in domestic worker who resides on the employer’s premises to provide domestic service, may claim an exemption from paying overtime to the worker under specified circumstances).

93

See Cal. Lab. Code § 1182.12; IWC Minimum Wage Order 2025.

94

For a brief summary of California’s history of overtime exclusions relating to agricultural employees, see S. Comm. on Lab. & Indus. Rels., Analysis, A.B. 1066, 2015-2016 Reg. Sess., at 2-4 (Cal. June 27, 2016).

95

Id.

96

See Cal. Code Regs. tit. 8, § 11150, sec. 1(B), 2(J). The overtime exclusion has since been overridden by statute, as discussed infra.

97

See A.B. 241, 2013–2014 Reg. Sess. (Cal. 2013); Laura Flanders, California Governor Signs Domestic Worker Bill of Rights, The Nation (Sept. 26, 2013), https:// www.thenation.com/article/archive/california-governor-signs-domestic-worker-bill-rights/.

98

Cal. Lab. Code §§ 1451, 1454. The statute excepts some workers from the definition of “domestic work employee.” Cal. Lab. Code § 1451 (b)(2). For domestic workers employed in private households who are not personal attendants, different overtime protections apply through IWC wage order 15, depending on whether the worker is a live-in or non-live-in employee. See Cal. Code Regs. tit. 8, § 11150, sec. 3. For domestic workers who are not employed in a private household, other overtime rules apply under a separate order, IWC wage order 5. See Cal. Code Regs. tit. 8, § 11050, sec. 3. Wage order 5 also includes special overtime rules for personal attendants employed by a non-profit institution covered by the order. See id., sec. 2(O), 3(E). For a helpful overview of the various overtime rights of domestic workers, see The Domestic Worker Bill of Rights, Frequently Asked Questions, Cal. Lab. Comm’r, https://www.dir.ca.gov/ dlse/DomesticWorkerBillOfRights-FAQ.html (last visited Jan. 5, 2025).

99

Cal. Lab. Code § 1451 (d).

100 Compare Cal. Lab. Code § 1454 with Cal. Lab. Code § 510. Similarly, under IWC wage order 15, live-in domestic workers in a private household who are not personal attendants also do not possess the same overtime rights as other California workers. See Cal. Code Regs. tit. 8, § 11150, sec. 3.

101 For example, California’s Domestic Worker Bill of Rights did not provide personal attendants employed in private households with rights relating to meal and rest periods, from which they remain excluded under the applicable IWC wage order. See Cal. Code Regs. tit. 8, § 11150, sec. 1(B), 2(J).

102 See A.B. 1066, 2015-2016 Reg. Sess. (Cal. 2016); Alison Moodie, ‘A Historic Change’: California First State to Pass Overtime Pay for Farm Workers, The Guardian (Sept. 14, 2016), https://www.theguardian.com/sustainable-business/2016/sep/14/california-overtime-farm-workers-union.

103 See Cal. Lab. Code §§ 859-862. In addition, by operation of the 2016 law, which eliminated the previous exemption of agricultural employees from various protections of the Labor Code, Section 512 of the Code (among other provisions) now applies to agricultural employers, who must accordingly provide a second meal period when an employee works more than 10 hours in a workday; prior to this change, the IWC wage order that governed did not require the provision of a second meal period. See Assemb. Comm. on Lab. & Emp’t, A.B. 2757, 2015-2016 Reg. Sess., at 2 (Cal. April 4, 2016).

104 Cal. Lab. Code § 864.

105 See History of Changes to the Minimum Wage Law, U.S. Dep’t of Lab., Wage & Hour Div., supra note 91.

106 See David Siders, Jerry Brown Signs $15 Minimum Wage in California, The Sacramento Bee (April 5, 2016), https://www.sacbee.com/news/politicsgovernment/capitol-alert/article69842317.html. For an overview of California’s changes to the state minimum wage, see supra note 56.

107 Cal. Lab. Code § 1182.12. See Siders, supra note 106. All IWC wage orders have been republished (pursuant to Cal. Lab. Code § 1182.13(b)) to reflect the new minimum wage rates.

108 See IWC Minimum Wage Order 2025; Consolidated Minimum Wage Table, U.S. Dep’t of Lab., Wage & Hour Div., https://www.dol.gov/agencies/whd/mwconsolidated (last visited Jan. 5, 2025).

109 See A.B. 1228, 2023-2024 Reg. Sess. (Cal. 2023); Cal. Lab. Code § 1475 (d)(2)(A). There are some exceptions to the term “fast food restaurant.” See Cal. Lab. Code § 1474 (j), (k).

110 Cal. Lab. Code § 1475 (a). The fast food worker law was enacted as part of a legislative compromise in which industry groups agreed to withdraw a controversial referendum on the state ballot that would have repealed A.B. 257, which had been signed into law the previous year. See Taryn Luna, Labor, Business Reach Deal to Raise Fast-Food Wages and End California Ballot Fight, Los Angeles Times (Sept. 11, 2023), https://www.latimes.com/california/story/2023-09-11/ labor-business-strike-deal-to-end-referendum-over-landmark-california-fast-food-law. Among its provisions, A.B. 257 had established the Fast Food Council to promulgate minimum standards on wages, hours, and working conditions in the fast food restaurant industry, including the authority to raise the minimum wage up to $22 per hour in 2023 for fast food workers. See A.B. 257, 2021-2022 Reg. Sess. (Cal. 2022). The subsequent legislative deal resulted in the enactment of a new bill, A.B. 1228, which replaced the provisions of A.B. 257 with the current provisions statutorily setting the minimum wage for fast food restaurant workers at $20 per hour effective April 2024 (subject to annual increases, as discussed infra), and preserving the creation of the Fast Food Council (while placing some limitations on its powers and slightly tweaking its membership). As part of this compromise, the legislature also agreed to pull back funding in the state budget that would have revived operations of the IWC. See Luna, supra.

Endnotes

131

111 Cal. Lab. Code § 1475 (g).

112 Cal. Lab. Code § 1475 (h).

113 This list is denoted in the statute. See Cal. Lab. Code §§ 1474 (h), 1475 (b), 1475 (d)(1)(A). The law defines the term “working conditions” in an all-encompassing manner to mean, but not be limited to, “wages, conditions affecting fast food restaurant employees’ health and safety, security in the workplace, the right to take time off work for protected purposes, and the right to be free from discrimination and harassment in the workplace.” Cal. Lab. Code § 1474 (h). However, the Council may not develop regulations to create new paid time off benefits such as paid sick leave or paid vacation, or regulations on predictable scheduling (other than reporting time pay). Cal. Lab. Code § 1475 (d)(7), (d)(8).

114 Cal. Lab. Code § 1475 (d)(1)(A).

115 See id.

116 Cal. Lab. Code § 1475 (d)(1)(C). However, if a standard falls within the jurisdiction of the California Occupational Safety and Health Standards Board or the California Civil Rights Council, the Fast Food Council must petition these state entities to issue the standard. Cal. Lab. Code § 1475 (e), (f).

117 Cal. Lab. Code § 1475 (d)(2).

118 Cal. Lab. Code § 1475 (d)(2)(D).

119 Cal. Lab. Code § 1475 (m).

120 See S.B. 525, 2023-2024 Reg. Sess. (Cal. 2023). The law specifies the types of health care facilities that are covered, subject to certain exceptions. See Cal. Lab. Code §§ 1182.14 (b)(3), 1182.15 (b)(2). For a helpful overview of the law, see Health Care Worker Minimum Wage Frequently Asked Questions, Cal. Lab. Comm’r, https://www.dir.ca.gov/dlse/Health-Care-Worker-Minimum-Wage-FAQ.htm (last visited Jan. 5, 2025).

121 See Cal. Lab. Code §§ 1182.14 (c), (d); 1182.15 (c), (d); 1182.16.

122 See Cal. Lab. Code §§ 1182.14 (b)(2), (b)(8); 1182.15 (b)(1), (b)(6).

123 Cal. Lab. Code §§ 1182.14 (f)(2); 1182.15 (f)(2).

124 See Mays, supra note 88. However, a California ballot proposition to increase the minimum wage statewide to $18 per hour, which was not the focus of active campaigning by labor unions, was rejected by voters in November 2024. See Jeanne Kuang, No Raise for California’s Minimum Wage Workers, CalMatters (Nov. 20, 2024), https://calmatters.org/politics/elections/2024/11/california-election-result-prop32-minimum-wage/ (reporting that “with a quieter than usual campaign in support and widespread voter frustration over inflation this election, the measure was doomed after business groups pushed back by claiming the wage hike would drive restaurant and grocery price increases”); Rogé Karma, The California Job-Killer That Wasn’t, The Atlantic (Dec. 22, 2024), https://www. theatlantic.com/ideas/archive/2024/12/california-minimum-wage-myth/681145/ (stating that California voters narrowly rejected the minimum wage ballot measure after a “massive” and misleading industry-led campaign claiming that the minimum wage hike for fast food workers had been disastrous, when in fact statistics have shown that in the six months after the minimum wage increase for fast food workers, the state’s fast food sector actually gained jobs).

125 See Jeanne Kuang, California Gave Fast Food Workers a Seat at the Table. What Comes Next?, CalMatters (March 1, 2024), https://calmatters.org/californiadivide/2024/01/california-fast-food-council-2/.

126 See S.B. 62, 2021-2022 Reg. Sess. (Cal. 2021); Cal. Lab. Code § 2673.2.

127 Although workers must be paid at least the minimum wage for each hour worked even if total piece rate earnings fall below minimum wage, the garment industry is notorious for flouting minimum wage laws. See Derek Guy, “Made in America” Never Meant More Ethical: Garment Workers in the US are Paid Far Below Minimum Wage. New Legislation, If Implemented Successfully, Would Change That, The Nation (Nov. 20, 2023), https://www.thenation.com/article/ archive/made-in-america-never-meant-more-ethical/.

128 See S.B. 62, 2021-2022 Reg. Sess., Sec. 1 (Cal. 2021).

129 Cal. Lab. Code § 2673.2 (a), (d), (g).

130 See Cal. Lab. Code § 2673.2 (e), (f).

131 See A.B. 701, 2021-2022 Reg. Sess. (Cal. 2021); Jay Greene, California Limits Use of Productivity Quotas by Amazon, Other Warehouse Companies, The Washington Post (Sept. 22, 2021), https://www.washingtonpost.com/technology/2021/09/22/amazon-california-productivity-quotas/.

132 See A.B. 701, 2021-2022 Reg. Sess., Sec. 1 (a), (b) (Cal. 2021).

133 See S. Comm. on Lab., Pub. Emp’t & Ret., Analysis, A.B. 701, 2021-2022 Reg. Sess., at 6 (Cal. July 1, 2021).

134 See A.B. 701, 2021-2022 Reg. Sess., Sec. 1 (b), (c), (e) (Cal. 2021).

135 See id., Sec. 1 (d).

136 See Cal. Lab. Code §§ 2101, 2102. Under the statute, the term “employer” is defined as meaning “a person who directly or indirectly, or through an agent or any other person, including through the services of a third-party employer, temporary service, or staffing agency or similar entity, employs or exercises control over the wages, hours, or working conditions of 100 or more employees at a single warehouse distribution center or 1,000 or more employees at one or more warehouse distribution centers in the state.” Cal. Lab. Code § 2100 (f).

132

Endnotes

137 Cal. Lab. Code §§ 2107, 2108.

138 Cal. Lab. Code § 2105.

139 See Marisol Cuellar Mejia, Cesar Alesi Perez & Hans Johnson, Public Policy Inst. of Cal., Fact Sheet, Immigrants in California (Jan. 2025), https://www.ppic. org/publication/immigrants-in-california/.

140 See Jeffrey S. Passel & Jens Manuel Krogstad, Pew Research Ctr., What We Know About Unauthorized Immigrants Living in the U.S. (July 22, 2024), https:// www.pewresearch.org/short-reads/2024/07/22/what-we-know-about-unauthorized-immigrants-living-in-the-us/.

141 See California Immigrant Data Portal, Data Summaries, Demographics, USC Dornsife Equity Research Inst., https://immigrantdataca.org/data-summaries (last visited Jan. 5, 2025).

142 See Mark Edberg, Opinion, Stop Scapegoating Immigrants for Every Social or Economic Problem, Newsweek (Oct. 22, 2024), https://www.newsweek.com/ stop-scapegoating-immigrants-every-social-economic-problem-opinion-1970898.

143 Carl Davis, Marco Guzman & Emma Sifre, Inst. on Taxation & Economic Policy, Tax Payments by Undocumented Immigrants 5-6, 13 (2024), https://itep.org/ undocumented-immigrants-taxes-2024/. See also Raul Hinojosa-Ojeda & Sherman Robinson, UCLA N. Am. Integration & Dev. Ctr., Mexican Instituto Nacional de Estadística y Geografía, Essential but Disposable: Undocumented Workers and Their Mixed-Status Families 9-13 (2020), https://irle.ucla.edu/2020/08/10/ essentialworkers/ (estimating that in 2018, undocumented immigrants in the U.S. paid over $190 billion in personal, business, and sales taxes, with undocumented Californians contributing over $63 billion in taxes).

144 Davis et al., supra note 143, at 5-6.

145 Id. at 8.

146 Id. at 3, 8-9; Kayla Kitson, Cal. Budget & Policy Ctr., Fact Sheet, California’s Undocumented Residents Make Significant Tax Contributions, Unjust Exclusions from Many Public Services Remain (Oct. 2024), https://calbudgetcenter.org/resources/californias-undocumented-residents-make-significant-tax-contributions/ (discussing estimates by ITEP).

147 See Hinojosa-Ojeda & Robinson, supra note 143, at 17, 20-24. See also Jamshid Damooei, Ctr. for Economics of Social Issues, Cal. Lutheran Univ., Demographic Profile and Economic Impact of Undocumented Immigrants in California 56-59 (2024), https://drive.google.com/file/d/1PtTCXSdAF6k01LjTFbzwM5sS-8fHhvrX/view.

148 Dany Bahar, Carlos Daboin Contreras & Greg Wright, Brookings Inst., Commentary, The Immigrant Workforce Supports Millions of US Jobs (Oct. 17, 2022), https://www.brookings.edu/articles/the-immigrant-workforce-supports-millions-of-u-s-jobs/.

149 Valerie Lacarte, Migration Policy Inst., Beyond the “Black Jobs” Controversy: Immigrants and U.S.-Born Black Workers Share a Growing Jobs Pie (Aug. 2024), https://www.migrationpolicy.org/news/beyond-black-jobs-controversy.

150 See Sahana Mukherjee & Jens Manuel Krogstad, Pew Research Ctr., Most U.S. Voters Say Immigrants – No Matter Their Legal Status – Mostly Take Jobs Citizens Don’t Want (Oct. 21, 2024), https://www.pewresearch.org/short-reads/2024/10/21/most-us-voters-say-immigrants-no-matter-their-legal-status-mostlytake-jobs-citizens-dont-want/.

151 See Hinojosa-Ojeda & Robinson, supra note 143, at 9-13, 15-16. See also Edward Flores, Ana Padilla, Rodrigo Alatriste-Diaz & Karina Juarez, Univ. of Cal. Merced Community and Lab. Ctr., Essential Fairness: The Case for Unemployment Benefits for California’s Undocumented Immigrant Workers 4-6 (2023), https://clc. ucmerced.edu/publications.

152 See California Immigrant Data Portal, Indicators, Median Hourly Wage, USC Dornsife Equity Research Inst., https://immigrantdataca.org/indicators/medianhourly-wage (last visited Jan. 5, 2025).

153 Natalia Vega Varela, Alec Clott & Nancy L. Cohen, Gender Equity Policy Inst., Undocumented and Essential: A Profile of Undocumented Women in California 2,4 (2022), https://thegepi.org/wp-content/uploads/2022/02/GEPI-Undocumented-Essential-Report.pdf.

154 See Flores et al., supra note 151, at 5. Noncitizen workers are defined in the report to include lawful permanent residents, family-sponsored visa holders, refugees, asylees, recipients of Deferred Action for Childhood Arrivals, workers on temporary visas, and undocumented immigrants. Id. at 3, n.3.

155 See Hinojosa-Ojeda & Robinson, supra note 143, at 15-16 (citing 2019 data analysis by the Migration Policy Institute).

156 Cooper & Kroeger, supra note 3, at 20.

157 535 U.S. 137 (2002).

158 Id. at 151.

159 Id. at 149, 151. In 1986, Congress passed IRCA as an amendment to the Immigration and Nationality Act. IRCA prohibits the employment of individuals who are not lawfully present in the U.S. or not lawfully authorized to work in the country. See 8 U.S.C. § 1324a (a). Paired with this prohibition, IRCA created an “employment verification system,” also known as the I-9 process, requiring employers to verify the identity and work authorization of all new hires by examining specified documents before they begin work. See 8 U.S.C. § 1324a (a)(1)(B), (b). Employers who violate IRCA, including its I-9 “paperwork” requirements, are subject to civil penalties. See 8 U.S.C. § 1324a (e)(4), (e)(5). Criminal penalties may also be sought against the employing person or entity, if there is a pattern or practice of certain violations. See 8 U.S.C. § 1324a (f).

160 S.B. 1818, 2001-2002 Reg. Sess. (Cal. 2002).

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161 See Assemb. Floor Analysis, S.B. 1818, 2001-2002 Reg. Sess., at 3 (Cal. Aug. 19, 2002).

162 See Cal. Lab. Code § 1171.5 (c). See Salas v. Sierra Chemical, 59 Cal.4th 407, 428 (discussing the phrase “declaratory of existing law” in S.B. 1818).

163 Cal. Lab. Code § 1171.5 (a).

164 The law was amended in 2017 to clarify the legislature’s intended scope of protections for undocumented workers. See A.B. 1690, 2017-2018 Reg. Sess. (Cal. 2017). The law also covers civil rights, consumer protection, and housing laws. See Cal. Lab. Code § 1171.5 (b).

165 Cal. Lab. Code § 1171.5 (b).

166 See Farmer Bros. Coffee v. Workers’ Comp. Appeals Bd., 133 Cal.App.4th 533, 541-42 (2005). In 2014, the California Supreme Court decided a narrow question relating to whether S.B. 1818 was preempted by federal immigration law. In Salas, supra, the court ruled that IRCA preempts S.B. 1818 only to the extent that it authorizes a “lost wages” award to an undocumented worker under the state antidiscrimination statute for any period after the employer “discovers” the worker’s unauthorized status; the court further limited its holding to the situation where employers make this discovery after the worker has been discharged or not rehired.

Salas, 59 Cal.4th at 423-24, & n.3. Salas solely concerned “lost wages,” i.e., post-termination compensation for work that would have been performed but was not actually performed because of the employer’s unlawful act. Id. at 423. “Lost wages” in this context are different from unpaid wages that are due under wage and hour laws for work that was in fact already performed for the employer. See also notes 167-68, infra, and accompanying main text.

167 See Patel v. Quality Inn S., 846 F.2d 700, 705-06 (11th Cir. 1988) (distinguishing the rationale to limit the availability of back pay awards under the NLRA from the “different considerations” presented by the FLSA’s wage and hour obligations for work already performed, and holding that undocumented workers are “entitled to the full range of available remedies under the FLSA without regard to [their] immigration status”).

168 See, e.g., Quality Inn, 846 F.2d at 704-06 (holding that the term “employee” under the FLSA includes undocumented workers, who can recover unpaid wages under the statute; finding that the FLSA’s coverage of undocumented workers is “fully consistent with the IRCA and the policies behind it”; and noting that if the FLSA did not cover undocumented workers, employers “would have an incentive to hire them” because they “might find it economically advantageous to hire and underpay undocumented workers and run the risk of sanctions under the IRCA” (emphasis in original)); Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299, 1306-08 (11th Cir. 2013) (following Quality Inn and affirming its reasoning; finding that “there is nothing in the FLSA that would allow us to conclude that undocumented aliens, although protected by the Act, are nevertheless barred from recovering wages thereunder,” that “Hoffman does not give us cause to reconsider whether the IRCA was intended to amend the FLSA by implication, removing undocumented aliens from its protection,” and that “IRCA does not express Congress’s clear and manifest intent to exclude undocumented aliens from the protection of the FLSA”); Lucas v. Jerusalem Cafe, LLC, 721 F.3d 927, 933-37 (8th Cir. 2013) (holding that employers who unlawfully hire undocumented workers “must otherwise comply with federal employment laws” and that workers, whether “authorized to work or not, may recover unpaid and underpaid wages under the FLSA”; reading Hoffman, in contrast, as limited to the issue of back pay for work not already performed; and finding that “prohibiting employers from hiring unauthorized aliens [under the IRCA] is in harmony with requiring employers—including those who break immigration laws by hiring unauthorized workers—to provide fair working conditions and wages [under the FLSA]”); Reyes v. Van Elk, Ltd., 148 Cal.App.4th 604, 615-18 (2007) (concluding that the California prevailing wage law is not preempted by the IRCA; observing that allowing employers to hire undocumented workers and pay them less than the prevailing wage would “subvert the IRCA by condoning and encouraging future violations by employers”; and noting that awarding undocumented workers unpaid prevailing wages would “make it clear that employers should not be allowed to profit from employing undocumented workers and then exploiting them”). See also Salas, 59 Cal.4th at 426 (observing that “[i]t would frustrate rather than advance the policies underlying federal immigration law to leave unauthorized alien workers so bereft of state labor law protections that employers have a strong incentive to ‘look the other way’ and exploit a black market for illegal labor”).

169 Madeira v. Affordable Housing Foundation, Inc., 469 F.3d 219, 243 (2nd Cir. 2006).

170 The perverse economic incentive created if undocumented workers are not provided with labor and employment protections would also ultimately undermine IRCA, as courts have observed. See note 168, supra.

171 Outside the labor and employment context, the state has also acted in other areas such as health care, driver’s licenses, and professional licenses to ensure accessibility without regard to immigration status.

172 See Gebreselassie et al., supra note 5, at 6 (discussing different forms of employer retaliation against workers).

173 See id. at 4-5 (in a survey conducted of California workers, finding low rates of workers reporting workplace violations and high rates of employer retaliation, and discussing chilling effect of such retaliation); Schneider et al., supra note 5, at 3, 9-12 (in a survey of California service sector workers, finding that very few workers who experience an apparent labor standards violation report it, and discussing chilling effect of employer retaliation).

174 Rivera v. NIBCO, Inc., 364 F.3d 1057, 1064 (9th Cir. 2004) (citations omitted).

175 For a discussion of recent changes to the law made by the legislature to strengthen retaliation protections for workers, see part 3 of this publication, infra.

176 We note that the state has enacted other statutes, which we do not highlight, aimed at addressing employer abuse of the I-9 process as a means of intimidating immigrant workers. In 2015, the state enacted Labor Code § 2814, which prohibits an employer from using the federal E-Verify system, an internet-based system used to determine whether a person is authorized to work in the U.S., before the person has received an offer of employment, or to use E-Verify in a manner or at a time that is not consistent with federal law. See A.B. 622, 2015-2016 Reg. Sess. (Cal. 2015). The following year, Labor Code § 1019.1, added under S.B. 1001, 2015-2016 Reg. Sess. (Cal. 2016), established a state law remedy for certain forms of document abuse in the I-9 process that are also prohibited under IRCA (e.g., when an employer requires more or different verification documents than are legally required). In 2017, as part of a larger bill addressing worksite enforcement actions by ICE, California enacted Labor Code § 1019.2, making it unlawful for an employer to reverify a current employee’s work authorization in a time or manner not required under federal law, and subjecting a violating employer to civil penalties. See A.B. 450, 2017-2018 Reg. Sess. (Cal. 2017). This provision as it applies to private employers was challenged by the federal government, which initially prevailed in preliminarily enjoining its enforcement. See U.S. v. California, 314 F.Supp.3d 1077, 1097-98 (E.D. Cal. 2018). However, the federal suit was subsequently

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dismissed without prejudice. See Joint Stipulation of Dismissal, U.S. v. California, 314 F.Supp.3d 1077 (E.D. Cal. 2018) (No. 2:18–cv–490–JAM–KJN). Also under A.B. 450, California enacted Labor Code § 90.2, which mandates that employers provide notice to each current employee of an I-9 inspection conducted by an immigration agency within 72 hours of receiving notice of the inspection, except as otherwise required by federal law. This provision has survived legal challenges. See U.S. v. California, 921 F.3d 865, 879-82 (9th Cir. 2019), cert. denied, 141 S.Ct. 124 (2020).

177 See S.B. 666, 2013-2014 Reg. Sess. (Cal. 2013).

178 See S.B. 497, 2023-2024 Reg. Sess. (Cal. 2023); Cal. Lab. Code § 98.6 (b)(1). See part 3c of this publication, infra, for a discussion of this rebuttable presumption.

179 See A.B. 263, 2013-2014 Reg. Sess. (Cal. 2013).

180 See Cal. Lab. Code § 1019 (a), (b).

181 See Cal. Lab. Code § 1019 (a).

182 See Cal. Lab. Code § 1019 (c).

183 Section 244 (b) can constitute the basis of a retaliation claim under Cal. Lab. Code §§ 98.6 or 1102.5. A civil action can be brought under Cal. Lab. Code §§ 98.6, 1102.5, and 1019. In addition, Cal. Lab. Code §§ 98.7 and 98.74 provide the Labor Commissioner with administrative mechanisms, as well as the ability to seek relief in court, to address retaliation based on § 244 (b) or § 1019.

184 See Cal. Lab. Code §§ 98.6, 98.7, 98.74, 1019, and 1102.5 for their provisions on remedies. For business license suspension due to retaliation based on Cal. Lab. Code § 244 (b), see Cal. Bus. & Prof. Code § 494.6.

185 Even if an employer threatens to contact a government agency that does not actually enforce federal immigration laws, the threat can still accomplish its intended purpose of intimidating the worker.

186 This provision, which was part of a larger bill enhancing retaliation protections for workers, see S.B. 306, 2017-2018 Reg. Sess. (Cal. 2017), also specifies other instances when the Labor Commissioner may proceed without a complaint.

187 The Ninth Circuit has observed that “most undocumented workers are reluctant to report abusive or discriminatory employment practices” due to their substantiated fear of being reported to ICE and subject to deportation proceedings. Rivera, 364 F.3d at 1064-65 (citations omitted).

188 Cal. Penal Code § 518. Earned wages can constitute a person’s “property or other consideration.”

189 See Cal. Penal Code § 519. The legislature declared in the bill that this amendment clarified existing law. See A.B. 524, 2013-2014 Reg. Sess., Sec. 2 (Cal. 2013).

190 See Cal. Penal Code § 520.

191 See Cal. Penal Code § 524.

192 See Am. Immigration Council, Fact Sheet, Summary of Executive Order “Enhancing Public Safety in the Interior of the United States” (May 19, 2017), https:// www.americanimmigrationcouncil.org/immigration-interior-enforcement-executive-order.

193 See Immigrant Defense Project & Ctr. for Constitutional Rts., ICEwatch: ICE Raids Tactics Map, A Brief Summary of ICE Raids Trends to Accompany raidsmap.immdefense. org 3-5 (2018), https://www.immigrantdefenseproject.org/wp-content/uploads/ICEwatch-Trends-Report.pdf; Nat’l Immigration Law Ctr., Guide, Know Your Rights: Worksite Raids Under the Trump Administration (Jan. 1, 2020), https://www.nilc.org/issues/workersrights/worksite-raids/; Tal Kopan, ICE Chief Pledges Quadrupling or More of Workplace Crackdowns, CNN (Oct. 17, 2017), https://www.cnn.com/2017/10/17/politics/ice-crackdown-workplaces/ index.html. The incoming Trump administration has announced its intention to deploy the military to conduct mass deportations. See Lauren Gambino, Trump Confirms He Will Utilize US Military to Conduct Mass Deportations, The Guardian (Nov. 18. 2024), https://www.theguardian.com/us-news/2024/nov/18/ trump-military-mass-deportation.

194 See, e.g., Natalie Kitroeff, Officials Say Immigration Agents Showed up at Labor Dispute Proceedings. California Wants Them Out, Los Angeles Times (Aug. 3, 2017), https://www.latimes.com/business/la-fi-ice-california-labor-20170802-story.html.

195 Cal. Gov’t. Code § 7284.2.

196 S.B. 54, 2017-2018 Reg. Sess. (Cal. 2017).

197 See Cal. Gov’t. Code § 7284.6 (a), (b).

198 See Cal. Gov’t. Code § 7284.6 (a).

199 See Cal. Gov’t. Code § 7284.8 (a), (c). In this provision of the Act, the California Labor Commissioner’s Office is referred to by its other name, the Division of Labor Standards Enforcement.

200 Researchers and advocates have analyzed how the California Values Act should be strengthened to fulfill its intended purpose. See Peter Mancina, Asian Americans Advancing Justice – Asian Law Caucus, University of Oxford Centre for Criminology & Border Criminologies, Turning the Golden State into a Sanctuary State: A Report on the Impact and Implementation of the California Values Act (SB 54) (2019), https://blogs.law.ox.ac.uk/research-subject-groups/centre-criminology/ centreborder-criminologies/blog/2019/03/turning-golden.

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201 See Kitroeff, supra note 194; Elizabeth Aguilera, CA Labor Commissioner Tells Staff to Keep Immigration Agents Out, CalMatters (Aug. 3, 2017), https://calmatters. org/politics/2017/08/ca-labor-commissioner-tells-staff-keep-immigration-agents/; Adam Ashton, Boss Tells State Workers: Kick ICE Out of California Labor Offices, The Sacramento Bee (Aug. 3, 2017), https://www.sacbee.com/news/politics-government/the-state-worker/article165111922.html. See also “Spotlight Taking a Stand Against ICE Interference with State Enforcement of Labor Standards: The California Labor Commissioner Leads the Way,” infra.

202 The California Values Act was challenged by the federal government, which primarily contended that S.B. 54 was preempted by federal law because it unlawfully obstructs enforcement of the Immigration and Nationality Act (INA). See U.S. v. California, 921 F.3d at 886-91. The Ninth Circuit upheld the legality of S.B. 54 in all respects. Id. The court ruled that the Values Act “does not directly conflict with any obligations that the INA or other federal statutes impose on state or local governments…” Id. at 887. Explaining that “the INA does not require any particular action on the part of California or its political subdivisions” but instead “provides states and localities the option, not the requirement, of assisting federal immigration authorities,” the court stated that “SB 54 simply makes that choice for California law enforcement agencies.” Id. at 889 (emphasis in original). The court reasoned that “[e]xtending conflict or obstacle preemption to SB 54 would, in effect, dictate[ ] what a state legislature may and may not do…because it would imply that a state’s otherwise lawful decision not to assist federal authorities is made unlawful when it is codified as state law.” Id. at 890 (internal citations and quotations omitted). While “SB 54 may well frustrate the federal government’s immigration enforcement efforts,” the court ruled “that frustration is permissible, because California has the right, pursuant to the anticommandeering rule [based on the Tenth Amendment], to refrain from assisting with federal efforts.” Id. at 890-91. Under this constitutional principle, the Ninth Circuit explained, “Congress could not ‘impress into its service—and at no cost to itself—the police officers of the 50 States’” even in the absence of the Values Act. Id. at 889 (citing Printz v. U.S., 521 U.S. 898, 922 (1997)). The court concluded that “the federal government was free to expect as much [cooperation between states and federal immigration authorities] as it wanted, but it could not require California’s cooperation without running afoul of the Tenth Amendment.” Id. at 891 (emphasis in original). In addition, the Ninth Circuit upheld S.B. 54’s information-sharing restrictions, including its prohibition against providing the personal information of an individual such as home and work addresses. Id. at 890, 891-93.

203 See Ashton, supra note 201 (quoting the Labor Commissioner on California’s long-standing policy that immigration status is irrelevant to state labor law protections).

204 A.B. 450, 2017-2018 Reg. Sess. (Cal. 2017).

205 For an analysis of this issue, see Immigrant Defense Project & Ctr. for Constitutional Rts., supra note 193, at 6 (noting that “in the hundreds of reports collected…since 2013, not a single report has been received where ICE had a judicial warrant—rather, agents relied on coercive means to either obtain permission to enter a home or they physically forced their way inside,” and also finding that “[w]here ICE agents have had warrants, the warrants are administrative warrants which are not signed by judges, but rather, signed by a deportation officer, without having to show the probable cause which is necessary for a judicial warrant”).

206 See Cal. Gov’t. Code § 7285.1 (a), (e). The federal government challenged this provision of A.B. 450 as applied to private employers only, and not public entities. See U.S. v. California, 314 F.Supp.3d at 1094-96. The federal district court preliminarily enjoined this provision from being enforced against private employers, and California did not appeal this ruling. U.S. v. California, 921 F.3d at 876-77, n.4. However, after a change in administration, the federal government later dismissed the case without prejudice. See Joint Stipulation of Dismissal, U.S. v. California, 314 F.Supp.3d 1077 (E.D. Cal. 2018) (No. 2:18– cv–490–JAM–KJN). A.B. 450 also contained other provisions, which are briefly discussed in note 176, supra.

207 Cal. Gov’t. Code § 7285.1 (b), (d).

208 See Cal. Att’y Gen., Promoting Fair and Safe Workplaces for All: Guidance and Model Policies to Assist the Division of Labor Standards Enforcement, the Agricultural Labor Relations Board, and the Division of Workers Compensation in Responding to Immigration Enforcement 8-11 (2024) (updated), https://oag.ca.gov/ publications#immigration.

209 See id. at 11 & n.41.

210 See Kitroeff, supra note 194; Aguilera, supra note 201; Ashton, supra note 201.

211 See Rivera, 364 F.3d at 1065, 1074-75 (in national origin discrimination case brought under Title VII and the California Fair Employment and Housing Act, holding that granting discovery into plaintiffs’ immigration status would place an undue burden on both plaintiffs and the public interest, and that a protective order against such discovery was warranted).

212 See id. at 1065.

213 See Assemb. Comm. on Judiciary, Analysis, S.B. 785, 2017-2018 Reg. Sess., at 3-6 (Cal. April 15, 2018).

214 See S.B. 785, 2017-2018 Reg. Sess. (Cal. 2018); Cal. Evid. Code § 351.3. An analogous provision was enacted with respect to criminal actions. See Cal. Evid.

Code § 351.4. These provisions originally expired in 2022 but were subsequently made permanent by S.B. 836, 2021-2022 Reg. Sess. (Cal. 2022). S.B. 785 and S.B. 836 extended to all civil and criminal actions the similar inadmissibility bar on evidence about immigration status that the legislature had previously codified for personal injury and wrongful death civil actions. See A.B. 2159, 2015-2016 Reg. Sess. (Cal. 2016); Cal. Evid. Code § 351.2.

215 See Cal. Evid. Code § 351.3 (a).

216 Id. 217 See Cal. Evid. Code § 351.3 (b)(2); Cal. Lab. Code § 1171.5.

218 See Cal. Lab. Code § 1171.5 (b).

219 See Assemb. Comm. on Judiciary, Analysis, S.B. 785, 2017-2018 Reg. Sess., at 6 (Cal. April 15, 2018).

220 See Cal. Lab. Code § 1171.5 (b).

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221 See Eunice H. Cho, Nat’l Employment Law Project, U Visas for Victims of Crime in the Workplace: A Practice Manual 3-23, 30 (2014), https://www.nelp.org/insightsresearch/u-visas-for-victims-of-crime-in-the-workplace-a-practice-manual/ (providing overview of U visas and discussing U visa certification protocols of the California Labor Commissioner, referred to as the Division of Labor Standards Enforcement, among a handful of agencies with such protocols).

222 See Gov. Gavin Newsom, Press Release, California Providing Free Legal Services for Undocumented Farmworkers (July 19, 2023), https://www.gov. ca.gov/2023/07/19/california-providing-free-legal-services-for-undocumented-farmworkers/ (stating the California Labor Commissioner was “the first state agency in the nation to successfully request deferred action from the Biden Administration for employees under an active investigation”).

223 See Kitroeff, supra note 194.

224 See id.; Aguilera, supra note 201; Ashton, supra note 201.

225 See Ashton, supra note 201 (quoting Labor Commissioner memo and script for staff).

226 Id. 227 See Kitroeff, supra note 194.

228 See discussion in note 202, supra.

229 See Cal. Att’y Gen., supra note 208, at 3.

230 The policies and recommendations we highlight are largely taken verbatim from the California Attorney General’s model guidance but are also paraphrased and condensed in some instances. The Attorney General notes its guidance was not meant to displace existing Labor Commissioner protocols that are aligned with or provide greater protections for workers. See id.

231 See id. at 11, 15.

232 See id. at 9, 15-16.

233 See id. at 9-10, 16.

234 See id. at 11, 15.

235 See id. at 11. The Attorney General has noted as an example that the Labor Commissioner has posted a sign that reads: “Only individuals seeking assistance or information from the Labor Commissioner about state labor laws, or those filing or involved in a claim or investigation before our agency (including parties, witnesses, representatives, family members, or persons assisting an individual with a claim), may enter this office. Solicitation is prohibited. Any person whose presence would interfere with agency proceedings is not permitted to enter this office.” Id., n.41.

236 See id. at 5-6.

237 See id. at 12, 15.

238 See Dynamex, 4 Cal.5th at 912-13 (discussing the problem of misclassification).

239 See Catherine Ruckelshaus, Rebecca Smith, Sarah Leberstein & Eunice Cho, Nat’l Employment Law Project, Who’s the Boss: Restoring Accountability for Labor Standards in Outsourced Work 4-5, 7-8 (2014), https://www.nelp.org/insights-research/whos-the-boss-restoring-accountability-for-labor-standards-in-outsourced-work/.

240 See S. Comm. on Lab., Pub. Emp’t & Ret., Analysis, A.B. 3075, 2019-2020 Reg. Sess., at 7 (Cal. Aug. 3, 2020) (commenting that “labor enforcement agencies in the state struggle to pierce the elaborate liability shields erected by corporations attempting to escape judgments against them” and that “[c]orporations that violate labor have numerous options available to them, including creating subsidiaries to absorb liability or debt, dissolving the company completely and reincorporating under a different [name] and many more schemes”).

241 4 Cal.5th 903 (2018).

242 See id. at 912, n.1 (quoting U.S. Dep’t of Lab., The Dunlop Commission on the Future of Worker-Management Relations: Final Report 64 (1994)).

243 Dynamex, 4 Cal.5th at 913.

244 Id. 245 See S.B. 459, 2011-2012 Reg. Sess. (Cal. 2011); Cal. Lab. Code § 226.8 (a).

246 Cal. Lab. Code § 226.8 (i)(4).

247 Cal. Lab. Code § 226.8 (b)-(e).

248 See A.B. 594, 2023-2024 Reg. Sess. (Cal. 2023); Cal. Lab. Code § 226.8 (g)(2). See also part 3b of this publication, infra, for a discussion of willful misclassification damages recoverable by employees.

249 See Cal. Lab. Code § 226.8 (g).

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250 48 Cal.3d 341 (1989).

251 See Dynamex, 4 Cal.5th at 922, 954-55 (discussing Borello).

252 For the California Supreme Court’s discussion of cases leading up to its opinion, see Dynamex, 4 Cal.5th at 927-42.

253 See, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 2 (F).

254 See, e.g., Cal. Code Regs. tit. 8, § 11010, sec. 2 (D).

255 See Martinez, 49 Cal.4th at 64; Dynamex, 4 Cal.5th at 938.

256 See Martinez, 49 Cal.4th at 59-60, 64-65; Dynamex, 4 Cal.5th at 937-38.

257 See discussion in part 1a of this publication, supra.

258 See Dynamex, 4 Cal.5th at 947 (citing California appellate cases post-Martinez “recognizing that the definitions of ‘employ’ and ‘employer’ discussed in Martinez now govern the resolution of claims arising out of California wage orders, including whether a worker is an employee or independent contractor”).

259 See Dynamex, 4 Cal.5th at 942-63.

260 See, e.g., Cal. Lab. Comm’r, Opinion Letter, Application of the “ABC” Test to Claims Arising Under Wage Orders (May 3, 2019), https://www.dir.ca.gov/dlse/ opinions/2019-05-03.pdf.

261 The provisions of A.B. 5, 2019–2020 Reg. Sess. (Cal. 2019), were later “recast” and replaced by A.B. 2257, 2019–2020 Reg. Sess. (Cal. 2020), which created additional exemptions from the ABC test, clarified and revised certain provisions, and renumbered the applicable Labor Code sections. We refer to both bills collectively as “A.B. 5.”

262 A.B. 5, 2019–2020 Reg. Sess., Sec. 1 (e) (Cal. 2019).

263 See Cal. Lab. Code § 2775 (b)(1).

264 Id. 265 Dynamex, 4 Cal.5th at 953 (emphasis in original) (italics and internal quotation marks omitted) (discussing the “expansive reach” of the suffer or permit to work standard, and quoting Martinez, 49 Cal.4th at 69).

266 Dynamex, 4 Cal.5th at 964.

267 See Cal. Lab. Code § 2775 (b)(1); Dynamex, 4 Cal.5th at 963-64. The California Supreme Court has commented that “in many cases it may be easier and clearer…to determine whether or not part B or part C of the ABC standard has been satisfied than…to resolve questions regarding the nature or degree of a worker’s freedom from the hiring entity’s control for purposes of part A of the standard.” Dynamex, 4 Cal.5th at 963.

268 See, e.g., Goldman & Weil, supra note 88, at 106, 111 (noting that the ABC test “may generate both over- and under-inclusive results” and that if the test “is truly overinclusive, legislatures will continue to include carve-outs, which often reflect political will and power rather than a need to re-balance power in a working relationship” (emphasis in original)).

269 A.B. 5 was fiercely opposed by business interests, including app-based gig companies that recently lost a federal suit in which they had alleged A.B. 5 violates the Equal Protection Clauses of the U.S. and California Constitutions. See Olson v. California, 104 F.4th 66, 81 (9th Cir. 2024), cert. denied, __S.Ct.__, 2024 WL 4486406 (Oct. 15, 2024). However, on a separate track, app-based companies spent more than $200 million to successfully pass Proposition 22—a highly controversial 2020 state ballot initiative classifying certain rideshare and delivery drivers as independent contractors and carving them out of A.B. 5’s protections—which was recently upheld by the California Supreme Court against a constitutional challenge. See Castellanos v. State of Cal., 16 Cal.5th 588, 596 (2024); see also Levi Sumagaysay, Uber, Lyft, DoorDash Workers Remain Contractors Due to California Supreme Court Ruling, CalMatters (July 25, 2024), https://calmatters.org/economy/2024/07/prop-22-california-gig-work-law-upheld/.

270 48 Cal.3d 341 (1989). See also Dynamex, 4 Cal.5th at 922, 954-55 (discussing Borello).

271 See supra note 240.

272 Eunice H. Cho, Tia Koonse & Anthony Mischel, Hollow Victories: The Crisis in Collecting Unpaid Wages for California’s Workers, Nat’l Employment Law Project & UCLA Lab. Ctr. 10-11 (2013), https://labor.ucla.edu/publications/hollow-victories-the-crisis-in-collecting-unpaid-wages-for-californias-workers/.

273 See Cal. Lab. Code § 2684 (successor liability in garment industry, enacted in 1999); Cal. Lab. Code § 2066 (successor liability in carwash industry, enacted in 2003); Cal. Lab. Code § 1698.9 (successor liability in agricultural industry, enacted in 2013); Cal. Lab. Code § 1434 (successor liability in janitorial industry, enacted in 2016).

274 See A.B. 3075, 2019-2020 Reg. Sess. (Cal. 2020).

275 Cal. Lab. Code § 200.3 (a).

276 Cal. Lab. Code § 200.3 (a)(1). This criterion specifies that it does not apply to employers who maintain the same workforce pursuant to the Displaced Janitor Opportunity Act, codified at Cal. Lab. Code §§ 1060, et seq.

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277 Cal. Lab. Code § 200.3 (a)(2).

278 Cal. Lab. Code § 200.3 (a)(3).

279 Cal. Lab. Code § 200.3 (a)(4).

280 Cal. Lab. Code § 200.3 (b).

281 Compare Cal. Lab. Code § 200.3 (a) with Cal. Lab. Code §§ 2684 (b), 2066, 1698.9, 1434.

282 Compare Cal. Lab. Code § 200.3 (a)(3) with Cal. Lab. Code §§ 2684 (b)(3), 2066 (c), 1698.9 (c), 1434 (c).

283 In cases involving willful misclassification of employees as independent contractors, California has also enacted a separate non-industry-specific successor liability provision. See Cal. Lab. Code § 226.8 (h). In addition, another statute that is not limited by industry, Cal. Lab. Code § 238, generally establishes that a successor employer to an employer with an unsatisfied final judgment for unpaid wages shall be deemed an employer for purposes of that section, which prohibits an employer from continuing to conduct business in the state unless the employer has obtained a surety bond as specified in the statute that is maintained until satisfaction of the judgment; employers conducting business in violation of the section are subject to civil penalties.

284 Compare Cal. Lab. Code § 200.3 (a) (using the phrase “judgment debtor’s former workforce”) with Cal. Lab. Code § 2684 (b) (using the phrases “successor to any employer” and “predecessor’s former employee or employees”), Cal. Lab. Code § 2066 (using the phrases “successor to any employer” and “predecessor’s former employee or employees”), Cal. Lab. Code § 1698.9 (using the phrase “former employee of the predecessor”), and Cal. Lab. Code § 1434 (using the phrases “successor employer” and “predecessor employer”).

285 Compare Cal. Lab. Code § 200.3 (a)(3) (liability for wages, damages, and penalties) with Cal. Lab. Code § 2684 (b) (liability for wages), Cal. Lab. Code § 2066 (liability for wages and penalties), Cal. Lab. Code § 1698.9 (liability for wages and penalties), and Cal. Lab. Code § 1434 (liability for wages, damages, and penalties).

286 See Toho-Towa Co. v. Morgan Creek Prods., Inc., 217 Cal.App.4th 1096, 1106-1110 (2013) (citation and internal quotation marks omitted).

287 Id. at 1107 (citations and quotation marks omitted).

288 See S.B. 588, 2015-2016 Reg. Sess. (Cal. 2015). S.B. 588 also included several other provisions to improve judgment enforcement for nonpayment of wages.

289 “Final” wages are those due to an employee who is discharged or quits. Employers who willfully fail to pay such “final” wages as required by the Labor Code are subject to waiting time penalties under Cal. Lab. Code § 203. See part 3b of this publication, infra, for a discussion of waiting time penalties.

290 See Cal. Lab. Code § 558.1 (a), (b).

291 See Cal. Lab. Code § 1194.2. See also part 3b of this publication, infra, for a discussion of liquidated damages.

292 See Cal. Lab. Code § 226.

293 See supra note 289.

294 BOFE is statutorily authorized to issue citations against individual corporate agents who violated or caused certain violations of the Labor Code or IWC wage orders. See Cal. Lab. Code § 558 (citation for civil penalties and restitution of wages against an employer or other person acting on behalf of an employer who violates or causes violations of provisions regulating hours and days of work, including overtime, meal and rest periods, and reporting time pay); Cal. Lab. Code § 1197.1 (citation for civil penalties, restitution of wages, liquidated damages, and waiting time penalties against an employer or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid a wage less than minimum wage); Cal. Lab. Code § 2802 (citation for business expense reimbursement against an employer or other person acting on behalf of the employer who violates reimbursement obligations under the statute). See part 3 of this publication, infra, for an overview of BOFE and a discussion of how BOFE’s citation power has been enhanced over time through various legislation.

295 In addition to administering the Berman wage claims process and exercising its citation authority under BOFE, the Commissioner is authorized under various provisions of the Labor Code to file civil actions to enforce basic labor standards. See, e.g., Cal. Lab. Code §§ 98.3, 217, 1193.6. For a discussion of Berman claims and BOFE citations, see part 3 of this publication, infra. For more on the Commissioner’s various units and enforcement activities, see Cal. Lab. Comm’r, A Report on the State of the Division of Labor Standards Enforcement, supra note 12. Workers also have the express right under various provisions of the Labor Code to bring civil actions. See infra note 388.

296 Individual corporate agent liability under Cal. Lab. Code § 558.1 is similar, but not identical, to the individual liability under Cal. Lab. Code §§ 558, 1197.1, and 2802.

See supra note 294. Section 558.1 defines and limits the term “other person acting on behalf of an employer” to an owner, director, officer, or managing agent of the employer. Other individuals cannot be held liable based on Section 558.1. In contrast, BOFE’s authority under Cal. Lab. Code §§ 558, 1197.1, and 2802 to issue citations against individuals acting on behalf of an employer does not contain this definitional limitation. We note that S.B. 588 also added another provision, Cal. Lab. Code § 238.5, that creates a form of individual liability for unpaid wages in the long-term care and property services industries, and specifies enforcement in Berman claims, BOFE citations, and civil actions filed by the Labor Commissioner. See discussion of Cal. Lab. Code § 238.5, infra.

297 We use the terms “upstream” to signify the entities at the top of the chain that outsource labor, and “downstream” to signify the entity such as a contractor or subcontractor at the bottom that directly employs workers to produce goods or provide services for these “upstream” entities. Accordingly, we also use the phrase “up-the-chain liability” to signify liability that extends upwards to the entities that use intermediaries to outsource labor “down” the chain. We distinguish our use of these terms from the way they may be utilized elsewhere (e.g., the term “downstream” has been used in the “hot goods” context under the FLSA, see Policy Recommendations, infra, in relation to persons or entities other than the employer that may receive and ship “hot goods” in the stream of commerce).

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298 For a discussion of subcontracting in low-wage industries as a subterfuge to avoid legal responsibility for workers and compliance with labor standards, see Assemb. Comm. on Lab. & Emp’t, Analysis, A.B. 1897, 2013-2014 Reg. Sess., at 2-7 (Cal. April 21, 2014).

299 In other words, each liable entity can be held independently responsible to satisfy the full amount owed, or recovery may be split among any or all liable entities.

300 See, e.g., Assemb. Comm. on Lab. & Emp’t, Analysis, A.B. 1897, 2013-2014 Reg. Sess., at 7-9 (Cal. April 21, 2014).

301 See supra note 10.

302 See Martinez, 49 Cal.4th at 59-60, 64-68; Dynamex, 4 Cal.5th at 937-38.

303 See Martinez, 49 Cal.4th at 69-77 (finding produce merchants were not liable for minimum wage violations of agricultural workers’ direct employer because merchants did not exercise control over the workers’ wages or performance of work, and did not have the “power to prevent” the work from occurring).

304 A.B. 1897, 2013-2014 Reg. Sess (Cal. 2014).

305 Cal. Lab. Code § 2810.3 (a)(1)(A).

306 Cal. Lab. Code § 2810.3 (a)(1)(B)(i), (ii).

307 See Cal. Lab. Code § 2810.3 (a)(1)(B)(iii), (n), (p).

308 Cal. Lab. Code § 2810.3 (a)(3).

309 Cal. Lab. Code § 2810.3 (a)(6). See Policy Recommendations, infra, for further discussion of this definition.

310 It does not matter whether the entity providing workers to the client employer is an independent contractor as long as the entity meets the definition of a labor contractor. The statute expressly states, “This section does not impose liability on a client employer for the use of an independent contractor other than a labor contractor or to change the definition of independent contractor.” Cal. Lab. Code § 2810.3 (o) (emphasis added). In other words, there is no client employer liability when a business utilizes an independent contractor that is not a labor contractor under the statute because, for example, the independent contractor does not supply workers to perform labor that is part of the regular and customary work of the business.

311 See Cal. Lab. Code § 2810.3 (a)(4), (b).

312 See Cal. Code Regs. tit. 8, § 13830. The implementing regulations issued by the Labor Commissioner also clarified recordkeeping requirements and the methods to allocate liability among multiple client employers. See Cal. Code Regs. tit. 8, §§ 13831, 13832.

313 Cal. Lab. Code § 2810.3 (d), (j).

314 S.B. 179, 2003-2004 Reg. Sess. (Cal. 2003).

315 See id., Sec. 1, Cal. Lab. Code § 2810 (a).

316 See A.B. 1855, 2011-2012 Reg. Sess., Sec. 1, Cal. Lab. Code § 2810 (a) (Cal. 2012).

317 See A.B. 2754, 2023-2024 Reg. Sess., Sec. 1, Cal. Lab. Code § 2810 (a) (Cal. 2024).

318 Cal. Lab. Code § 2810 (g).

319 Assemb. Comm. on Appropriations, Analysis, S.B. 179, 2003-2004 Reg. Sess., at 2 (Cal. Aug. 19, 2003).

320 See, e.g., Castillo v. Toll Bros., Inc., 197 Cal.App.4th 1172 (2011).

321 See S. Judiciary Comm., Analysis, A.B. 1897, 2013-2014 Reg. Sess., at 5 (Cal. June 23, 2014).

322 See id.

323 See id. at 6.

324 See id.

325 For example, the Labor Commissioner has enforced the law with some notable success. See, e.g., Cal. Dep’t of Indus. Rels., News Release 2024-06, California Labor Commissioner’s Office Reaches $1 Million Settlement with Cheesecake Factory, Janitorial Contractors (Jan. 23, 2024), https://www.dir.ca.gov/ DIRNews/2024/2024-06.html. In general, there is relatively limited caselaw interpreting Section 2810.3. For a discussion of the Ninth Circuit case, MoralesGarcia v. Better Produce, Inc., 70 F.4th 532 (9th Cir. 2023), see Policy Recommendations, infra.

326 See S.B. 588, 2015-2016 Reg. Sess. (Cal. 2015).

327 See Cal. Lab. Code § 238.5 (a)(1), (e).

328 Id.

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329 Section 238.5 does not impose joint liability for property services provided to an individual homeowner or the owner of a home-based business, under specified circumstances. See Cal. Lab. Code § 238.5 (f). The law also does not apply to unpaid wages owed to employees covered by a bona fide collective bargaining agreement as specified under the statute. See Cal. Lab. Code § 238.5 (b).

330 See Cal. Lab. Code § 238.5 (a).

331 It could perhaps be argued that the term “wages” under Section 238.5 should be construed broadly to include compensatory damages and penalties for the failure to pay wages, especially given the broad remedial purpose of the Labor Code. However, other statutes like the client employer law explicitly define “wages” to include “all sums payable” for the failure to pay wages. In comparison, the lack of such an express definition in Section 238.5 appears limiting.

332 The statute by its terms only discusses administrative enforcement mechanisms of the Labor Commissioner or a court action either filed by the Commissioner or that results if the Commissioner’s Berman wage claim decision is appealed. See Cal. Lab. Code § 238.5 (a).

333 See A.B. 1701, 2017-2018 Reg. Sess. (Cal. 2017).

334 S. Judiciary Comm., Analysis, A.B. 1701, 2017-2018 Reg. Sess., at 1 (Cal. July 17, 2017).

335 Id. at 8.

336 See A.B. 1701, 2017-2018 Reg. Sess. (Cal. 2017).

337 S. Judiciary Comm., Analysis, A.B. 1701, 2017-2018 Reg. Sess., at 2 (Cal. July 17, 2017).

338 See S.B. 727, 2021-2022 Reg. Sess. (Cal. 2021); Cal. Lab. Code § 218.8 (a).

339 See Cal. Lab. Code § 218.8 (b)(1).

340 See Cal. Lab. Code § 218.8 (b)(2), (3).

341 See S.B. 1402, 2017-2018 Reg. Sess. (Cal. 2018).

342 See id., Sec. 1 (f), (h), (i).

343 Id., Sec. 1 (o).

344 Id., Sec. 1 (r).

345 Id., Sec. 1 (q).

346 Id., Sec. 1 (s).

347 This would include a final court judgment resulting from a Labor Commissioner order, decision or award in a Berman wage claim or from a citation issued by the Commissioner. See part 3 of this publication, infra, for a discussion of Berman claims and the Commissioner’s citation processes.

348 Cal. Lab. Code § 2810.4 (c)(1). Section 2810.4 states that this information may be publicly released to the extent permitted under federal and state laws. See id.

349 See Cal. Lab. Code § 2810.4 (c)(1). The original bill was amended in 2021 to require the Labor Commissioner to also publicly post the names, addresses, and essential information of prior offenders, as defined, with a subsequent judgment, ruling, citation, order, decision, or award finding that the port drayage motor carrier has violated labor laws, even if all appeal periods have not expired. See S.B. 338, 2021-2022 Reg. Sess. (Cal. 2021).

350 See Cal. Lab. Code § 2810.4 (c)(1), (2).

351 Cal. Lab. Code § 2810.4 (c)(3).

352 See Cal. Lab. Code § 2810.3 (b), and discussion of the client employer law, supra.

353 See Cal. Lab. Code § 2810.4 (c)(3). Joint and several liability does not apply to customers if they engage or use a port drayage motor carrier whose employees are covered by a bona fide collective bargaining agreement as specified under the law. Cal. Lab. Code § 2810.4 (e)(1).

354 See A.B. 2754, 2023-2024 Reg. Sess. (Cal. 2024); Cal. Lab. Code § 2810.4 (b). This amendment, effective January 1, 2025, may have quite an impact given the high rates of misclassification in the port trucking industry. See S. Judiciary Comm., Analysis, A.B. 2754, 2023-2024 Reg. Sess., at 6-10 (Cal. June 30, 2024); S. Comm. on Lab., Pub. Emp’t & Ret., Analysis, A.B. 2754, 2023-2024 Reg. Sess., at 4-5 (Cal. June 25, 2024).

355 Cal. Lab. Code § 2810.4 (a)(5).

356 Cal. Lab. Code § 2810.4 (a)(2). Certain business entities are excepted from the definition of “customer,” including small businesses with fewer than 25 workers (counted as including those hired directly by the customer, or through a temporary employer or labor contractor). See Cal. Lab. Code § 2810.4 (a)(2)(B).

357 See Cal. Lab. Code § 2810.4 (d).

358 See legislative history cited in note 354, supra.

359 A.B. 633, 1999-2000 Reg. Sess. (Cal. 1999).

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360 S.B. 62, 2021-2022 Reg. Sess. (Cal. 2021).

361 See Cal. Lab. Code § 2670 (a).

362 Id. 363 S.B. 62, 2021-2022 Reg. Sess., Sec. 1 (Cal. 2021).

364 Id. 365 Cal. Lab. Code § 2670 (a).

366 Id. 367 See Cal. Lab. Code § 2671 (d). Subsequent legislation in 2022 made a technical correction to the definition of “brand guarantor.” See S.B. 191, 2021-2022 Reg. Sess. (Cal. 2022).

368 Cal. Lab. Code § 2673.1 (a)(1).

369 See Cal. Lab. Code §§ 2671, 2673.1 (a)(1).

370 See Cal. Lab. Code § 2677 (allowing a garment worker employed by a contractor that has not registered its business with the Labor Commissioner, as required by law, to bring a civil action for unpaid wages, damages, or penalties against a person engaged in garment manufacturing who contracts with the unregistered contractor).

371 Compare A.B. 633, 1999-2000 Reg. Sess., Sec. 2, Cal. Lab. Code § 2673.1 (a) (Cal. 1999), with the law as now amended, Cal. Lab. Code § 2673.1 (a)(1).

372 See Cal. Lab. Code § 2673.1 (b). This subsection was amended by subsequent legislation in 2022 to fix a technical mistake in the original 2021 law. See S.B. 191, 2021-2022 Reg. Sess. (Cal. 2022).

373 Compare A.B. 633, 1999-2000 Reg. Sess., Sec. 2, Cal. Lab. Code § 2673.1 (e) (Cal. 1999), with the law as now amended, Cal. Lab. Code § 2673.1 (b).

374 See Cal. Lab. Code § 2673.1 (d)(3).

375 See Cal. Lab. Code § 2673.2. See also part 1b of this publication, supra, for an overview of the piece rate pay prohibition under S.B. 62. The bill also made other adjustments to A.B. 633, which we do not address in this publication.

376 Various references are made throughout this table to Berman claims and BOFE citations. See section 3a, infra, for an overview of these administrative enforcement mechanisms of the California Labor Commissioner.

377 A.B. 633, 1999-2000 Reg. Sess. (Cal. 1999).

378 See Erin Blakemore, 20th-Century Slavery Was Hiding in Plain Sight, Smithsonian Magazine (July 31, 2020), https://www.smithsonianmag.com/smithsonianinstitution/20th-century-slavery-california-sweatshop-was-hiding-plain-sight-180975441/.

379 See S. Rules Comm., Analysis, A.B. 633, 1999-2000 Reg. Sess., at 7 (Cal. Sept. 27, 1999) (discussing concern around the growing prevalence of sweatshops in the state); Liz Ohanesian, For Garment Workers, Making Any Minimum Wage Has Been a Struggle. A California Senate Bill Aims to Change That, Los Angeles Magazine (Jan. 29, 2021), https://lamag.com/featured/garment-workers-sb-62 (noting that the El Monte case led to the passage of A.B. 633).

380 See Christina Chung & Judy Marblestone, Asian Pacific American Legal Center, Reinforcing the Seams: Guaranteeing the Promise of California’s Landmark AntiSweatshop Law 10-11 (2005).

381 See A.B. 633, 1999-2000 Reg. Sess., Cal. Lab. Code §§ 2671, 2673.1 (Cal. 1999).

382 See A.B. 633, 1999-2000 Reg. Sess., Cal. Lab. Code § 2673.1 (d)(3) (Cal. 1999). This provision was amended by S.B. 62, 2021-2022 Reg. Sess. (Cal. 2021), to augment the presumption of validity of the worker’s claim so that the worker’s claim of upstream liability is also presumed valid upon provision by the employee of garment labels or other credible information about the work performed.

383 See A.B. 633, 1999-2000 Reg. Sess., Cal. Lab. Code § 2673.1 (d)(3) (Cal. 1999).

384 See S.B. 62, 2021-2022 Reg. Sess., Sec. 1 (Cal. 2021).

385 See S.B. 62, 2021-2022 Reg. Sess., Sec. 1, Cal. Lab. Code §§ 2670, 2671 (d), 2673.1 (Cal. 2021).

386 See discussion of S.B. 62, supra.

387 See Blakemore, supra note 378.

388 See, e.g., Cal. Lab. Code § 1194 (private right of action to recover unpaid minimum and overtime wages); Cal. Lab. Code § 1194.2 (private right of action to recover liquidated damages equal to unpaid minimum wages); Cal. Lab. Code § 203 (private right of action to recover “waiting time” penalties for willful failure to pay final wages); Cal. Lab. Code § 218 (private right of action to recover wages due under applicable Labor Code sections, including wages due for meal and rest period violations); Cal. Lab. Code § 2810.3 (d) (private right of action to enforce client employer liability); Cal. Lab. Code § 2810.4 (c)(2) (private right of action to enforce customer liability in port trucking industry).

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389 See Kate Hamaji, Rachel Deutsch, Elizabeth Nicolas, Celine McNicholas, Heidi Shierholz & Margaret Poydock, Ctr. for Popular Democracy & Economic Policy Inst., Unchecked Corporate Power: Forced Arbitration, The Enforcement Crisis, and How Workers are Fighting Back 1 (2019), https://www.epi.org/publication/ unchecked-corporate-power/; Colvin, supra note 11, at 2.

390 Labor Code sections that on their face only contemplate government enforcement include, for example, Cal. Lab. Code § 248.5 (paid sick leave law); Cal. Lab. Code § 238.5 (upstream liability in the property services and long-term care industries); Cal. Lab. Code § 2673.1 (upstream liability in the garment industry).

In 2003, California passed the Private Attorneys General Act (PAGA), an innovative law which enables workers to stand in the shoes of government agency officials and file representative actions on behalf of themselves and other workers, as private attorneys general (in which the state is the real party in interest) to seek civil penalties against employers for violations of the Labor Code. PAGA does not allow for the recovery of unpaid wages or damages that are owed to workers, and the effects of more recent “reforms” of the statute remain to be seen. See “Spotlight - California’s Private Attorneys General Act (PAGA): Promoting the Synergy of Public and Private Enforcement of Labor Standards,” infra. Some Labor Code provisions also expressly exclude or limit PAGA actions. See, e.g., Cal. Lab. Code § 238.5 (a)(2); Cal. Lab. Code § 2810.4 (d)(2).

391 See supra note 10.

392 As noted previously, the California Labor Commissioner is also referred to as the Division of Labor Standards Enforcement. See note 66, supra.

393 The California Labor Commissioner also has other arms, including units focused on public works, licensing and registration, judgment enforcement, and criminal investigations, as well as a legal department that supports all units and files civil actions. For an overview of the Commissioner’s various arms and enforcement activities, see Cal. Lab. Comm’r, A Report on the State of the Division of Labor Standards Enforcement, supra note 12.

394 See Cal. State Auditor, supra note 1, at 19 (analyzing backlogs in the Commissioner’s wage claims adjudication process and finding that insufficient staffing is the primary cause).

395 For a related analysis of the critical importance of funding government enforcement of labor standards, see Daniel Costa, Josh Bivens, Ben Zipperer & Monique Morrissey, Economic Policy Inst., The U.S. Benefits from Immigration but Policy Reforms Needed to Maximize Gains 40-45, 51 (2024), https://www.epi.org/ publication/u-s-benefits-from-immigration/#epi-toc-20 (examining the underfunding of labor standards enforcement at the federal level, observing that this ultimately degrades standards for all workers, and arguing for major investments in federal worker protection agencies).

396 See Cuadra v. Millan, 17 Cal.4th 855, 858 (1998), disapproved on another ground in Samuels v. Mix, 22 Cal.4th 1, 16, n.4 (1999).

397 Murphy, 40 Cal.4th at 1115 (internal quotations and citation omitted).

398 Sonic-Calabasas A, Inc. v. Moreno, 57 Cal.4th 1109, 1129 (2013) (citation omitted).

399 Murphy, 40 Cal.4th at 1115 (internal quotations and citation omitted). There is no requirement of administrative exhaustion. Id. at 1117 (citation omitted). As we have discussed, there is a separate administrative wage claims process for garment workers that was established under A.B. 633. See “Spotlight - AB 633: California’s Landmark Corporate Accountability Law in the Garment Industry,” supra.

400 Sonic-Calabasas, 57 Cal.4th at 1146.

401 See Cuadra, 17 Cal.4th at 858-861; Cal. Code Regs. tit. 8, §§ 13500-13508.

402 See How to File a Wage Claim, Cal. Lab. Comm’r, https://www.dir.ca.gov/dlse/HowToFileWageClaim.htm#page_tabs (last visited Jan. 5, 2025).

403 See Cuadra, 17 Cal.4th at 861; Cal. State Auditor, supra note 1, at 3-6 (describing Berman wage claims process).

404 See Cuadra, 17 Cal.4th at 861; Cal. State Auditor, supra note 1, at 3-6 (describing Berman wage claims process); Cal. Lab. Code § 98 (a).

405 See Cal. Lab. Code § 98 (c), (d).

406 See Cal. Lab. Code § 98 (a); Cal. Code Regs. tit. 8, § 13502.

407 See Cal. Code Regs. tit. 8, § 13505.

408 Id. 409 See Cal. Code Regs. tit. 8, § 13506.

410 See Cal. Lab. Code § 98.1.

411 See Cal. Lab. Code § 98.2.

412 See Cal. Lab. Code § 98.2 (b).

413 See Cal. Lab. Code § 98.2 (d), (e).

414 Murphy, 40 Cal.4th at 1116-1117 (citations omitted).

415 See Cal. Lab. Code § 98.4.

416 Cal. Lab. Code § 98.5.

417 See Cal. Lab. Code § 98 (a).

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418 Murphy, 40 Cal.4th at 1116, n.14 (citations omitted).

419 See Cal. State Auditor, supra note 1, at 9, 19.

420 See supra note 3.

421 See supra note 10. We note that under forced arbitration agreements, workers could be foreclosed from pursuing not only private suits but also Berman claims. See note 437, infra.

422 See Cal. State Auditor, supra note 1, at 3, 12.

423 See Cal. Lab. Code § 90.5 (c); Cal. Lab. Comm’r, The Bureau of Field Enforcement 2020-2021 Fiscal Year Report 2, 4-5, 9, https://www.dir.ca.gov/dlse/ dlsereports.htm. In addition, BOFE investigates employers for compliance with child labor laws, workers’ compensation laws, and business licensing and registration requirements.

424 See Cal. Lab. Comm’r, The Bureau of Field Enforcement 2020-2021 Fiscal Year Report, supra note 423, at 3 (noting that “[t]he Bureau does not rely solely on complaintbased investigations but also engages in proactive, strategic enforcement based on leads obtained by organizations, associations, and industry representatives”).

425 See id. at 2-3, 8; Cal. Lab. Comm’r, A Report on the State of the Division of Labor Standards Enforcement, supra note 12. BOFE launched its strategic enforcement initiative with community partners in 2016, under the leadership of then California Labor Commissioner Julie Su. For a brief history of the Commissioner’s strategic enforcement initiative, see Alejandro Lazo & Jeanne Kuang, To Fight Wage Theft California Gets Strong Assist from Worker Centers, CalMatters (May 2, 2023), https://calmatters.org/california-divide/2022/11/california-wage-theft-workers/.

426 Cal. Lab. Comm’r, The Bureau of Field Enforcement 2020-2021 Fiscal Year Report, supra note 423, at 3.

427 See supra note 294.

428 BOFE citations may include civil penalties for violating laws on minimum wage and overtime, misclassification, workers’ compensation, child labor, and business licensing and registration, as some examples. See Cal. Lab. Comm’r, The Bureau of Field Enforcement 2020-2021 Fiscal Year Report, supra note 423, at 6.

429 See Cal. Lab. Code § 1197.1 (b)-(g). Other Labor Code sections authorizing BOFE citations reference the procedures in Section 1197.1. See, e.g., Cal. Lab. Code § 558 (b); Cal. Lab. Code § 2802 (d).

430 See Cal. Lab. Code § 1197.1 (c).

431 Id. This bond requirement was enacted in order “to ensure that unscrupulous employers cannot avoid paying withheld wages by filing frivolous petitions.” ZB, N.A., 8 Cal.5th at 192 (citation omitted).

432 See Cal. Lab. Code § 1197.1 (c)-(f).

433 See id.

434 See Cal. Lab. Code § 1197.1 (c)(4).

435 See discussion of this point in ZB, N.A., 8 Cal.5th at 194–95. This is not to say, however, that the BOFE citation and appeals process is not also subject to delays.

436 See Cal. Gov’t. Code § 11425.60 (agency may designate a hearing decision or part of a decision as a “precedent decision” if it “contains a significant legal or policy determination of general application that is likely to recur”; such a designation is not rulemaking or subject to judicial review).

437 See Sonic-Calabasas, 57 Cal. 4th at 1149-50 (arbitration agreement may compel a worker to waive protections of the Berman process, but an employee’s surrender of Berman protections in their totality may be considered as a factor in determining whether an arbitration agreement is unconscionable because it does not provide for accessible, affordable resolution of wage disputes).

438 The Labor Code section creating the BOFE unit sets forth the Bureau’s law enforcement purpose: “It is the policy of this state to vigorously enforce minimum labor standards in order to ensure employees are not required or permitted to work under substandard unlawful conditions or for employers that have not secured the payment of compensation, and to protect employers who comply with the law from those who attempt to gain a competitive advantage at the expense of their workers by failing to comply with minimum labor standards.” Cal. Lab. Code § 90.5 (a). To this end, the BOFE unit was established “to ensure that minimum labor standards are adequately enforced” through the Bureau’s efforts. Cal. Lab. Code § 90.5 (b).

439 See E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 291-98 (2002) (ruling that the EEOC is not bound by an arbitration agreement between an employer and employee because the EEOC is not a party to the agreement and has therefore not agreed to arbitration, and the EEOC was thus not barred from pursuing victimspecific judicial relief such as back pay, reinstatement, and damages in an enforcement action under the federal Americans with Disabilities Act; finding that the federal statute “clearly makes the EEOC the master of its own case and confers on the agency the authority to evaluate the strength of the public interest at stake,” that it is the EEOC’s province as a public agency “to determine whether public resources should be committed to the recovery of victim-specific relief,” and that “whenever the EEOC chooses from among the many charges filed each year to bring an enforcement action in a particular case, the agency may be seeking to vindicate a public interest, not simply provide make-whole relief for the employee, even when it pursues entirely victim-specific relief”); In re Uber Technologies Wage & Hour Cases, 95 Cal.App.5th 1297, 1303-18 (2023) (ruling that the California Labor Commissioner was not bound by private arbitration agreements between drivers and app-based gig companies to which the Commissioner, a public enforcement agency, was not a party, and accordingly, the Commissioner was not precluded from exercising its express independent authority under the Labor Code to bring a civil enforcement action seeking appropriate relief, including unpaid wages for drivers; noting that the Labor Commissioner filed its action pursuant to its statutory authority under a number of Labor Code sections including § 90.5, which sets forth the state’s public policy interest in vigorous enforcement of minimum labor standards; and rejecting Uber and Lyft’s argument that the Commissioner “must arbitrate its claims because the relief it obtains may benefit individuals”), cert. denied, __S.Ct.__, 2024 WL 4426557 (Oct. 7, 2024),

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and cert. denied, __S.Ct.__, 2024 WL 4426561 (Oct. 7, 2024). See also Walsh v. Arizona Logistics, Inc., 998 F.3d 393, 395-97 (9th Cir. 2021) (holding that U.S. Department of Labor was not bound by arbitration agreement between employer and delivery-driver employees because the Secretary of Labor is not a party to the arbitration agreement, and the Secretary could pursue monetary relief for employees in FLSA enforcement action which the Secretary has authority to direct; ruling that, as the U.S. Supreme Court recognized in Waffle House, “the government can vindicate a public interest while also pursuing employee-specific relief”; and observing that “the Secretary may still have interests independent of the aggrieved employee when seeking employee-specific relief, including deterring other employers from violating the FLSA and protecting complying employers from unfair wage competition with noncomplying employers”). There are other cases following the reasoning in Waffle House; we highlight only a few.

440 Gebreselassie et al., supra note 5, at 4-5.

441 Id. at 5.

442 Schneider et al., supra note 5, at 3, 9.

443 Id. at 10-11.

444 Assemb. Comm. on Judiciary, Analysis, S.B. 306, 2017-2018 Reg. Sess., at 5 (Cal. June 17, 2017).

445 See Laws that Prohibit Retaliation and Discrimination, Cal. Lab. Comm’r, https://www.dir.ca.gov/dlse/HowToFileLinkCodeSections.htm (last visited Jan. 5, 2025).

446 See Cal. Lab. Code § 98.6 (a).

447 See Cal. Lab. Code § 246.5 (c).

448 See Cal. Lab. Code § 1102.5 (b).

449 Cal. Lab. Code § 98.7 (a). In 2020, California extended the statute of limitations on retaliation claims filed with the Commissioner from six months to one year.

See A.B. 1947, 2019-2020 Reg. Sess. (Cal. 2020).

450 See Cal. Lab. Code § 98.7 (a)-(c).

451 See Cal. Lab. Code § 98.7 (c)(1), (d)(1), (e).

452 Cal. Lab. Code § 98.7 (c)(1).

453 See Cal. Lab. Code § 98.7 (c)(1), (c)(2).

454 Cal. Lab. Code § 98.7 (c)(1).

455 See id.

456 Cal. Lab. Code § 98.7 (c)(3).

457 See Cal. Lab. Code § 98.7 (e). In one exception, an administrative appeal may be filed as set forth under the statute for retaliation complaints arising under Labor Code sections relating to occupational health and safety.

458 See Cal. Lab. Code § 98.7 (d)(1).

459 See Cal. Lab. Code § 98.7 (b)(1), (g).

460 See Cal. Lab. Code § 98.7 (c)(1), (e).

461 See discussion in part 3c of this publication, infra.

462 See Cal. Lab. Code § 98.7 (a)(2).

463 See notes 3 & 4, supra.

464 See parts 3b & 3c of this publication, infra.

465 See part 3b of this publication, infra (discussing statutory authority of the Commissioner to enforce local minimum wage and overtime ordinances).

466 See A.B. 594, 2023-2024 Reg. Sess. (Cal. 2023) (expressly authorizing the California Attorney General and local public prosecutors to independently enforce a wide array of Labor Code sections and to seek injunctive relief for violations); A.B. 2738, 2023-2024 Reg. Sess. (Cal. 2024) (adding to enforcement authority); Cal. Lab. Code § 181.

467 See supra note 388, for some examples. However, private rights of action continue to be undercut by the prevalence of forced arbitration. See “Spotlight Leveling the Playing Field for Workers in Forced Arbitration: Free Legal Representation by the California Labor Commissioner,” infra.

468 See Kim v. Reins Int’l Cal. Inc., 9 Cal.5th 73, 80 (2020).

469 See S.B. 796, 2003-2004 Reg. Sess. (Cal. 2003); Adolph v. Uber Technologies, Inc., 14 Cal.5th 1104, 1116 (2023) (citations omitted).

470 See Cal. Lab. Code § 2699 (a); Arias v. Superior Ct., 46 Cal.4th 969, 980 (2009).

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471 See Adolph, 14 Cal.5th at 1116 (citations omitted).

472 Id. (citations omitted).

473 See id. (citations omitted); Cal. Lab. Code § 2699 (f).

474 Cal. Lab. Code § 2699.3 (a)(1)(A), (c)(1)(A). The PAGA statute refers to the Labor and Workforce Development Agency, which is California’s umbrella labor agency that includes the California Labor Commissioner’s Office. See supra note 66.

475 Cal. Lab. Code § 2699.3 (a)(2), (c)(1). For certain violations of the Labor Code, a PAGA action may not commence against an employer with fewer than 100 employees in total during the period covered by the PAGA notice until after the employer is first given the opportunity to cure the violation. See Cal. Lab. Code § 2699.3 (c)(2), (c)(3). This cure provision was added as part of a recent PAGA “reform” bill. See infra notes 486 & 487 and accompanying main text.

476 Cal. Lab. Code § 2699 (k)(1).

477 See Cal. Lab. Code § 2699.3 (s)(2).

478 Adolph, 14 Cal.5th at 1117 (internal quotation marks and citation omitted).

479 Kim, 9 Cal.5th at 86 (internal quotation marks and citations omitted) (emphasis in original).

480 Adolph, 14 Cal.5th at 1116, 1117 (internal quotation marks and citations omitted).

481 See Cal. Lab. Code § 2699 (m); Tia Koonse & Minsu Longiaru, UCLA Lab. Ctr., PowerSwitch Action & Ctr. for Popular Democracy, A Shrinking Toolbox: The Corporate Efforts to Eliminate PAGA and Limit California Workers’ Rights 6, 30-31 (2024), https://labor.ucla.edu/publications/paga-california-2024/.

482 See Koonse & Longiaru, supra note 481.

483 See id.; Rachel Deutsch, Rey Fuentes & Tia Koonse, Ctr. for Popular Democracy, UCLA Lab. Ctr. & Partnership for Working Families, California’s Hero Labor Law: The Private Attorneys General Act Fights Wage Theft and Recovers Millions from Lawbreaking Corporations (2020), https://www.powerswitchaction.org/ resources/californias-hero-labor-law.

484 See Viking River Cruises, Inc. v. Moriana, 596 U.S. 639, 649, 662-63 (2022) (holding that Federal Arbitration Act does not preempt California rule that a predispute wholesale waiver of the right to bring a PAGA action is unenforceable, and ruling that a PAGA plaintiff’s “non-individual” claims on behalf of other employees may not be dismissed “simply because they are ‘representative’”); Adolph, 14 Cal.5th at 1117-1118, 1123 (discussing California prohibition against PAGA waivers that Viking River left intact and holding that “where a plaintiff has filed a PAGA action comprised of individual and non-individual claims, an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate non-individual claims in court”). See also Koonse & Longiaru, supra note 481, at 6, 15-17 (discussing prevalence of forced arbitration and finding that “PAGA filings have increased in direct proportion to the explosion in forced arbitration clauses since the early 2000s”).

485 See Kim, 9 Cal.5th at 81 (PAGA notice requirement allows state agency “to decide whether to allocate scarce resources to an investigation”); Deutsch et al., supra note 483, at 9 (quoting Labor Commissioner’s statement that PAGA notices generate high quality leads enabling the discovery of serious violations).

486 The recent changes to the PAGA statute include, inter alia, generally limiting PAGA claims to violations the PAGA plaintiff personally suffered (previously, the statute allowed PAGA plaintiffs to include violations suffered by co-workers but not the plaintiff); specifying certain factors that reduce civil penalty amounts, including when employers take “all reasonable steps” to come into compliance with the law; altering the civil penalty payment structure to provide the state labor agency with 65% (instead of 75%) of civil penalties recovered and aggrieved employees with 35% (instead of 25%); creating a new process for employers with less than 100 employees to cure violations alleged in a PAGA notice, and requiring that when an employer cures a wage violation, aggrieved employees must be made whole by receiving an amount sufficient to recover any unpaid wages extending back 3 years from the date of the PAGA notice, plus 7 percent interest, liquidated damages, and reasonable lodestar attorney’s fees and costs; allowing aggrieved employees to seek injunctive relief in PAGA actions; and setting forth procedures for employers with at least 100 employees to request an early evaluation conference in a PAGA suit as well as a stay of court proceedings in order to cure violations. See A.B. 2288, 2023-2034 Reg. Sess. (Cal. 2024); S.B. 92, 2023-2024 Reg. Sess. (Cal. 2024).

487 See Koonse & Longiaru, supra note 481, at 20-41; Bob Egelko, Newsom, Labor Leaders Announce Deal to Keep Worker Protection Measure Off the Ballot, San Francisco Chronicle (June 18, 2024), https://www.sfchronicle.com/politics/article/paga-ballot-deal-19520623.php.

488 The California Supreme Court has held that the “amount sufficient to recover underpaid wages” under Section 558 is compensatory and is separate from and additional to the fixed civil penalty amounts provided for in the statute. ZB, N.A., 8 Cal.5th at 194–96.

489 While BOFE could refer the case to the Labor Commissioner’s legal department to seek workplace-wide recovery of the unpaid minimum wages (for example, through the possibility of a civil action by the Commissioner), this is far less efficient and more resource-intensive than simply citing the employer.

490 See discussion of this point in ZB, N.A., 8 Cal.5th at 194–95.

491 See A.B. 469, 2011-2012 Reg. Sess. (Cal. 2011).

492 See Cal. Lab. Code § 1197.1 (a), (b).

493 See A.B. 970, 2015-2016 Reg. Sess. (Cal. 2015); Cal. Lab. Code § 1197.1 (a), (b), (h); Cal. Lab. Code § 558 (b), (c).

494 See S.B. 688, 2019-2020 Reg. Sess. (Cal. 2019); Cal. Lab. Code § 1197.1 (b).

495 See Cal. Lab. Code § 2802 (a).

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496 Sanchez v. Aerogroup Retail Holdings, Inc., No. 12–CV–05445–LHK, 2013 WL 1942166, at *9 (N.D. Cal. May 8, 2013). See also Janken v. GM Hughes Electronics, 46 Cal.App.4th 55, 74, n.24 (1996) (Section 2802 shows legislative intent that job duty-related losses fall on the employer business, not the individual employee).

497 See, e.g., Assemb. Comm. on Lab. & Emp’t, Analysis, A.B. 970, 2015-2016 Reg. Sess., at 1 (Cal. April 6, 2015) (“very common” violation of Section 2802 “involves illegal charges for tools or equipment necessary to perform the job, but which are deducted from workers’ pay notwithstanding”); Gattuso v. HarteHanks Shoppers, Inc., 42 Cal.4th 554, 567-68 (2007) (vehicle-related expenses under Section 2802).

498 Sanchez, 2013 WL 1942166, at *10 (requiring an employee to unlawfully bear business expenses under Section 2802 may constitute a minimum wage violation under the Labor Code; employee whose net income falls below the minimum wage after paying for business expenses is in the same position as an employee who was not paid minimum wage in the first place). See also In re Work Uniform Cases, 133 Cal.App.4th 328, 337-38 (2005) (discussing Section 2802 and California cases that have concluded payment for employee uniforms “is a component of employee compensation” and “in effect concern[s] employee wages”); Stuart v.

RadioShack Corp., 641 F.Supp.2d 901, 904 (N.D. Cal. 2009) (“[r]eimbursement for expenses [under section 2802] is comparable to a wage”).

499 See A.B. 970, 2015-2016 Reg. Sess. (Cal. 2015).

500 Cal. Lab. Code § 2802 (d).

501 See 29 U.S.C § 216 (b). However, unlike the federal FLSA, California’s liquidated damages law is limited to unpaid minimum wages. A separate state statute in the garment industry constitutes the lone exception to this limitation. See infra note 611.

502 See S.B. 955, 1991-1992 Reg. Sess. (Cal. 1991).

503 Cal. Lab. Code § 1194.2 (a).

504 See Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 707 (1945) (liquidated damages under the FLSA are not penal in nature but compensatory, and reflect Congressional recognition that double payment must be made if minimum wage is not paid when due, in order to ensure “restoration of the worker to [the] minimum standard of well-being”); Biggs v. Wilson, 1 F.3d.1537 (9th Cir. 1993) (liquidated damages under the FLSA compensate employees for losses they have suffered in not receiving prompt payment of wages).

505 See Murphy, 40 Cal.4th at 1109-1111 (generally discussing dual purpose remedies that compensate workers while they also shape employer conduct).

506 See A.B. 240, 2011-2012 Reg. Sess. (Cal. 2011); Cal. Lab. Code §§ 98 (a), 1194.2.

507 See S.B. 588, 2015-2016 Reg. Sess. (Cal. 2015). As we have discussed, individual corporate agent liability is not limited to Berman claims. See part 2b of this publication, supra.

508 See A.B. 442, 2013-2014 Reg. Sess. (Cal. 2013); Cal. Lab. Code §§ 1194.2, 1197.1.

509 See A.B. 2074, 2013-2014 Reg. Sess. (Cal. 2014).

510 Cal. Lab. Code § 1194.2 (a). See further discussion of statutes of limitation in part 3c, infra.

511 See S. Judiciary Comm., Analysis, A.B. 2074, 2013-2014 Reg. Sess., at 4 (Cal. June 23, 2014).

512 The amendment to Section 1194.2 clarifies the limitations period for liquidated damages recoverable through the Labor Commissioner’s various administrative enforcement mechanisms and in civil suits under the Labor Code.

513 See A.B. 1723, 2013-2014 Reg. Sess. (Cal. 2014); Cal. Lab. Code § 1197.1 (a), (b).

514 See A.B. 673, 2019-2020 Reg. Sess. (Cal. 2019). Section 210 focuses on the late payment of wages, but also includes a provision of the Labor Code that prohibits discrimination in the payment of wages based on sex, race, or ethnicity. See Cal. Lab. Code § 210 (a) (incorporating Cal. Lab. Code § 1197.5).

515 Cal. Lab. Code § 210 (b).

516 For a discussion of the PAGA statute, see “Spotlight - California’s Private Attorneys General Act (PAGA): Promoting the Synergy of Public and Private Enforcement of Labor Standards,” supra.

517 Cal. Lab. Code § 210 (a). The statute does not define its terms including “subsequent violation” or “willful or intentional violation.”

518 See A.B. 1522, 2013-2014 Reg. Sess. (Cal. 2014); Summary: Paid Sick Leave, Nat’l Conference of State Legislatures (July 21, 2020), https://www.ncsl.org/ labor-and-employment/paid-sick-leave. Although California was the second state in the U.S. to pass paid sick leave legislation, for almost a decade afterwards, it lagged behind other states in the amount of paid sick leave that it required employers to provide. See Mark Kreidler, California is Last Among States Mandating Paid Sick Leave, Capital & Main (Sept. 28, 2023), https://capitalandmain.com/california-is-last-among-states-mandating-paid-sick-leave. In 2023, the state enacted legislation to increase the amount of paid sick leave from 24 hours (or 3 days) per year, up to 40 hours (or 5 days) per year. See S.B. 616, 2023-2024 Reg. Sess. (Cal. 2023).

519 See A.B. 1522, 2013-2014 Reg. Sess., Sec. 3, Cal. Lab. Code § 248.5 (b) (Cal. 2014).

520 See A.B. 1522, 2013-2014 Reg. Sess., Sec. 3, Cal. Lab. Code § 248.5 (b), (c), (e) (Cal. 2014).

521 See A.B. 1867, 2019-2020 Reg. Sess., Sec. 5 (Cal. 2020). The law still does not expressly include a private right of action for workers, however.

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522 See Cal. Lab. Code § 248.5 (a), (b).

523 See part 2a of this publication, supra.

524 See S.B. 459, Reg. Sess. 2011-2012, Sec. 1, Cal. Lab. Code § 226.8 (b), (c) (Cal. 2011).

525 See A.B. 594, 2023-2024 Reg. Sess. (Cal. 2023).

526 See Cal. Lab. Code § 226.8 (g). The statute also expressly contemplates enforcement by the RCI unit and civil actions filed by the Commissioner.

527 See id.

528 Hamaji et al., supra note 389, at 11.

529 Katherine V.W. Stone & Alexander J.S. Colvin, Economic Policy Inst., EPI Briefing Paper #414, The Arbitration Epidemic: Mandatory Arbitration Deprives Workers and Consumers of Their Rights 19 (2015), https://www.epi.org/publication/the-arbitration-epidemic/.

530 Id. 531 Colvin, supra note 11, at 9.

532 Hugh Baran & Elisabeth Campbell, Nat’l Employment Law Project, Policy & Data Brief, Forced Arbitration Helped Employers Who Committed Wage Theft Pocket $9.2 Billion in 2019 From Workers in Low-Paid Jobs 1, 8 (2021), https://www.nelp.org/insights-research/forced-arbitration-cost-workers-in-low-paid-jobs-9-2billion-in-stolen-wages-in-2019/.

533 The U.S. Supreme Court recently emphasized that the policy behind the Federal Arbitration Act (FAA) “is about treating arbitration contracts like all others, not about fostering arbitration.” See Morgan v. Sundance, Inc., 596 U.S. 411, 418 (2022) (citations omitted). In addition, an arbitration agreement may be invalidated, without running afoul of the FAA, based on generally applicable contract defenses (for example, if the agreement is found unconscionable). See OTO, LLC v. Kho, 8 Cal.5th 111, 125-26 (2019).

534 See supra note 439 and accompanying main text; see also “Spotlight - California’s Private Attorneys General Act (PAGA): Promoting the Synergy of Public and Private Enforcement of Labor Standards,” supra.

535 See S.B. 707, 2019-2020 Reg. Sess. (Cal. 2019).

536 See S.B. 365, 2023-2024 Reg. Sess. (Cal. 2023).

537 S.B. 1384, 2019-2020 Reg. Sess. (Cal. 2020). The legislature passed S.B. 1384 the year after enacting A.B. 51, 2019-2020 Reg. Sess. (Cal. 2019), which prohibited employers from requiring any employee or applicant for employment to waive, as a condition of employment, continued employment, or receipt of any employment-related benefit, any right, forum, or procedure (including the right to file a civil action) for a violation of any provision of the Labor Code or the state’s antidiscrimination statute. A.B. 51 also prohibited employers from retaliating against employees and applicants for employment because of the refusal to consent to the waiver of such rights. In a challenge to the law immediately brought by various trade associations and business groups, the Ninth Circuit eventually ruled that A.B. 51 was preempted as a whole by the FAA to the extent it applied to arbitration agreements. See Chamber of Commerce of the U.S.A. v. Bonta, 62 F.4th 473, 490 (9th Cir. 2023).

538 Cal. Lab. Code § 98.4 (a) (emphasis added).

539 Cal. Lab. Code § 98.4 (b).

540 Cal. Lab. Code § 98.4 (c).

541 S. Comm. on Lab., Pub. Emp’t & Ret., Analysis, S.B. 1384, 2019-2020 Reg. Sess., at 3 (Cal. May 11, 2020).

542 Id. at 2 (quoting bill author).

543 Assemb. Comm. on Lab. & Emp’t, Analysis, S.B. 1384, 2019-2020 Reg. Sess., at 2 (Cal. July 27, 2020).

544 S. Comm. on Lab., Pub. Emp’t & Ret., Analysis, S.B. 1384, 2019-2020 Reg. Sess., at 3 (Cal. May 11, 2020).

545 See Cal. Lab. Comm’r, The Bureau of Field Enforcement 2020-2021 Fiscal Year Report, supra note 423, at 3, 8 (discussing BOFE audits of employers). For examples of employer recordkeeping requirements under California law, see Cal. Lab. Code § 1174 (d) and the “Records” section of the IWC wage orders (e.g., Cal. Code Regs. tit. 8, § 11010, sec. 7).

546 See S.B. 96, 2017-2018 Reg. Sess., Sec. 11 (Cal. 2017).

547 See Cal. Lab. Code § 1174.1 (a), (b).

548 See Cal. Lab. Code § 1174.1 (c), (d).

549 See Cal. Lab. Code § 1174.1 (e), (g).

550 See Murphy, 40 Cal.4th at 1114 (citation omitted).

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551 See Cuadra, 17 Cal.4th at 859.

552 Id. at 859, 867.

553 Take the example of a minimum wage worker who is owed wages for a two-year period, from January 1, 2023 to January 1, 2025. If the worker files a wage claim on January 1, 2026, the worker’s claim can encompass the entire two years of wages owed, since the statute of limitations on the minimum wage claim is three years and enables the worker’s claim to extend back to January 1, 2023. However, if the worker does not file the claim until January 1, 2027, the statute of limitations on the claim for wages owed from January 1, 2023 to December 31, 2023 would have expired by January 1, 2027. Thus, the worker could only seek unpaid wages starting from January 1, 2024, cutting off one year of wages owed.

554 See supra note 545.

555 See S.B. 96, 2017-2018 Reg. Sess., Sec. 8 (Cal. 2017).

556 Cal. Lab. Code § 90.6 (a), (b).

557 Cal. Lab. Code § 90.6 (a).

558 Id. 559 Id. 560 See Cal. Lab. Code § 98.7 (c)(1). For a discussion of the RCI determination process, see also part 3a of this publication, supra.

561 See S.B. 306, 2017-2018 Reg. Sess. (Cal. 2017). While we highlight certain changes to the law made by S.B. 306, we note that in tandem with S.B. 306, the state also made other improvements to the Labor Commissioner’s procedures under Labor Code Section 98.7, including allowing the Commissioner to recover attorney’s fees if the Commissioner prevails in an enforcement action pursuant to the section, and establishing a penalty payable to affected employees for an employer’s refusal to comply with a court order under the section, among several other amendments to Section 98.7. These changes were made under S.B. 96, 2017-2018 Reg. Sess. (Cal. 2017).

562 Cal. Lab. Code § 98.74 (a).

563 See Cal. Lab. Code § 98.74 (b)-(d).

564 Cal. Lab. Code § 98.74 (d)(1), (2), (5).

565 See Cal. Lab. Code § 98.74 (d)(3).

566 See Cal. Lab. Code § 98.74 (b)-(d).

567 See Cal. Lab. Code § 98.74 (b), (d).

568 Cal. Lab. Code § 98.74 (e).

569 Id. 570 Assemb. Judiciary Comm., Analysis, S.B. 306, 2017-2018 Reg. Sess., at 1 (Cal. June 17, 2017).

571 Id. 572 Id. 573 Cal. Lab. Code § 98.7 (b)(2)(A).

574 Cal. Lab. Code § 98.7 (b)(2)(C).

575 Cal. Lab. Code § 98.7 (b)(2)(D).

576 Cal. Lab. Code § 98.7 (b)(2)(E), (F).

577 S.B. 306 also added provisions to the Labor Code that expressly provide individual workers who file whistleblower claims under Labor Code Section 1102.5 with the commensurate ability to seek injunctive relief. See Cal. Lab. Code §§ 1102.61, 1102.62.

578 See Assemb. Comm. on Judiciary, Analysis, S.B. 306, 2017-2018 Reg. Sess., at 5 (Cal. June 17, 2017).

579 See discussion under part 3a of this publication, supra.

580 See Cal. Lab. Code § 98.7 (a)(2).

581 Id. For our related discussion of Labor Code provisions protecting against immigration-based retaliation, see part 1c of this publication, supra.

582 See, e.g., Cal. Lab. Comm’r, 2021 Retaliation Complaint Report, Exh. A, https://www.dir.ca.gov/dlse/DLSEreports.htm#RCReports.

583 See Cal. Lab. Code § 98.6 (a).

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584 See S. Judiciary Comm., Analysis, S.B. 497, 2023-2024 Reg. Sess., at 5 (Cal. April 21, 2023) (discussing Section 98.6 and stating that under its existing provisions, the “employee…bear[s] the initial burden of convincing the court that there is a causal link between the employee exercising their right and the adverse action taken; something that will often be difficult to show”). See generally Daiquiri J. Steele, Protecting Protected Activity, 95 Wash. L. Rev. 1891, 1893 (2020) (discussing causation standards in retaliation cases and difficulty workers face in proving retaliation claims under heightened standards; stating that “[c]ausation itself is a mechanism for limiting liability” and a heightened causation standard “removes incentives for employers to ensure retaliation is not occurring…[and] may deter employees from exercising statutory rights”).

585 See S. Judiciary Comm., Analysis, S.B. 497, 2023-2024 Reg. Sess., at 4 (Cal. April 21, 2023) (quoting bill sponsor, the California Coalition for Worker Power).

586 See S.B. 497, 2023-2024 Reg. Sess. (Cal. 2023).

587 See Cal. Lab. Code 98.6 (b)(1).

588 S. Judiciary Comm., Analysis, S.B. 497, 2023-2024 Reg. Sess., at 5 (Cal. April 21, 2023).

589 Id. 590 See our discussion of California’s use of rebuttable presumptions in “Spotlight - A.B. 633: California’s Landmark Corporate Accountability Law in the Garment Industry,” supra, and Policy Recommendations, infra.

591 See S. Judiciary Comm., Analysis, S.B. 497, 2023-2024 Reg. Sess., at 4 (Cal. April 21, 2023).

592 As we have discussed in part 1b, supra, the statute creating the Fast Food Council contains express language to this effect. See Cal. Lab. Code § 1475 (d)(1)(A).

593 See discussion in part 1a of this publication, supra.

594 The statute creating the Fast Food Council provides one example. See part 1b of this publication, supra.

595 The legislature has recently demonstrated a willingness to consider this. As referenced previously, in the 2023 state budget, the legislature appropriated $3 million to revive the IWC, which was directed “to convene industry-specific wage boards and adopt orders specific to wages, hours, and working conditions in such industries, provided that any such orders shall not include any standards that are less protective than existing state law.” See Budget Act of 2023, A.B. 102, 2023-2024 Reg. Sess., Sec. 215 (Cal. 2023). This effort was subsequently abandoned in favor of the legislative compromise that created the Fast Food Council in its final form. See A.B. 1228, 2023-2024 Reg. Sess. (Cal. 2023); supra note 110.

596 See part 1a of this publication, supra. The California Supreme Court has repeatedly upheld the lawful scope and substance of the IWC wage orders. See, e.g., Martinez, 49 Cal.4th at 61-62; Indus. Welfare Comm’n, 27 Cal.3d at 702-728.

597 See supra note 56.

598 See Cal. Lab. Code § 98.6 (b)(1); Cal. Lab. Code § 244 (b); Cal. Lab. Code § 1019 (c).

599 See S. Judiciary Comm., Analysis, A.B. 1897, 2013-2014 Reg. Sess., at 6 (Cal. June 23, 2014).

600 Cal. Lab. Code § 2810.3 (a)(1)(A).

601 Cal. Lab. Code § 2810.3 (a)(6).

602 Morales-Garcia v. Better Produce, Inc., 70 F.4th 532, 535, 539-42 (9th Cir. 2023).

603 Id. at 542.

604 Id. 605 Id. 606 Id. 607 See id. at 539-42.

608 Id. at 539, 541 (agreeing with the reasoning of the district court).

609 See S. Judiciary Comm., Analysis, A.B. 1897, 2013-2014 Reg. Sess., at 2 (Cal. June 23, 2014) (quoting Ruckelshaus et al., supra note 239).

610 29 U.S.C § 216 (b).

611 See Cal. Lab. Code § 1194.2 (a). There is one exception to California’s limitation on liquidated damages to minimum wage violations. Under a separate law, garment workers may seek liquidated damages for not only minimum wage but also overtime violations; however, such broader recovery of liquidated damages by garment workers is generally confined to the specialized administrative claims process that the legislature created for garment workers. See Cal. Lab. Code § 2673.1 (b).

612 See supra note 504.

613 See supra note 505.

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Endnotes

614 This average is based on fiscal year statistics. See Cal. Lab. Comm’r, The Bureau of Field Enforcement Fiscal Year Report (for fiscal years 2017-2018, 2018-2019, 2019-2020, 2020-2021), https://www.dir.ca.gov/dlse/dlsereports.htm. See also Annette Bernhardt, Ruth Milkman, Nik Theodore, Douglas Heckathorn, Mirabai Auer, James DeFilippis, Ana Luz González, Victor Narro, Jason Perelshteyn, Diana Polson & Michael Spiller, Ctr. For Urban Economic Dev., Nat’l Employment Law Project & UCLA Inst. for Rsch. on Lab. & Employment, Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities 2, 21-22 (2009), https:// labor.ucla.edu/publications/broken-laws-unprotected-workers/ (surveying over 4,000 low-wage workers in Los Angeles, Chicago, and New York City and finding a “substantial magnitude” of overtime violations).

615 See 29 U.S.C. §§ 212 (a), 215 (a)(1); Fact Sheet #80: The Prohibition Against Shipment of “Hot Goods” Under the Fair Labor Standards Act, U.S. Dep’t of Lab., Wage & Hour Div., https://www.dol.gov/agencies/whd/fact-sheets/80-flsa-hot-goods (last visited Jan. 14, 2025).

616 29 U.S.C. § 203 (j).

617 Fact Sheet #80, U.S. Dep’t of Lab., Wage & Hour Div., supra note 615.

618 Id. 619 Id. 620 See 29 U.S.C. §§ 212 (a), 215 (a)(1); Fact Sheet #80, U.S. Dep’t of Lab., Wage & Hour Div., supra note 615.

621 Fact Sheet #80, U.S. Dep’t of Lab., Wage & Hour Div., supra note 615.

622 See Corporate Accountability Lab, Hot Goods Part I: Rooting Out Forced Labor in Supply Chains Using the “Hot Goods” Provisions of the FLSA (Aug. 5, 2019), https://corpaccountabilitylab.org/calblog/2019/8/5/part-i-rooting-out-forced-labor-in-supply-chains-using-the-hot-goods-provisions-of-the-flsa (discussing the FLSA’s hot goods provision, its lack of a private right of action, and its good faith exception loophole); Abbie Fentress Swanson, ‘Hot’ Oregon Blueberry Fight Prompts Farm Bill Changes, NPR (April 3, 2014), https://www.npr.org/sections/thesalt/2014/04/03/298537746/hot-oregon-blueberryfight-prompts-farm-bill-changes (reporting on heated labor dispute in which USDOL enforced the FLSA’s hot goods provision, which led to a new federal law requiring the Labor Secretary to consult with the Agriculture Secretary regarding use of the hot goods provision in the agriculture industry).

623 See Fact Sheet #80, U.S. Dep’t of Lab., Wage & Hour Div., supra note 615.

624 See U.S. Dep’t of Lab., Wage & Hour Div., News Release, Department of Labor Finds Children Employed Illegally in Dangerous Jobs, Obtains $4.8M in Wages, Damages for Poultry Industry Workers in California (May 2, 2024), https://www.dol.gov/newsroom/releases/whd/whd20240502.

625 See Cal. Lab. Code §§ 2679 (b), 2680.

626 See Cal. Lab. Code § 2680 (b).

627 See 29 U.S.C. § 203 (j).

628 Cal. Lab. Code § 1174 (d).

629 For example, “off-the-clock” work that enables wage theft in low-wage industries is common. See, e.g., Ruth Milkman, Ana Luz González & Victor Narro, UCLA Inst. for Rsch. on Lab. & Employment, Wage Theft and Workplace Violations in Los Angeles: The Failure of Employment and Labor Law for Low-Wage Workers 2, 22-23 (2010), https://irle.ucla.edu/old/publications/documents/LAwagetheft-Milkman-Narro-110.pdf. Time working “off-the-clock” not only constitutes a minimum wage violation (since workers are not paid at least minimum wage for the hours worked off the books), but such time is also not computed as part of the total daily or weekly hours worked and thus can amount to and mask an overtime violation.

630 See, e.g., Cal. Lab. Code §§ 226, 226.3 (itemized wage statements).

631 See, e.g., Cal. Lab. Code §§ 2673, 2678 (garment industry).

632 See Cal. State Auditor, supra note 1, at 19.

633 We focus on one recommendation here but note that other improvements to the process which would work in conjunction with this recommendation should also be considered.

634 See, e.g., Cal. Lab. Code § 1174 (d); Cal. Code Regs. tit. 8, § 11010, sec. 7 (A)(3).

635 See Hernandez v. Mendoza, 199 Cal.App.3d 721, 727-28 (1988).

636 See id.

637 Although we use the term “complaint” in this recommendation, we note that the term is not defined in the current statute.

638 See Cal. Lab. Comm’r, The Bureau of Field Enforcement 2020-2021 Fiscal Year Report, supra note 423, at 2, 4-5, 9.

639 See “Spotlight - A.B. 633: California’s Landmark Corporate Accountability Law in the Garment Industry,” supra.

640 In addition to its use in garment worker wage claims, rebuttable presumptions have also been incorporated by the legislature in other contexts to address problems endemic to low-wage industries, including retaliation (see, e.g., Cal. Lab. Code §§ 98.6 (b)(1), 1019 (c), 2105) and worker misclassification (see Cal. Lab. Code § 2775 (b)(1)), as we have discussed supra.

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