CA Paycheck Fairness Act Approved by Appropriations Committee

CA Paycheck Fairness Act Approved by Appropriations Committee
LAS-ELC and Fair Paycheck Coalition Advocate for AB 1164
January 24, 2014

In an important step toward justice for victims of wage theft, AB 1164, the California Paycheck Fairness Act, passed out of the Assembly Appropriations Committee today by a vote of 12-5.

The bill, authored by Assembly member Bonnie Lowenthal, would hold employers accountable for paying less than the minimum wage or not paying workers for all of the hours they work, making it easier for workers to recover stolen wages. 

Between 2008 and 2011, the California Labor Commissioner issued awards of unpaid wages to workers totaling $282 million dollars. This is an incredible feat, and sends a strong message to unscrupulous employers.  But, shockingly, most employers do not actually pay the awards. Of all the workers who won their wage claims before the Labor Commissioner and received a judgment during that same three year period, only 17 percent of them were able to recover any money.

Why are employers able to commit wage theft with impunity? Many of the businesses that are the worst violators of our labor laws simply roll up their operations and close shop when workers try to hold them accountable, thus avoiding any responsibility for their exploitative employment practices. In fact, in over 60% of the cases in which the Department of Labor Standards Enforcement found an employer owed wages, the employer was listed as non-active, i.e., defunct. And because so much of the low-wage sector is now structured using layers of contractors and subcontractors, the real employers and beneficiaries of the work provided are able to avoid legal responsibility.

Even when it is possible to locate the actual employer, a worker must pursue the employer in civil court in order to obtain relief. This process is time consuming and challenging for anyone, and much more so for a low-wage worker dealing with agencies that lack language capacity, cultural competency, and the incentive to aggressively pursue smaller individual judgments.

In order to compel these employers to pay workers what they are owed, AB 1164 would expand California’s existing Mechanic’s Lien to all sectors beyond construction and farm workers, allowing workers to put a temporary hold, or lien, on the property of an employer who owes back wages while the case is being decided. Wage liens have helped workers in other states, including Wisconsin, Alaska, Idaho, Maryland, New Hampshire, Texas, and Washington, to more effectively recover their wages.  Wisconsin’s wage lien law helps 80% of workers recover payment for wages owed, compared to fewer than 20% in California.

LAS-ELC, along with other members of the Fair Paycheck Coalition, has advocated strongly for AB 1164, meeting with Assembly members and raising awareness about this important issue. We know from the clients served by our Wage Claims Project that this phenomenon both demoralizes workers and undermines state labor protections. 

In the words of a former LAS-ELC client who won a Labor Commissioner judgment, “On one level, it feels good. It was really good that the truth came out, that the power of the employer could be overcome…On another level, it is also something negative. It’s like there was no result. It makes me really sad. It’s emotionally challenging, so I try not to think about it. I worked so long, and I still did not receive any pay for my hours…I will keep trying.”

And that is precisely why passage of AB 1164 is so important. LAS-ELC and Coalition members will keep up the pressure – the bill has to be voted out of the Assembly by the end of the month. According to Assembly member Lowenthal, “This is an opportunity to help bring up the status of a class of workers that are often ignored."