SACRAMENTO, CA – Senate President pro Tempore Kevin de León and the California Fair Paycheck Coalition today announced a new legislative effort, SB 588, to curtail wage theft and restore the California dream for low-wage workers.
“Wage theft has reached epidemic proportions in California and it is literally robbing a shot at the American Dream from the very people who build the prosperity of our state,” said Senator De León. “California must target the bad actors to level the playing field for honest businesses and help workers collect the pay they’ve earned.”
Billions of dollars are siphoned out of California’s economy each year by companies that pay workers less than the minimum wage, keep workers off the clock, or violate overtime laws. A landmark UCLA study found that more than $1 billion is taken each year from the paychecks of low-wage workers in Los Angeles alone, with the biggest bite taken from the paychecks of women, immigrants and communities of color.
A December, 2014 report from the United States Department of Labor (DOL) spotlighted minimum wage violations in California, reporting 334,000 to 372,000 California workers paid less than the minimum wage each week, at a cost of between $1.2 and $1.5 billion annually.
While California has strong labor laws on the books, the state’s enforcement efforts haven’t kept up with the realities of our economy. Among those workers who are successful in obtaining a court order for their wages, only 17% are able collect even a portion of what they are owed. By the time workers get a court order for their back pay, 60% of businesses have filed for bankruptcy, hidden their assets, or shut down operations and reorganized as a “new” entity, according to research by the National Employment Law Project and UCLA Labor Center.
SB 588 (De León), would give California’s Labor Commissioner the tools to hold wage thieves accountable. Under SB 588, the Labor Commissioner may require businesses that have failed to pay court orders for employee wages to post a bond of $150,000.
SB 588 protects honest businesses, while targeting bad actor companies that have repeatedly violated the law. When companies that already have outstanding judgments also fail to comply with the bond requirement, the proposal gives the Labor Commissioner the option to file a lien for unpaid wages on the employers’ property to collect the pay they’ve earned.
Michael Madhesian, Board Chairman of Servicon Services, a janitorial services contractor for the aerospace industry said, “Right now the deck is stacked against companies that follow the law. We’re routinely undercut by underhanded businesses because there are no consequences for those who cheat their workers. I’m encouraged that Senator De León’s bill will allow honest companies to compete fairly.”
The U.S. Department of Labor’s report spotlighted how wage theft drives California’s crisis of poverty for working families. Working long hours at sub-minimum wages takes its toll on the health of workers and families.
Monica Uraña is one such worker, who earns just half the minimum wage for her labor as a janitor in Los Angeles area office buildings. “I am not asking for more than what I make. I am only asking for payment for my work,” Monica, a single mother of four, says. Her wages of $60 for 12 or 13 hours work can’t come close to covering the basics her family needs. “I go to buy a soup and I have to stretch the soup for three days.”
"Wage theft is crushing our families, and that’s why SB 588 will be front and center in our fight for a fair day’s pay in California,” said Laphonza Butler, President of SEIU California and SEIU United Long-Term Care Workers (ULTCW). “Nationwide, working families are rising up and challenging our leaders to address the roots of our poverty crisis. SB 588 is an essential accountability measure to ensure every person who works hard can be a part of the American Dream.”
"Wage theft creates and perpetuates poverty and its prevalence in California depresses our economy significantly," said David Huerta, President of SEIU United Service Workers West (USWW). "Solving this problem is one of the cornerstones for creating real shared prosperity -- especially when it comes to black, brown, undocumented, and other workers that are particularly vulnerable to exploitation by irresponsible employers."
“When it comes to protecting the right to a fair day’s pay, California sadly lags behind many other states. SB 588 offers California the chance to be a leader in fairness and opportunity for workers,” said Alexandra Suh, Executive Director of the Koreatown Immigrant Workers Alliance (KIWA). KIWA is a member of the California Fair Paycheck Coalition, which brings together worker centers, community organizations, legal services and others to fight for fair pay and a strong economy.
SB 588 will be heard by the Senate Judiciary Committee on April 28 and the Senate Labor and Industrial Relations Committee on April 29.