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New California bill targets employers who steal wages

Here in California, people will provide an honest day’s work for an honest day’s pay. But many employers in the state do not pay their workers what they are owed, especially low-wage workers and immigrants.

To combat this exploitation, Gov. Jerry Brown signed the Fair Day’s Pay Act into law earlier this month. The new law empowers the state Labor Commissioner’s Office to take tough steps against businesses that short their workers on their wages.

Up until now, California has had a big problem with wage theft. In Los Angeles alone, employers steal about $26.2 million from their employees — every week. This gives L.A. the dubious title of “wage theft capital” of the U.S., according to Ms. Magazine. Many victims are immigrants, people of color and/or women, said David Huerta, president of the Service Employees International Union.

Of course, this was already against the law before the FDPA, but actually obtaining justice was difficult most of the time. A 2013 study from UCLA concluded that aggrieved workers who sought to get their full pay only obtain back pay 17 percent of the time. Getting a judgment against the employer was not the problem; it was actually getting the business to pay up.

This is because, in response to wage theft judgments, many businesses would form a shell corporation or shift control to another entity. The FDPA blocks this shady behavior by making an employer or any subsequent business created to avoid penalties post a bond between $50,000 and $150,000, if they want to keep doing business in California.

In addition, the law allows the Labor Commissioner’s Office the ability to pursue back pay on workers’ behalf. Once the court has ordered a business to pay, failure to do so could lead the Office to shut the business down, or attach a lien to its property.

This law applies to contract workers as well as direct employees, which significantly widens its scope.