Senate Bill (S.B.) 588 that went into effect on January 1, 2016, seeks to ensure recovery of unpaid wages by victims of wage theft.
What is Wage Theft?
Wage theft is defined as failing to pay workers for all of their work, regardless of whether it is intentional or merely an honest mistake. This includes paying below minimum wage, failing to pay overtime, violating meal and rest break requirements, and failing to pay for off-the-clock work.
New Penalties for Wage Theft
- If an employee brings a successful wage claim against your company, the Labor Commissioner can now place a lien on the company’s property or levy on the business’ bank accounts and/or accounts receivable, including a lien or levy to recover the employee’s attorneys’ fees.
- SB 588 prevents a company from closing down its business and re-opening under a new name in order to avoid their debts to workers.
- Owners and anyone else acting “on behalf of” the employer are now individually liable for wage and hour violations. This means that the Labor Commissioner can now seize the personal property and bank accounts of individual owners and others who violate California wage and hour laws.
- Companies found to have engaged in wage theft will be required to post a bond ranging from $50,000 to $150,000 to continue doing business.
- Review relevant wage and hour laws, including Wage Orders that apply to your specific industry and ensure that your company is in compliance.
- Take wage claims filed with the Department of Industrial Relations seriously.