Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
In September, Governor Brown signed a bill (A.B. 240) that will equalize the penalties available to employees and the defenses available to employers on certain employee wage claims, brought either in court or in the administrative system.
Under current California law, an employee who wishes to bring a claim alleging payment of less than the minimum wage has a choice of making that claim either in California Superior Court or in an administrative proceeding before the Labor Commissioner (the chief of the Division of Labor Standards Enforcement). A significant difference in the remedy available to a successful claimant between the court and the administrative agency is that a judge in a court proceeding could award the claimant liquidated damages equal to the amount of the wages unlawfully unpaid and the interest on that sum. The Labor Commissioner, however, had no authority to award liquidated damages as a remedy to a successful claimant.
With major support coming from the California Rural Legal Assistance Foundation, A.B. 240 was introduced as a solution to the perception of unequal remedies. The bill’s proponents argued that the current system discouraged employees from bringing their claims in the simpler and less-costly DLSE process, as that agency could not award liquidated damages for the subject claims as a court could. The bill’s supporters also included various labor organizations, while an array of business entities opposed the measure. The bill was based on a nearly identical measure passed by the Legislature in 2007, but vetoed by then-Governor Arnold Schwarzenegger.
Effective January 1, 2012, the difference in remedies between filing such a claim in court or before the Labor Commissioner will be eliminated, as A.B. 240 amends California Labor Code sections 98 and 1194.2. The amended statutes will allow the Labor Commissioner to award liquidated damages to a successful employee. The Labor Commissioner will also have the discretion, as the court now does, to award reduced or no liquidated damages if the employer proves that it acted in good faith and that it had reasonable grounds for believing that its act or omission was not a violation of any provision of the Labor Code relating to the minimum wage, or an order of the commission.
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