Investigating the California Wage Theft Investigators

Sacramento, CALast year nearly 19,000 workers filed claims with the state of California for at least $338 million in lost or stolen wages alleging wage theft by their employers. But the Golden State consistently breaks its own law by not meeting deadlines for resolving cases. The Labor Commissioner’s office has provided data that shows many California lost wages claims take three times longer than the legal minimum of 135 days to resolve.

California state regulators state that wage theft is rampant, from construction and car washes to hospitality and agriculture to the garment industry, mainly affecting immigrant, minority and least educated workers – workers who are typically struggling on a minimum wage. State lawmakers have passed laws to toughen regulations to combat the problem, but have those laws been effective? CalMatters California Divide team investigated how those laws are being enforced, and their impact on workers and their bosses. (CalMatters is a nonprofit, nonpartisan newsroom and the California Divide project is a media collaboration to raise awareness and engagement about poverty and income inequality by a team of reporters deployed at news organizations throughout California.)

National labor experts say that California prides itself on being a national leader in labor law, but it’s falling short trying to enforce wage theft rules. And it’s falling short despite a 2021 bill making some instances of wage theft a felony, defined as “intentional theft of wages, including gratuities, in an amount greater than $950 from any one employee, or $2,350 in the aggregate from 2 or more employees, by an employer in any consecutive 12-month period punishable as grand theft.”

For instance, The Labor Commissioner’s Office--the California agency overseeing wage and hour violations--stated in an October 2022 press release that it recovered $282,000 for Car Wash Wage Citations, but it started investigating Classic Castle Car Wash, Inc. in 2017. Sure, there was an appeal, but why did the investigation take five years? Why is it taking so long to clear worker claims of wage theft?

The Department of Industrial Relations blames the backlog on the number of bills that have been enacted granting the Labor Commissioner additional responsibilities and enforcement tools over many of the state’s industries prone to wage theft. “These new laws significantly increased the length of time it takes to process a wage claim, and also require support, training and supervision to ensure the requirements of the law are applied and properly carried out,” according to its “Analysis of Problem”.

CalMatters reported that the Labor Commissioner:

• Does not have enough agents or other workers to process all of the wage claims made by California workers effectively;
• Had nearly a third of its positions vacant in May 2022, officials told a state Senate budget committee.
• Reported in August 2022 that it hired 288 people since January 2021, but not how many people had left the office during that period.
• Has a budget this year of $166 million, enough funding for nearly 840 positions.

 

Workers’ Backlogs

For those stalwart workers who don’t drop or settle their cases, the state averages 505 days to decide an individual worker’s wage claim, data from 2017 to 2021 show, a far cry from the 135-day maximum set by state law. That average climbed to 800 days in 2022. (Claims of wage theft are supposed to be in 120 days and decided 15 days after that.)

State Audit – Yay and Nay

If budget hearings before September 2023 don’t address the agency’s problems to the satisfaction of lawmakers, California’s independent state auditor will investigate the understaffed California Labor Commissioner’s Office over its persistent backlogs in workers’ wage theft claims, reported CalMatters.

The California Chamber of Commerce is in favor of the audit. Ashley Hoffman, a lobbyist for the Chamber, told the committee it is important to the state’s employers that bad actors be held to account and that disputes between employees be resolved expediently, out of court. 

But State Sen. Steve Glazer’s audit request has opposition. The California Labor Federation, unions, and worker centers wrote earlier in March that an audit would divert time and attention from an already understaffed agency. Lorena Gonzalez Fletcher, executive secretary-treasurer of the Labor Federation, said, “Everyone knows there’s a problem, including the labor commissioner. I don’t think an audit is going to tell us anything we don’t know already.”  The federation’s proposed solutions include, along with increased funding, cutting red tape in the state’s hiring process, boosting the use of criminal charges against problem employers and a bill expanding local officials’ abilities to sue businesses on behalf of workers to relieve pressure on the state.

Labor Commissioner Lilia García-Brower is also against an audit, saying that her office is already undertaking multiple reforms to address her agency’s backlogs.

On its website, the Labor Commissioner's Office sates: “As a national leader in the Wage Claim Adjudication process, [it] enforces the law by setting a standard of fair and expeditious resolution of claims to achieve long-term compliance from the employers of the State of California. By providing education and meaningful enforcement of wage and hour laws, we combat wage theft and ensure that wages earned are put into the pockets of the workers.”  

Its mission “is to ensure a just day's pay in every workplace in the State and to promote economic justice through robust enforcement of labor laws. By combating wage theft, protecting workers from retaliation, and educating the public, we put earned wages into workers' pockets and help level the playing field for law-abiding employers.”