Wage Theft Already is a Crime in California

California employers must navigate the nation’s toughest labor and employment laws.  Long before the introduction of AB 1003 (Gonzalez), California already deemed wage theft a crime.  It is absurd to think a progressive state like California would not have already addressed this issue.

In 2012, Labor Commissioner Julie Su created the Criminal Investigation Unit within the agency to specifically focus and prosecute employers who steal wages from employees.

In 2014, Commissioner Su partnered with CalChamber and the Labor Federation, AFL-CIO, to launch a statewide campaign called “Wage Theft is a Crime.” A top Labor Federation official stated, “We stand together with the Chamber because we agree that wage theft is a crime and their support acknowledges that it’s not fair and it’s not right for responsible employers who are trying to abide by the rules to compete against employers whose business practice, and whose whole business model is to cheat workers.”

The website, www.wagetheftisacrime.com, is still active, and since 2014 has stated:

“The Labor Commissioner’s Office inspects workplaces for wage and hour violations, adjudicates wage claims, and investigates retaliation complaints. Wage theft is a crime – the Labor Commissioner’s Office can partner with other law enforcement agencies to criminally prosecute employers that engage in wage theft.”

In 2015, CalChamber worked alongside unions to enact SB 588 (De Leon), further enhancing the Labor Commissioner’s tools to address wage theft, such as allowing the Commissioner to place a lien of up to 10 years on any of the employer’s property in California to satisfy wages owed to an employee; requiring an employer to post a surety bond if they haven’t paid a final judgment within 10 days; allowing the Labor Commissioner to issue a stop order if any employer operates without a bond; allowing the Labor Commissioner to impose successor liability for unpaid wages, so that an employer cannot shut down and reopen as a different company to avoid liability; creating joint and several liability for listed employers; and imposing personal liability for managing agents of employers.

In addition, the Labor Code includes more than a dozen laws imposing civil penalties or misdemeanor criminal liability against employers who willfully and intentionally, and/or fraudulently fail to pay employee wages.  Finally, existing penal statutes such as grand theft, fraud, embezzlement, and conversion can already be used to criminally prosecute an employer who steals an employee’s wages.

As initially introduced, AB 1003 would have criminalized any Labor Code violation that deprived an employee of wages, even if there was no willfulness or fraud by the employer to actually steal wages.  Meaning, it would have criminalized good faith mistakes.  The Assembly Public Safety Committee agreed with this concern and proposed amendments to distinguish between bad actors who fraudulently steal wages, versus those employers who “make a genuine mistake about owed wages, or employers who have a good-faith belief that they owe less than what the employee claims to be owed.”  As amended, AB 1003 only focuses on the truly bad actors who intentionally commit theft and knowingly take employee wages – which is basically existing law in California.  Given these amendments, CalChamber removed opposition to the bill.

Ashley Hoffman, Policy Advocate