AB 1234: Employment: nonpayment of wages: complaints.

98.

(a) (1) (A) The Labor Commissioner is authorized to investigate employee complaints. The Labor Commissioner may provide for a hearing in any action to recover wages, penalties, and other demands for compensation, including liquidated damages if the employee complaint alleges payment of a wage less than the minimum wage fixed by an order of the Industrial Welfare Commission or by statute, properly before the division or the Labor Commissioner, including orders of the Industrial Welfare Commission, and shall determine all matters arising under the Labor Commissioner’s jurisdiction.

(B) The Labor Commissioner may also provide for a hearing to recover civil penalties due pursuant to Section 558 against any employer or other person acting on behalf of an employer, including, but not limited to, an individual liable pursuant to Section 558.1.

(C) It is within the jurisdiction of the Labor Commissioner to accept and determine claims from holders of payroll checks or payroll drafts returned unpaid because of insufficient funds, if, after a diligent search, the holder is unable to return the dishonored check or draft to the payee and recover the sums paid out.

(D) For the purpose of calculating the statute of limitations for any employee complaint investigated under this section, the action shall commence upon the filing of the employee complaint.

(2) If the Labor Commissioner determines that no further action will be taken on the employee complaint, the Labor Commissioner shall, within 30 days of the receipt of an employee complaint, notify the complainant of the determination. If the Labor Commissioner declines to continue to investigate an employee complaint, the claimant may pursue remedies through any alternative forum available with the tolling of the statute of limitations based on the date the employee complaint was made, so long as the subsequent action is commenced within one year of the date the notice was provided pursuant to this subdivision.

(3) If the Labor Commissioner does not make a determination pursuant to paragraph (2) that no further action will be taken, the Labor Commissioner shall, within 60 days of receipt of an employee complaint, notify all parties against which the employee complaint has been filed of the allegations asserted in the complaint, including the total amount of wages, penalties, and other demands for compensation alleged due. If the employee complaint did not include the complainant’s best estimate of wages and penalties owed, the Labor Commissioner may calculate a monetary value based on the complainant’s allegations and any investigation it has conducted within the time period allowed. The notice shall identify the Labor Code section under which the claimant asserts the defendant’s liability if it is ascertainable from the employee’s complaint or if it is ascertainable from other available information within the time period allowed.

(4) Within 30 days of transmittal of the notice described in paragraph (3), the defendants shall respond by either paying the full amount due as described in the notice or by filing an answer with the Labor Commissioner. An answer shall, at a minimum, include both of the following:

(A) Whether the defendant admits to employing the complainant during any period alleged in the notice.

(i) If the defendant denies an employment relationship based on a worker’s classification as an independent contractor, the defendant shall provide facts to demonstrate that the classification meets the requirements in Article 1.5 (commencing with Section 2775) of Chapter 2 of Division 3.

(ii) If the defendant denies an employment relationship for a reason other than as specified in clause (i), the defendant shall name any and all known employers of the complainant or other parties potentially liable for the violations during the claim period, and shall include their contact information.

(B) Whether the defendant admits or denies owing any amount to the complainant.

(i) For any admission of an amount owed, the Labor Commissioner may issue an order, decision, or award for that amount as set forth in Section 98.1. The order, decision, or award may be appealed under Section 98.2. The Labor Commissioner may continue to investigate any claims for which the defendant did not admit to owing.

(ii) For any denial of liability for wages, penalties, and other demands for compensation alleged, the defendants shall set forth the particulars in which the employee complaint is inaccurate or incomplete and the facts upon which the defendant intends to rely.

(5) If the defendant fails to provide an answer within 30 days of transmittal of the notice described in paragraph (3), the Labor Commissioner shall issue an order, decision, or award in the amount stated in the notice, as set forth in Section 98.1. The order, decision, or award may be appealed under Section 98.2. If the defendant provides an answer, but the answer does not meet the requirements of this section, the Labor Commissioner may provide the defendant with 15 additional days to submit a revised answer. After the 15 days, if the defendant fails to provide an answer within the requirements of this section, the Labor Commissioner shall issue an order, decision, or award in the amount stated in the notice described in paragraph (3), as set forth in Section 98.1. The order, decision, or award may be appealed under Section 98.2.

(6) The Labor Commissioner may request an answer from any new party added to the employee complaint at any point in the investigation by issuing a notice of claim to that employer within 60 days of the employer being added to the employee complaint. The notice of claim shall include the information specified in paragraph (3). The employer’s response to the notice of claim shall be governed by paragraphs (4) and (5).

(b) If the Labor Commissioner determines to take action in accordance with Section 98.3 or determines that no further action will be taken on the employee complaint, the Labor Commissioner shall, within 30 days of the receipt of the answer, notify all parties of the determination. If the Labor Commissioner declines to continue to investigate an employee complaint, the claimant may pursue remedies through any alternative forum available with the tolling of the statute of limitations based on the date the employee complaint was made, so long as the subsequent action is commenced within one year of the date the notice was provided pursuant to this subdivision.

(c) If the Labor Commissioner does not make a determination pursuant to subdivision (b), the Labor Commissioner shall conduct an investigation of the employee complaint. The Labor Commissioner shall make an estimated appraisal of the amount of wages, damages, penalties, expenses, and other compensation owed and shall determine all the parties liable for the assessment. The investigation, assessment, and determination of liability shall be made within 90 days of the receipt of the answer described in paragraph (4) of subdivision (a), and shall be made through the following process:

(1) The Labor Commissioner may decide to hold a mandatory investigatory and settlement conference upon providing notice of the conference to the parties. If the claimant fails to attend the conference, the employee complaint may be dismissed unless a claimant can provide a good cause reason for their nonappearance. If the defendant fails to attend the settlement conference and does not provide a good cause reason for their nonappearance, the Labor Commissioner may issue an order, decision, or award in the amount stated in the notice provided by paragraph (3) of subdivision (a). The order, decision, or award shall be issued as set forth in Section 98.1 and may be appealed under Section 98.2. Upon agreement of the claimant, the Labor Commissioner may hold additional mandatory investigatory and settlement conferences if additional defendants are identified during the investigation of the employee complaint.

(2) The Labor Commissioner may issue a subpoena pursuant to Section 92 to a defendant requesting copies of records for the employee, as described in Section 226, during the claim period. The Labor Commissioner may also issue a subpoena pursuant to Section 92 for all records required to be maintained by the relevant wage order, and to any other parties or for any other information as determined by the Labor Commissioner.

(3) The Labor Commissioner shall issue a formal complaint that includes the allegations in the employee complaint concerning the time period of the claim, the laws violated, and all parties liable, and the amount of compensation requested, applicable interest, and administrative fees available under Section 98.1.

(d) Within 90 days of the issuance of the formal complaint described in paragraph (3) of subdivision (c), the Labor Commissioner shall set a hearing date and serve a copy of the formal complaint on all parties, along with a notice of the date, time, and place of the hearing. The Labor Commissioner may conduct the hearing in person, over the telephone, or via video conference.

(1) Within 10 days after service of the notice of the hearing and the formal complaint, a defendant may file an answer or a revised answer with the Labor Commissioner in any form as the Labor Commissioner may prescribe, setting forth the particulars in which the formal complaint is inaccurate or incomplete and the facts upon which the defendant intends to rely.

(2) No pleading other than the formal complaint and answer of the defendant or defendants shall be required. Both shall be in writing and shall conform to the form and the rules of practice and procedure adopted by the Labor Commissioner.

(3) Evidence on matters not pleaded in the answer or produced in response to a subpoena issued by the Labor Commissioner shall be allowed only on terms and conditions the Labor Commissioner shall impose. In all these cases, the claimant shall be entitled to a continuance for purposes of review of the new evidence.

(4) If a defendant fails to appear, the Labor Commissioner may issue an order, decision, or award in the amount stated in the formal complaint issued pursuant to paragraph (3) of subdivision (c). The order, decision, or award shall be issued as set forth in Section 98.1, and may be appealed under Section 98.2.

(5) If a defendant’s records are inaccurate or inadequate as to the precise extent of work completed and compensated by the claimant, the claimant has carried out their burden of proof if they prove that they have in fact performed work for which they were improperly compensated and produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.

(e) A hearing conducted pursuant to this chapter is governed by the division and by the rules of practice and procedure adopted by the Labor Commissioner. It is the intent of the Legislature that hearings held pursuant to this section be conducted in an informal setting preserving the rights of the parties.

(f) A defendant failing to appear or answer, or subsequently contending to be aggrieved in any manner by want of notice of the pendency of the proceedings, may apply to the Labor Commissioner for relief in accordance with Section 473 of the Code of Civil Procedure. The Labor Commissioner may afford this relief. The Labor Commissioner’s authority to grant relief under this subdivision terminates upon the defendant’s filing of an appeal under Section 98.2. Absent an appeal under Section 98.2, no right to relief, including the claim that the findings or award of the Labor Commissioner or judgment entered thereon are void upon their face, shall accrue to the defendant in any court unless prior application is made to the Labor Commissioner in accordance with this chapter.

(g) (1) Whenever a claim is filed under this chapter against a person operating or doing business under a fictitious business name, as defined in Section 17900 of the Business and Professions Code, which relates to the person’s business, the division shall inquire at any point during the procedures set forth in this section whether the name of the person is the legal name under which the business or person has been licensed, registered, incorporated, or otherwise authorized to do business.

(2) The division may amend an order, decision, or award to conform to the legal name of the business or the person who is the defendant to a wage claim, if it can be shown that proper service was made on the defendant or the defendant’s agent, unless a judgment had been entered on the order, decision, or award pursuant to subdivision (d) of Section 98.2. The Labor Commissioner may apply to the clerk of the superior court to amend a judgment that has been issued pursuant to a final order, decision, or award to conform to the legal name of the defendant, if it can be shown that proper service was made on the defendant or the defendant’s agent.

(h) A party who has received actual notice of a claim before the Labor Commissioner shall, while the matter is before the Labor Commissioner, notify the Labor Commissioner in writing of any change in that party’s business or personal address within 10 days after the change in address occurs.

(i) The Labor Commissioner’s authority to investigate a claim or issue an order, decision, or award does not terminate upon the expiration of the deadlines set forth in this section.

(j) A notice required to be given pursuant to this section shall be given by personal service, first-class mail, certified mail, registered mail, in the manner specified in Section 415.20 of the Code of Civil Procedure, or by any manner that the party agrees to accept service, including, but not limited to, electronic service.

98.1.

(a) Within 15 days after the hearing described in Section 98 is concluded, or upon a failure to answer or appear as described in Section 98, the Labor Commissioner shall file in the office of the division a copy of the order, decision, or award. Upon filing of the order, decision, or award, the Labor Commissioner shall serve a copy of the decision on the parties by personal service, first-class mail, certified mail, or registered mail, in the manner specified in Section 415.20 of the Code of Civil Procedure, or by any manner that a party agrees to accept service, including, but not limited to, electronic service. The notice shall also advise the parties of their right to appeal the decision or award and further advise the parties that failure to do so within the period prescribed by this chapter shall result in the decision or award becoming final and enforceable as a judgment by the superior court.

(b) For the purpose of this section, an order, decision, or award shall include any sums found owing, damages proved, interest accrued, any penalties awarded pursuant to this code, and the reasons for the decision. An order, decision, or award issued under this section shall be deemed a determination of the defendant’s liability for the unpaid wages specified in the order, decision, or award.

(c) All awards granted pursuant to a hearing under this chapter shall accrue interest on all due and unpaid wages at the same rate as prescribed by subdivision (b) of Section 3289 of the Civil Code. The interest shall accrue until the wages are paid from the date that the wages were due and payable as provided in Part 1 (commencing with Section 200) of Division 2.

(2) Upon appropriation by the Legislature for this express purpose, all money in the Wage Recovery Fund shall be disbursed by the Labor Commissioner only to persons determined by the Labor Commissioner to have been damaged by the failure to pay wages and penalties and for other damages by an employer.

(3) Any disbursement shall be made pursuant to a claim for recovery from the fund in accordance with procedures prescribed by the Labor Commissioner.

(4) Any disbursed funds subsequently recovered by the Labor Commissioner from a liable party pursuant to an assignment of the claim to the Labor Commissioner for recovery of due amounts shall be returned to the fund.

(5) Upon a request by a defendant at a hearing held pursuant to subdivision (d) of Section 98, the Labor Commissioner shall waive any or all of the administrative fee, provided that all of the following are satisfied:

(A) The order, decision, or award issued under this chapter does not impose liability for penalties pursuant to Section 203.

(B) The defendant shall attest in writing that they do not have a prior order, decision, award, or judgment issued against them within the past 10 years for engaging in illegal conduct related to a dispute over wages or other violations under the jurisdiction of the Labor Commissioner.

(C) The defendant shall attest in writing that they have not entered into a settlement agreement within the past 10 years concerning prior illegal conduct related to a dispute over wages or other violations under the jurisdiction of the Labor Commissioner. A payment made pursuant to paragraph (4) of subdivision (a) of Section 98 does not constitute a settlement agreement for purposes of this subparagraph.

98.2.

(a) Within 10 days after service of notice of an order, decision, or award the parties may seek review by filing an appeal to the superior court, where the appeal shall be heard de novo. The court shall charge the first paper filing fee under Section 70611 of the Government Code to the party seeking review. The fee shall be distributed as provided in Section 68085.3 of the Government Code. A copy of the appeal request shall be served upon the Labor Commissioner by the appellant. For purposes of computing the 10-day period after service, Section 1013 of the Code of Civil Procedure is applicable. An appeal filed under this section shall be classified as an unlimited civil case.

(b) As a condition to filing an appeal pursuant to this section, each appealing defendant shall first post an undertaking with the reviewing court in the amount of the order, decision, or award. The undertaking shall consist of an appeal bond issued by a licensed surety or a cash deposit with the court in the amount of the order, decision, or award. The appealing defendant shall provide written notification to the other parties and the Labor Commissioner of the posting of the undertaking. The undertaking shall be on the condition that, if any judgment is entered in favor of the employee, the appealing defendant shall pay the amount owed pursuant to the judgment, and if the appeal is withdrawn or dismissed without entry of judgment, the appealing defendant shall pay the amount owed pursuant to the order, decision, or award of the Labor Commissioner unless the parties have executed a settlement agreement for payment of some other amount, in which case the appealing defendant shall pay the amount that the appealing defendant is obligated to pay under the terms of the settlement agreement. If the appealing defendant fails to pay the amount owed within 10 days of entry of the judgment, dismissal, or withdrawal of the appeal, or the execution of a settlement agreement, a portion of the undertaking equal to the amount owed, or the entire undertaking if the amount owed exceeds the undertaking, is forfeited to the employee.

(c) If the party seeking review by filing an appeal to the superior court is unsuccessful in the appeal, the court shall determine the costs and reasonable attorney’s fees incurred by the other parties to the appeal, and assess that amount as a cost upon the party filing the appeal. A party seeking appeal is unsuccessful if they withdraw their appeal without a judgment. An employee is successful if the court awards, or a defendant voluntarily pays, an amount greater than zero.

(d) If no notice of appeal of the order, decision, or award is filed within the period set forth in subdivision (a), the order, decision, or award shall, in the absence of fraud, be deemed the final order.

(e) A court hearing an action filed under this section has jurisdiction over the entire wage dispute, including related wage claims not raised in front of the Labor Commissioner.

(f) A court shall not consolidate an action filed under this section with any other action not arising out of, or related to, the wage claim covered by underlying order, decision, or award absent an executed agreement in writing by all parties.

(g) (1) The Labor Commissioner shall file, within 10 days of the order becoming final pursuant to subdivision (d), a certified copy of the final order with the clerk of the superior court of the appropriate county unless a settlement has been reached by the parties and approved by the Labor Commissioner. Judgment shall be entered immediately by the court clerk in conformity therewith. The judgment so entered has the same force and effect as, and is subject to all of the provisions of law relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court in which it is entered. Enforcement of the judgment shall receive court priority.

(2) Notwithstanding paragraph (1), a court shall grant an application filed by the Labor Commissioner to vacate a judgment deemed final under paragraph (1) upon the Labor Commissioner’s granting of relief under subdivision (f) of Section 98.

(h) (1) In order to ensure that judgments are satisfied, the Labor Commissioner may serve upon the judgment debtor, personally or by first-class mail at the last known address of the judgment debtor listed with the division, a form similar to, and requiring the reporting of the same information as, the form approved or adopted by the Judicial Council for purposes of subdivision (a) of Section 116.830 of the Code of Civil Procedure to assist in identifying the nature and location of any assets of the judgment debtor.

(2) The judgment debtor shall complete the form and cause it to be delivered to the division at the address listed on the form within 35 days after the form has been served on the judgment debtor, unless the judgment has been satisfied. In case of willful failure by the judgment debtor to comply with this subdivision, the division or the judgment creditor may request the court to apply the sanctions provided in Section 708.170 of the Code of Civil Procedure.

(i) (1) As an alternative to a judgment lien, upon the order becoming final pursuant to subdivision (d), a lien on real property may be created by the Labor Commissioner recording a certificate of lien, for amounts due under the final order and in favor of the employee or employees named in the order, with the county recorder of any county in which the employer’s real property may be located, at the Labor Commissioner’s discretion and depending upon information the Labor Commissioner obtains concerning the employer’s assets. The lien attaches to all interests in real property of the employer located in the county where the lien is created to which a judgment lien may attach pursuant to Section 697.340 of the Code of Civil Procedure.

(2) The certificate of lien shall include information as prescribed by Section 27288.1 of the Government Code.

(3) The recorder shall accept and record the certificate of lien and shall index it as prescribed by law.

(4) Upon payment of the amount due under the final order, the Labor Commissioner shall issue a certificate of release, releasing the lien created under paragraph (1). The certificate of release may be recorded by the employer at the employer’s expense.

(5) Unless the lien is satisfied or released, a lien under this section shall continue until 10 years from the date of its creation.

(j) Notwithstanding subdivision (g), the Labor Commissioner may stay execution of any judgment entered upon an order, decision, or award that has become final upon good cause appearing therefor and may impose the terms and conditions of the stay of execution. A certified copy of the stay of execution shall be filed with the clerk entering the judgment.

(k) When a judgment is satisfied in fact, other than by execution, the Labor Commissioner may, upon the motion of either party or on its own motion, order entry of satisfaction of judgment. The clerk of the court shall enter a satisfaction of judgment upon the filing of a certified copy of the order.

(l) The Labor Commissioner shall make every reasonable effort to ensure that judgments are satisfied, including taking all appropriate legal action and requiring the employer to deposit a bond as provided in Section 240.

(m) The judgment creditor, or the Labor Commissioner as assignee of the judgment creditor, is entitled to court costs and reasonable attorney’s fees for enforcing the judgment that is rendered pursuant to this section.