California state regulators will soon have more ways to go after dishonest employers who skimp on paying their workers. This story is part of our series on new California laws taking effect Jan. 1.
The new law is called the Fair Day’s Pay Act. The intent is to crack down on employers who, for example, don’t give workers rest breaks or force employees to clock out early but keep working.
"Wage theft is rampant in California and throughout the country actually," says Lilia Garcia-Brower with the Maintenance Cooperation Trust Fund, an advocacy group that monitors conditions in the janitorial industry.
She points out the new California law gives the state more power to hold employers accountable when they lose wage claims but fail to pay their debt.
"So it gives the Labor Commission new tools, like liens, to go after those employers," says Garcia-Brower.
Garcia-Brower cites a UCLA study that shows more than 60 percent of the employers found guilty of wage theft shut down their company or changed their name.
"So then when the employee wins, and has that legally binding document that they’re owed that money, they’re unable to collect that," says Garcia-Brower. "And that’s why we have such a low collections rate of 17 percent in California.”
Under the new law, companies found guilty will be banned from closing down and re-opening with a different name.
And the Labor Commission will be able to place a lien on the property of an employer cited for wage theft.