The California DLSE has been busy! Following the May release of A Report on the State of The Division of Labor Standards Enforcement by Labor Commissioner, Julie A. Su, the DLSE issued a press release highlighting “record-breaking results for labor law enforcement in California.” The news is that, in 2012, the field investigators assessed 462% more in minimum wages and 642% more in overtime wages than the DLSE did in 2010 (the year before Governor Brown took office), and achieved “favorable resolutions” in over 95% of cases.
Here are some interesting points from the Report and DLSE press release:
- Significant Increase in Total Wages Assessed through Investigations: The Bureau of Field Enforcement (BOFE) significantly increased its assessment activities in the last two years. The BOFE conducts investigations of employers and accesses civil penalties for non-compliance with wage and hour laws, workers’ compensation laws, and business licensing and registration requirements. The BOFE doubled its monetary assessments between 2010 and 2011, and increased its assessments by 419% between 2010 and 2012.
- Industry Focus Resulting in Record Wage and Civil Penalties: Awards for wages and penalties have been assessed in virtually every industry and position, but the BOFE has set a record in the past two years collecting money from five major industry groups: car washes, restaurants, construction, garment, and agriculture.
- Highest Award in the Past 5 Years: Last year, the Wage Claim Adjudication (WCA) offices (the largest unit within the DLSE), awarded over $85 million in unpaid wages, compensation, and penalties.
- Individual Wage Claims Moving Faster: In 2012, it took two months less for matters to be heard, and hearings lasted an average of only two days.
- Retailers Beware! The DLSE continues to target the garment industry:
- In 2012, the WCA awarded $7 million in hearing decisions on wage claims in the garment industry, and issued 254 hearing decisions, the most of all hearing decisions. This is more than 6 times the amount awarded in 2010; and triple the number of decisions issued in 2010.
What does this mean for California employers? Especially if you are in one of the targeted industries, this Report should get your attention. Overall, while the Report notes staffing decreases in recent years, the Commissioner remains keenly focused on adjudicating wage claims, assessing penalties, and pursing investigations, especially in certain “underground economy” industries. As in many areas, the best defense here may be a demonstrable record of compliance. Making sure that policies and practices are legally correct, training, and conducting routine internal audits and spot checks of wage and hour, pay and timekeeping practices can minimize risks.