Senator Hill to Introduce Legislation to Help Reduce Delays in Handling Workers’ Claims for Wage Theft

February 25, 2020

For Immediate Release – Office of State Senator Jerry Hill – February 25, 2020
Media Contact: Leslie Guevarra, 415-298-3404, leslie.guevarra@sen.ca.gov

Senator Jerry Hill to Introduce Legislation to Help Reduce Delays in Handling Workers’ Claims for Wage Theft

SACRAMENTO – State Senator Jerry Hill announced today that he will introduce legislation to help clear logjams in the state’s process for handling claims from workers for unpaid wages.

“Workers deserve to receive the wages they’ve earned, and it’s disgraceful when they are denied their rightful pay,” said Senator Hill, D-San Mateo and Santa Clara Counties. “California should not be compounding the challenges faced by wage theft victims with a claims process that takes an average of 400 days to produce a result. That’s more than three times the 120-day turnaround the state expects.”

Senator Hill’s legislation will respond to a report issued last week by the state Legislative Analyst’s Office, which studied outcomes of the unpaid wage claims filed with the state Labor Commissioner’s Office.

The LAO found that about 30,000 claims for unpaid wages are filed with the Labor Commissioner’s Office each year. In 2017, the most recent year for which complete data was available, workers filed claims for $320 million in unpaid wages and recovered just $40 million, the LAO report said. The study also found “major delays” in handling the claims. On average, it now takes roughly 400 days for a claim to undergo the multistep review process, said the report, which added “under state law, wage claims are to be adjudicated within 120 days.”

The delays are discouraging for workers and tend to favor employers, according to the report. The longer the process takes, the more likely workers are to drop their claim, causing staff to close cases before the review process ends. Delays also cause workers to settle claims for less money than they sought. Those circumstances favor employers in general; they also provide a distinct advantage to bad actors among employers. “Long delays favor noncompliant employers insofar as the long time line discourages workers from filing a claim in the first place,” the report said.

The report pointed out that the governor’s proposed 2020-21 budget calls for increasing staff and funding for the Labor Commissioner’s Office over three fiscal years, moves that would ultimately increase the number of staff members handling unpaid wage claims by 50 percent. The changes would not end the delays but could reduce the processing time by at least 100 days, the report said. More would have to be done to achieve the 120-day adjudication timeline. To further reduce delays and improve the outcomes for workers, the report offered several recommendations, including simplifying the claims process and setting goals for wage recovery by workers.

“I strongly support the Governor’s budget proposal to increase staffing and funding for the Labor Commissioner’s Office, and I am committed to reducing backlogs in processing unpaid wage claims,” said Senator Hill. “I look forward to working with stakeholders on a solution to this unacceptable situation.”

The strategies for the legislative solution are being developed. The results will be amended into Senate Bill 1159, which the senator introduced on Friday to serve as a placeholder for his legislation.

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