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California Dept. of Industrial Relations Creates Wage Theft Crime Unit

HR Informant

The state Labor Commissioner announced the creation of a Criminal Investigation Unit (CIU) to target employers who perpetrate “wage theft.”

Generally, “wage theft” is a phrase used to refer to infractions of the California Labor Code involving the payment of wages to workers. Wage theft might refer to employers who fail to pay for all hours worked, fail to pay nonexempt employees overtime, fail to pay minimum wage or fail to properly classify workers as employees and report them to the various state and federal agencies.

According to Labor Commissioner Julie Su, the new criminal unit “will be tasked with leveling the playing field for California employers by raising the stakes for those who underpay, underbid and under-report in violation of the law.”

The goal is to protect workers and to allow companies who follow the law to compete. The CIU will handle cases including:

  • Workers’ compensation violations
  • Theft of labor (felony or misdemeanor)
  • Payment of wages with bounced checks or insufficient funds
  • Unlicensed farm labor contractors and garment manufacturers
  • Kickbacks on public works projects
  • Violations involving minors on the job

The CIU will conduct investigations, make arrests, file criminal charges and serve subpoenas and inspection warrants. The CIU will be made up of sworn peace officers who have completed the police academy and who qualify to carry firearms.

Wage theft prevention certainly appears to be at the forefront of the Labor Commissioner’s agenda. In January, HRWatchdog reported that the California Department of Industrial Relations (DIR) also launched an interagency Labor Enforcement Task Force (LETF) to “combat the underground economy” by cracking down on businesses that do not follow the state’s  labor laws — hiring employees off the books and paying them under the table.

Employers should not forget that the Wage Theft Protection Act (AB 469) took effect January 1, 2012. Under AB 469, employers must provide nonexempt employees with a notice at the time of hire specifying certain wage and employment information.

HR Allen customers can reference to our blog about the wage notice and for a wage notice.


Author: Gail Cecchettini Whaley

HR Watchdog, HRCalifornia’s Employment Law Blog, © California Chamber of Commerce

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