California Wage-Theft Law Needs More Enforcement Muscle, Advocates Say

Home health aide Marta Lepe Martinez cared for an elderly woman in Sacramento for eight years. She was so underpaid by the woman’s son that California regulators determined the employer owed her $350,000 in 2019. To this day, Lepe Martinez hasn’t been compensated.

“My husband and I were evicted, and we faced a big crisis both economically and emotionally,” Lepe Martinez told state lawmakers on Wednesday. “I had hoped that this process would be fast so that I could rebuild my life.”

Each year, California workers lose more than $4 billion to employers’ violations of minimum wage, overtime, meal breaks and other required protections, with those most impacted often in low-wage industries, researchers estimate.

Martinez’s story underscores a common experience for many workers who pursue and win wage theft claims: Though a decade-old California law that armed regulators with debt-collecting tools similar to those of banks has increased victims’ success in recovering millions in restitution, some employers don’t ever pay.

Advocates in Sacramento on Wednesday called for lawmakers to strengthen enforcement at a state Assembly Labor Committee hearing.

In 2015, SB 588 gave new powers to the California Labor Commissioner’s Office to collect court judgments for unpaid wages after an investigation, including by placing liens and levies on an employer’s property. The law also made companies hiring contractors for janitorial, security guard and other services jointly liable when their contractors broke labor laws.

The law helped recover money for hundreds of workers cleaning a Tesla facility, Cheesecake Factory kitchens and Optum healthcare exam rooms after those companies’ janitorial contractors were found responsible for serious wage violations, said Chloe Osmer, executive director of the Maintenance Cooperation Trust Fund, a nonprofit watchdog in the janitorial industry based in Los Angeles.

“In these cases, SB 588 meant that the janitors who mopped the floors, who cleaned the toilets, who emptied the trash for these multi-million dollar companies are actually getting those stolen wages back,” Osmer said. 

But gaps in the law make it less effective across other industries, with some unscrupulous bosses continuing to evade accountability by dissolving their businesses, and selling or shifting assets, worker advocates said. They called on lawmakers to invest in more enforcement staffers at the Labor Commissioner’s Office and expand the agency’s authority to record liens before a court judgment is issued.

The state wage claim process can take years, ultimately resulting in a court judgment if a guilty employer fails to settle owed wages. Most businesses pay before a judgment is issued, but some refuse or can’t do so even after the court order against them.

“Without strong judgment enforcement, wage theft decisions risk becoming paper victories rather than real justice,” said Daniela Urban, executive director of the Center for Workers’ Rights in Sacramento, who represented Lepe Martinez in claims before the Labor Commissioner’s Office.

Urban said that a years-long delay in deciding Lepe Martinez’s case allowed her former employer to sell a property before a judgment was issued and the agency could place a lien on it. The caregiver’s payment now depends on whether the employer, an 87-year-old man, eventually sells his home, she said.

“The earlier the Labor Commissioner has authority to preserve assets, the more likely there will be payment,” Urban said.

The state Labor Commissioner Lilia García-Brower said 72% of employers pay settlements or demands as a result of the wage claim process, and only 7% of cases are referred to the agency’s Judgment Enforcement Unit to help workers with collections.

“These businesses often represent the criminal element and require extensive resources to hold accountable,” García-Brower said. “Thus, our judgment enforcement efforts focus on the hardest cases against the worst operators on behalf of the most vulnerable workers.”

Before SB 588 was approved, the employer’s payment rate in the first year of a judgment pursued by the Labor Commissioner’s Office was just 17%. That rate increased to 46% today, she said, adding that the agency has moved “in the right direction,” but needs additional support.

Since the law’s enactment, the agency’s Judgment Enforcement Unit has recovered $125 million for workers, she added. The unit has increased its number of funded positions from fewer than two dozen three years ago to 33, to handle thousands of the hardest wage collection cases statewide.