Recently in California wage theft and labor law news:  Another California city adds wage theft ordinance that requires developers to pay all wage theft obligations before receiving permits,  The California Department of Labor is struggling to connect with all the workers for which it has received settlements and back pay, and there is a backlog at California state agencies handling wage theft claims.

New Wage Theft Ordinance – South City 

South City, California is joining San Jose, Milpitas, Fresno and other cities in signing an ordinance requiring that any developer building a site of a certain square footage must first clear all wage theft claims remaining to be paid. 

When the California Labor Commission records a judgement, defendants are giving final amounts owed via a court order or judgement. Now in South City, and other locations, the permit process for developers will include a check for outstanding wage theft judgements.  Developers with an open judgement that is unpaid will be unable to proceed with their development until they have paid existing judgements. 

In South City the trigger for the check will be when the building under construction or being renovated is 5,000 square feet or more. The goal is that the permit process can be used to check and enforce existing wage judgements in the construction industry. The construction industry joins other major categories including restaurants and garment factories in having a history of unpaid wages of workers. 

Wage Judgments Not Collected In California 

A year ago a major restaurant chain settled a case with the California Labor Commission regarding unpaid time for the restaurant chains janitorial staff.  Now after a year, the Commission is reporting that they still haven’t paid out $700,000 of the $1,000,000 settlement. 

The Labor Commission estimates it has not found around 500 workers from the San Diego and Orange County restaurants that were part of the settlement.  The staff at these locations were hired by a janitorial subcontractor and claims included that the janitors were forced to work off the clock at end of the night. 

They’re asking janitors who worked at that chain in San Diego, Irvine, Newport Beach, Brea, Huntington Beach, Mission Viejo, and Escondido anytime August 31, 2014, through August 31, 2017 to call (619) 767-2039. 

Other recent cases have smaller but still unpaid settlements.  In 2022 a residential care facility in Los Angeles paid $1.8 million regarding allegations of unpaid wages, $700,000 hasn’t been collected. 

California Wage Theft Claim Investigation Backlog 

A recent audit of the Department of Industrial Relations’ Division of Labor Standards Enforcement (Labor Commission Office or LCO) found that due primarily to a lack of staffing the Labor Commission Office is “not providing timely adjudication of wage claims for workers”.  The audit found that there are now 47,000 claims as of the end of the fiscal year 2022-2023.  A state law requires the LCO to issue a decision on a wage claim within 135 days, but the agency is currently taking a median of 854 days to issue decisions.   

The backlog of claims was 22,000 in 2017-2018, before doubling to the 47,000 seen as of the end of 2022-2023.  The audit noted that over 2,800 claims were over 5 years old, with claims for $64 million in unpaid wages. 

The audit noted that the vacancy rate for jobs was over 10 percent in seventeen field offices, with thirteen offices having vacancy rates exceeding 30 percent. This staffing shortage was the main determining factor for the auditors in why the backlog has doubled over the last half decade. 

In addition to delays in processing wage claims, the audit found that only 12 percent of cases from 2018 through November 2023 had payments collected after an award or judgement was determined. This means that successful wage claims through the Labor Commision, as opposed to alternatives such as a private action by private labor attorneys, can result in wage judgements that result in no payment to workers. 

California Wage Theft Attorneys 

Schneider Wallace has two California offices, in the Bay Area and Los Angeles. Contact us to schedule an appointment with our experienced employment class action litigation lawyers.  

If you believe you are not being paid for all of the time you have worked, or are not being paid the overtime due to you, we invite you to schedule a consultation with an employment law attorney at our offices. Schneider Wallace Cottrell Konecky LLP is a national law firm that represents employees in a wide range of employment law cases, including class action lawsuits involving the failure to pay wages, overtime pay and commissions. Contact us at 1-800-689-0024 or info@schneiderwallace.com.