Stopped: New Employer Penalty, Burdensome Changes to Claims Process

[Link]A CalChamber-led coalition of business groups, including local chambers of commerce, has stopped a Cost Driver bill that would have exposed employers to a new 30% penalty on orders issued by the Labor Commissioner.

The legislation, AB 1234 (Ortega; D-San Leandro), was placed on the Senate Inactive File last week.

AB 1234 would have penalized employers that exercise their due process rights. It also made other burdensome changes to the existing claims process.

Although the bill was amended to give the Labor Commissioner discretion in setting the penalty based on facts giving rise to a claim, the version sent to the inactive file still included provisions causing concern for the coalition. The coalition called for changes, such as:

• Revising the criteria for waiving the penalty so that settling an alleged claim or losing one claim doesn't imply that an employer is a "bad actor" rather than a good one.
• Providing the trial court with discretion to reduce the penalty if appropriate.
• Making a defendant's response to a wage claim due after the informal conference.
• Giving the Labor Commissioner the right to ask for testimony or further evidence and discretion to deal with late responses.

Staff Contact: Ashley Hofmann