On Wednesday, July 30th, a contingent of members from both the Santa Cruz County Business Council (SCCBC) and the Santa Cruz County Association of REALTORS (SCCAR) met with State Senator Bill Monning at his Santa Cruz office. The purpose of the meeting was to share both organizations’ thoughts on AB 2416, dubbed the CA Wage Theft Prevention Act, which is currently under review in the State Senate Appropriations Committee. If passed through the Appropriations Committee, AB 2416s next stop would be the floor of the State Senate. Due to the possibility that the bill could be voted upon in the coming weeks, SCCAR and SCCBC wanted to ensure that their shared concerns about the bill were clearly communicated to Senator Monning.
Amongst many personal comments made during the 45-minute session, SCCBC shared the following as significant areas of concern on behalf of our members:
- Under AB 2416, a lien can be filed by employee, employee representative, or even a creditor of the employee. Any dispute should be between the employer and employee. Allowing a third-party (representative or creditor) to file a lien adds a detrimental element to the process.
- If enacted, processes set in place could negatively impact with financing opportunities and real estate transactions for employers. An unmerited lien could be placed on a property as a result of AB 2416. Even an unwarranted lien could take months or even years to be resolved/lifted. This could have wide-ranging impacts on the real estate and banking industries, as well as any business looking to sell or acquire property. Getting liens lifted could possibly take months or years
- Alleged protections in the bill for property owners come to fruition too late in the overall process, as they do not take effect until after the lien has already been recorded. The bill does not provide equal protection for employees and employers.
- Is this really the best way to remedy the situation? AB 2416 would add layer after layer of legal wrangling to the wage dispute process. Enhanced enforcement tools for the State Labor Commissioner’s office should be considered first. If enforcement is not the issue, a deeper look into why the Labor Commissioner’s office is unable to award funds that have been adjudicated should be conducted. Currently, only 17% of adjudicated claims end up being paid.
The conversation ended with both SCCAR and SCCBC stating that we are certainly in favor of processes being put in place to ensure employees are paid wages they have earned. Without question, unscrupulous employers should be penalized. That said, we encouraged further exploration as to why the State Labor Commissioner’s office is failing in its ability to award payment to those that have a legal claim to it. Lastly, we asked Senator Monning to please vote “no” on the bill if it does in fact make it before the State Senate.
SCCBC will continue to monitor AB 2416 and will update members as new information becomes available.
For an overview of the bill, and its current status, click here.