CA labor law enforcers penalizing the productive

June 4, 2013

By Katy Grimes


Looking for a place to start a business? Some are saying anywhere but California.

The California Chamber of Commerce did an analysis of a new report just released by the state Labor Commissioner.

“State of the Division of Labor Standards Enforcement” reveals that California labor law enforcement the past two years has broken previous enforcement records.

“Enforcement efforts in 2011 and 2012 resulted in more minimum and overtime wages found owing to California workers and more monetary penalties for illegal business practices than in any previous years in the past decade,” the Cal Chamber found.

I was a Human Resource Director for 20 years for a manufacturing company of 250 employees at our largest. Increasingly during my HR years, my job required me to try to stay one step ahead of the state’s regulatory labor agencies. And enforcement measures were stepped up every year.

The only good part of this was I worked closely with our managers and trained them to document everything. We rarely lost a labor case. But being constantly hounded by the state’s labor regulators was an real impediment to competitiveness with businesses in other states.

California’s ridiculous regulatory atmosphere and frivolous and insipid labor laws have rendered many of the state’s homegrown businesses non-competitive outside of the state.

Some of the key findings of the report include:

  • Minimum wage – More than $3 million unpaid minimum wages assessed in 2012 – more than any previous year on record, and an increase of 462 percent from minimum wage assessments in 2010.
  • Unpaid overtime – More than $13 million unpaid overtime wages assessed in 2012 – more than any previous year on record, and a 642 percent increase from 2010.
  • Civil penalties – More than $51 million in civil penalties assessed in 2012 against employers for violating labor laws – more than any previous year in a decade, and a 150 percent increase from 2010.
  • Higher Citation Rate – In 2012, the Labor Commissioner’s Office had the highest rate of civil penalty citations (80 percent) in the past decade (compared to an average citation rate of only 48 percent from 2002 to 2010).
  • Industry focus: In 2011 and 2012, the Labor Commissioner’s Office set various records in wage and civil penalty assessments in five major underground economy industries: car wash, restaurant, construction, garment, and agriculture.
  • Public works – More than $25 million in wages assessed and civil penalties issued on public works projects in 2012 – the highest amount since 2002.

“Understanding California’s complex labor laws is no easy task,” the Cal Chamber said.

In my company of 250 employees, I spend nearly 90 percent of my time on just labor law issues, and not because we had labor problems — it was always preemptive.

“State enforcement efforts are on the rise.” And why not? It’s a clever way to extract more money from the most productive in the state. Business owners fear labor enforcers…the same way they fear the IRS.

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