California has some of the nation’s strongest employee protection laws, but the government agencies tasked with enforcing them lack the resources they need to hold employers accountable for wage theft and other violations. The California Labor Commissioner’s Office assessed more than $450 million in penalties for wage theft between 2017 and 2023, but only about 16% of that money has been recovered from employers according to official records. Some worker advocacy groups blame this lax enforcement on manpower shortages. In 2023, the vacancy rate at the Labor Commissioner’s Office climbed to 42%.
How employers avoid payment
When employers fail to pay fines assessed for wage claim delinquencies, the Labor Commissioner’s Office can petition the courts to order compliance. When a civil judgement is granted, state officials can use liens and levies to recover unpaid wages. However, these efforts may not lead to workers receiving the money they are owed. The appeals process can take years, which could give employers time to transfer assets like machinery and real estate. Companies can also avoid paying fines by filing for bankruptcy.
California’s worst wage theft offender
This is what happened in a case involving a man California officials have described as the state’s worst wage theft offender. Between 2014 and 2017, employees of the man’s construction company often received paychecks that bounced due to insufficient funds or no paychecks at all. The Labor Commissioner’s Office ordered the construction company to pay fines totaling more than $16 million, but only about 2% of that money has been recovered. The company filed a Chapter 11 bankruptcy before its appeals were dismissed in May 2022.
More resources are needed
Employers in California are sometimes able to avoid paying fines assessed for violating wage and hour laws by filing appeals, transferring assets or filing for bankruptcy. The Labor Commissioner’s Office does what it can to address wage theft, but it lacks the resources it needs to bring the problem under control.