Funding for New L.A. Law Questioned: “We need enforcement now. There’s wage theft now.”

 As the Los Angeles City Council looks to create a new office to enforce local wage laws as part of its minimum wage hike plan, many experts want to know how they will fund it. 

Sen. Kevin de León

Sen. Kevin de León  

The council has approved $500,000 to be used to hire five analysts for the new office by July 1st.  But it may not be enough to ensure that there is strict enforcement when the office is operational.  

“They approved what’s basically a third of the need,” Elena Popp, executive director of the Eviction Defense Network, told The Los Angeles Times.  “We need enforcement now. There’s wage theft now.”

The council says it will be able to supplant the office’s resources over time, including another $200,000 by 2016.  But in a city known for having problems adequately funding its public services, others are looking to the state for help with the wage theft epidemic.

SB 588, a bill proposed by  Sen. Kevin de León of Los Angeles, cleared the Senate last week.  If enacted, SB 588 would make it harder for employers who owe back wages to skirt their legal responsibility.  de Leon called it ”a victory for low-wage workers…whose salaries are literally being stolen from them because they are being paid less than minimum wage.”

The bill would grant the state more power to collect back wages.  It would also include a provision forcing employers who fail to pay court-ordered back wages to put up a bond to provide the funds. Those who do not comply would receive liens or be ordered to cease operations.  Business owners’ names would also be included in judgements under the legislation, which would prevent employers from skipping out on back wages by shutting down their company and reincorporating under a different name.  

The bill is now before the assembly and could be heard by a policy committee soon.  It would cost the state $2.6 million in its first year and $2.2 million to keep up the operation annually.  Through amendments, the bill has recieved minimal opposition, even from the California Manufacturers and Technology Association (CMTA), which thwarted a similar bill last year.  In a position paper, the CMTA wrote of SB 588:

“…no opposition but concerns have been expressed related to a few technical provisions that if fixed would make the bill better…CMTA is neutral on the measure and supports the Labor Commissioner’s ability to collect on debts owed by unscrupulous businesses operating outside of the law.”

L.A. city council member Gil Cedillo said that passage of SB 588 would coincide with Los Angeles’ new ordinance and could help the city achieve its enforcement needs.

“It helps put more boots on the ground, as you would say.  Our challenge is not just trying to make sure that everybody complies with the law, that no one takes advantage of vulnerable communities, that businesses who don’t pay the minimum wage then have a competitive advantage over those who do. But our challenge is also having people to enforce it.”

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