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In this episode of California Employment News, Weintraub Tobin attorneys Shauna Correia and Meagan Bainbridge discuss SB 261, a new law that strengthens enforcement of California wage judgments. Learn about the new public database for unpaid judgments, triple penalties for late payment, and mandatory attorney’s fees for enforcement.
Watch this episode on the Weintraub YouTube channel.
Show Notes:
Shauna: Thank you for joining us for this installment of the California Employment News, an informative video and podcast resource offered by the Labor and Employment group at Weintraub Tobin. My name is Shauna Correia. I’m the practice group leader, and I’m joined today with my partner, Meagan Bainbridge. Today we’ll be talking about Labor Code enforcement tools that were recently greenlighted by Governor Newsom. Meagan, can you start us off by providing some background on this new law?
Meagan: Yeah. So, for context, if a judgment is issued against a defendant employer for a wage claim filed by an employee before the Labor Commissioner, under the current Labor Code, what have the proceedings under the Labor Code and Civil Code allowed for simple interest to accrue on a judgment until that judgment is paid. However, the legislature believed that this was not a strong enough incentive to promptly pay judgments owed or to deter employers from violating the Labor Code in the first place. So, Shauna, do you want to kind of talk through what the new regulations allow for and what those tools being provided are?
Shauna: So the stated intent behind SB261 is to provide these additional tools to enhance enforcement and collection of wage judgments in order to ensure victims of wage theft are paid in a timely manner. And so the new law, as enacted, requires the creation of a public database of employers who have unsatisfied wage judgments against them. And that would be searchable online in order to increase accountability. Megan, this new law will also provide some new penalties to incentivize prompt payment of judgments, right? Yeah.
Meagan: So, a new labor code section, section 238.05, is being added that allows for a civil penalty of up to three times the judgment, plus accrued post-judgment interest for non-payment of any judgment that remains outstanding for more than 180 days after the deadline to appeal has passed. 50% of this penalty will go to the employee. The other 50% will go to the Division of Labor Standards Enforcement. And the new law also makes mandatory an award of attorney’s fees and cost to the employee or the public prosecutor, whoever has to enforce the judgment. Well, those are some powerful enforcement incentives.
Now, there is a way for employers to avoid these penalties even if they were delinquent in paying a judgment, which is that if they work with the employee and they reach an accord as outlined in Labor Code Section 238 prior to the deadline, and they comply with the terms of the agreement, such as if it calls for installment payments, then that the penalty would not be imposed. Thanks, Shauna. And that’s it for now. You can continue to find our video series and podcast through the lelawblog.com on the Weintraub Tobin YouTube channel or wherever you listen to your favorite podcasts. Thank you everyone for joining us and we look forward to reconnecting on the next edition of California Employment News.
Shauna: We’ll see you then. Thanks.