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How a new state law could leave employers facing serious charges

On Behalf of | Oct 27, 2021 | Employment Law

One of the multiple laws taking effect on the first day of the new year that impacts California employers and employees carries some stiff penalties for employers found guilty of violating it. It involves wage theft – which now can rise to the level of grand theft. 

Last month, Gov. Gavin Newsom signed Assembly Bill (AB) 1003 into law. The California Penal Code is being updated to reflect the change brought about by the law.

What do employers need to know about the new law?

Under the new law, intentional wage theft of over $950 from one employee or a total of over $2,350 from two or more employees over 12 consecutive months can be charged and penalized as grand theft. Under the law, the term “employee” includes independent contractors.

In addition to other penalties, employers convicted of intentional wage theft under the new law may be ordered by a criminal court to pay restitution to victims, just as other victims of theft can receive restitution. However, victims or the Labor Commissioner may also take civil legal action against the employer under the state’s Labor Code.

The definition of wage theft

Under the new law, wage theft is defined as the “intentional deprivation of wages, as defined in Section 200 of the Labor Code, gratuities, as defined in Section 350 of the Labor Code, benefits, or other compensation, by unlawful means, with the knowledge that the wages, gratuities, benefits, or other compensation is due to the employee under the law.”

As California business owners well know, employment laws in our state are constantly changing – typically for the benefit of employees. This one, however, can have more serious legal ramifications for employers than most. That’s why it’s crucial to take all accusations of wage theft seriously and work to resolve them as quickly as possible.