AB 1003 Makes Wage Theft a Crime in CA

California lawmakers recently passed Assembly Bill 1003, which would make “wage theft” a form of grand theft in the state. The bill also defines independent contractors as employees and specifies that the hiring party of an independent contractor is known as an “employer.” 

Wage theft occurs when an employer fails to pay an employee their full wages, whether it’s salaries, commission, gratuities, benefits, or other forms of compensation. Common examples of this offense include employers not paying for all hours worked, not providing proper compensation for overtime, pocketing tips, or paying below the minimum wage. 

AB 1003 would make an employer’s intentional wage theft of more than $950 from one employee, or $2,350 total from at least two employees, within a 12-month period punishable as grand theft, which carries a prison sentence of up to three years, depending on the facts and circumstances of the case. In addition, employees who are victims of wage theft by recovering their lost wages by filing a lawsuit against their employer or the Labor Commissioner. 

In May 2021, the California Assembly passed the bill on a 78-0 vote. In June, the Senate Public Safety Committee approved the bill unopposed, which means AB 1003 will likely become law in California. 

Although Section 215 of the California Labor Code criminalizes any intentional deprivation of an employee’s earned wages, supporters of AB 1003 argue that the consequences for violating the California Labor Code do not properly deter widespread wage theft throughout the state. Section 215 says an employer is guilty of a misdemeanor if it intentionally refuses to pay wages or falsely denies a valid claim of wage theft by an employee. 

AB 1003 would target payroll managers and supervisors, human resources personnel, as well as operating managers and supervisors, who are all tasked to manage payroll and overtime, oversee timekeeping, and implement meal and rest break policies. If—or when—the bill passes, California employers must invest time and resources to ensure they comply with the new law since even a good-faith error could be charged as wage theft. 

If you believe your employer is intentionally depriving you of your entitled wages, contact Polaris Law Group today at (888) 796-4010 for more information about our experienced employment law services. Serving clients in Redding, Sacramento, Santa Rosa, Oakland, San Francisco, the Bay Area, Stockton & Modesto, Pleasanton, Redwood City, San Jose, the Silicon Valley, Hollister, Salinas, Fresno, Bakersfield, Santa Barbara, Oxnard, Santa Clarita, Riverside, San Bernardino, Orange County, and San Diego. 

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