The California legislature has passed two bills that aim to crack down on wage theft in the state and better protect workers from wage-and-hour violations. Among other things, the new legislation would make wage theft a misdemeanor crime punishable by prison time and fines. The bills would also double the amount of damages that a court could award a worker suing for unpaid minimum wages. The bills are currently sitting on Governor Schwarzenegger's desk and he has until the end of the month to decide whether to sign them.
According to the Los Angeles Times, a study published by UCLA last year found that around three-fourths of 160,000 people who worked more than 40 hours a week did not receive proper compensation for working overtime. The study also found that around 30 percent of Los Angeles County's low-earning workers were paid less than the minimum wage of $8 per hour.
Wage theft and exploitation of workers has gone up during the recession because workers are desperate for jobs. Workers who know their rights are being violated may feel like they don't have any other options and that they could be easily replaced if they complained. For this reason, the lawmakers felt they needed to increase the penalties for businesses who abuse employees.
Part of the problem is that wage and hour inspectors have not increased at nearly the rate that the state population has grown. In addition, the role of labor unions in protecting workers has gone down and the economy of the state has shifted from higher-paying manufacturing jobs to lower-paying service positions.
Harsher penalties suggested for employers who shortchange workers in California (Los Angeles Times)