The California Department of Industrial Relations (DIR) created a new Criminal Investigation Unit (CIU) to reinforce efforts to combat “wage theft.” California’s Labor Code contains several provisions making it a crime to withhold wages or to violate detailed requirements for semi-monthly paychecks to employees. The criminal penalties for such violations include up to a year of imprisonment. The California Labor Commissioner hopes the CIU will push more investigations to a successful conclusion. In its efforts to keep pace with the California Legislature’s recent changes to employment laws, the Labor Commissioner appears keen to exert more leverage against employers accused of wage violations.
Effective this year, California’s Wage Theft Prevention Act (AB469) and Employee Misclassification Act (SB459), have already increased civil and criminal penalties against employers for violations of wage and hour laws in California. The formation of CIU represents the Labor Commissioner’s dedication to enforce wage and hour laws, including in criminal prosecutions.
It is too early to tell whether the Labor Commissioner’s plans to prioritize criminal prosecutions in wage cases will be supported by local prosecutors in California. Nearly a month after CIU’s creation, DIR has not announced any groundbreaking criminal investigations or prosecutions. Even so, employers should have no doubt that governmental and legislative policy appears focused on enforcing wage and hour laws. Should you have any questions concerning your wage and hour policies and practices for California employees, please consult your Masuda Funai relationship attorney.