With California’s ever-changing employment laws, it’s important to stay informed of legal updates that affect your business. Last fall, California Governor Gavin Newsom signed Assembly Bill 1003 into law, which went into effect on January 1, 2022. Proposed by Lorena Gonzalez, Section 487m now redefines the theft of wages as grand theft. Wages in this circumstance include not just direct wages, but also gratuities, benefits and other forms of compensation.
What has changed?
Section 487m updates the law to expand the definition of grand theft and provide for criminal penalties if an employer is found guilty of intentional deprivation of wages as defined in Labor Code section 200.
State law now defines such theft as an amount greater than $950 from any single employee or $2,350 combined from two or more employees during any consecutive 12-month period. It also includes provisions for independent contractors and classifies whoever hires the independent contractor as the employer.
This legal update makes it a good time to check your wage and other compensation policies and ensure they are legally compliant. You may want to review your pay systems and communicate any policy updates to your staff.
Most wage issues are the result of mistakes, not maliciousness or deliberate theft, but the new law makes it clear that employers need to remain alert to potential problems and be responsive to employee concerns about their wages.