California Bill Aims to Increase Penalties for Employer Wage Theft (Senate Bill 261)
In an effort to combat wage theft and improve enforcement in Santa Clara County and across California, State Senator Aisha Wahab (D-Hayward) introduced Senate Bill 261 (SB 261) in February 2025. Sponsored by the County of Santa Clara, the proposed legislation seeks to enhance legal mechanisms for workers seeking to recover unpaid wages and impose stricter penalties on businesses that fail to comply with wage theft judgments.
Key Provisions of SB 261
The bill includes several measures aimed at increasing accountability for employers who violate wage laws:
- Public Database for Wage Theft Judgments – SB 261 proposes creating a publicly accessible database on the Labor Commissioner’s Office’s (LCO) website listing businesses with outstanding wage theft judgments awarded against them by the LCO. A business would be removed from the database only if all violations were remedied or abated.
- Mandatory Reimbursement of Attorneys’ Fees and Court Costs – Workers and civil prosecutors would be entitled to mandatory award of attorneys’ fees and court costs associated with any legal action to collect a wage judgment against an employer.
- Civil Penalty – Employers would be subject to a civil penalty of up to 3x the amount of any outstanding judgment that remains unpaid 180 days after issuance.
According to Santa Clara County officials, these provisions aim to close enforcement gaps that have left many low-wage workers struggling to collect their rightful earnings despite obtaining judgments in their favor.
Addressing a Widespread Issue
Wage theft remains a persistent issue across multiple industries, including restaurants, hospitality, construction, and health care. Common violations include:
- Failure to pay minimum wage
- Unpaid overtime
- Denial of meal and rest breaks
- Unlawful withholding of tips
The Civil Prosecutors Coalition, which co-sponsored the bill, emphasized the need for stronger enforcement mechanisms, citing the high percentage of unpaid wage theft judgments.
Senator Wahab underscored the urgency of the issue, stating:
“Wage theft is one of the most pervasive forms of crime, and it is time we increase our enforcement to ensure victims of wage theft are made whole and perpetrators are held accountable.”
Challenges in Collecting Unpaid Wages
Santa Clara County officials noted that even when workers successfully obtain wage theft judgments through the State Labor Commissioner’s Office (LCO), many do not receive their compensation. The majority of these judgments remain unpaid, highlighting the need for stronger enforcement mechanisms.
The county’s Office of the County Counsel and Office of Labor Standards Enforcement has launched a Worker Rights Initiative to assist workers in collecting unpaid wages. However, officials argue that additional legal support is necessary to ensure compliance.
What’s Next?
SB 261 is currently making its way through the California State Legislature. If passed, it could provide significant tools to deter wage theft and aid workers in recovering their earnings. The bill reflects growing statewide efforts to hold employers accountable and strengthen protections for low-wage workers.
