Reports Show Rampant California Wage Violations and Poor Enforcement by State Agencies

The Harvard-UCSF Report

The Harvard Kennedy School and the University of California at San Francisco have issued a report that shows rampant wage violations occurring in California workplaces. A copy of the report can be downloaded here. Some highlights from the report:

• 41% of workers experienced “serious” wage-related violations, including unpaid hours, minimum wage breaches, or lack of overtime pay.
• Paid rest breaks were violated for 58% of workers, while 43% experienced meal break violations, such as being required to work through breaks without compensation.
• 18% of workers reported being forced to work off the clock.
• 10% were denied overtime pay for extended shifts.
• Only 22% of affected workers reported the violations. Most complaints (58%) were directed to supervisors rather than regulatory agencies.
• Only 2% of complaints reached state labor regulators, highlighting a gap in effective enforcement mechanisms.
• Among those who reported violations, only 32% saw improvements in their working conditions, with 22% reporting positive changes for colleagues

The report concludes that while California boasts some of the most progressive labor laws in the country, a lack of effective enforcement mechanisms leaves most workers unprotected:

“These findings suggest a crisis of enforcement in a state that prides itself on leading the way on higher road employment practices and demonstrate that labor standards enforcement is a continual and crucial component in making legal entitlements a reality.”

The California State Audit

The report is in line with a May 2024 report previously issued by the California State Auditor, pointedly entitled “[The Labor Board’s] Inadequate Staffing and Poor Oversight Have Weakened Protections for Workers”. A copy of the audit report can downloaded here. In that report, the auditor highlighted the following issues:

• Between January 2018 and November 2023, about 28 percent of employers did not make Labor Board‑ordered payments
• The Labor Board’s Judgment Enforcement Unit was successful in collecting the entire amount owed to workers in only 12% of cases from 2018 through November 2023. A possible factor was the Unit’s failure to consistently use all methods available for collection.
• The Labor Board had 47,000 backlogged claims at the end of fiscal year 2022–23.
• As of 11/1/23, more than 2,800 claims had been open for five years or more.
• By state law, the Labor Board is required to resolve claims within a maximum of 135 days. However, as of the end of fiscal year 2022–23, the Labor Board took a median time of 854 days to issue a decision, more than six times longer than statute allows.
• Four offices in particular stood out for having the lengthiest delays (in order): Oakland, San Francisco, Santa Ana and Los Angeles.
• As of 11/1/23, the Van Nuys office had 28 new claims that had not been scheduled for a conference or hearing, despite having been filed between 2017 and 2021
• There were hundreds of understaffed positions and a high 30% vacancy rate
• The Labor Board was saddled with a mandatory hiring process that was ineffective and delayed
• Low, uncompetitive salaries contributed to low hiring success and high turnover.
• Outdated technology and incomplete / inaccurate data prevented effective caseload management.
• There was insufficient staff training and oversight of field offices.

The report highlighted one particularly egregious case:

In one egregious example, a worker filed a claim with the Van Nuys field office in September 2014. According to LCO’s case management system’s data, the Van Nuys field office held the first settlement conference in January 2015 but did not schedule a hearing for another four years until July 2019. The delay extended even further when the LCO improperly served the notice of hearing and held another settlement conference before scheduling the hearing. The LCO subsequently rescheduled the hearing an additional four years later, in August 2023, but the case management notes do not provide a reason for the extensive delay in rescheduling the hearing. Then, because of the assigned hearing officer’s unavailability, the LCO canceled the hearing and instead facilitated a third conference on the hearing date. The worker offered to settle the claim for less than half of what the LCO identified as owed to the worker; however, the defendant refused the settlement offer at the conference. The LCO had yet to reschedule the hearing as of March 2024. According to LCO’s case management notes, the worker, who served as a caregiver for clients who are since deceased, has more than $71,000 in outstanding claims—not including interest—for unpaid overtime, unpaid mileage reimbursements, and for wages that were paid at a rate less than the minimum wage. Almost 10 years after filing the claim for unpaid wages, the worker still has not received a decision on the claim.

Conclusion

As labor board backlogs worsen and the time from filing to trial pushes 5+ years, it remains to be seen whether California will be able to fix its enforcement problem and stem the tide of wage theft victimizing workers. In a response to the audit, the labor board stated that they had already completed 285 improvements since November 2021 to their online wage complaint and Salesforce case management system. The auditor took a dim review of this response, however, stating:

“Although DIR claims that the LCO has made many improvements to Salesforce—the LCO’s wage claims case management system—we found that these changes have not improved its processing of claims”

The auditor ultimately stood by the recommendations in his initial report – not a good omen for California workers.