Historic Wage Theft Reform Proposals Move One Step Closer to Fixing the System, Saving Workers Billions

SACRAMENTO – Amid historic inflation and a deepening affordability crisis, one East Bay legislator is taking aim at a little-discussed crime that drains billions from paychecks every year: wage theft. Assemblymember Liz Ortega (D-San Leandro), Chair of the Assembly Committee on Labor & Employment, announced a major victory this week: her bill package to discourage wage theft and help victims recover stolen wages faster has officially passed off the California Assembly floor and will head to the Senate.

“When employers fail to pay workers the wages they have earned, there must be consequences. Voters made that clear last November,” said Asm. Ortega. “Workers who’ve had their paychecks stolen need that money back as quickly as possible.

”Californians lose $2 billion per year due to violations of minimum wage law alone. Yet the process for claiming stolen wages is so arduous, even when workers are able to win judgments, many don’t ultimately receive their stolen pay. In California, just 12% of cases are enforced, and of those, only one in seven employees recover the full amount of stolen wages. A 2024 audit found the Labor Commissioner had a backlog of 47,000 unprocessed claims.

Asm. Ortega’s package includes:

• AB 1234, the Timely Wage Recovery Act, which streamlines the wage recovery process by requiring employers to respond promptly when workers file wage claims. The bill passed the Assembly with a vote of 44 Ayes and 12 Noes. [See video here.]
• AB 485, which requires state agencies to deny new licenses or license renewals to employers with unpaid wage theft judgments. The bill passed the Assembly with a vote of 56 Ayes and 16 Noes.

Under current law, workers who have had their wages stolen may file a claim with the California Labor Commissioner’s office. But employers can refuse to respond and drag out the process for years, often refusing to pay judgments even once found guilty.

According to the California State Auditor, between 2018 and 2023, the Labor Commissioner’s Judgement Enforcement Unit was successful in collecting the entire amount owed in just 12 percent of the cases that were referred to the state for enforcement. A 2022 CalMatters investigation found that only one in seven court-issued judgements are paid by employers.

AB 1234 is co-sponsored by the California Federation of Labor Unions, the Center for Workers’ Rights, and Bet Tzedek Legal Services. AB 485 is also supported by the California Federation of Labor Unions and sponsored by Santa Clara County Wage Theft Coalition.

"Wage theft takes billions of dollars out of workers’ paychecks every year in California," said Lorena Gonzalez, President of the California Federation of Labor Unions, AFL-CIO representing over 1,300 unions with 2.3 million union members. "Employers that fail to respond to wage claims or even appear at hearings delay and deny justice to workers. This bill gives the Labor Commissioner tools to require employers to respond to workers' claims and will help clear the backlog so that workers get their wages owed without delay.”

Assemblymember Ortega can be available for press interviews in both English and Spanish. Contact Veronica Lopez at (951) 520 7386 or M.V. Watson at (210) 667-5046 (text preferred).

VIDEO RESOURCES: See this reel featuring Asm. Ortega’s presentation of AB 1234 and interviews with bill witnesses. See this video with more info about AB 1234