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The 2020-21 Budget: Improving the State’s unpaid wage claim process

The Legislative Analyst’s Office has just published the following post:

The 2020-21 Budget: Improving the State’s Unpaid Wage Claim Process

Filing a claim for unpaid wages with the state’s Labor Commissioner is one option workers have to recover unpaid wages from their employer. Each year, about 30,000 workers file wages claims. In 2017, workers filed claims for a total of $320 million in unpaid wages, about $10,000 per claim on average, and recovered about $40 million. State law sets as a target that wage claims should be adjudicated within 120 days of when the worker files the claim. At this time, however, workers wait 396 days for their wage claim to be decided.

As part of its 2020-21 budget plan, the administration proposes to hire 15 claims staff (increasing to 63 over four years) to reduce delays for workers seeking unpaid wages. The administration notes that recent employment law changes have had the effect of making wage claims more complex, leading to delays. We recommend that the Legislature approve the requested positions, given the severity of the current delays, but that it also take a broader look at the wage claim process to address challenges workers face recovering unpaid wages. Broader options the Legislature could consider include: setting benchmarks for worker outcomes, requesting annual reports from the Labor Commissioner, simplifying the process to lower hurdles, enabling the Labor Commissioner to take a more active role in collections, and reimbursing legal aid nonprofits that assist workers.

This post is available using the following link: https://lao.ca.gov/Publications/Report/4165?utm_source=laowww&utm_medium=email&utm_campaign=4165

This article was released by the Legislative Analyst’s Office.