(1)Existing law sets forth the Labor Commissioners duties, including investigating employee complaints and providing for a hearing in any action to recover wages, penalties, and other demands for compensation, as specified. Existing law authorizes the Labor Commissioner, as an alternative to a judgment lien, to create a lien on real property for amounts due under a final order in favor of the employee or employees named in the order with the county recorder of any county in which the employers real property may be located, at the Labor Commissioners discretion and depending upon the information the Labor Commissioner obtains concerning the employers assets. Existing law provides that unless the lien is satisfied or released, the lien continues until 10 years from the date of its creation.

This bill would authorize the lien to be renewed at any time prior to its expiration for additional periods of 10 years by recording a renewal of certificate of lien or a copy of a renewed judgment.

(2)Existing law precludes an employer or other person or entity who may be liable for a violation of the Labor Code from introducing as evidence in an administrative proceeding contesting a citation or writ proceeding under specified provisions, certain books, documents, or records that are not provided pursuant to a duly served written request by the Labor Commissioner within a specified time period, except as specified.

This bill would also preclude an employer or other person or entity from using or relying on the above-described books, documents, or records as evidence, would revise the types of books, documents, or records to which the provisions are applicable, and would make those provisions applicable to a specified administrative proceeding contesting citations for retaliation or discrimination complaints.

(3)Existing law defines the term public works for purposes of requirements regarding the payment of prevailing wages, the regulation of working hours, and the securing of workers compensation for public works projects. Existing law requires the Labor Commissioner to issue a civil wage and penalty assessment to a contractor or subcontractor, or both, if, after an investigation, the commissioner determines there has been a willful violation of the laws regulating public works. Existing law authorizes an affected contractor or subcontractor to obtain a review of the civil wage and penalty assessment by requesting a hearing from the office of the Labor Commissioner, after which the director shall issue a written decision, as specified. Existing law authorizes an affected contractor or subcontractor to obtain review of the decision of the director by filing a petition for a writ of mandate to the appropriate superior court, as specified.

This bill would preclude a contractor or subcontractor from introducing as evidence, or in any other way using or relying on as evidence, at a hearing or writ of mandate proceeding described in the provisions above, any books, documents, or records that are not provided pursuant to a duly served written request by the Labor Commissioner within the time that the Labor Commissioner requests those books, documents, or records to be produced, except as specified. The bill would require the Labor Commissioner to take into consideration a reasonable request from the contractor or subcontractor for an extension of time for production of books, documents, or records, as specified.

(1)Existing law sets forth the Labor Commissioners duties, including investigating employee complaints and providing for a hearing in any action to recover wages, penalties, and other demands for compensation, as specified. Existing law authorizes the Labor Commissioner, as an alternative to a judgment lien, to create a lien on real property for amounts due under a final order in favor of the employee or employees named in the order with the county recorder of any county in which the employers real property may be located, at the Labor Commissioners discretion and depending upon the information the Labor Commissioner obtains concerning the employers assets. Existing law provides that unless the lien is satisfied or released, the lien continues until 10 years from the date of its creation.

This bill would authorize the lien to be renewed at any time prior to its expiration for additional periods of 10 years by recording a renewal of certificate of lien or a copy of a renewed judgment.

(2)Existing law precludes an employer or other person or entity who may be liable for a violation of the Labor Code from introducing as evidence in an administrative proceeding contesting a citation or writ proceeding under specified provisions, certain books, documents, or records that are not provided pursuant to a duly served written request by the Labor Commissioner within a specified time period, except as specified.

This bill would also preclude an employer or other person or entity from using or relying on the above-described books, documents, or records as evidence, would revise the types of books, documents, or records to which the provisions are applicable, and would make those provisions applicable to a specified administrative proceeding contesting citations for retaliation or discrimination complaints.

(3)Existing law defines the term public works for purposes of requirements regarding the payment of prevailing wages, the regulation of working hours, and the securing of workers compensation for public works projects. Existing law requires the Labor Commissioner to issue a civil wage and penalty assessment to a contractor or subcontractor, or both, if, after an investigation, the commissioner determines there has been a willful violation of the laws regulating public works. Existing law authorizes an affected contractor or subcontractor to obtain a review of the civil wage and penalty assessment by requesting a hearing from the office of the Labor Commissioner, after which the director shall issue a written decision, as specified. Existing law authorizes an affected contractor or subcontractor to obtain review of the decision of the director by filing a petition for a writ of mandate to the appropriate superior court, as specified.

This bill would preclude a contractor or subcontractor from introducing as evidence, or in any other way using or relying on as evidence, at a hearing or writ of mandate proceeding described in the provisions above, any books, documents, or records that are not provided pursuant to a duly served written request by the Labor Commissioner within the time that the Labor Commissioner requests those books, documents, or records to be produced, except as specified. The bill would require the Labor Commissioner to take into consideration a reasonable request from the contractor or subcontractor for an extension of time for production of books, documents, or records, as specified.

Existing law establishes the Division of Occupational Safety and Health within the Department of Industrial Relations and sets forth its powers and duties related to protection of the life, safety, and health of employees. Existing law, the California Occupational Safety and Health Act of 1973, establishes various requirements relating to investigations and complaints of unsafe conditions of employment. Existing law requires the division to annually compile and release data relating to those complaints and citations.

This bill would additionally require the division to annually report that data to the Legislature and Governors office.

Date of Hearing: August 5, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 1316

Author:(Smallwood-Cuevas) – As Amended Ver:March 25, 2026

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill makes various updates to the Labor Commissioner’s (LC’s) enforcement authority.

Specifically, this bill:

1. Authorizes the LC to renew, at any time prior to expiration, a lien created on an employer’s real property to satisfy a wage order for an additional 10-year period by recording a renewal of certificate of lien or a copy of a renewed judgment.
2. Prohibits an employer precluded from introducing certain materials as evidence in certain administrative proceedings contesting a citation or writ proceedings from in any other way using or relying on those materials as evidence, and makes these evidence provisions applicable to an administrative proceeding contesting a citation for retaliation or discrimination complaints.
3. Provides that these evidentiary rules also generally apply to a contractor or subcontractor at an administrative hearing or writ proceeding contesting a civil wage and penalty assessment.

FISCAL EFFECT:

1. Minor and absorbable costs to the LC to renew expiring liens and update evidence rules. Additionally, potential cost savings of an unknown amount to the LC to the extent the LC would otherwise file a new lien against an employer and the LC’s current ability to resolve a violation on behalf of an employee is delayed by procedural motions.
2. Similarly, potential decrease in cost pressures to the courts to the extent this bill would expedite writ proceedings. Although courts are not funded on the basis of workload, decreased pressure on court staff and the Trial Court Trust Fund may lower demand for increased court funding from the General Fund.

COMMENTS:

1. Purpose. According to the author:

Current labor enforcement statutes contain outdated timelines, inconsistent document production requirements, and technical gaps that can delay investigations and complicate wage recovery. These inconsistencies are often exploited by noncompliant employers to delay proceedings or avoid accountability on procedural grounds rather than compliance with labor laws…

SB 1316 makes targeted technical and clarifying amendments to labor enforcement statues to ensure consistent document production timelines, clarify evidentiary rules, and align lien duration and renewal authority with existing judgment lien law. These changes strengthen the [LC’s] ability to enforce existing worker protections, reduce unnecessary litigation over procedural issues, and improve the timely recovery of unpaid wages without creating new penalties or expanding enforcement authority beyond current law.

This bill is supported by the California Federation of Labor Unions.

1. LC Enforcement. Among other responsibilities, the LC is tasked with adjudicating worker wages claims. Existing law requires the LC to determine whether to hear a wage claim within 30 days of receiving the claim, hold a hearing within 90 days of making that determination, and issue a decision within 15 days. In reality, however, a worker’s claim generally takes two years or longer to go through the adjudicatory process.

When an employer refuses to pay a wage claim ordered by the LC, the LC may file a lien against the employer’s real property, preventing the sale or transfer of the property until the judgment is paid. Existing law provides that the lien continues for 10 years from the date the lien is created unless satisfied or released. This bill allows the LC to renew the lien for additional periods of 10 years prior to the lien’s expiration.

Existing law precludes an employer from refusing to cooperate with an LC investigation or proceeding by withholding properly requested documents but then attempting to introduce those same documents as evidence when appealing an adverse order. This bill further precludes the introduction of those documents in any other way, including by attempting to impeach a witness. This bill also applies these existing evidence rules and proposed updates to a public works contractor or subcontractor that has previously failed to provide evidence.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: June 23, 2026

ASSEMBLY COMMITTEE ON JUDICIARY

Ash Kalra, Chair

SBPCA Bill Id:SB 1316

Author:(Smallwood-Cuevas) – As Amended Ver:March 25, 2026

SENATE VOTE: 37-0

SUBJECT: Employment

SYNOPSIS

The California Labor Commissioner oversees the Division of Labor Standards Enforcement, the state agency responsible for enforcing wage and hour laws and protecting workers from retaliation. Among other things, the Labor Commissioner investigates wage theft claims, conducts hearings on wage and other claims; and, when necessary, seeks compensation on behalf of workers victimized by wage theft. Pursuant to this authority, the Labor Commissioner may record a lien against the property of an employer for the amounts due under any wage order that the Commissioner has issued. Existing law provides that, unless the lien is satisfied or otherwise released, the lien continues for a period of ten years. This bill authorizes the Labor Commissioner to renew the lien for an additional ten years.

In addition, the bill modifies a provision of existing law that prohibits an employer, in any administrative hearing contesting a citation or writ proceeding, from introducing as evidence any books, documents, or records that the employer failed to provide to the Labor Commissioner upon a duly served request. In short, the existing law prevents an employer from refusing to cooperate with a Labor Commissioner investigation or proceeding by withholding properly requested documents and then attempting to introduce those same documents as evidence when appealing an adverse order in an administrative proceeding (the law does not apply to judicial proceedings.) Whereas existing law precludes the introduction of the documents “as evidence,” this bill would also preclude the introduction of such documents “in any other way. . . including, but not limited to, attempting to impeach any witness in an administrative proceeding contesting a citation or writ proceeding.”

Finally, the bill applies the existing rules on precluding the introduction of evidence, or otherwise relying upon that evidence, in a hearing or writ proceeding to public works contractors and subcontractors who have failed to provide same evidence pursuant to a duly served written request by the Labor Commissioner. The bill, consistent with existing law, creates reasonable exceptions to this rule, including where the failure to provide requested books, documents, or records was due to an inadvertent error, as defined, or where the contractor or subcontractor opposes such a request in court, and the court determines that the books, documents, or records are not required to be disclosed. Also, the Labor Commissioner, at its discretion, may admit and consider otherwise precluded evidence, as specified.

The bill is supported by the California Federation of Labor Unions. There is no recorded opposition. The bill recently passed out of the Assembly Labor Committee on consent and has not received any “no” votes in any committee or floor vote.

SUMMARY: Authorizes the Labor Commissioner (LC) to renew for an additional period of ten years a lien on an employer’s property for an unsatisfied wage judgment and precludes employers, including public works contractors or subcontractors, from introducing certain evidence at administrative or writ hearings if the employer previously failed to provide that evidence to the LC upon request, subject to certain exceptions. Specifically, this bill

1. Authorizes a lien on real property utilized by the LC for an unsatisfied judgment to be renewed for an additional period of 10 years by the LC recording a renewal of certificate of lien or a copy of a renewed judgment at any time prior to its expiration.
2. Specifies that an existing prohibition on an employer, when contesting a citation or writ in an administrative proceeding, from introducing as evidence certain books, documents, or records that the employer failed to provide pursuant to a duly served written request by the LC, also prohibits an employer from in any other way using or relying on the evidence, including in attempting to impeach any witness.
3. Precludes a public works contractor or subcontractor from introducing as evidence certain books, documents, or records at an administrative hearing or a writ proceeding related to a review of a civil wage violation and penalty, if those books, documents, or records were not previously provided pursuant to a duly served written request by the LC, unless the failure to provide the books, documents, or records as requested was the result of an “inadvertent error,” as defined.
4. Requires the LC to take into consideration a reasonable request from the contractor or subcontractor for an extension on the time for production of books, documents, or records, as specified.
5. Makes technical and clarifying changes relating to violations to which the prohibition in 2) above apply.

EXISTING LAW:

1. Establishes within the Department of Industrial Relations (DIR) the Division of Labor Standards Enforcement (DLSE), under the direction of the Labor Commissioner (LC), and empowers the LC to investigate employee complaints and provide for a hearing in any action to recover wages, penalties, and other demands for compensation. (Labor Code Section 98 et seq.)
2. Precludes any employer, or other person or entity, who may be liable for a violation of any provision of the labor code from introducing as evidence, in an administrative proceeding contesting a citation or writ proceeding, any books, documents, or records that are not provided pursuant to a duly served written request by the LC to provide such records, as specified. However, the LC may admit books, documents, or records that are produced beyond the time limits specified if the employer cooperated with the investigation and made good faith efforts to comply with the request. (Labor Code Section 1174.1.)
3. Authorizes, as an alternative to a judgment lien, upon an order, decision or award for unpaid wages, a lien on real property to be created by the LC recording a certificate of lien, for amounts due under the final order and in favor of the employee or employees named in the order, at the LC’s discretion and depending upon information the LC obtains concerning the employer’s assets. (Labor Code Section 98.2 (g)(1).)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: According to the author, “too many workers in California are still fighting just to recover the wages they have already earned. Outdated statutes can slow labor investigations and weaken the Labor Commissioner’s ability to collect unpaid wages and penalties, delaying justice for vulnerable workers. SB 1316 strengthens the Labor Commissioner’s authority to hold bad actors accountable and ensures workers can recover the wages they are legally owed.”

Background. The author and supporters of this bill contend that this bill will enhance the Labor Commissioner’s ability to combat wage theft in California. “Wage theft” is generally defined as an employer’s failure to pay workers the wages to which they are legally entitled. Examples of wage theft may include failure to pay minimum wage, failure to pay overtime rates, failure to provide promised benefits, unauthorized deductions from a pay check, or simply not paying promised wages at all. The California Labor Commissioner oversees the Division of Labor Standards Enforcement, which is the state agency responsible for enforcing wage and hour laws and protecting workers from retaliation. Among other things, the Labor Commissioner investigates wage theft claims, conducts hearings on wage and other claims, and, when necessary, issues wage orders that seek compensation on behalf of workers victimized by wage theft. Pursuant to this authority, the Labor Commissioner may record a lien against the property of an employer for the amounts due under any wage order that the Commissioner has issued. Existing law provides that, unless the lien is satisfied or otherwise released, the lien continues for a period of ten years. This bill authorizes the Labor Commissioner to renew the lien for an additional ten years.

In addition, the bill modifies a provision of existing law that prohibits an employer, in any administrative hearing contesting a citation or writ proceeding, from introducing as evidence any books, documents, or records that the employer failed to provide to the Labor Commissioner upon a duly served request. In short, the existing law prevents an employer from refusing to cooperate with a Labor Commissioner’s investigations or proceedings by withholding properly requested documents and then attempting to introduce the same documents as evidence when appealing an adverse order in an administrative proceeding (existing law does not apply to judicial proceedings.) Whereas existing law precludes the introduction of the evidence “as evidence,” this bill would also preclude the introduction of such evidence “in any other way. . . including, but not limited to, attempting to impeach any witness in an administrative proceeding contesting a citation or writ proceeding.”

Finally, the bill applies the existing rules on precluding the introduction of evidence in an administrative hearing or writ proceeding to public works contractors and subcontractors who have failed to provide same evidence pursuant to a duly served written request by the Labor Commissioner. The bill, consistent with existing law, creates reasonable exceptions to this rule, including where the failure to provide requested books, documents, or records was due to an inadvertent error, as defined, or where the contractor or subcontractor opposes such a request in court, and the court determines that the books, documents, or records are not required to be disclosed. Also the Labor Commissioner, at its discretion, may admit and consider otherwise precluded evidence, as specified.

ARGUMENTS IN SUPPORT: The California Federation of Labor Unions writes in support:

Wage theft is an employer’s failure to pay workers the wages and benefits they owe for hours worked. This practice has a disproportionate impact on disadvantaged and immigrant workers who are overrepresented in low wage industries with higher rates of wage theft, including agriculture, construction, garment, and hospitality. Unfortunately, the practice is pervasive in California, and in 2023 alone, the LCO received 39,000 wage theft claims.

Current labor enforcement statutes contain outdated timelines, inconsistent document production requirements, and technical gaps that can delay investigations and complicate wage recovery. Noncompliant employers often exploit these inconsistencies to delay proceedings or avoid accountability on procedural grounds rather than comply with labor laws. As a result, workers, particularly low-wage workers, immigrant workers, and workers in industries with high rates of wage theft, experience prolonged delays in recovering wages that have been stolen from them.

SB 1316 makes targeted technical and clarifying amendments to labor enforcement statutes to ensure consistent document production timelines, clarify evidentiary rules, and align lien duration and renewal authority with existing judgment lien law. These changes strengthen the Labor Commissioner’s ability to enforce existing worker protections, reduce unnecessary litigation over procedural issues, and will help ensure workers no longer have to continue waiting for the pay they have earned.

REGISTERED SUPPORT / OPPOSITION:

Support

California Federation of Labor Unions

Opposition

None on file

Analysis Prepared by: Tom Clark / JUD. / (916) 319-2334

Date of Hearing: June 10, 2026

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Liz Ortega, Chair

SBPCA Bill Id:SB 1316

Author:(Smallwood-Cuevas) – As Amended Ver:March 25, 2026

SENATE VOTE: 37-0

SUBJECT: Employment

SUMMARY: Authorizes a lien on real property utilized by the Labor Commissioner (LC) for an unsatisfied wage judgment to be renewed for additional periods of 10 years. Further provides that a public works contractor or subcontractor shall be precluded from introducing as evidence, or in any other way using or relying on as evidence, at a hearing or a writ proceeding related to a review of a civil wage and penalty assessment, books, documents, or records that are not provided pursuant to a duly served written request by the LC within the time the LC requests them. Specifically, this bill:

1. Makes technical and clarifying changes.
2. Authorizes a lien on real property utilized by the LC for an unsatisfied judgment to be renewed for additional periods of 10 years by the LC recording a renewal of certificate of lien or a copy of a renewed judgment at any time prior to its expiration.
3. Specifies that the prohibition on an employer, who may be liable for a violation of the labor code from introducing as evidence, in an administrative proceeding contesting a citation or writ, as specified, certain books, documents, or records, that are not provided pursuant to a duly served written request by the LC within the time the LC requests, also prohibits using or relying on these documents as evidence, including attempting to impeach a witness with them.
4. Adds to the administrative proceedings covered in 3) above a proceeding involving a discrimination or retaliation complaint.
5. Clarifies which sections of the labor code require payroll, time, and employment records to be maintained at the place of employment or at a central location within the state by the employer.
6. Provides that a public works contractor or subcontractor shall be precluded from introducing as evidence, or in any other way using or relying on as evidence, including, but not limited to, attempting to impeach any witness, at a hearing or a writ proceeding related to a review of a civil wage and penalty assessment, books, documents, or records that are not provided pursuant to a duly served written request by the LC within the time the LC requests those books, documents, or records be produced, pursuant to either of the following:
7. When the LC provides for no less than 10 days to respond, subject to the exception described in 8), 9), 10), and 11) below.
8. When the LC provides for less than 10 days to respond, subject to the exception described in 8) and 10) below, if the LC, in their discretion, determines that circumstances exist that make it necessary to require a shorter period of production for the LC to conduct a complete investigation. In this instance, a statement indicating that determination of necessity shall be included with the written request from the LC.
9. States that the books, documents, or records to which 6) applies are payroll, time, and employment records that are required to be maintained at the place of employment or at a central location within the state by the contractor or subcontractor, as specified.
10. States that 6) above shall not apply in the event that the contractor or subcontractor subject to the written request by the LC for the production of books, documents, or records opposes such a request in court, prior to the issuance of a civil wage and penalty assessment, as specified, and a court determines that the books, documents, or records are not required to be produced.
11. States that 6) a) above shall not apply to the failure to produce any books, documents, or records within the time requested by the LC if such failure is due to an inadvertent error, provided that such error is corrected and the books, documents, or records are produced to the LC no later than 20 days from the date originally requested. For purposes of this section, “inadvertent error” means any clerical mistake causing an unintended delay in production of the requested books, documents, or records.
12. Requires the LC to take into consideration a reasonable request from the contractor or subcontractor subject to 6) above for an extension on the time for production of books, documents, or records. No extension granted shall extend the time in which a contractor or subcontractor is required to produce certified payroll records to the LC. The LC shall determine the reasonableness of the request and may consider, among other things, the location of the books, documents, or records and the volume of production. The LC, in their discretion, may admit and consider books, documents, or records that are produced beyond the time limits provided for in this section upon a finding that both of the following conditions are satisfied:
13. The contractor or subcontractor cooperated with the underlying investigation and substantially complied with the request within the time limit prescribed.
14. The contractor or subcontractor made good faith efforts to comply with the request, including discovery of the late-produced books, documents, or records.
15. Requires, for purposes of 6) a) above and notwithstanding 10) above, a contractor or subcontractor that provides a timely good faith response to the LC that additional time is needed to gather requested books, documents, or records, to be provided an automatic extension of 15 days. This provision does not apply to requests for certified payroll records, as specified.
16. Provides that nothing in 6)-11) above shall apply to a contractor or subcontractor’s obligation to provide certified payroll records to the LC in response to a written request, as specified.

EXISTING LAW:

1. Authorizes, as an alternative to a judgment lien, upon an order, decision or award for unpaid wages, a lien on real property to be created by the LC recording a certificate of lien, for amounts due under the final order and in favor of the employee or employees named in the order, at the LC’s discretion and depending upon information the LC obtains concerning the employer’s assets. Labor Code §98.2(g)(1).
2. Provides that the lien in 1) above attaches to all interests in real property of the employer located in the county where the lien is created to which a judgment lien may attach, as described. Labor Code §98.2(g)(1).
3. Provides that, unless the lien in 1) above is satisfied or released, the lien shall continue until 10 years from the date of its creation. Labor Code §98.2(g)(5).
4. Prohibits an employer, who may be liable for a violation of the labor code from introducing as evidence, in an administrative proceeding contesting a citation or writ, as specified, certain books, documents, or records, that are not provided pursuant to a duly served written request by the LC within the time the LC requests, pursuant to either of the following:
5. When the LC provides for less than 15 days to respond, subject to certain exceptions.
6. When the LC provides for less than 15 days to respond, subject to certain exceptions, if the LC, in their discretion determines the circumstances exist that make it necessary to require a shorter period of production for the LC to conduct a complete investigation. Labor Code §1174.1(a).
7. Identifies the sections of the Labor Code that require payroll, time, and employment records to be maintained at the place of employment or at a central location within the state by the employer. Labor Code §1174.1(b).
8. Requires, if the LC or their designee determines after an investigation that there has been a violation of public works law, the LC to with reasonable promptness issue a civil wage and penalty assessment to the contractor or subcontractor, or both. The assessment shall be in writing, shall describe the nature of the violation and the amount of wages, penalties, and forfeitures due, and shall include the basis for the assessment. Labor Code §1741(a).
9. Permits a contractor or subcontractor to obtain review of a civil wage and penalty assessment as described in 6) above by transmitting a written request to the office of the LC that appears on the assessment within 60 days after service of the assessment. Labor Code §1742(a).
10. Requires, upon receipt of a timely request, a hearing to be commenced within 90 days before the director, who shall appoint an impartial hearing officer possessing the qualifications of an administrative law judge, as specified. Labor Code §1742(b).
11. Provides that the contractor or subcontractor shall have the burden of proving that the basis for the civil wage and penalty assessment is incorrect. The assessment shall be sufficiently detailed to provide fair notice to the contractor or subcontractor of the issues at the hearing. Labor Code §1742(b).
12. Requires, within 45 days of the conclusion of the hearing, the director to issue a written decision affirming, modifying, or dismissing the assessment. The decision of the director shall consist of a notice of findings, findings, and an order. Labor Code §1742(b).
13. Permits the contractor or subcontractor to obtain review of the decision of the director by filing a petition for a writ of mandate to the appropriate superior court, as specified, within 45 days after service of the decision. Labor Code §1742(c).

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS: Note: This bill is double-referred to the Assembly Judiciary Committee upon passage from this committee.

California’s Office of the LC is charged with, among other things, adjudicating worker wage claims. Wage claims can cover a number of issues, including, unpaid overtime, missed meal and rest periods, or the failure to pay wages. The LC is statutorily required to determine whether a wage claim needs a hearing within 30 days of receiving the claim. In addition, the LC has 90 days to hold a hearing from making that determination and 15 days from the hearing to issue a decision. Unfortunately, the reality is that workers’ claims generally take two years or longer to go through the adjudicatory process.^[1]

When an employer refuses to pay a wage claim or declines to participate in the process, the LC can file a lien against their real property. This allows the LC to record a legal claim against their property and can prevent the sale or transfer of the property until the wage judgment is paid. Given the time it can take to collect unpaid wages through the LC’s wage claim process, it is important that these liens can be renewed—as proposed by SB 1316.

Additionally, in the public works context, the Labor Commissioner has experienced dilatory tactics from contractors in hearings to review civil wage and penalty assessments for violating the law. For example, in one case, the LC and a public works contractor appeared for a public works hearing and the contractor failed to follow the Hearing Officer’s orders to timely furnish exhibits and evidence to the LC. On the day of the hearing, the contractor showed up with a stack of documents. The LC objected, stating the documents were not timely furnished as exhibits and the contractor failed to follow the Hearing Officer’s orders. However, the Hearing Officer subsequently determined that they did not have any regulatory authority to deny a contractor’s request to submit additional documents. Day 2 of the hearing was not scheduled until months later for the purpose of allowing the contractor to introduce and submit additional evidence into the record. This measure would prohibit a public works contractor or subcontractor from introducing new evidence in a hearing in this manner.

According to the author, “Current labor enforcement statutes contain outdated timelines, inconsistent document production requirements, and technical gaps that can delay investigations and complicate wage recovery. These inconsistencies are often exploited by noncompliant employers to delay proceedings or avoid accountability on procedural grounds rather than compliance with labor laws. As a result, workers, particularly low-wage workers, immigrant workers, and workers in industries with high rates of wage theft, experience prolonged delays in recovering wages already determined to be owed.

SB 1316 makes targeted technical and clarifying amendments to labor enforcement statutes to ensure consistent document production timelines, clarify evidentiary rules, and align lien duration and renewal authority with existing judgment lien law. These changes strengthen the Labor Commissioner’s ability to enforce existing worker protections, reduce unnecessary litigation over procedural issues, and improve the timely recovery of unpaid wages without creating new penalties or expanding enforcement authority beyond current law.”

Arguments in Support

The California Federation of Labor Unions, AFL-CIO, is in support, and states that the measure “will help protect workers by strengthening the Labor Commissioner’s ability to enforce wage theft claims.

Wage theft is an employer’s failure to pay workers the wages and benefits they owe for hours worked. This practice has a disproportionate impact on disadvantaged and immigrant workers who are overrepresented in low wage industries with higher rates of wage theft, including agriculture, construction, garment, and hospitality. Unfortunately, the practice is pervasive in California, and in 2023 alone, the LCO received 39,000 wage theft claims…

SB 1316 makes targeted technical and clarifying amendments to labor enforcement statutes to ensure consistent document production timelines, clarify evidentiary rules, and align lien duration and renewal authority with existing judgment lien law.”

Arguments in Opposition

None on file.

Prior Legislation

SB 588 (De Leon) Chapter 803, Statutes of 2015 provided, among other things, that beginning 20 days after a judgment is entered by a court of competent jurisdiction in favor of the LC, or in favor of any employee pursuant to an appeal, the LC may with the consent of any employee in whose favor the judgment is entered, collect any outstanding amount of the judgment by mailing a notice of levy upon all persons having in their possession, or who will have in their possession or under their control, any credits, money, or property, belonging to the judgment debtor, or who owe any debt to the judgment debtor at the time they receive the notice of levy. 

REGISTERED SUPPORT / OPPOSITION:

Support

California Federation of Labor Unions, AFL-CIO

Opposition

None on file.

Analysis Prepared by: Megan Lane / L. & E. / (916) 319-2091

1. California State Auditor Report, “The California Labor Commissioner’s Office: Inadequate Staffing and Poor Oversight Have Weakened Protections for Workers.” Report #2023-104, May 29, 2024. ↑

 THIRD READING  

Bill No: SB 1316

Author: Smallwood-Cuevas (D)

Amended: 3/25/26

Vote: 21

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 4/15/26

AYES: Smallwood-Cuevas, Strickland, Cortese, Durazo, Laird

SENATE JUDICIARY COMMITTEE: 13-0, 4/21/26

AYES: Umberg, Niello, Allen, Ashby, Caballero, Durazo, Laird, Reyes, Stern, Valladares, Wahab, Weber Pierson, Wiener

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Employment

SOURCE: Author

DIGEST:

This bill strengthens the Labor Commissioner’s (LC) ability to enforce claims of wage theft by 1) authorizing the renewal of a lien on real property for wage theft obligations for an additional 10 years before its expiration; 2) limiting how employers can use books, documents, or records that the employer failed to provide to the LC within specified timelines, as specified; and 3) applying these late-records rule provision of books, documents, or records to contractors or subcontractors in public works projects.

ANALYSIS:

Existing law:

1. Establishes the Department of Industrial Relations (DIR) in the Labor and Workforce Development Agency (LWDA), and vests it with various powers and duties to foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment. (Labor Code §50.5)
2. Establishes within the DIR, various entities including the Division of Labor Standards Enforcement (DLSE) under the direction of the Labor Commissioner (LC), and empowers the LC with ensuring a just day’s pay in every workplace and promotes economic justice through robust enforcement of labor laws. (Labor Code §79-107)
3. Authorizes the LC to investigate employee complaints and provide for a hearing in any action to recover wages, penalties, and other demands for compensation, including liquidated damages if the complaint alleges payment of a wage less than the minimum wage, as specified. (Labor Code §98)
4. Precludes any employer, or other person or entity, who may be liable for a violation of any provision of the labor code from introducing as evidence, in an administrative proceeding contesting a citation or writ proceeding, as specified, books, documents, or records that are not provided pursuant to a duly served written request (providing not less than 15 days to respond) by the LC requiring the provision of such records, as specified. Grants the LC discretion to admit for consideration books, documents, or records that are produced beyond the time limits specified if:
   1. The person or entity cooperated with the underlying investigation and substantially complied with the request within the time limits prescribed; and
   2. The person or entity made good faith efforts to comply with the request, including discovery of the late-produced books, documents, or records.

(Labor Code §1174.1)

1. Requires the LC, within 15 days after the hearing is concluded, to file in the office of the division a copy of the order, decision, or award (ODA). The ODA shall include a summary of the hearing and the reasons for the decision. Additionally, the ODA includes any sums found owing, damages proved, and any penalties awarded pursuant to the Labor Code, including interest on all due and unpaid wages, as specified. (Labor Code §98.1)
2. Upon filing of the ODA, requires the LC to:
   1. Serve a copy of the decision personally, by first-class mail, or in the manner specified in Section 415.20 of the Code of Civil Procedure on the parties.
   2. Advise the parties of their right to appeal the decision or award and further advise the parties that failure to do so within 10 days shall result in the decision or award becoming final and enforceable as a judgment by the superior court.

(Labor Code §98.1 and §98.2)

1. Specifies that if no appeal of the ODA is filed within the period specified, the ODA shall, in the absence of fraud, be deemed the final order. Existing law then requires the LC to file, within 10 days of the ODA becoming final, a certified copy of the final order with the clerk of the superior court of the appropriate county unless a settlement has been reached by the parties and approved by the LC. Judgment shall be entered immediately by the court clerk in conformity therewith. (Labor Code §98.2)
2. Authorizes the LC, as an alternative to a judgment lien, upon the order becoming final pursuant, to create a lien on real property recording a certificate of lien, for amounts due under the final order and in favor of the employee or employees named in the order, with the county recorder of any county in which the employer’s real property may be located, as specified. (Labor Code §98.2)
3. Requires the LC, upon payment of the amount due under the final order, to issue a certificate of release, releasing the lien created under provisions specified above and specifies that, unless the lien is satisfied or released, a lien under these provisions shall continue until 10 years from the date of its creation. (Labor Code §98.2)

This bill:

1. Authorizes the Labor Commissioner to renew a lien on real property for owed wages for additional periods of 10 years by recording a renewal certificate of lien or a copy of a renewed judgment at any time prior to the original liens’ expiration.
2. Prohibits an employer, or other person or entity, who fails to provide the Commissioner with specified books, documents, or records related to payroll and employment within certain timelines to rely upon or use those documents as evidence, including to impeach a witness, in any administrative proceeding contesting a citation writ, as specified.
3. Extends this prohibition to any administrative proceeding contesting a citation regarding retaliation or discrimination.
4. Includes within the definition of books, documents, or records: the job title and wage rate history for each employee; records of wages and wage rates, job classifications, and other terms and conditions of employment for its employees; and employee performance, education and training, or grievance records.
5. Includes within the existing law exemption for when the employer opposes the LC’s request for records in court prior to the issuance of any citation, and the court determines that such books, documents, or records are not required to be produced, any records for a citation related to claims of retaliation or discrimination.
6. Precludes a public works contractor or subcontractor from introducing as evidence, or in any other way using or replying on as evidence, including to impeach a witness, at a hearing regarding a civil wage and penalty assessment (CWPA), any books, documents, or records that the contractor or subcontractor fails to provide to the LC pursuant to a request of the LC, as specified:
   1. When the LC provides for at least 10 days to respond to the request; or
   2. When the LC provides less than 10 days to respond, if the LC determines that circumstances exist that make it necessary to require a shorter period of production of the documents, and includes a statement of that determination in the request.
7. Regarding requests for access to books, documents, or records of a public works contractor or subcontractor:
   1. Make these provisions inapplicable when the contractor or subcontractor opposes the LC’s request for records, documents, or books in court prior to the issuance of the CWPA, and the court determines that the books, documents, or records are not required to be produced.
   2. Makes these provisions inapplicable when the failure to produce the books, documents, or records within 10 days was due to an inadvertent error, provided that the error is corrected and the books, documents, or records are produced no later than 20 days from the date originally requested. Defines “inadvertent error” as any clerical mistake causing an unintended delay in production of the requested books, documents, or records.
   3. Requires the LC to take into consideration a reasonable request from the contractor or subcontractor for an extension of time for production of books, documents, or records, as specified.
   4. Permits the LC to admit and consider, in their discretion, books, documents, or records that are produced beyond the time limits provided, upon a finding that:
      1. The contractor or subcontractor cooperated with the underlying investigation and substantially complied with the request within the time limit prescribed; and
      2. The contractor or subcontractor made good faith efforts to comply with the request, including discovery of the late-produced books, documents, or records.
   5. Provides an automatic extension of 15 days to a contractor or subcontractor that provides a timely good faith response to the LC’s request stating that additional time is needed to gather the books, documents, or records, except for in the case of certified payroll records.
   6. Exempts from all these requirements a contractor or subcontractor’s obligation to provide certified payroll records to the LC pursuant to Labor Code section 1776.

Background

California leads the nation with some of the strongest workplace protections for workers. Unfortunately, those laws are meaningless if they are not implemented or enforced, leaving workers struggling to recoup owed wages. Wage theft in California, which impacts low-wage workers disproportionately, is well documented. Wage theft captures many labor law violations including violations of the minimum wage, overtime, denied meal periods, or misclassification of employees as independent contractors, among others. A 2022 report to the Legislature on the state’s wage claim adjudication process reveals that there were nearly 19,000 wage claims filed in 2021 with a total of $335 million being owed to workers.^[1] Due to challenges in staffing, resources, and a growing case backlog (as documented in a May 2024 California State Auditor report on the DLSE) only approximately $40 million has been paid in awards or settlements through the wage claim adjudication unit of the LC.^[2] In 2022, the Labor Commissioner’s office recovered through the wage claim process an average of 63 percent of wages owed, totaling more than $47 million paid to workers.

A 2024 Rutgers School of Management and Labor Relations report assessed minimum wage violations across four metropolitan statistical areas of interest – Los Angeles/Long Beach/Anaheim, San Jose/Sunnyvale/Santa Clara, San Diego/Carlsbad/San Marcos, and San Francisco/Oakland/Fremont.^[3] Among the key findings of the report are the following:

• An average of $2.3 to $4.6 billion in earned wages were lost by workers each year from 2014 to 2023 due to minimum wage violations across these four metro areas.
• The majority of lost wages were in the Los Angeles area, where we estimate an average of $1.6 to $2.5 billion was lost a year during the study period.
• Those that were paid below the minimum wage lost roughly 20 percent of their total paycheck on average, or nearly $4,000 in earned wages a year if working full-time.
• The most impactful violations occurred in the San Francisco area, where workers lost an average of $4,300 to $4,900 annually to minimum wage violations.
• The number of workers paid below both the state and primary metro minimum wages has more than doubled since 2014, growing particularly dramatically over the most recent year of the study (2023).

Wage theft does not only affect workers, but it also creates unfair competition for responsible employers who follow the law. The State of California is also harmed when labor laws are not enforced because more workers fall into poverty, the safety net is eroded, and payroll taxes are not paid.

Need for this bill? According to the author:

Current labor enforcement statutes contain outdated timelines, inconsistent document production requirements, and technical gaps that can delay investigations and complicate wage recovery. These inconsistencies are often exploited by noncompliant employers to delay proceedings or avoid accountability on procedural grounds rather than compliance with labor laws. As a result, workers, particularly low-wage workers, immigrant workers, and workers in industries with high rates of wage theft, experience prolonged delays in recovering wages already determined to be owed.

SB 1316 makes targeted technical and clarifying amendments to labor enforcement statutes to ensure consistent document production timelines, clarify evidentiary rules, and align lien duration and renewal authority with existing judgment lien law. These changes strengthen the Labor Commissioner’s ability to enforce existing worker protections, reduce unnecessary litigation over procedural issues, and improve the timely recovery of unpaid wages without creating new penalties or expanding enforcement authority beyond current law.

[NOTE: Please see the Senate Labor, Public Employment and Retirement Committee analysis on this bill for more background information.]

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 5/11/26)

California Federation of Labor Unions

OPPOSITION: (Verified 5/11/26)

None received

ARGUMENTS IN SUPPORT: According to the California Federation of Labor Unions: “Current labor enforcement statutes contain outdated timelines, inconsistent document production requirements, and technical gaps that can delay investigations and complicate wage recovery. Noncompliant employers often exploit these inconsistencies to delay proceedings or avoid accountability on procedural grounds rather than comply with labor laws. As a result, workers, particularly low-wage workers, immigrant workers, and workers in industries with high rates of wage theft, experience prolonged delays in recovering wages that have been stolen from them.

SB 1316 makes targeted technical and clarifying amendments to labor enforcement statutes to ensure consistent document production timelines, clarify evidentiary rules, and align lien duration and renewal authority with existing judgment lien law. These changes strengthen the Labor Commissioner’s ability to enforce existing worker protections, reduce unnecessary litigation over procedural issues, and will help ensure workers no longer have to continue waiting for the pay they have earned.”

Prepared by: Alma Perez-Schwab / L., P.E. & R. / (916) 651-1556

5/13/26 16:28:05

**** END ****

1. Wage Claims Adjudication Unit Annual Report Pursuant to Labor Code Section 96.1, Calendar Year 2021, California Labor Commissioner’s Office, p. 15. ↑

2. Ibid. ↑

3. Daniel J. Galvin, Jake Barnes, Janice Fine, and Jenn Round. Wage Theft in California: Minimum Wage Violations, 2014-2023. (Rutgers School of Management and Labor Relations, May 2024) ↑

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

SB 1316 (Smallwood-Cuevas) - Employment

Bill Summary:

SB 1316 would increase the Labor Commissioner’s ability to enforce claims of wage theft, as specified.

Fiscal Impact:

The Department of Industrial Relations (DIR) has yet to determine its administrative impacts that would result from this bill. However, these costs would likely total, at a minimum, in the hundreds of thousands of dollars annually (special fund).

Background:

Wage theft captures many labor law violations, including the minimum wage, overtime, denied meal periods, and misclassification of employees as independent contractors. A 2022 report to the Legislature on the state’s wage claim adjudication process reveals that there were nearly 19,000 wage claims filed in 2021 with a total of $335 million being owed to workers. Due to challenges in staffing, resources, and a growing case backlog (as documented in a May 2024 California State Auditor report), only approximately $40 million has been paid in awards or settlements through the wage claim adjudication unit of the LC. In 2022, the Labor Commissioner’s office recovered through the wage claim process an average of 63 percent of wages owed, totaling more than $47 million paid to workers.

When an employer has failed to pay a worker what they are owed under the law, the worker generally must (1) file a wage claim with DIR’s Division of Labor Standards Enforcement (DLSE) headed by the Labor Commissioner (LC), (2) sue for damages, or (3) file a representative civil action against the employer through California’s Private Attorneys General Act (PAGA). A public prosecutor, which includes the Attorney General, a district attorney, a city attorney, a county counsel, or any other city or county prosecutor, can prosecute a civil or criminal violation of specified provisions of the Labor Code.

Under current law, when a worker files a wage claim with the LC, the Commissioner will investigate the claim. The LC must notify both parties within 30 days of the complaint as to whether (1) a hearing is required to adjudicate the claim, (2) the LC will prosecute the labor law violation, or (3) no further action will be taken. If the Commissioner determines a hearing is needed, it must set the matter for a hearing within 90 days, except that it may postpone the hearing or grant additional time if doing so would lead to an equitable solution. Hearings before the LC are informal hearings in which the rules of evidence are relaxed, though both parties are able to call, examine, and cross examine witnesses and introduce exhibits.

After the hearing, the LC must file and serve on each party its decision within 15 days, after which the parties have 10 days from the date of service to seek review of the Commissioner’s decision in the superior court. If no party appeals the Commissioner’s decision by this deadline, it is deemed final, and the Commissioner has 10 days to file a copy of the final order with the superior court. The superior court then enters a judgment pursuant to the final order that has the same force and effect as a judgment in a civil action, and the Commissioner or the employee can take action to enforce that judgment.

The Labor Code currently provides for a variety of other mechanisms to ensure the employer satisfies a final judgment. After 20 days from when a judgment is entered in favor of the LC or in favor of an employee after a hearing before the Commissioner, the LC may collect the outstanding amount of the judgment with the consent of the aggrieved employee by placing a levy on the employer’s assets and property. If a final judgment for unpaid wages remains unsatisfied after 30 days or more from the time to appeal the judgment and no appeal is pending on the judgment, the employer is prohibited from conducting any business in the State, unless it obtains a specified bond or has reached an accord with the holder of the judgment for payment. In addition, the LC may place a lien on the real property of the employer for the amount due. The lien attaches to all interests in real property of the employer that is located in the county where the lien is created, as specified. If the employer pays the amount due, the LC must issue a certificate of release for the lien; otherwise, it continues for 10 years from the date of its creation.

Thus, once the LC issues an order, decision, or award (ODA), the employer has a limited time after service of the LC decision to file an appeal. If no appeal is filed within the specified period, the LC must file a certified copy of the decision with the appropriate Superior Court and obtain a judgment against the employer for the amount owed. When the LC does request that the court enter the judgment against the employer, the worker can choose the option of referring the judgment to the LC’s Enforcement Unit for collection or pursue collection on their own or through the use of an external partner, such as a private attorney or advocacy groups. DLSE’s Enforcement Unit can use a variety of means to collect judgment amounts, including levies against employers’ bank accounts and liens on properties.

Proposed Law:

This bill would do the following:

• Authorize the Labor Commissioner to renew a lien on real property for owed wages for additional periods of 10 years by recording a renewal certificate of lien or a copy of a renewed judgment at any time prior to the original liens’ expiration.
• For provisions regarding the requirement to timely provide books, documents, or records during an investigation into employee owed wages, would additionally:
  • preclude an employer or other person or entity from using or relying on such books, documents, or records as evidence, including, but not limited to, attempting to impeach any witness (challenge or discredit their credibility during an investigation).
  • Revise and expand the types of books, documents, or records to which the provisions are applicable including by making them applicable to specified administrative proceeding contesting citations for retaliation or discrimination complaints.
• Extend these provisions to preclude a public works contractor or subcontractor from introducing as evidence, or in any other way using or relying on as evidence, at a hearing or writ of mandate proceeding, as specified, any books, documents, or records that are not provided pursuant to a duly served written request by the LC within the time that the LC requests those books, documents, or records to be produced, except as specified.
  • Require the LC to take into consideration a reasonable request from the contractor or subcontractor for an extension of time for production of books, documents, or records, as specified.

Related Legislation:

• SB 261 (Wahab, Chapter 747, Statutes of 2025) permitted a public prosecutor, as assignee of the judgement creditor, to be awarded court costs and reasonable attorney’s fees for enforcing a final judgement regarding a violation of labor law.
• SB 62 (Durazo, Chapter 329, Statutes of 2022) prohibited the practice of piece-rate compensation for garment manufacturing, except as specified, and precluded the introduction or use of records relating to the payment of wages for garment manufacturing from administrative proceedings contesting an order of the Commissioner when those records were not provided to the Commissioner upon request.
• SB 96 (Committee on Budget and Fiscal Review, Chapter 28, Statutes of 2017) among other things, prohibited any employer from introducing as evidence in an administrative proceeding contesting a citation or writ under certain provisions of law, books, documents, or records that are not provided pursuant to a duly served written request by the commissioner, as specified.
• SB 588 (De Leon, Chapter 803, Statutes of 2015) permitted the Commissioner to file a lien or levy on an employer’s property to satisfy a final judgment relating to a violation of labor law.
• AB 1386 (Committee on Labor and Employment, Chapter 750, Statutes of 2013) provided for the creation of a lien upon an order of the Commissioner becoming final, permitted the Commissioner to record a certificate of lien to attach to an employer’s property for the satisfaction of the final judgement, and specified that this lien would continue for ten years, or until satisfied or released before expiration.

Staff Comments: As noted above, this bill would (1) authorize the renewal of a lien on real property for another 10 years before it expires, (2) limit how employers can use books, documents, or records in an attempt to delay specified investigations of the LC, and (3) apply these late-records rule provision of books, documents, or records to contractors or subcontractors in public works projects.

Regarding the other provisions of the bill, currently, when the LC investigates claims of specified violations, it asks employers to provide information that would rebut the allegations as part of the investigation. Some employers may simply not respond to the LC requests for documents, oftentimes to delay the proceedings. Current processes allow the dismissal of cases where complainants do not provide timely information or are uncooperative in an investigation; however, no such provision exists for respondents.

Existing Labor Code Section 1174.1 already allows LC’s Bureau of Field Enforcement (BOFE) hearing officers to exclude time and payroll records from a hearing if a BOFE deputy requests it and the employer does not provide it. This evidentiary preclusion applies to a narrow set of documents that the Labor Code requires employers to keep, generally payroll and time records. The proposed language would extend these same evidentiary preclusions in wage theft claims as well as public works claims.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2025-2026 Regular Session

Bill No: SB 1316 (Author:Smallwood-Cuevas)

Version: March 25, 2026

Hearing Date: April 21, 2026

Fiscal: Yes

Urgency: No

Consultant: ID

SUBJECT

Employment

DIGEST

This bill permits a lien on an employer’s real property for the satisfaction of a final order relating to a violation of labor law to be extended for an additional period of 10 years, as specified, and expands the requirement that an employer be precluded from using at a proceeding contesting a citation or writ by the Commissioner any books, documents, or records that the employer failed to provide to the Commissioner within specified time limits of a request for such documents, as specified.

EXECUTIVE SUMMARY

When an employee believes their employer has violated the labor laws, they may file a complaint with the Labor Commissioner (Commissioner). The Commissioner may hold a hearing regarding the complaint, and if they do, they must issue an order, decision, or award regarding the complaint within 15 days of the hearing. Parties to the case may then appeal the Commissioner’s decision within 10 days. If no appeal is filed, the decision becomes final, and will be entered into the superior court to become a final judgment. The Commissioner may create a lien on the real property of the employer for the amount of the judgment by recording a certificate of lien. This lien expires after 10 years. In addition, if the Commissioner requests specified books, documents, or records from an employer in an investigation and the employer fails to provide those books, documents, or records within a specified time, the employer may be precluded from using those books, documents, or records in their defense in an administrative proceeding challenging the Commissioner’s citation or writ, as specified. SB 1316 specifies that a lien on an employer’s real property for the satisfaction of a final order may be extended for additional 10-year period if a renewal certificate of lien or renewed judgement is recorded before the lien expires. In addition, SB 1316 expands the preclusion rule to cover more types of documents and citations of the Commission, and creates a similar preclusion rule for the public works context.

SB 1316 is author-sponsored, and the Committee has received no timely letters of support or opposition. SB 1316 previously passed out of the Senate Labor, Public Employment and Retirement Committee by a vote of 5 to 0.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Establishes within the Department of Industrial Relations (DIR) the Division of Labor Standards Enforcement (DLSE) under the direction of the Commissioner, and empowers the Commissioner to ensure a just day’s pay in every work place and to promote justice through the robust enforcement of labor law. Empowers the Commissioner to enforce, among other things, wage and hour law, anti-retaliation provisions, and employer notice requirements. (Lab. Code §§ 79 et seq.)
2. Specifies certain requirements relating to an employee’s compensation, allowable hours of work, overtime work and pay, required rest breaks and days off, and guaranteed time off. (Lab. Code §§ 200-2699.8.)
3. Authorizes the Commissioner to investigate employee complaints, conduct hearings, and issue orders, decisions, and awards regarding complaints. Requires that the Commissioner notify the parties within 30 days of the filing of a complaint whether a hearing will be held, the Commissioner will prosecute the case, or whether no further action will be taken. Requires that, if the Commissioner will hold a hearing, that the hearing be held within 90 days of the date of that determination, with the option of postponement as specified. Specifies required notice that the Commissioner must provide the parties regarding the complaint and the proceeding, and allows a defendant to file an answer within 10 days of service of the notice and complaint. (Lab. Code § 98.)
4. Requires that the LCO file their order, decision, or award within 15 days after the hearing, and requires that the LCO serve a copy of the decision on the parties. Requires that the LCO’s decision must notify the parties of their right to appeal, and that failing to appeal within the prescribed period for appeals will result in the decision becoming final. Specifies that all awards granted by the LCO pursuant to a hearing shall accrue interest, as specified. (Lab. Code § 98.1.)
5. Specifies that, within 10 days after the service of a notice of an order, decision, or award by the LCO, either party may appeal the decision to the superior court, which will hear the appeal de novo. Specifies that, if no notice of appeal is filed within the 10-day period, the order, decision, or award is deemed a final order. Specifies that, as a condition to appeal, an employer appealing the decision must post a bond with the court in the amount of the order, decision, or award. (Lab. Code § 98.2.)
6. Specifies that, as an alternative to a judgement lien, the Commissioner may create a lien on the real property of an employer to satisfy a final order by recording a certificate of lien for the amounts due under the final order with the county recorder of any county in which the employer’s real property is located, at the Commissioner’s discretion and depending upon information the Commissioner obtains concerning the employer’s assets. Specifies that the lien attaches to all interest in real property of the employer located in the county where the lien is created, and requires the Commissioner to issue a certificate of release for the lien upon payment of the amount due under the final order. Specifies that, unless the lien is satisfied or released, the lien continues for 10 years from the date of its creation. (Lab. Code § 98.2(g).)
7. Requires an employer or other entity who may be liable for a violation of the labor code to be precluded from introducing as evidence, or in any other way using or relying on as evidence, including to impeach a witness, in an administrative proceeding to contest a citation or writ issued by the Commissioner under specified provisions of the Labor Code any books, documents, or records, as defined, not provided to the Commissioner pursuant to a duly written request within the time requested, as specified.
   1. Specifies that this provision applies when the Commissioner provides for no less than 15 days to respond to the request, or for less than 15 days if the Commissioner determines that circumstances exist that make it necessary to require a shorter period, and makes a statement in its request indicating as such.
   2. Specifies that this provision does not apply when the person or entity subject to the request opposes the Commissioner’s request in court, and the court determines that a production of the books, documents, or records requested is not required.
   3. Specifies that these provisions do not apply when the failure to produce the requested books, documents, or records within the time required was due to inadvertent error, as defined, provided that the error is corrected and the books, documents, or records are produced within 20 days from the date originally requested.
   4. Requires the Commissioner to take into consideration a reasonable request for an extension on time for the production of the books, documents, or records, requires the Commissioner to determine the reasonableness of the request, and permits the Commissioner to admit and consider late books, documents, or records, as specified.
   5. Provides that a person who provides a timely good faith response that more time is needed to gather requested books, documents, or records, shall be provided an automatic extension of 15 days. (Lab. Code § 1174.1.)
8. Defines a “public work” as construction, alteration, demolition, installation, or repair work done under contract and paid in part or in whole out of public funds, except for work done directly by a public utility company pursuant to the Public Utilities Commission or another public authority. Includes work done for irrigation, utility, reclamation, improvement districts and other similar districts, street, sewer, or other improvement work, laying of carpet in specified circumstances, tree removal work, and public transportation demonstration projects. (Lab. Code § 1720.)
9. Requires contractors and subcontractors to register with the DIR, as specified, to be qualified to bid on, be listed in a bid proposal for, or engage in the performance of any public work contract. Requires contractors and subcontractors on public works projects to follow various rules relating to the employment of workers and the payment of prevailing wages to those workers for public works projects. (Lab. Code §§ 1720 et seq.)

This bill:

1. Permits a lien on the real property of an employer for a final order by the Commissioner to be renewed for additional periods of 10 years by recording a renewal of certificate of lien or a copy of a renewed judgement, at any time before the expiration of the lien.
2. Prohibits an employer, or other person or entity, who fails to provide the Commissioner with specified books, documents, or records related to payroll and employment within certain timelines to rely upon or use those documents as evidence, including to impeach a witness, in any administrative proceeding contesting a citation writ, as specified.
3. Extends this prohibition to any administrative proceeding contesting a citation regarding retaliation or discrimination.
4. Includes within the definition of books, documents, or records: the job title and wage rate history for each employee; records of wages and wage rates, job classifications, and other terms and conditions of employment for its employees; and employee performance, education and training, or grievance records.
5. Includes within the exemption for when the employer opposes the Commissioner’s request in court prior to the issuance of any citation, and when the court determines that such books, documents, or records are not required to be produced, any citation related to claims of retaliation or discrimination.
6. Precludes a contractor or subcontractor from introducing as evidence, or in any other way using or replying on as evidence, including to impeach a witness, at a hearing regarding a civil wage and penalty assessment (CWPA), any books, documents, or records that the contractor or subcontractor fails to provide to the Commissioner pursuant to a request of the Commissioner, as specified:
   1. When the Commissioner provides for at least 10 days to respond to the request; or
   2. When the Commissioner provides less than 10 days to respond, if the Commissioner determines that circumstances exist that make it necessary to require a shorter period of production of the documents, and includes a statement of that determination in the request.
7. Makes inapplicable the provisions described in 6) when the contractor or subcontractor opposes the Commissioner’s request for records, documents, or books in court prior to the issuance of the CWPA, and the court determines that the books, documents, or records are not required to be produced.
8. Makes inapplicable the provisions described in 6) when the failure to produce the books, documents, or records within 10 days was due to an inadvertent error, provided that the error is corrected and the books, documents, or records are produced no later than 20 days from the date originally requested. Defines “inadvertent error” as any clerical mistake causing an unintended delay in production of the requested books, documents, or records.
9. Requires the Commissioner to take into account, for the purposes of 6), any reasonable request from the contractor or subcontractor for an extension of time to produce the requested documents, books, or records. Requires the Commissioner to determine the reasonableness of the request, and permits them to consider, among other things, the location of the books, documents, or records, and the volume of production. Prohibits any extension of time for the production of certified payroll records.
10. Permits the Commissioner to admit and consider, in their discretion, books, documents, or records that are produced beyond the time limits provided, upon a finding that:
    1. The contractor or subcontractor cooperated with the underlying investigation and substantially complied with the request within the time limit prescribed; and
    2. The contractor or subcontractor made good faith efforts to comply with the request, including discovery of the late-produced books, documents, or records.
11. Provides an automatic extension of 15 days to a contractor or subcontractor that provides a timely good faith response to the Commissioner’s request stating that additional time is needed to gather the books, documents, or records, except for in the case of certified payroll records.
12. Exempts from the requirements described in 4) through 9) a contractor or subcontractor’s obligation to provide certified payroll records to the Commissioner pursuant to Labor Code section 1776.

COMMENTS

1. Author’s statement

According to the author:

Too many workers in California are still fighting just to recover the wages they have already earned. Outdated statutes can slow labor investigations and weaken the Labor Commissioner’s ability to collect unpaid wages and penalties, delaying justice for vulnerable workers. SB 1316 strengthens the Labor Commissioner’s authority to hold bad actors accountable and ensures workers can recover the wages they are legally owed.

1. Wage theft is a major issue in California

California has some of the strongest protections across the country for workers and ensuring they can be made whole when they are wronged by their employer. These laws include rules for a minimum wage, rest and meal breaks, overtime pay, and the timely payment of wages, and rules against retaliation for an employee asserting their rights. Many of California’s labor laws include statutory or civil penalties and fines for employers who violate them. These laws ensure that California’s workforce and economy are the strongest in the world and that workers’ rights, fair treatment and pay, and dignity are respected.

However, laws are only as good as the extent to which they are followed and enforced, and labor law violations continue to be a major problem across the state. A 2017 study found that 19.2% of low-wage workers experience minimum wage violations in California each year, with employers stealing almost two billion dollars from California workers every year though minimum wage violations.^[1] Another study found even higher losses for California workers: across three metropolitan areas covering Los Angeles, San Diego, and the Bay Area, employers were estimated to have stolen an average of 2.3 to 4.6 billion dollars in earned wages from workers each year between 2014 and 2023.^[2] Furthermore, the number of underpaid workers has more than doubled since 2014, with a dramatic increase of 56 percent from 2022 to 2023.^[3] This wage theft disproportionately affects African American, Latinx, noncitizen, and women workers. Given these statistics, wage theft remains a bigger problem of theft in California and the United States than all other forms of theft.^[4]

1. Various state laws help workers recover when they are wronged by their employer

When an employer has failed to pay a worker what they are owed under the law, the worker generally must file a wage claim with the Labor Commissioner (Commissioner), sue for damages, or file a representative civil action against the employer through California’s Private Attorneys General Act (PAGA). A public prosecutor, which includes the Attorney General, a district attorney, a city attorney, a county counsel, or any other city or county prosecutor, can prosecute a civil or criminal violation of specified provisions of the Labor Code. (Lab. Code § 181(b).)

When a worker files a wage claim with the Commissioner, the Commissioner will investigate the claim. The Commissioner must notify both parties within 30 days of the complaint as to whether a hearing is required to adjudicate the claim, whether the Commissioner will prosecute the labor law violation, or whether no further action will be taken. If the Commissioner determines a hearing is needed, it must set the matter for a hearing within 90 days, except that it may postpone the hearing or grant additional time if doing so would lead to an equitable solution. (Lab. Code § 98.) Hearings before the Labor Commissioner are informal hearings in which the rules of evidence are relaxed, though both parties are able to call, examine, and cross examine witnesses and introduce exhibits. (Lab. Code § 98(a); Cal. Code Regs. §§ 13502, 13505.)

After the hearing, the Commissioner must file and serve on each party its decision within 15 days, after which the parties have 10 days from the date of service to seek review of the Commissioner’s decision in the superior court. (Lab. Code §§ 98.1, 98.2.) If no party appeals the Commissioner’s decision by this deadline, it is deemed final, and the Commissioner has 10 days to file a copy of the final order with the superior court. (Lab. Code § 98.2(d)-(e).) The superior court then enters a judgment pursuant to the final order that has the same force and effect as a judgment in a civil action, and the Commissioner or the employee can take action to enforce that judgment.

The Labor Code currently provides for a variety of other mechanisms to ensure the employer satisfies a final judgment. After 20 days from when a judgment is entered in favor of the Commissioner or in favor of an employee after a hearing before the Commissioner, the Commissioner may collect the outstanding amount of the judgment with the consent of the aggrieved employee by placing a levy on the employer’s assets and property. (Lab. Code § 96.8.) Under Labor Code section 238, if a final judgment for unpaid wages remains unsatisfied after 30 days or more from the time to appeal the judgment and no appeal is pending on the judgment, the employer is prohibited from conducting any business in the state, unless it obtains a specified bond or has reached an accord with the holder of the judgment for payment. (Lab. Code § 238.) In addition, the Commissioner may place a lien on the real property of the employer for the amount due. (Lab. Code § 98.2(g).) The lien attaches to all interests in real property of the employer that is located in the county where the lien is created, as specified. If the employer pays the amount due, the Commissioner must issue a certificate of release for the lien. (Lab. Code § 98.2(g)(4).) The lien otherwise continues for 10 years from the date of its creation. (Lab. Code §98.2(g)(5).)

1. Public works laws and their enforcement by the Labor Commissioner

When a state or local agency completes any construction, demolition, installation, alteration, or repair work, or work on any irrigation, utility, or street, sewer, public transportation, or other infrastructure project through the use of public funds, it is considered a “public works” project. (Lab. Code § 1720.) When a California state or local agency initiates a public works project, the agency often lacks the staff and expertise to carry out the project itself. Instead, it turns to contractors to which it awards funds and a contract to complete the project for the agency.

Every contractor or subcontractor on a public works project must be registered with the Department of Industrial Relations (DIR). (Lab. Code § 1725.5.) In order to be registered, a contractor or subcontractor must: submit an application with an application fee of $800; have workers’ compensation coverage for its workers; be licensed with the Contractors State Licensing Board, if applicable; not have any delinquent liability to an employee or the state for previous final wage theft judgements; not be debarred from working on public works projects for violations of the public works laws; and must not have worked on any public works projects in the past year while not registered. (Lab. Code § 1725.5.) All workers employed on a public works project must be paid a prevailing wage for the locality, as determined by the Director of DIR. (Lab. Code § 1771.) The prevailing wage is based on the standard wages for a particular work or position, and is often based on the rate in local collective bargaining agreements. In addition, contractors and subcontractors on public works must follow a variety of other requirements regarding their employees, including regarding overtime, the hiring of a specified number of apprentices, and the maintenance of payroll records. These payroll records must be made available for inspection to an employee, a representative of the public agency that awarded the public works contract, or the public through the awarding agency or the Division of Labor Standards Enforcement of DIR, upon request, within 10 days of the request. (Lab. Code § 1776(b).)

When there has been a violation of any of these public works laws, the Labor Commissioner may conduct an investigation. If after that investigation, they determine that there has been a violation, the Labor Commissioner issues a civil wage and penalty assessment (CWPA) for wages due, plus interest, and the penalties specified in statute, such as those described above. If a contractor wishes to contest the CWPA, they may make a written request within 60 days after service of the CWPA. (Lab. Code § 1742.) Upon the contractor’s request, the Director of DIR will appoint an impartial hearing officer to hold a hearing on the CWPA within 90 days of the request for review. In this hearing, the contractor bears the burden of proving that the basis for the CWPA is incorrect. Within 45 days after the conclusion of the hearing, the Director must issue a written decision affirming, modifying, or dismissing the CWPA. If the contractor still contests the CWPA, they may further appeal it in court.

1. SB 1316 allows the extension of expiring liens for unpaid judgements

SB 1316 would permit a lien on the real property of an employer for an unpaid judgement for labor law violations to be renewed beyond the current 10-year period of validity. Under the current law, after this 10-year period runs, the lien expires and can no longer be enforced to force the employer to pay the judgement. SB 1316 would permit the lien to be renewed in 10-year periods, as long as it is renewed through the recording of a renewal of certificate of lien or a copy of a renewed judgment prior to the expiration of the lien.

1. SB 1316 expands the instances in which an employer can be precluded from using documents it failed to provide the Labor Commissioner in a hearing regarding labor law violations

Under labor law, the Commissioner may request certain documents from an employer pursuant to an investigation into a claim of a violation of labor law. When the Commissioner requests documents related to payroll and various other employment records that the Labor Code requires to be maintained, and the employer fails to produce those documents within 15 days of the request, the law precludes the employer from using or relying upon those documents in any proceeding in which they contest the citation or finding of the Commissioner. (Lab. Code § 1174.1.) The purpose of this preclusion is to encourage employers to cooperate with the Commissioner in their investigation, and to prevent employers from withholding documents from the Commissioner only to use those documents in their appeal. While this can be a harsh consequence for failing to provide documents within specified deadlines, the law also creates an exception for when the failure is due to an inadvertent error and provides an employer an automatic 15-day extension for any deadline when they submit a timely good faith response that more time is needed. (Lab. Code § 1174.1(d), (g).)

This preclusion applies to a variety of types of documents and a variety of administrative proceedings. SB 1316 would extend its applicability to additional documents and administrative proceedings. Specifically, it would extend its applicability to an administrative proceeding contesting a citation regarding retaliation or discrimination. It would also expand the covered documents to include: records of job title and wage rate history for the employer’s employees, in relation to rules regarding applications for employment; records of wages and wage rates, job classifications, and other terms and conditions of employment for its employees; and employee performance, education and training, or grievance records.

In addition, SB 1316 creates a similar preclusion of the use of documents in an administrative proceeding for appeals of Commissioner orders and citations relating to public works. This preclusion is substantially similar in its design to the existing preclusion for all other labor law violations; it includes exceptions for when the failure to produce documents is the result of inadvertent error, or for when the employer contests the request for documents before the issuance of a CWPA and a court determines that such documents are not required to be produced. It likewise permits the Commissioner to accept documents provided late, requires the Commissioner to consider reasonable requests for extensions of time, and provides an automatic 15-day extension for employers who provide a timely good faith response that additional time is needed to gather the documents. It exempts from its provisions certified payroll documents and the statutory requirement that an employer provide such documents within 10 days of a request. This preclusion would apply both to an appeal of the Commissioner’s CWPA that is heard before the Director of DIR, as well as to an appeal of the Director’s decision in superior court.

1. Considerations in precluding the use of evidence for a party’s defense

The Due Process Clause of the Fourteenth Amendment guarantees every litigant the right to present their case and have its merits fairly judged.^[5] Procedural due process provides an individual the right to a process that is fair and ensures they are afforded the ability to defend themselves or make their case. However, the right to present evidence is not absolute, and there are a variety of evidentiary rules that can exclude otherwise relevant evidence from a court trial.

Here, the exclusion from evidence of documents an employer has failed to provide the Commissioner could prejudice the employer in their appeal. The state’s interest in the exclusion of those documents is based upon its interest in ensuring that employers comply with labor investigations by the Commissioner. Moreover, if an employer withholds documents only to provide them in defense at trial, it denies the Commissioner the ability to fully and fairly adjudicate the claim. These interests must be balanced with the employer’s interest in providing a defense and all relevant evidence. SB 1316 attempts to provide a balance by creating a number of exceptions and extensions of time for employers who work in good faith to comply with the Commissioner’s request or successfully challenge the request for documents itself.

SUPPORT

None received

OPPOSITION

None received

RELATED LEGISLATION

Pending Legislation: None known.

Prior Legislation:

SB 261 (Wahab, Ch. 747, Stats. 2025) permitted a public prosecutor, as assignee of the judgement creditor, to be awarded court costs and reasonable attorney’s fees for enforcing a final judgement regarding a violation of labor law.

SB 62 (Durazo, Ch. 329, Stats. 2022) prohibited the practice of piece-rate compensation for garment manufacturing, except as specified, and precluded the introduction or use of records relating to the payment of wages for garment manufacturing from administrative proceedings contesting an order of the Commissioner when those records were not provided to the Commissioner upon request.

SB 96 (Committee on Budget and Fiscal Review, Ch. 28, Stats. 2017) among other things, prohibited any employer from introducing as evidence in an administrative proceeding contesting a citation or writ under certain provisions of law, books, documents, or records that are not provided pursuant to a duly served written request by the commissioner, as specified.

SB 588 (De Leon, Ch. 803, Stats. 2015) permitted the Commissioner to file a lien or levy on an employer’s property to satisfy a final judgment relating to a violation of labor law.

AB 1386 (Committee on Labor and Employment, Ch. 750, Stats. 2013) provided for the creation of a lien upon an order of the Commissioner becoming final, permitted the Commissioner to record a certificate of lien to attach to an employer’s property for the satisfaction of the final judgement, and specified that this lien would continue for ten years, or until satisfied or released before expiration.

PRIOR VOTES:

Senate Labor, Public Employment and Retirement (Ayes 5, Noes 0)

**************

1. David Cooper & Teresa Kroeger, “Employers steal billions from workers’ paychecks each year,” Economic Policy Institute (May 10, 2017), https://www.epi.org/publication/employers-steal-billions-from-workers-paychecks-each-year/. ↑

2. Jake Barnes et al., Wage Theft in California: Minimum wage violations, 2014-2023, Rutgers School of Mgmt. and Lab. Rel. (May 2024), available at https://www.smlr.rutgers.edu/news-events/smlr-news/minimum-wage-theft-rises-sharply-california. ↑

3. Id. ↑

4. Ross Eisenbrey & Brady Meixell, “Wage theft is a much bigger problem than other forms of theft – but workers remain mostly unprotected,” Economic Policy Institute (Sept. 18, 2014), https://www.epi.org/publication/wage-theft-bigger-problem-forms-theft-workers/. ↑

5. Logan v. Zimmerman Brush Co. (1982) 455 U.S. 422, 433. ↑

SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT

Senator Lola Smallwood-Cuevas, Chair

2025 - 2026 Regular

Bill No: SB 1316 Hearing Date: April 15, 2026

SUBJECT: Employment

KEY ISSUES

This bill strengthens the Labor Commissioner’s (LC) ability to enforce claims of wage theft by: 1) authorizing the renewal of a lien on real property for wage theft obligations for an additional 10 years before its expiration; 2) limiting how employers can use books, documents, or records that can delay specified investigations of the LC; and 3) applying these late-records rule provision of books, documents, or records to contractors or subcontractors in public works projects.

ANALYSIS

Existing law:

1. Establishes the Department of Industrial Relations (DIR) in the Labor and Workforce Development Agency (LWDA), and vests it with various powers and duties to foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment. (Labor Code §50.5)
2. Establishes within the DIR, various entities including the Division of Labor Standards Enforcement (DLSE) under the direction of the Labor Commissioner (LC), and empowers the LC with ensuring a just day’s pay in every workplace and promotes economic justice through robust enforcement of labor laws. (Labor Code §79-107)
3. Authorizes the LC to investigate employee complaints and provide for a hearing in any action to recover wages, penalties, and other demands for compensation, including liquidated damages if the complaint alleges payment of a wage less than the minimum wage, as specified. (Labor Code §98)
4. Precludes any employer, or other person or entity, who may be liable for a violation of any provision of the labor code from introducing as evidence, in an administrative proceeding contesting a citation or writ proceeding, as specified, books, documents, or records that are not provided pursuant to a duly served written request (providing not less than 15 days to respond) by the LC requiring the provision of such records, as specified. Grants the LC discretion to admit for consideration books, documents, or records that are produced beyond the time limits specified if:
   1. The person or entity cooperated with the underlying investigation and substantially complied with the request within the time limits prescribed; and
   2. The person or entity made good faith efforts to comply with the request, including discovery of the late-produced books, documents, or records.

(Labor Code §1174.1)

1. Requires the LC, within 15 days after the hearing is concluded, to file in the office of the division a copy of the order, decision, or award (ODA). The ODA shall include a summary of the hearing and the reasons for the decision. Additionally, the ODA includes any sums found owing, damages proved, and any penalties awarded pursuant to the Labor Code, including interest on all due and unpaid wages, as specified. (Labor Code §98.1)
2. Upon filing of the ODA, requires the LC to:
   1. Serve a copy of the decision personally, by first-class mail, or in the manner specified in Section 415.20 of the Code of Civil Procedure on the parties.
   2. Advise the parties of their right to appeal the decision or award and further advise the parties that failure to do so within 10 days shall result in the decision or award becoming final and enforceable as a judgment by the superior court.

(Labor Code §98.1 and §98.2)

1. Specifies that if no appeal of the ODA is filed within the period specified, the ODA shall, in the absence of fraud, be deemed the final order. Existing law then requires the LC to file, within 10 days of the ODA becoming final, a certified copy of the final order with the clerk of the superior court of the appropriate county unless a settlement has been reached by the parties and approved by the LC. Judgment shall be entered immediately by the court clerk in conformity therewith. (Labor Code §98.2)
2. Authorizes the LC, as an alternative to a judgment lien, upon the order becoming final pursuant, to create a lien on real property recording a certificate of lien, for amounts due under the final order and in favor of the employee or employees named in the order, with the county recorder of any county in which the employer’s real property may be located, as specified. (Labor Code §98.2)
3. Requires the LC, upon payment of the amount due under the final order, to issue a certificate of release, releasing the lien created under provisions specified above and specifies that, unless the lien is satisfied or released, a lien under these provisions shall continue until 10 years from the date of its creation. (Labor Code §98.2)

This bill:

1. Authorizes the Labor Commissioner to renew a lien on real property for owed wages for additional periods of 10 years by recording a renewal certificate of lien or a copy of a renewed judgment at any time prior to the original liens’ expiration.
2. For provisions regarding the requirement to timely provide books, documents, or records during an investigation into employee owed wages, would additionally:
   1. preclude an employer or other person or entity from using or relying on such books, documents, or records as evidence, including, but not limited to, attempting to impeach any witness (challenge or discredit their credibility during an investigation).
   2. Revise and expand the types of books, documents, or records to which the provisions are applicable including by making them applicable to specified administrative proceeding contesting citations for retaliation or discrimination complaints.
3. Extends these provisions to preclude a public works contractor or subcontractor from introducing as evidence, or in any other way using or relying on as evidence, at a hearing or writ of mandate proceeding, as specified, any books, documents, or records that are not provided pursuant to a duly served written request by the LC within the time that the LC requests those books, documents, or records to be produced, except as specified.
   1. Requires the LC to take into consideration a reasonable request from the contractor or subcontractor for an extension of time for production of books, documents, or records, as specified.

COMMENTS

1. Background:

Data on Wage Theft:

California leads the nation with some of the strongest workplace protections for workers. Unfortunately, those laws are meaningless if they are not implemented or enforced, leaving workers struggling to recoup owed wages. Wage theft in California, which impacts low-wage workers disproportionately, is well documented. Wage theft captures many labor law violations including violations of the minimum wage, overtime, denied meal periods, or misclassification of employees as independent contractors, among others. A 2022 report to the Legislature on the state’s wage claim adjudication process reveals that there were nearly 19,000 wage claims filed in 2021 with a total of $335 million being owed to workers.^[1] Due to challenges in staffing, resources, and a growing case backlog (as documented in a May 2024 California State Auditor report on the DLSE) only approximately $40 million has been paid in awards or settlements through the wage claim adjudication unit of the LC.^[2] In 2022, the Labor Commissioner’s office recovered through the wage claim process an average of 63 percent of wages owed, totaling more than $47 million paid to workers.

A 2024 Rutgers School of Management and Labor Relations report assessed minimum wage violations across four metropolitan statistical areas of interest – Los Angeles/Long Beach/Anaheim, San Jose/Sunnyvale/Santa Clara, San Diego/Carlsbad/San Marcos, and San Francisco/Oakland/Fremont.^[3] Among the key findings of the report are the following:

• An average of $2.3 to $4.6 billion in earned wages were lost by workers each year from 2014 to 2023 due to minimum wage violations across these four metro areas.
• The majority of lost wages were in the Los Angeles area, where we estimate an average of $1.6 to $2.5 billion was lost a year during the study period.
• Those that were paid below the minimum wage lost roughly 20 percent of their total paycheck on average, or nearly $4,000 in earned wages a year if working full-time.
• The most impactful violations occurred in the San Francisco area, where workers lost an average of $4,300 to $4,900 annually to minimum wage violations.
• The number of workers paid below both the state and primary metro minimum wages has more than doubled since 2014, growing particularly dramatically over the most recent year of the study (2023).

Wage theft does not only affect workers, but it also creates unfair competition for responsible employers who follow the law. The State of California is also harmed when labor laws are not enforced because more workers fall into poverty, the safety net is eroded, and payroll taxes are not paid.

Existing Wage Theft Adjudication Process:

As noted under existing law, a worker may file a wage theft claim with the DLSE. The DLSE, also known as the LC’s office, is then tasked with resolving wage theft claims by investigating, facilitating a resolution with the worker and employee, and holding a hearing when necessary. In some cases, claims may go directly to civil litigation, skipping the settlement conference and hearing steps.

Once the LC issues an order, decision, or award (ODA), the employer has a limited time after service of the LC decision to file an appeal. If no appeal is filed within the specified period, the LC must file a certified copy of the decision with the appropriate Superior Court and obtain a judgment against the employer for the amount owed. When the LC does request that the court enter the judgment against the employer, the worker can choose the option of referring the judgment to the LC’s Enforcement Unit for collection or pursue collection on their own or through the use of an external partner, such as a private attorney or advocacy groups.

The DLSE Enforcement Unit can use a variety of means to collect judgment amounts, including levies against employers’ bank accounts and liens on properties.

This bill: 1) authorizes the renewal of a lien on real property for another 10 years before it expires; 2) limits how employers can use books, documents, or records in an attempt to delay specified investigations of the Labor Commissioner; and 3) apply these late-records rule provision of books, documents, or records to contractors or subcontractors in public works projects.

Regarding the provisions authorizing the renewal of a property lien for an additional 10 years, existing law already authorizes such renewals for specified standard judgment liens (under Code of Civil Procedure Sections 683.12(b), 683.180, 683.190) and recently enacted Labor Code Section 90.8, all of which can be renewed for additional periods of 10 years. Because these wage claims liens cannot be renewed, workers with such certificates of lien risk losing their place in the line of creditors at the 10-year mark. This bill would align with existing law lien renewal provisions to allow the LC’s enforcement unit to more efficiently collect on wage judgments.

Regarding the other provisions of the bill, currently, when the LC investigates claims of specified violations, they ask employers to provide information that would rebut the allegations as part of the investigation. Some employers may simply not respond to the LC requests for documents, oftentimes, to delay the proceedings. Current processes allow the dismissal of cases where complainants do not provide timely information or are uncooperative in an investigation; however, no such provision exists for respondents.

Existing Labor Code Section 1174.1 already allows LC’s Bureau of Field Enforcement (BOFE) hearing officers to exclude time and payroll records from a hearing if a BOFE deputy requests it and the employer does not provide it. This evidentiary preclusion applies to a narrow set of documents that the Labor Code requires employers to keep, generally payroll and time records. The proposed language would extend these same evidentiary preclusions in wage theft claims as well as public works claims.

2. Need for this bill?

According to the author:

“Current labor enforcement statutes contain outdated timelines, inconsistent document production requirements, and technical gaps that can delay investigations and complicate wage recovery. These inconsistencies are often exploited by noncompliant employers to delay proceedings or avoid accountability on procedural grounds rather than compliance with labor laws. As a result, workers, particularly low-wage workers, immigrant workers, and workers in industries with high rates of wage theft, experience prolonged delays in recovering wages already determined to be owed.

SB 1316 makes targeted technical and clarifying amendments to labor enforcement statutes to ensure consistent document production timelines, clarify evidentiary rules, and align lien duration and renewal authority with existing judgment lien law. These changes strengthen the Labor Commissioner’s ability to enforce existing worker protections, reduce unnecessary litigation over procedural issues, and improve the timely recovery of unpaid wages without creating new penalties or expanding enforcement authority beyond current law.”

3. Proponent Arguments:

None received.

4. Opponent Arguments:

None received.

5. Double Referral:

This bill has been double referred and if approved by this Committee today, will be sent to Senate Judiciary Committee for a hearing.

SUPPORT

None received

OPPOSITION

None received

-- END --

1. Wage Claims Adjudication Unit Annual Report Pursuant to Labor Code Section 96.1, Calendar Year 2021, California Labor Commissioner’s Office, p. 15. ↑

2. Ibid. ↑

3. Daniel J. Galvin, Jake Barnes, Janice Fine, and Jenn Round. Wage Theft in California: Minimum Wage Violations, 2014-2023. (Rutgers School of Management and Labor Relations, May 2024) ↑