Amended  IN  Senate  April 07, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 505

Introduced by Senator Hertzberg

February 17, 2021

An act to amend Section 224 of add Section 224.1 to the Labor Code, relating to employment.


LEGISLATIVE COUNSEL'S DIGEST


SB 505, as amended, Hertzberg. Wages: withholdings: written authorizations.
Under existing law, it is not unlawful for an employer to withhold or divert a portion of an employee’s wages when the employer is required or empowered to do so by state or federal law or in other specified cases. Under existing law, the Division of Labor Standards Enforcement is charged with investigating and enforcing violations of the wage laws.
This bill would require an a public employer, as defined, absent fraud, misrepresentation, or theft, to make a good faith effort to consult with an employee to obtain a written authorization to resolve a monetary obligation before utilizing third-party collection services or commencing a civil action. The bill would require the written authorization to include a mutual agreement between the public employer and employee and, to the extent possible, would prohibit that written authorization from placing an undue financial burden upon the employee. The bill would provide that if the written authorization involves a withholding or diversion of an employee’s wages over a designated period of months, the amount withheld or diverted shall not exceed 5% of the employee’s monthly gross wages unless this requirement is expressly waived by the employee or it would be inconsistent with a wage agreement, collective bargaining agreement, judgment, or other legal agreement or legal requirement. The bill would provide that the period of time in which the public employer and employee are engaging in consultation is not a part of the time limited for the commencement of a civil action, which the bill would prohibit from exceeding one year from the date the consultation commenced. The bill would specify that its provisions apply to all employers, including the state, political subdivisions of the state, municipal corporations, and municipalities.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 224.1 is added to the Labor Code, to read:

224.1.
 (a) Absent fraud, misrepresentation, or theft, a public employer shall make a good faith effort to consult with an employee to obtain a written authorization allowed under Section 224 to resolve a monetary obligation before utilizing third-party collection services or commencing a civil action.
(b) A written authorization under this section shall include a mutual agreement between the public employer and employee and, to the extent possible, shall not place an undue financial burden upon the employee. If the written authorization involves a withholding or diversion of an employee’s wages over a designated period of months, the amount withheld or diverted shall not exceed 5 percent of the employee’s monthly gross wages unless this requirement is expressly waived by the employee or it would be inconsistent with a wage agreement, collective bargaining agreement, judgment, other legal agreement, or other legal requirement. The period of time in which the public employer and employee are engaging in consultation is not a part of the time limited for the commencement of a civil action, which shall not exceed one year from the date this consultation commenced.
(c) For purposes of this section, a “public employer” shall mean the state, every state entity, and any political subdivision of the state, including, but not limited to, municipal corporations, municipalities, school districts, community college districts, joint powers authorities, joint powers agencies, and other public agencies.

SECTION 1.Section 224 of the Labor Code is amended to read:
224.

(a)The provisions of Sections 221, 222, and 223 shall in no way make it unlawful for an employer to withhold or divert any portion of an employee’s wages when the employer is required or empowered so to do by state or federal law or when a deduction is expressly authorized in writing by the employee to cover insurance premiums, hospital or medical dues, or other deductions not amounting to a rebate or deduction from the standard wage arrived at by collective bargaining or pursuant to wage agreement or statute, or when a deduction to cover health and welfare or pension plan contributions is expressly authorized by a collective bargaining or wage agreement.

(b)(1)Absent fraud, misrepresentation, or theft, an employer shall make a good faith effort to consult with an employee to obtain a written authorization allowed under subdivision (a) to resolve a monetary obligation before utilizing third-party collection services or commencing a civil action.

(2)A written authorization under this subdivision shall include a mutual agreement between the employer and employee and, to the extent possible, shall not place an undue financial burden upon the employee. If the written authorization involves a withholding or diversion of an employee’s wages over a designated period of months, the amount withheld or diverted shall not exceed 5 percent of the employee’s monthly gross wages unless this requirement is expressly waived by the employee or it would be inconsistent with a wage agreement, collective bargaining agreement, judgment, or other legal agreement or legal requirement. The period of time in which the employer and employee are engaging in consultation is not a part of the time limited for the commencement of a civil action, which shall not exceed one year from the date this consultation commenced.

(c)Nothing in this section or any other provision of law shall be construed as authorizing an employer to withhold or divert any portion of an employee’s wages to pay any tax, fee, or charge prohibited by Section 50026 of the Government Code, whether or not the employee authorizes that withholding or diversion.

(d)This section applies to all employers, including the state, political subdivisions of the state, municipal corporations, and municipalities.