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 employer, 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 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 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.