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Intentional Wage Theft to Carry Increased Criminal Liability

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CALIFORNIA EMPLOYER UPDATE

By Chandra Winter, Business Litigation Associate at Lobb & Plewe Attorneys at Law

California employers often feel they are navigating a minefield when it comes to maintaining wage and hour compliance in the ever-changing landscape of California law. One of the latest changes to that landscape, AB 1003 was signed into law by Governor Newsom on September 27, 2021, and will go into effect as Section 487m of the Penal Code on January 1, 2022. This new Section 487m imposes harsh penalties, including potential jail time, for employers committing intentional wage theft. When changes to employment law take effect, there is always concern about the scope and applicability of those changes, and smart employers take the opportunity to review their current policies.  

While the new Section 487m on its face creates harsh penalties, there are some key points the average California employer should understand to alleviate concerns about the threat of jail time. Wage theft is defined in the section as the intentional deprivation of wages, gratuities, benefits, or other compensation by unlawful means with the knowledge that the wages are due to the employee. This definition introduces two main points, intentional deprivation, and knowledge that the wages are due to the employee. Although the term ‘intentional’ is not defined in the bill, other areas of California state law and provisions in the Labor Code require deliberate acts rather than an honest mistake. While comforting, this does not mean that the bill can be ignored given that this crime carries a potential prison sentence of up to three years in addition to allowing employees or the Labor Commissioner to seek redress through civil action. The second point, that there must be knowledge of the wages being due to the employee has also been addressed under current law but is not specifically addressed in the bill. Under the current legal framework, a good faith dispute regarding wages due precludes the imposition of penalties. These two points serve as protection for well-meaning employers following best practices to ensure that their employees are timely paid all wages owed.  

It is important to note that under Section 487m, the code defines an “employee” to include independent contractors, and  “employer” to include the hiring entity of an independent contractor this broader definition increases the type of employer who will be potentially liable under the bill. Additionally, the monetary amounts are the only limits placed, so employers of any number of employees need to ensure compliance as this bill is directed at all employers not only those that employ a larger number of employees. Section 487m makes an employer’s intentional wage theft of more than $950 from one employee, or $2,350 total from at least two employees, within a 12-month period, punishable as grand theft. The bill further allows wages, gratuities, benefits, or other compensation subject to the prosecution to be recovered as restitution. 

As with any change to the legal requirements regarding wages and employment, this bill should serve as a reminder that frequent reviews of your employment policies are the best way to protect yourself and your company. Now is a great time to review your policies and procedures to keep your company’s practices in line with the best practices related to California wage and hour law. This review should include policies related to all employees and independent contractors, policies for time entry and verification, payment of overtime wages, tracking of all tips and gratuities, and the delineation of discretionary and non-discretionary bonuses as appropriate. Our firm can assist your company in organizing a compliance review protocol as well as handling any claims or employment litigation.

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

Business

Supported by Local Leaders, CALED’s Annual Conference will be in Ontario this May

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Empowering Economic Growth: CALED Conference Set to Unite Industry Leaders in Ontario

CALED’s ‘Growing Local Economies from the Ground Up’ Conference is being held in Ontario at the DoubleTree by Hilton Hotel Ontario Airport on May 7-9. This event is co-hosted by the City of Ontario and San Bernardino County, with Jennifer McLain Hiramoto, CALED’s Chair of the Board and Derek Armstrong respectively representing their city and county as Co-Chairs of the event.

With over 950 members and 45 years of empowering economic developers, CALED is the largest economic development association in the country and the annual conference is the number one place to meet and connect with the boots-on-the -ground, decision makers in our communities. 

The conference will include a pre-conference teaching tour, ‘Building & Paying for Development Projects’ on May 6th and then begin in full on May 7th, with a welcome session and breakouts. Overall, there will be four general assembly sessions and 18 breakout sessions, which will delve into local economic development practices and innovative tools.

In addition to compelling content, the conference will have numerous opportunities to connect with community leaders and valued peers through networking receptions, the culinary crawl, and new this year, the Tournament of Champions, where conference attendees will navigate a gauntlet of games to win the grand prize on the evening of Thursday, May 8th.

To learn more about the conference and register, visit the CALED website at www.caled.org.

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Strengthening Community Connections: Our Exciting New Partnership with Toyota Arena, Ontario Convention Center, and GOCAL

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Contributed Content | By Chris Venhoff, Senior Vice President and Inland Empire Market Leader for Consumer and Business Banking at U.S. Bank

As the Inland Empire market leader for U.S. Bank, I’m thrilled to share some exciting news: we are proud to be the Official Bank Partner of Toyota Arena and Ontario Convention Center. This partnership represents a reflection of our deep commitment to the Inland Empire and our dedication to fostering a vibrant, thriving community.

At U.S. Bank, we believe that strong partnerships drive meaningful progress. Toyota Arena and Ontario Convention Center are at the heart of the region’s culture and economy, bringing people together for world-class entertainment, business conventions, and community events. By joining forces, we’re not only expanding our presence but also creating opportunities to engage with residents, businesses, and organizations in ways that make a lasting impact.

Through our sponsorship, we’ll support concerts, sporting events, and conventions that showcase the diversity and energy of the Inland Empire. But this is only the beginning. As our partnership evolves, we’ll work closely with Toyota Arena, Ontario Convention Center, and GOCAL to introduce community-focused programs, including financial literacy workshops and charitable giving initiatives.

This partnership is designed to bring added value to the people we serve. For our customers, we’re introducing the U.S. Bank Fast Pass Lanes, providing priority access at Toyota Arena events. Special offers, exclusive event experiences, and tailored financial solutions for businesses operating in the region are just a few of the many perks we’re excited to roll out.

Our employees are at the core of our success, and this partnership allows us to recognize their dedication. Through exclusive access to events, corporate hospitality opportunities, and community volunteer programs, our team will have new ways to engage with and celebrate the community they serve.

The Inland Empire is a dynamic, fast-growing region, and we’re committed to supporting its continued success. By investing in Toyota Arena and Ontario Convention Center, we’re helping to create and sustain jobs while driving local business growth. These venues bring in visitors, revenue, and visibility, strengthening the region’s economy.

This collaboration is about more than just sponsorship—it’s about making a difference. By working together, we can elevate not just these venues but the entire Inland Empire. At U.S. Bank, we’re committed to being a partner in progress, supporting our customers, businesses, and communities every step of the way.

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Inland Empire Celebrates Entrepreneurial Excellence at Spirit Awards Gala

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Honoring Visionary Leaders Driving Innovation and Community Impact

The Spirit of the Entrepreneur Awards Gala, held at the Riverside Convention Center, celebrated the brightest entrepreneurial talent across the Inland Empire. Among the evening’s finalists was Edward Ornelas, Jr., President & CEO of the Inland Empire Regional Chamber of Commerce, who was honored in the Social Entrepreneur category for his outstanding leadership and commitment to the region.

Although Ornelas did not win, the Social Entrepreneur award went to Cesar Navarrete, President & CEO of Children’s Fund, a proud Chamber member. “Being a finalist alongside such remarkable leaders is an incredible honor,” said Ornelas. “I am especially thrilled to see Cesar, a Chamber member, recognized for the transformative work he’s doing to improve the lives of children in our community. It’s a proud moment for us all.”

Another highlight of the evening was the recognition of Hilda Kennedy, President & Founder of AMPAC Business Capital, another Chamber member, who was awarded the Top Female Entrepreneur category. Hilda’s leadership at AMPAC, a mission-driven business lender, has been instrumental in empowering small businesses and fostering economic growth across the region.

“It’s amazing to see leaders like Hilda and Cesar being celebrated for their contributions,” added Ornelas. “Their achievements underscore the talent and dedication of entrepreneurs in our Chamber and across the Inland Empire. They are setting the standard for excellence and impact in their fields.”

The evening also featured the prestigious “Best of the Best” Award, sponsored by Best Best & Krieger LLP, which was awarded to Mauro Gomez, Chief Growth Officer of Anita’s Mexican Foods Corp.. Based in San Bernardino, Anita’s Mexican Foods has grown from modest beginnings into a leader in the food production industry under Gomez’s strategic direction.

The Spirit of the Entrepreneur Awards Gala continues to shine a spotlight on the transformative work of Inland Empire entrepreneurs, celebrating their innovation, resilience, and commitment to the community.

For more information about the Spirit of the Entrepreneur Awards, visit https://www.spiritawardsie.com.

For more details about the Inland Empire Regional Chamber of Commerce and its members, visit www.iechamber.org.

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