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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

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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Inland Empire Chamber President Edward Ornelas, Jr. Named Finalist for Spirit of the Entrepreneur Awards

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Celebrating Leadership and Innovation: Ornelas Recognized for Advancing Business Growth and Social Impact in the Inland Empire.

Edward Ornelas Jr., President of the Inland Empire Regional Chamber of Commerce and owner of the Inland Empire Business Journal, has been named a finalist in the famed 2024 Spirit of the Entrepreneur Awards. Ornelas is honored in the Social Entrepreneur category for his remarkable leadership and vision in fostering business growth and development across the Inland Empire. The award ceremony will take place on November 21, 2024, at the Riverside Convention Center, celebrating the best of entrepreneurship throughout the region.

The Spirit of the Entrepreneur Awards, often regarded as the “Oscars of Business” in the Inland Empire, recognizes the innovation, leadership, and impact of outstanding entrepreneurs across various sectors. Ornelas joins a select group of 34 finalists, each representing the entrepreneurial spirit and resilience that define the I.E. business community. The Social Entrepreneur category highlights individuals like Ornelas, whose work goes beyond profit to positively impact society.

In his role as President of the Inland Empire Regional Chamber of Commerce, Ornelas has been a powerful advocate for the business community, connecting small businesses with essential resources and creating opportunities for growth. As the owner of the IE Business Journal, the only publication in the region dedicated solely to business news, Ornelas has provided a platform for local businesses to thrive by sharing their stories and promoting their success. His innovative, forward-thinking approach to marketing has earned him a reputation as a “visionary” and a “get-things-done” leader across both public and private sectors.

“I’m deeply honored to be recognized as a finalist for the 2024 Spirit of the Entrepreneur Awards. This nomination is a reflection of the incredible businesses and community leaders across the Inland Empire who inspire me every day. At the Inland Empire Regional Chamber of Commerce, our mission is to empower businesses and foster economic growth, and this recognition highlights the collective efforts of our entire community. I’m excited for what the future holds as we continue to work together to make a lasting impact,” said Ornelas.

Other notable finalists for the 2024 Spirit of the Entrepreneur Awards include leaders in healthcare innovation, green technology, and digital transformation. Each finalist, selected by a distinguished panel of judges, represents the best in their respective industries and contributes to the Inland Empire’s continued growth as a hub of innovation and entrepreneurship.

The Spirit of the Entrepreneur Awards is an annual event that brings together business leaders, community advocates, and entrepreneurs to celebrate the entrepreneurial excellence that drives the region’s economy. This year’s event promises to be a night of inspiration and recognition, showcasing the achievements of finalists like Ornelas, who continue to elevate the Inland Empire’s business landscape.

For more information about the Spirit of the Entrepreneur Awards and to see the full list of finalists, visit www.spiritawardsie.com

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Business

CBRE Opens Newly Renovated, Tech-Enabled Office in the Inland Empire

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The office is designed to support hybrid work and employee wellbeing

CBRE announced the opening of its new 10,159-sq.-ft. office suite on the ground floor of 4141 Inland Empire Blvd., in Ontario, Calif.

The office is part of CBRE’s Workplace360 program, which features innovative office designs and functionality, including in-office technology and a wider variety of collaborative spaces designed to support hybrid working. CBRE launched its Workplace360 program over a decade ago in its downtown LA office. Since then, the company has opened more than 100 Workplace360 offices worldwide, continually updating the program as work habits have changed over the years, especially with the increase in hybrid work.

“Our newly renovated space provides us with a great opportunity to deliver a collaborative, experience-driven workplace that supports hybrid work,” said Ian Britton, managing director and market leader for CBRE in Inland Empire. “Our Workplace360 office will also serve as a showpiece to help clients conceptualize flexible work strategies for their employees.”

The renovated office has several different work areas including focus, huddle, living, and conference rooms. The open-space lobby, known as the “Heart,” features a variety of seating and a communal space for collaboration. A large 86” media display with a speaker system welcomes employees, visitors, and clients and assists with onsite events.

New office technology, including touch-enabled video conference rooms, allows for hybrid work collaboration between in-office and remote employees and clients. Additionally, the Mt. Baldy conference room has Liquid Galaxy, a geospatial visualization platform set across large format curved screens providing a cinematic presentation experience. This room has an operable wall that opens to the Heart, creating an onsite event space.

A cornerstone of the Workplace360 model is its free-address approach, in which there is no dedicated seating. The free-address approach allows employees who are in the office on a given day to use any workstation or office.

The office’s design led by CBRE Design Collective, took inspiration from the Inland Empire’s orange groves and mountainous landscapes of Mt. Baldy. Images of Route 66 from local photographer VC Torneden features the role the highway plays in the area. 

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