ANNUAL REPORT ON THE

EFFECTIVENESS OF BUREAU OF FIELD ENFORCEMENT

Labor Code § 90.5(d) requires the Labor Commissioner to report annually to the Legislature concerning the effectiveness of the Bureau of Field Enforcement (Bureau). This report shall include: (1) the enforcement plan adopted by the Labor Commissioner and the rationale for the priorities, (2) the number of establishments investigated by the Bureau, and the number and types of violations found, (3) the amount of wages found to be unlawfully withheld from workers, and the amount of unpaid wages recovered for workers, and (4) the amount of penalties transferred to the General Fund as a result of the efforts of the Bureau.

The Bureau investigates complaints and takes enforcement actions to ensure employees are not being required or permitted to work under unlawful conditions. Enforcement action taken by Bureau investigators involves the enforcement of child labor laws; the requirement of employers to carry workers’ compensation insurance coverage; audits of payroll records, collection of unpaid minimum wages, overtime, as well as prevailing and other unpaid wages; the issuance of civil and criminal citations; and the confiscation of illegally manufactured garments, and injunctive relief to preclude further violations of the law.

The Labor Commissioner has maximized enforcement efforts through the use of multi-agency enforcement programs operating within the Bureau. These programs are designed to focus enforcement on those employers committing flagrant violations or operating in the underground economy. The Labor Commissioner is intent on giving the economic advantage back to the law-abiding employer, and to protect workers from unlawful labor practices. These multi-agency programs are specifically, the Targeted Industries Partnership Program (TIPP), which is a joint enforcement and educational effort between the Labor Commissioner and its sister agency, the Division of Occupational Safety and Health (Cal/OSHA), the California Employment Development Department and the U.S. Department of Labor, Wage and Hour Division. The second program is the Joint Enforcement Strike Force (JESF), whose members include the Labor Commissioner, the Employment Development Department, the Department of Consumer Affairs, the Office of Criminal Justice Planning, the Department of Justice, the Franchise Tax Board, and the Board of Equalization.

In 2001, investigators concentrated in several industries that have a history of labor law violations. These industries include restaurants, agriculture, construction and garment. The Bureau conducted 1,081 inspections in the restaurant industry, 1,046 in agriculture, 744 in construction, and 1,180 in the garment industry. As a result of these inspections, investigators issued 152 citations for violations found in agriculture, 633 civil citations among restaurant owners, 242 citations in construction, and 688 citations issued to employers of garment workers. A total of $668,205 penalties were collected for citations in restaurants, $367,314 in construction, $70,850 in agriculture and $525,599 in penalties for citations issued in the garment industry.

In the 6,841 inspections conducted during 2001, the greatest number of violations found involved failure to carry workers’ compensation insurance coverage, resulting in 1,201 citations. Investigators also issued 428 citations for violations relating to garment manufacturing registration requirements and 447 citations for paying employees in cash without the required itemized wage deduction statement.

During 2001, Bureau investigators from DLSE collected $11,668,174 in wages owed to employees in California.

In addition to enforcement of specific Labor Code statutes and provisions of the Industrial Welfare Commission (IWC) wage orders, the Bureau investigates complaints arising from violations of the state’s prevailing wage laws, and conducts payroll audits on behalf of California’s workers for back wages owed. During 2001, investigations of violations of prevailing wage laws resulted in $8,625,208 in wages for workers on public works projects. In addition to collecting wages owed for underpayment or non-payment of prevailing wages, DSLE collected $1,302,183 in civil penalties for wage and public works violations.

In accordance with subsections (2), (3), and (4) of Labor Code § 90.5(d), the following data is presented to demonstrate the effectiveness of the field enforcement unit during 2001:

Number of Establishments Investigated 6,841

Total Number of Citations Issued for Labor
Law Violations 2,744

          Workers’ Compensation Insurance

1,201
          Child Labor 344
          Cash Pay 447
          Minimum Wage 125
          Unlicensed Contractors 28
          Garment Manufacturing Penalties 429
          Overtime 170

Public Works (prevailing wage) Enforcement

          Cases Opened

1,989
          Cases Closed 1,489

          Wages Recovered

$8,625,208
          Penalties Collected $ 1,302,183

Amount of wages recovered for workers

* $20,293,382

* This figure denotes only wages recovered through the Bureau and Public Works. General wage claims filed with the Labor Commissioner are not processed through the Bureau.

Amount of penalties transferred to the
General Fund in Calendar Year 2001

$ 2,763,994

 

Respectfully Submitted,

 

Arthur S. Lujan

State Labor Commissioner

March 2002