Department of Labor Standards and Enforcement
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 (BOFE). 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 BOFE, 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 BOFE.

BOFE investigates complaints and takes enforcement action to ensure employees are not being required or permitted to work under unlawful conditions. Enforcement action taken by BOFE 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 BOFE. 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 within the Department of Industrial Relations, 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.

During the past year, investigators in BOFE have concentrated their efforts in industries with histories of labor law violations, as well as industries that tend to operate in the underground economy. Specifically, BOFE, including the TIPP and the JESF, has focused on enforcement activity in such industries as garment manufacturing, agriculture, automotive repair, and bars. In the 5,689 inspections conducted during 1997, the greatest number of violations found involved failure to carry workers' compensation insurance coverage, resulting in 1,381 citations. Investigators also issued 740 citations for violations relating to garment manufacturing registration requirements and 661 citations for paying employees in cash without the required itemized wage deduction statement.

In 1998, the Labor Commissioner created a rapid reaction Strike Force, composed of several experienced labor law investigators, to deal with major, fraudulent labor law violations in any industry. The Strike Force is currently investigating employers involved in the construction and garment manufacturing industries.

During 1997, the TIPP garment enforcement program continued

to target the underground economy, which has been a priority of the governor since 1991. Some of the innovations used by TIPP that were specifically employed to target the illegal activities of the underground economy were:

In 1997, the Division installed a statewide hotline for the garment industry so that employers and employees could report suspected violations to TIPP. This focus on the underground economy resulted in 198 confiscations of garments that were illegally manufactured. The total value of these confiscated goods amounted to $1.5 million. Further, expansion of TIPP investigations into restaurants and the construction industry is planned for early 1998.

TIPP, in an effort to measure the level of compliance in the apparel industry, has conducted three surveys. The first survey in 1994 was conducted to establish a baseline. The 1994 survey included firms from throughout the state. The 1996 survey was focused on firms located in Southern California, and the 1997 survey was conducted on firms located in Northern California. These surveys have demonstrated that the level of compliance have improved since the baseline survey. The 1997 survey indicated that there were improvements in

all categories of labor law violations. The greatest improvements were in the areas of cash pay, recordkeeping, and posting requirements. In recognition of its considerable accomplishments, in 1996 TIPP received the prestigious national Innovations Award from the Council of State Governments.

In addition to enforcement of specific Labor Code statutes and provisions of the Industrial Welfare Commission (IWC) wage orders, BOFE 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 1997, BOFE recovered approximately $5.8 million in wages, and also recovered approximately $3.8 million for workers on public works projects. In addition to collecting wages owed for underpayment or non-payment of prevailing wages, BOFE collected over $3,378,776 in civil penalties for wage and public works violations.

Taken together, the multi-agency joint enforcement programs, the ongoing public works regulatory activity and the educational and outreach efforts of BOFE have all served to create an increasingly effective unit for enforcing the state's labor laws for the protection of California's workers, and to ensure equal competition for all law-abiding employers in the state.

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 1997:

Number of Establishments Investigated 5,689
Total Number of Citations Issued for Labor Law Violations 3,207
Workers' Compensation Insurance 1,381
Child Labor 256
Cash Pay 661
Minimum Wage 96
Unlicensed Contractors 73

Public Works (prevailing wage) Enforcement

Cases Closed 979
Wages Recovered 3,775,598
Penalties Collected 1,206,610
Amount of wages recovered for workers *9,574,090

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

Amount of penalties transferred to the
General Fund in Calendar Year 1997
$3,378,776



Jose Millan
State Labor Commissioner
February 1998