Labor Board Judgments

Suppose your employer hasn’t paid you and prospects for payment look bleak. You may attempt to resolve the issue in small claims. If the claim is large enough, you could retain an attorney and instigate a limited/unlimited civil action.

Generally, there is a better way. The function of the California Labor Commissioner’s Office is to “foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment”.

A judgment from the Labor Board has some advantages over a regular civil judgment:

Legal fees. You may recover legal fees for enforcing a labor board judgment. Unlike civil judgments, this is provided by statute: CA LAB§98.2(k) The judgment creditor, or the Labor Commissioner as assignee of the judgment creditor is entitled to court costs and reasonable attorney fees for enforcing the judgment that is rendered pursuant to this section.

Additional damages. The Labor Code is riddled with penalties and fees for a myriad of transgressions. Penalties/interest can be huge if accruing daily. It is not at all unusual for the penalties in a Labor Board judgment to far exceed the claim for unpaid wages.

The Labor Board will take up cases against employers for violations of the Labor Code which they believe may have merit. This means they will investigate your case and hold a hearing, much like a court trial. Unlike a case in civil limited/unlimited, you do not have to worry about legal fees when the labor commissioner prosecutes your claim. Like a court decision, when an administrative decision is arrived at, there is a period of time in which the decision can be appealed and/or set aside pursuant to CCP§473. Once the decision is final, the Labor Board will generally contact the employer in order to secure payment. As expected, this rarely results in payment.

In order to enforce the judgment the Labor Commissioner submits the necessary certification to the Superior Court which opens a new case and assigns a court case number. The Labor decision now becomes a fully enforceable judgment.

As a back-up plan, the Labor Board has an agreement under §19290 of the Revenue and Taxation Code with the CA Franchise Tax Board [“FTB”]. This agreement transfers the responsibility for collecting labor board judgments. The employee may assign their judgment for collection to the FTB which will attempt to collect and charge the debtor with the actual costs of collection.

Bureaucrats working thousands of judgments, however, are usually not successful. They simply don’t have the time (or drive) to aggressively enforce a judgment. I have received dozens of calls over the years from disillusioned creditors who were frustrated with the FTB’s lack of action. And once they get their judgment back from the FTB, it is often too late to collect. For time is of the essence when it comes to Labor Board judgments. By the time a Labor decision is handed down, often a company has multiple claims against it. They may be ‘circling the drain’ or taking various steps to thwart creditors, like changing their name. So, it’s not surprising when a company is defunct and uncollectible after languishing in the files at the FTB for years.

The last one to the dinner table will be left with crumbs. Move swiftly and aggressively if you hold a Labor Board decision. Do not be scrambling for crumbs.