A bill that could jail employers for intentionally committing wage theft was signed into law Monday by Gov. Gavin Newsom.
Assembly Bill 1003, written by Assemblywoman Lorena Gonzalez, D-San Diego, specifies that the intentional theft of wages or tips by employers is punishable as grand theft.
"I've never understood why we don't hold employers who steal from their workers responsible for their crimes, the same way we treat any other serious theft," Gonzalez said. "I'm hopeful this bill will finally change that and make bad actors think twice before treating wage theft like a simple business decision.
"This law sends a clear message: if you intentionally steal workers' hard-earned wages, you can actually go to prison," she said.
In California, minimum wage violations cost workers close to $2 billion annually. AB 1003 makes the intentional theft of wages, tips, benefits or compensation -- over $950 for one employee and over $2,350 for two or more employees in any 12 consecutive month period -- punishable as grand theft. Prosecutors would have the authority to decide whether to charge an employer with a misdemeanor or felony.
According to a report released in May by the Economic Policy Institute, laws that made the crime of wage theft a felony increased the likelihood that district attorneys would pursue more cases and provided prosecutors a more effective means to go after egregious employer crimes.
A 2017 study from the institute found that in the United States, wage theft -- including minimum wage, overtime, rest break and off-the-clock violations -- dwarfs all other kinds of theft.
"In the 10 most populous states in the country, each year 2.4 million workers covered by state or federal minimum wage laws report being paid less than the applicable minimum wage in their state -- approximately 17% of the eligible low-wage workforce," the report found.
Those workers lost around $8 billion annually, an average of $3,300 per year for year-round workers.