Davis Cuts Requested Labor Law Funding

Gov. Gray Davis cut $3 million from the budget for labor law enforcement Thursday, even as state legislators heard hours of testimony at a Los Angeles hearing about the need for substantially more funding.

Enforcement funding, measured against the number of workers and employers in California, has been “decimated” over the last two decades, Labor Commissioner Arthur S. Lujan conceded. And despite some increases in the last three budgets under Davis, funding still falls far short of historic levels and national averages.

Though the number of employers in California has doubled since 1982, the enforcement staff is actually 6% smaller, according to a staff analysis. At the same time, workers and business owners complained, abuses have proliferated. A recent sweep of California garment shops by the U.S. Department of Labor found 67% were in violation of wage and hour laws.

“In the richest state in the United States, we should have compliance rates in the 90th percentile, not the 30th percentile,” said Assemblyman Paul Koretz (D-W. Hollywood), who chairs the Assembly Committee on Labor and Employment and called the hearing.

Among other things, the cuts will eliminate a $500,000 central computer system, which field investigators in the Division of Labor Standards Enforcement said is desperately needed.

The enforcement budget still grew by $2 million, to $153 million. Davis said the reduction from what state legislators requested--among many cuts in the budget package--was forced by “fiscal constraints and limited general-fund resources.”

Word of the reduction buzzed around a hearing room packed with garment workers, janitors and their advocates, who complained that an understaffed and demoralized labor enforcement department made “a cruel joke” of state minimum wage and overtime laws.

Several workers testified that complaints to labor authorities languished for years and that they were fired after complaining. Others said that even when they won cases, the state was unable to collect judgments for back wages.

“We haven’t seen an effective presence [in enforcement] and the employer is aware of that,” said Lilia Garcia, who investigates complaints in the janitorial industry for a private trust funded by contractors who comply with the law.

Field enforcers said they are overwhelmed by workloads and hampered by lack of a central computer system that would allow them to track violators statewide.

Another key impediment to enforcement is the growing industry use of contractors and subcontractors, which blurs the chain of responsibility between retailers and workers who sew their garments or clean their supermarkets, field investigators said.

Much of the testimony centered on one attempt to close that loop, AB 633. Implemented in January 2000, the law was meant to hold garment manufacturers, including widely recognized labels, liable for wage and hour violations of contractors.

But the law already “needs a major overhaul,” according to Gary Blasi, a UCLA law professor. Fewer than 400 California garment workers have filed claims under the law, less than 1% of the 82,000 estimated to be earning less than minimum wage in Los Angeles, he said.

Blasi said many workers aren’t aware of the new law or fear losing their jobs if they file a claim.

From Jan. 1 to March 25, 108 cases were settled for a total of $141,997--an average settlement of $1,315 per worker. In 46 additional claims during that period, contractors refused to settle, forcing the labor commissioner to slap them with judgments totaling $320,569. But the state was able to collect only $17,274 of that for workers. The rest of the claims are still pending.

Blasi was particularly concerned that the state wasn’t able to recover a dime from so-called guarantors, the manufacturers who were supposed to be on the hook for unpaid wages under the new law. “That was supposed to be the centerpiece of AB 633,” he said.

Roger Miller, the state’s top deputy for labor enforcement, agreed to work on an enforcement plan and to bring a progress report to the committee in 90 days.