New law in California increases penalties for wage theft

California Governor Gavin Newson has signed Assembly Bill No. 1003 into law. It’s a statute that makes intentional theft of wages a felony. As of January 2022, perpetrators of the crime could find themselves charged with grand theft.

AB 1003

California Penal Code Section 487(m) sets the guidelines for the new felony. According to AB 1003, “intentional” theft of wages by an employer consists of:

• An employer taking an amount of $950 or greater from any employee
• An employer taking the aggregate of $2,350 or more from two or more employees in any 12 months

AB 1003 recognizes independent contractors as “employees.” Any entity that hires independent contractors falls under the definition of “employer.”

What to expect

Making intentional wage theft a felony likely increases the chance of employers being charged with a crime. In the past, this type of violation has generally not amounted to more than a misdemeanor and a fine.

Still, legal analysts do not foresee a sharp rise in convictions for the upgraded crime. It is hoped, however, that the possibility of criminal charges will help to protect employees from wage theft.

Wronged employees may take civil action

If your employer has failed to pay your full and proper wages, you do not have to wait for criminal charges to take action. In fact, many employees bring civil wage and hour claims against employers throughout California every year. Depending on your circumstances, you may be owed significant back pay for unpaid overtime or other unpaid wages, as well as your employer’s failure to provide legally compliant meal and rest breaks.

To learn more, please see:

• Our overview of unpaid wages
• Our overview your right to meal and rest breaks
• Our overview of employee misclassification