Bad Actor Licensed Contractors Put on Notice: Attorney General Bonta’s Sponsored Bill to Permit DOJ to Revoke or Suspend Contractors’ Licenses for Wage Theft Violations Signed[...]

SACRAMENTO -California Attorney General Rob Bonta today issued the following statement in response to Governor Gavin Newsom signing Assembly Bill (AB) 1002 into law. Authored by Assemblymember Jesse Gabriel, AB 1002 permits the California Department of Justice (DOJ) to seek Contractors State License Board (CSLB) license suspension or revocation against licensed contractors for wage theft or similar violations. Wage theft affects some of the most vulnerable workers in our economy, many of whom may not have the resources or knowledge to protect themselves when an employer refuses to pay wages owed. While wage theft and labor violations are already illegal in California, this new law will add a remedy to DOJ's existing toolbox as the Department combats serious and repeat wage theft and other wage and hour violations.

"With the signing of this new law, we are putting bad actor licensed contractors on notice. For far too long, bad actors in the construction industry have engaged in a pattern of wage-theft - stealing hard-earned pay from the very people who build our communities," said Attorney General Bonta. "This new law strengthens enforcement by allowing my office to not only seek civil penalties, injunctions, and restitution for workers, but also seek to suspend or revoke licenses of contractors who steal wages and exploit labor. I want to thank Assemblymember Gabriel for his ongoing partnership to strengthen corporate accountability and the Building Trades, Carpenters, Laborers, and the Contractors State License Board for their partnership. Every worker deserves to be paid fully and fairly for their work, and this law will build on that commitment and hold those who violate it fully accountable."

"This new law sends a clear message that wage theft will not be tolerated in California. Workers deserve dignity and economic security and this starts with receiving the wages they have rightfully earned," said Assemblymember Jesse Gabriel (D-Encino). "I applaud Governor Newsom for signing this important bill, and I am grateful to Attorney General Bonta and the Building Trades, Carpenters, and Laborers for their partnership in helping to protect working people across California."

"Wage theft robs working families of the pay they've earned and undermines responsible contractors across California. By signing AB 1002, Governor Newsom is closing a dangerous loophole which will strengthen accountability, and make sure our industry is built on fairness and integrity," said Vince Sugrue, State Legislative Director for Sheet Metal Workers' Local Union No. 104.

Background on AB 1002

Last year, the Attorney General announced a lawsuit against a Southern California-based construction subcontractor alleging ongoing wage and hour violations. The lawsuit alleged that West Coast Drywall & Company, Inc. (operating as West Coast Drywall & Paint) failed to pay employees wages owed and overtime wages, provide accurate and complete itemized wage statements, reimburse for tools and equipment, and supply mandated breaks for its field employees since at least August 2019.

The West Coast Drywall Company had settled cases with the federal Department of Labor for wage theft and other labor code violations three times before and, we allege, is continuing to break the law. Under existing law, the DOJ could seek restitution for workers who are owed unpaid wages, civil penalties, and injunctions, but the DOJ could not take action against a contractor's license. In order to pursue license discipline in this case, CSLB had to join the case as a plaintiff.

With today's signing, the new law will allow the DOJ to seek discipline against a CSLB license on its own, such as license suspension or revocation, when a licensed contractor commits specified labor code violations against its workers. Under the new law, the DOJ must provide the CSLB notice of the relevant complaint, and give the CSLB the option of intervening in the action.