Sunshine Week: The Golden State (California) Gets a Gold Star

March 15, 2024

Note: Sunshine Week was launched in 2005 by the then-American Society of Newspaper Editors. It is designed to draw attention to the perils of a secretive government and the critical importance of an open, transparent government. This year, Good Jobs First celebrates by highlighting places modeling great transparency around economic development incentives and corporate behavior.

california beach with palm trees
Source: Matthew Hamilton, Unsplash

In 2022, California classified wage theft as a felony charge if underpaid wages exceed $950. Since wage theft is rarely charged criminally, these changes sent a strong message to would-be paycheck thieves. Ordinarily, the crime is prosecuted as a civil crime, and the employer is given little more than a slap on the wrist.

The California Labor Commissioner’s Office (LCO) has since begun referring more and more cases to local prosecutors, while remaining diligent in its own regulatory efforts.

The LCO has brought nearly 19,000 cases for wage theft totaling $691 million in back wages for workers since 2000. These judgments are available on a searchable database easily accessible to the public, and cross-posted in press releases from the agency.

Another great example is the San Diego County Office of Labor Standards and Enforcement, which is finding new strategies to encourage wage-law compliance, such as withholding permits for restaurants or disqualifying companies with active wage theft claims for procurement contracts.

Even beyond labor departments, California consistently succeeds in its transparency efforts. It has the largest state and local agency list from which we collect data, totaling almost 40 agencies across a variety of industries.

The Golden State also has the largest number of state and local prosecutors, including district, city, and county attorneys who publicize their verdicts on their websites. These prosecutors are expected to handle a larger number of cases in response to the increased criminalization of labor violations, putting more pressure on thieving employers.

California’s regulators have overseen more than 10 times the number of cases and given out penalties 14-fold compared to the average of all other state regulators and prosecutors. Many of these agencies don’t even require open records requests and embrace transparency in its true form: open-source data.

We can verify this data because we can actually see it.

In contrast, a recent lawsuit against the New York Department of Labor (NY DOL) revealed that the agency has been stumbling in their public disclosure responsibilities. Upon denial of an open records request in 2019, the non-profit media outlet Documented took the state labor agency to court and won. The group was given access to a database containing nearly 97,000 wage theft cases between the years 2005 and 2022.

As of today, Good Jobs First is still waiting on an open records request with the same NY agency for the same data from over seven months ago. Consequently, the Violation Tracker database shows minimal instances of wage theft in the state of New York—fewer than 800 cases of wage and hour violations despite it being the fourth most populous state in the country—and none from the NY DOL itself. We now know this reflects issues with government transparency, not necessarily regulatory efforts.

So, why was the NY DOL being cagey about their data? As Documented revealed, it had failed to recover over half of the back wages for affected workers, even years later. Almost $80 million in restitution was missing.

Regulation is only as good as its enforcement. Even with strong legislation, actual enforcement can fail to keep up with corporate misbehavior when regulatory agencies are understaffed or underfunded. But without adequate disclosure of records, it can be nearly impossible to identify the problem: the ability of agencies to enforce misconduct or the extent to which they’re transparent about their operations.

This is why full transparency is a necessary step to holding our regulators accountable—and improving enforcement where it may be lacking in a fractured legal landscape, particularly among states.

Read more

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