New California Penal Code section 487m – intentional theft (deprivation) of greater than $950 in wages may be punished as grand theft, and the employee also has a civil action – Tate’s Comments

Below I have copied and pasted new California Penal Code section 487m, which makes the intentional theft (deprivation) of wages in an amount greater than $950 for any one employee, or $2,350 for two or more employees, may be punished as grand theft. “Employee” includes an independent contractor. And, the employee also has the right to commence a civil action.

Tate comments: the triggering amounts, $950 and $2,350, are very small amounts – i.e., not much needs to be in dispute for someone to argue or allege that someone has violated or breached section 487m. Additionally, the definition of the term “intentional” (i.e., the Legislature’s intent as to what conduct constitutes “intentional”), and whether the alleged wrongdoing is “intentional” will be heavily litigated. For example, is simply not paying an amount that is alleged due considered theft or intentional deprivation of wages? A review of the legislative history might or might not shed some light depending on whether the Legislature gave these issues consideration. In any event, the courts will be called upon to decide.  

(a) Notwithstanding Sections 215 and 216 of the Labor Code, the intentional theft of wages in an amount greater than nine hundred fifty dollars ($950) from any one employee, or two thousand three hundred fifty dollars ($2,350) in the aggregate from two or more employees, by an employer in any consecutive 12-month period may be punished as grand theft.

(b) For purposes of this section, “theft of wages” is the intentional deprivation of wages, as defined in Section 200 of the Labor Code, gratuities, as defined in Section 350 of the Labor Code, benefits, or other compensation, by unlawful means, with the knowledge that the wages, gratuities, benefits, or other compensation is due to the employee under the law.

(c) For purposes of this section, “employee” includes an independent contractor and “employer” includes the hiring entity of an independent contractor.

(d) Wages, gratuities, benefits, or other compensation that are the subject of a prosecution under this section may be recovered as restitution in accordance with Sections 1202.4 and 1203.1. This section does not prohibit the employee or the Labor Commissioner from commencing a civil action to seek remedies provided for under the Labor Code for acts prosecuted under this section.

(e) This section does not constitute a change in, and does not expand or limit the scope of conduct prohibited by, Section 487.

(Added by Stats. 2021, Ch. 325, Sec. 1. (AB 1003) Effective January 1, 2022.)

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Best to you. David Tate, Esq. (and inactive CPA)

Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

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David Tate, Esq. (and inactive California CPA) – practicing in California only.

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