The Brief

As lobbyists for businesses and labor groups negotiate with Gov. Gavin Newsom’s administration on how to amend a unique California labor law that allows workers to sue their bosses, the two sides seem to agree on at least one puzzling reality.

The law, known as the Private Attorneys General Act, generates millions each year for a state fund reserved for enforcing state labor laws, including those against wage theft. But despite rising worker complaints of labor violations and severe understaffing hampering the state Labor Commissioner’s Office’s response, California leaves much of the money untouched.

The money comes from the state’s cut of the settlements and fines that businesses pay in response to these lawsuits. For years, the fund has grown faster than lawmakers and Newsom have directed it to be spent, according to state budget documents. In 2022-23 they left $197 million in the fund unspent; the 2023-24 budget leaves $170 million.

The state draws from the fund each year for portions of the Labor Commissioner’s budget, as well as other agencies. And the fund has paid for some worker outreach and enforcement. Those programs include $8.6 million in recent grants to 17 local prosecutors to pursue criminal charges in wage theft cases, and a pandemic-era partnership with community groups to inform workers in 42 different languages about workplace rights.

But the fund’s single biggest use in the past five years has been to shore up the state budget. In 2020, the state borrowed $107 million from the labor fund for other uses. In April, an early budget deal between Newsom and legislative leaders allowed the state to borrow another $125 million as they sought to reduce a record shortfall.

Neither of these loans need to be repaid until at least 2027. The administration has proposed to leave $119 million in the fund unused in the 2024-25 budget it’s negotiating with lawmakers this month. They’re seeking to cover the remaining $28 billion shortfall.

The fund’s use has frustrated businesses and labor groups alike, who say the state should spend much more of the money to help the Labor Commissioner’s Office hire or retain more staff needed to process a record number of workers’ wage theft claims.

In response to questions from CalMatters, Department of Industrial Relations spokesperson Erika Monterroza wrote in an email that the loans are not unusual during budget deficits and only come from money that’s not being used. She said $7.6 million from the fund is already allocated this year to processing wage claims.

But the department has struggled to fill those new positions. A state audit released in May found the staff shortages are caused in part by a slow hiring process and salaries that are lower than some comparable state and local government jobs.

Monterroza said it’s out of her department’s hands whether the money could be used to increase salaries or speed up hiring, saying that must be bargained with state employee unions. Newsom’s office declined to comment, referring questions to the department.

The fund is also part of the negotiations between business and labor on potential changes to the Private Attorneys General Act to take a business-backed measure to repeal the law off the November ballot. Recent polling suggests voters support a legislative fix over a ballot measure. The sides face a June 27 deadline for the Legislature to approve changes.

If a deal is reached to avert the costly ballot measure, it is likely to address how to spend the enforcement fund.

“The Labor Commissioner’s Office has hundreds of millions currently available,” said Kathy Fairbanks, a spokesperson for the coalition of employers sponsoring the ballot measure. “We strongly support using these funds to quickly hire and train staff to help resolve employee claims.”

Between 30,000 and 40,000 workers a year file wage theft claims with the office. The state audit found chronic understaffing has led to a backlog of 47,000 cases, and the claims regularly take six times longer than the time state law allows to resolve.

Lorena Gonzalez, leader of the California Labor Federation and a former state Assemblymember, said labor groups have advocated in past budgets to allow Labor Commissioner Lilia García-Brower to use the money to address the backlogs.

“Obviously we have a crisis and we have been asking and pushing the Legislature and the governor to beef up spending, to hire up,” Gonzalez told CalMatters. “We were having a hard time getting attention. It’s one of many examples that it’s not a priority to process wage theft claims.”

The Assembly’s current and former labor committee chairpersons, San Jose Democrat Ash Kalra and Hayward Democrat Liz Ortega, both declined to comment through spokespersons. Sen. Lola Smallwood-Cuevas, a Los Angeles Democrat who leads the Senate labor committee, could not be reached for comment last week.

California Chamber of Commerce CEO Jennifer Barrera also said she supported using available money to increase staff.

Still, an agreement for the state to appropriate the funds depends on broader negotiations about the scope of the PAGA law.

The two-decade-old state law allows the Labor Commissioner’s office to outsource the role of suing employers over alleged labor violations to private attorneys, with a worker standing in as plaintiff on behalf of the state and their coworkers. Most suits are brought over wage theft claims, according to a UCLA Labor Center report.

Business groups have pushed to repeal it for years, arguing it primarily enriches lawyers while subjecting businesses to frivolous cases over technical violations. Their ballot measure would direct cases back to the Labor Commissioner’s Office, where Fairbanks said workers stand to keep more money if they win individual wage theft claims.

Labor advocates say that would only worsen the backlogs at the Labor Commissioner’s Office, and take away an option for workers to bring workplace-wide suits against problem employers.

Gonzalez said even if the enforcement funds are spent on beefing up Labor Commissioner staff, the law should still stand. The May state audit concluded the office would need nearly 900 employees to efficiently process all wage claims. That’s almost triple the positions currently approved for the office — and a third of those are vacant.

“The Labor Commissioner itself is not equipped to handle all the cases we’re seeing in California today,” Gonzalez said. “We’re not fine with taking away the right of employees to sue.”

A federal judge on Monday temporarily blocked California from enforcing a new law that would have banned federal immigration agents from wearing masks during immigration sweeps.

U.S. District Judge Christina Snyder ruled that the state could not enforce the facial-covering provision of SB 627, the No Secret Police Act, while a legal challenge brought by the federal government moved forward. That lawsuit argued that SB 627 conflicted with federal authority and would improperly limit how federal agents could do their jobs.

The backstory

The law banning facial coverings took effect Jan. 1 and had already sparked confusion and backlash in Los Angeles after Los Angeles Police Department Chief Jim McDonnell said officers would not enforce the ban. McDonnell called the law bad policy and said enforcing it could put officers and the public at risk.

McDonnell’s statements drew sharp criticism from local elected officials, the authors of the laws, and immigration law attorneys and advocates.

The federal government sued California last year, arguing that SB 627 and a second law, SB 805, known as the No Vigilantes Act, unlawfully interfered with federal immigration enforcement. SB 627 sought, in part, to make it illegal for most officers, including federal agents, to conduct law enforcement operations while wearing masks. SB 805, in part, required agents to identify themselves.

About the ruling

Snyder ruled that the mask ban inconsistently applied to some law enforcement officers and not others, which is one of the reasons why the judge temporarily blocked it.

Federal attorneys had argued that agents should be allowed to wear masks for their safety against harassment and assault, such as doxxing. Snyder disagreed, writing that while federal agents and other public figures face security risks, masks were not essential for performing their duties.

“Security concerns exist for federal law enforcement officers with and without masks,” Snyder wrote. “If anything, the Court finds that the presence of masked and unidentifiable individuals, including law enforcement, is more likely to heighten the sense of insecurity for all.”

Reaction to the ruling

One of the law’s authors, Sen. Scott Wiener, D-San Francisco, announced Monday afternoon that he would be introducing new legislation aimed at revising the original law to apply to state officers it previously exempted. He characterized the ruling as a win and vowed to continue efforts to unmask federal agents.

“Now that the Court has made clear that state officers must be included, I am immediately introducing new legislation to include state officers,” Wiener said in a prepared statement, adding: “We will unmask these thugs and hold them accountable. Full stop.”

What's next

Monday’s ruling still required enforcement of SB 627 and SB 805’s remaining provisions, including that officers identify themselves. It also protected the pathway for civilians to directly sue agents for misconduct.

This temporary order will remain in effect until the federal case is resolved. The Department of Homeland Security did not immediately respond to requests for comment. This story will update if it does.

A new report from L.A. County offers a closer look at the economic damage to the region caused by federal immigration enforcement — and at the neighborhoods most affected.

The analysis, compiled by the Los Angeles County Department of Economic Opportunity and Los Angeles County Economic Development Corporation, identified the neighborhoods hardest hit by ICE, and found that they were more economically precarious.

Researchers determined that the most targeted ZIP code in the county is 91402, which spans Mission Hills, Panorama City and North Hills in the San Fernando Valley.

The report, which was commissioned by the county Board of Supervisors, also found that many small businesses county-wide have lost revenue and customers since ICE ramped up its presence in Los Angeles last year.

The Department of Homeland Security has detained more than 10,000 people in the L.A.-area since June, according to numbers released in December. Its aggressive deportation campaign has altered daily life in Los Angeles, where nearly one in five people is undocumented or lives with someone who is undocumented.

The report lays out the ripple effect of that campaign on communities, local businesses, and workers, and its uneven influence on the region as a whole.

Vulnerable neighborhoods

The survey created an index of most vulnerable areas.

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Courtesy L.A. County Economic Development Corporation

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The report lays out the economic consequences for communities repeatedly hit by ICE sweeps.

The Los Angeles County Economic Development Corporation, a nonprofit research group, used census data and reports on detentions from the Los Angeles Rapid Response Network to assess how vulnerable each L.A. County ZIP code was to immigration enforcement.

Researchers looked at four other factors for each ZIP code: shares of foreign-born population from Latin America, renter households, Spanish-speaking households and non-citizen workforce.

The 10 most vulnerable ZIP codes, they determined, are primarily in working class, immigrant neighborhoods including Bell, Pico Rivera and Southeast L.A.

Researchers used employment data for the county and found that those ZIP codes were over-represented in industries, including manufacturing and retail, which have a significant number of undocumented workers. Businesses in these neighborhoods also tended to have fewer employees on average compared to the rest of the county, and employees were paid less.

"Taken together, these exhibits show that areas facing heightened immigration enforcement differ from the rest of Los Angeles County and appear more economically vulnerable," the report states.

Declined revenue, less foot traffic

Researchers also distributed a survey to small businesses county-wide to assess how federal immigration enforcement has affected the communities they operate in and their bottom lines since summer.

More than 200 small businesses responded. Most reported having fewer than 10 employees, and the majority were in industries like restaurants, retail, professional or personal services and manufacturing.

The majority of respondents — 82% — reported being negatively affected by federal immigration enforcement. Around half reported lost regular customers, less foot traffic or reduced daily sales. Around a quarter reported temporary closures due to concerns from community members.

Many surveyed business owners reported a climate of fear that has led people to stay home and avoid certain places altogether.

"Businesses reported that customers expressed fear about their location, that customers asked about safety in the neighborhood, and that customers avoided shopping or dining in their neighborhood," the report states.

Undocumented workers generate 17% of county's economic activity

No corner of Los Angeles is exempt to the ongoing immigration sweeps that have become a new reality for the region. Nearly 950,000 undocumented immigrants live in L.A. County, according to recent estimates. That's more than 9% of people in the county who lack legal status.

Undocumented workers also play a huge role in many of L.A.'s key industries. Recent research from the USC Equity Research Institute estimates that 37% of cleaning and maintenance workers and 25% of food preparation and service workers in L.A. County are undocumented.

The industry with the highest percentage of undocumented workers is construction, at 40%.

The county's undocumented population together generates just under $240 billion in economic output, according to the county's report. That's around 17% of the county's total economic activity.

The Los Angeles Unified School District rescheduled a Tuesday meeting where the board was expected to vote on layoffs as part of a larger plan to cut spending.

“The district has adjusted the date of the upcoming board meeting to ensure adequate time for preparation, public engagement, and responsible deliberation on items of significant impact and interest to our workforce and community,” an LAUSD spokesperson wrote in a statement to LAist.

They wrote the proposed reduction in force would be presented at a “future meeting.” Tuesday’s meeting is currently re-scheduled for Tuesday, Feb. 17.

In a Friday letter, the unions representing LAUSD teachers, support staff and principals asked the board to delay the RIF vote until there is more information available about state funding and the public has more time to understand the proposed cuts.

“The notion that these are dark times for education requiring harmful cuts when there are record high state revenues is fearmongering,” the union letter reads.

LAUSD's financial challenges

For the last two years, the district has relied on reserves to backfill a multi-billion-dollar deficit. That deficit comes enrollment has declined steeply but expenses have not. There are more than 40% fewer students compared to the early 2000s. At the same time, as costs have increased, the district has not closed schools or significantly reduced staff. LAUSD hired more staff to support students during the pandemic, and now the federal relief dollars that initially funded those positions are gone.

The layoff vote is part of a $1.4 billion “fiscal stabilization plan.” Reductions in force are proposed for several categories including “un-funded” positions, central office staff, and at schools that support higher needs students.

LAUSD must vote on the reduction in force before March 15, the deadline for California school districts to notify staff they may be laid off.

 “It is not a foregone conclusion that people will lose jobs,” said Superintendent Alberto Carvalho at a Jan. 20 board meeting. For example, he said staff may be reassigned to vacant positions or given the opportunity to transfer to another school.

Where are the plan details?

At that same meeting, several board members pressed LAUSD staff for more details.

“When are we going to know the central office reductions? When are we going to know how many of those [there] are?” Karla Griego, a board member who represents District 5, asked, adding: “In a couple of weeks, I hope.”

“No, sooner,” responded Saman Bravo-Karimi, LAUSD's chief financial officer. Bravo-Karimi said the board would be provided with the number of positions impacted and their job classifications.

LAist requested information about the proposed layoffs last week and was told by a district spokesperson that the information would not be available until the board materials were publicly posted.

California’s Brown Act requires public agencies, including school districts, to post information about their regular meetings, including a description of each matter to be discussed, at least 72 hours in advance. Some agencies opt to publish the information even earlier.

No materials related to the Feb. 10 meeting were posted by that 72-hour deadline, and the meeting was rescheduled Sunday.

LAist reached out to Scott Schmerelson, LAUSD board president, who represents District 3, to discuss the delayed meeting. As of Monday evening Schmerelson had not responded.

Weigh in on LAUSD’s planned layoffs

The next meeting where the board could vote on the layoff proposal is Tuesday, Feb. 17. The agenda for the meeting must be publicly posted by Saturday, Feb. 14 at 10 a.m.— 72 hours before the start of the meeting. Sign up to get the agendas emailed here.