On September 30, Governor Newsom signed AB 1947, which extends the statute of limitations for DLSE complaints and authorizes courts to award reasonable attorney’s fees to a plaintiff who brings a successful action for a violation of Section 1102.5 of the Labor Code. The bill’s provisions take effect January 1, 2021. Learn more about how AB 1947 affects California businesses and workers below.

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Extended Statute of Limitations

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California Labor Code Section 98.7 currently allows individuals who believe that they have been discharged or otherwise discriminated against in violation of any law under the Labor Commissioner’s jurisdiction to file a complaint with the California Division of Labor Standards Enforcement (DLSE) within six months after the violation occurred. Assembly Bill (AB) 1947 extends this deadline to one year after the occurrence of the violation.

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Changes to Labor Code Section 1102.5

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Labor Code Section 1102.5 prohibits employers from retaliating against employees for reporting employer violations or noncompliance with local, state, or federal statutes and regulations. Under this section, employees must only have “reasonable cause to believe” their employer violated the aforementioned laws to file a complaint.

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AB 1947 amends Section 1102.5 to authorize courts to award plaintiffs with reasonable attorney’s fees if they are successful in retaliating against violations of Section 1102.5 in court. Therefore, employers may be liable to pay employees’ attorney fees when they face suits arising from Section 1102.5 violations.

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Implications for California Employers

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Critics of AB 1947 suggest that the new bill adds financial incentivizes for employees to litigate Section 1102.5 claims instead of utilizing the DLSE’s more efficient investigation procedures. The bill will likely also heighten the DLSE’s enforcement activities by doubling the statute of limitations for such claims.

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Resources for California Employers

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View the full text of AB 1947 here.

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View the full text of Labor Code Section 1102.5 here.

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View the full text of Labor Code Section 98.7 here.

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If you have questions regarding the application of AB 1947 to your business, please contact one of the following attorneys in The Maloney Firm’s Employment Law Department: Patrick Maloney, Lisa Von Eschen, Samantha Botros, or Nicholas Grether.

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