The return of the Industrial Welfare Commission, what does that mean for employers?

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In the recently passed 2023 California Budget Bill, signed by Gavin Newsom on July 10, 2023, $3 Million was allocated to reviving the Industrial Welfare Commission (IWC). Originally established in 1913, the IWC was de-funded in 2004, eliminating the commission while leaving the 17 wage orders intact.

Responsible for protecting wages and working conditions for California employees, the wage orders were created to establish standards by industry.

Every employer in California is governed by one of these wage orders, and each wage order has specific guidelines regarding pay, working hours, and conditions.

Employers should know which wage order applies to their organization and ensure that their pay policies and practices meet the wage order requirements. Organizations who violate the IWC wage orders can face action from the Department of Labor Standards Enforcement, or potential legal action from the employee(s).

So why reconvene the Commission now? The re-funded commission has been tasked with reviewing and revising the existing standards, which haven’t been updated in almost 20 years. As part of the legislation the commission will convene by January 2024, and have been tasked with making recommendations for changes to the standards on wages, hours, and working conditions, to be adopted by October 31, 2024.

Any changes made by the commission will certainly be favorable to the workers, with it’s initial focus likely to be on wage order 5, Public Housekeeping, which includes the largest proportion of low-wage earners, including fast food workers, according to the Society for Human Resource Management [https://www.shrm.org/ResourcesAndTools/legal-and-compliance/state-

and-local-updates/Pages/california-IWC-refunded.aspx?].

Although there isn’t much employers can do now except wait and watch, knowing there are changes coming provides an opportunity to audit current practices to make sure they are in compliance with the standards that already exist. Schedule a free consultation to see how Moving Mountains HR Consulting can help.