California budget bill includes a provision to reinstitute the dormant Industrial Welfare Commission (IWC), which would impact virtually every employer in the Golden State. The IWC would have the power to convene industry-specific wage boards to regulate the wages, hours, and working conditions in various industries through new orders, and the authority to issue subpoenas and conduct discovery. The IWC could enact rules and regulations through a quasi-legislative process not subject to APA oversight.

As happens this time every year in California, legislators and the governor are crafting a state budget for the upcoming fiscal year. The budget bill currently under consideration in Sacramento contains a startling and momentous provision: reinstatement of the California Industrial Welfare Commission (IWC), which in the past had regulated the wages, hours and working conditions of employees in California. The reestablishment of the IWC portends new and more burdensome minimum wage, overtime, meal and rest period and related obligations for employers.

A re-funded IWC could also potentially venture into new areas that have blossomed in the last 20 years in labor and employment law: joint employment, independent contractor status, predictive scheduling, leaves of absence, and the like.

The re-funding of the IWC suggests a desire on the part of some interests in the legislature to pursue changes through administrative action that would not be palatable in the legislative...

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