2023-104 The California Labor Commissioner’s Office
Inadequate Staffing and Poor Oversight Have Weakened Protections for Workers
Published: May 29, 2024Report Number: 2023-104
Audit Recommendations Disclosure
When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor’s assessment of auditee’s response based on our review of the supporting documentation.
Recommendation to the Legislature
Recommendation 1
To monitor the LCO’s progress in reducing its backlog of claims and filling vacant positions, the Legislature should require the LCO to report annually to the Legislature on its progress in both of these areas.
Status
pending
Recommendations to the California Labor Commissioner’s Office
Recommendation 2
To allow it to accurately analyze and report on wage claim data entered into the case management system, the LCO should accomplish the following by December 2024, require all staff to use the existing fields in the case management system to capture the date they determine whether a hearing is needed so that staff can track and monitor compliance with the 30-day statutory requirement for making such a determination and notifying the parties of whether a claim will be referred to a hearing.
Status:
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
This requirement has been established. To ensure consistent implementation, LCO has taken the following steps: The WCA Unit has created 10 new supervisor positions, resulting in two supervisor positions in most field offices. Ultimately, LCO will have two supervisors in each field office to provide more direct support and oversight to hearing officers and conference deputies. Additionally, IT is creating mandatory fields to ensure LCO staff cannot proceed with a wage claim until all required fields are completed. Data analysts are being established in every field office to audit and ensure data accuracy. Furthermore, an additional management dashboard is being created for all new wage cases, allowing supervisors to review and ensure fields are completed and the case is efficiently moving through the wage claim process.
Recommendation 3
To allow it to accurately analyze and report on wage claim data entered into the case management system, the LCO should accomplish the following by December 2024, require all staff to consistently enter the date that claims are referred to the Enforcement Unit.
Status
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
This requirement has been established. To ensure consistent implementation, the LCO has taken the following steps: In addition to the solutions noted in #2 above, the LCO is working with IT to automate additional fields including date of referral and develop training for staff on the new processes. This will allow tracking and monitoring of cases referred to the Judgment Enforcement Unit (JEU). With these changes, the referrals to JEU should include all documentation needed to move forward with the enforcement action. Finally, IT will create coordinating fields to ensure consistent data entry and tracking.
Recommendation 4
To allow it to accurately analyze and report on wage claim data entered into the case management system, the LCO should accomplish the following by December 2024, modify the case management system to properly identify and capture all settlement conference dates to ensure that multiple records are not created when a claim has multiple conferences and to allow tracking and monitoring of conferences and hearings independently.
Status:
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
This requirement has been established. To ensure consistent implementation, the LCO has taken the following steps: In addition to the solution noted in #2 above, the LCO redirected a position to serve as a full-time IT position under a compelling management needs assignment (CMNA). This position has been filled by a WCA expert, who is working with system experts to lead and implement the CSA’s recommendations and developing strategies aimed at addressing the backlog.
Recommendation 5
To allow it to accurately analyze and report on wage claim data entered into the case management system, the LCO should accomplish the following by December 2024, work with DIR to ensure that its process improvement initiative to redesign the case management system is completed in a timely manner and that the necessary staffing levels at the LCO headquarters and each field office exist to ensure that these initiatives have appropriate levels of support and supervisory oversight.
Status:
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
The LCO engaged a vendor to perform a Business Process Reengineering (BPR) effort to identify inefficiencies and improve the LCO system operations. The BPR provided guides to aid the LCO with automating processes and assessing how to prioritize training areas and tools. LCO’s IT WCA expert is meeting frequently with DIR’s IT leaders to evaluate priorities and to resolve any implementation concerns on existing WCA projects and IT Salesforce change request relevant to improving the system consistent with the BPR recommendations in alignment with the Auditor’s recommendations.
Recommendation 6
To allow it to accurately analyze and report on wage claim data entered into the case management system, the LCO should accomplish the following by December 2024, develop and implement a regular review process for supervisory staff so that they ensure that staff have entered all necessary data, including dates, accurately.
Status:
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
In addition to the solution noted in #2 above, the IT WCA expert filled under a CMNA (see #4) is working to build the LCO team’s capacity on Salesforce by providing extensive training and troubleshooting support for any issues that affect the WCA process. Additionally, data analysts will be established in every field office to audit data, troubleshoot, and make necessary corrections in real time. Statewide expectation standards for all regional managers are being created and implemented to ensure uniformity and clarity among supervisors and staff. Furthermore, an additional management dashboard is being created for supervisors to review and ensure data compliance and accuracy among staff in real time.
Recommendation 7
To improve employee retention and to reduce the number of vacancies, the LCO should identify by December 2024 whether it will need any additional analyses of employee salaries following the completion of the classification and compensation studies. If so, the LCO should prepare and execute a plan for conducting such analyses and, if appropriate, request salary increases for relevant positions from CalHR as soon as possible.
Status:
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
In collaboration with DIR, the LCO completed a classification study of the Industrial Relations Representative (IRR) and Deputy Labor Commissioner (DLC) series. The results of the study have been submitted to CalHR for consideration. Additionally, DIR has an active contract for a workload and salary study, which will support LCO studies.
Recommendation 8
To shorten its hiring process and reduce the number of canceled recruitments, the LCO should do the following by July 2024, reduce the number of positions it includes in a single recruitment so that the interview process can be completed in a timely manner.
Status:
Not fully implemented
Date of implementation:
8/15/24
Evaluator assessment status:
Pending
60-Day Agency Response
The LCO has worked with HR to streamline the recruitment process by continuing to reduce recruitments to one vacant position per Job Control (JC) number and reducing the number of vacant positions per interview panel.
Recommendation 9
To shorten its hiring process and reduce the number of canceled recruitments, the LCO should do the following by July 2024, work with DIR to improve its applicant screening criteria so that candidates selected for a position are more likely to meet the minimum qualifications for the position.
Status:
pending
Date of implementation:
11/30/2024
Evaluator assessment status:
Pending
60-Day Agency Response
The LCO is working closely with HR to adjust processes that may mitigate minimum qualification withholds. The outcome of the recent classification study should also help alleviate this issue.
Recommendation 10
To shorten its hiring process and reduce the number of canceled recruitments, the LCO should do the following by July 2024, to the extent possible, re-use duty statements, interview questions, and other hiring documentation that DIR has already approved to avoid delays in approvals for the various stages of the hiring process.
Status:
Not fully implemented
Date of implementation:
8/15/2024
Evaluator assessment status:
Pending
60-Day Agency Response
To streamline the hiring process, the LCO will no longer recreate new hiring documents for each recruitment. HR has developed standardized duty statements per position type, a bank of pre-approved interview questions with scoring criteria, and justification memorandum templates.
Recommendation 11
To adequately identify the staffing levels necessary to resolve both newly filed and backlogged claims, the LCO should perform a workload assessment by December 2024 that includes using the alternative methods for determining whether a hearing is to be held, identify for each position the number of staff needed to address the backlog of claims. This assessment should take into account any new claims the LCO expects to receive during a year, extrapolating from historical data and the statutory time frames required for each stage of claim processing.
Status:
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
As mentioned in #7 above, the LCO has completed a classification study for two job series and is awaiting a workload study and finalization of the salary study. Once all studies are completed, the LCO will align the results with the historical data collected on claims received to identify adequate staffing at all levels within the organization.
Recommendation 12
To adequately identify the staffing levels necessary to resolve both newly filed and backlogged claims, the LCO should perform a workload assessment by December 2024 that includes identifying the number and type of supervisors required to support and oversee field office staff and operations.
Status:
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
Once the staffing studies are completed and results are aligned with historical data, LCO will work with HR to identify the appropriate number of supervisors in each area.
Recommendation 13
If the LCO believes that it cannot meet the required time frames for certain claims because of their complexity, the LCO should assess the extent to which it cannot meet statutory time frames. It should then work with the Legislature to revise claim processing time frames accordingly.
Status:
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
LCO will analyze various types of claims, ranging from straightforward single-issue claims to extremely complex multi-issue and employer claims, to determine the adequate time frames these types of claims require. This analysis will include an evaluation to identify contributing factors to case complexity or trends that affect the time frames for these cases. LCO will report these findings in the annual report required under Labor Code section 96.1 for the Legislature’s review.
Recommendation 14
To the extent budgetarily feasible and to ensure that it has the staffing necessary to process all claims within the statutory time frames, the LCO should fill all vacant positions at field offices for the Adjudication Unit. It should then request additional staff according to the results of its workload assessment.
Status:
Not fully implemented
Date of implementation:
11/30/2024
Evaluator assessment status:
Pending
60-Day Agency Response
The LCO has implemented strategies to address these challenges by strengthening infrastructure and increasing recruitment efforts. The Hiring Unit has grown from 3 professionals to 16 (3 managers and 13 analysts), which will improve the quality of recruitment packets and decrease processing times. Additionally, the Career Pathway Program (CPP) has been expanded to California State University Dominguez Hills. Alongside the existing program at UCLA, there will be regular workshops at CSUDH during the 2024/2025 academic year. The primary objectives of the CPP are to demystify the state hiring process and introduce potential applicants to a career at LCO.
Recommendation 15
To ensure that all field office supervisors manage the office’s workload in an effective and efficient manner, the LCO should develop procedures by December 2024 for monitoring whether field office supervisors are assigning claims in a timely and appropriate manner.
Status:
Not fully implemented
Date of implementation:
12/31/2024
Evaluator assessment status:
Pending
60-Day Agency Response
IT will create mandatory fields so LCO staff cannot proceed with a wage claim until all required fields are accurately filled out. The LCO will continue hiring supervisors within the WCA unit to provide uniform statewide training, ensuring staff are properly trained to thoroughly and accurately complete all required fields to move through the WCA process. Additionally, the LCO is developing a dashboard for regional managers to review case assignments and ensure cases are equitably and promptly assigned to staff. Regional managers will also be expected to fulfill the expectations outlined in the LCO regional manager expectation memo.
Recommendation 16
To ensure that it appropriately trains staff in all classifications to process wage claims in accordance with statutory time frames, the LCO should, by November 2024, centralize the tracking and retention of all training records.
Status:
Not fully implemented
Date of implementation:
11/30/2024
Evaluator assessment status:
Pending
60-Day Agency Response
The LCO is creating a dedicated training unit at its headquarters to ensure more standardized and uniform training is provided to staff statewide. This will also establish a centralized database for training records and materials. Additionally, a uniform policy will be created with DIR to ensure supervisors and managers can access and monitor staff training records. The LCO is collaborating with the DIR Training Unit to modernize training modules by including e-learning components and a process to centralize and document the completion of trainings.
Recommendation 17
To ensure that it appropriately trains staff in all classifications to process wage claims in accordance with statutory time frames, the LCO should, by November 2024, develop procedures for regularly reviewing all training records to ensure that all staff are meeting training standards.
Status:
Not fully implemented
Date of implementation:
11/30/2024
Evaluator assessment status:
Pending
60-Day Agency Response
In addition to the solution noted in #16 above, the LCO will develop procedures for reviewing all training records and ensuring staff are up to date with all mandatory trainings. The LCO is also collaborating with DIR to engage a vendor to assist in streamlining training material and providing on-demand trainings.
Recommendation 18
To ensure that it appropriately trains staff in all classifications to process wage claims in accordance with statutory time frames, the LCO should, by May 2025, ensure that its training unit has adequate number of staff dedicated to training only.
Status:
Not fully implemented
Date of implementation:
5/31/2025
Evaluator assessment status:
Pending
60-Day Agency Response
In addition to the solution noted in #16 and #17 above, the LCO is creating capacity to staff a centralized training unit focused on training and ensuring staff are compliant with all necessary trainings.
Recommendation 19
To ensure that it has complete and accurate data to measure the effectiveness of its Enforcement Unit, the LCO should ensure by May 2025 that its Adjudication Unit’s case management system captures the closure date of claims referred to the Enforcement Unit for which full payment has been collected.
Status:
Not fully implemented
Date of implementation:
5/31/2025
Evaluator assessment status:
Pending
60-Day Agency Response
In addition to the solution noted in #2 above, the LCO is creating procedures within the Judgement Enforcement Unit (JEU) to ensure cases that are referred include necessary information, like dates and amounts of payments collected.
Recommendation 20
To maximize its judgment enforcement efforts, the LCO should, by July 2024, develop operating procedures for Enforcement Unit staff, outlining how to determine appropriate judgment collection methods to use for a claim and requiring supervisors to ensure that staff implement all applicable methods.
Status:
Not fully implemented
Date of implementation:
11/30/2024
Evaluator assessment status:
Pending
60-Day Agency Response
The LCO is developing a standardized operating procedure (SOP) for WCA cases referred to and handled by JEU, with LCO staff receiving in-depth training to reinforce these SOPs. Additionally, mandatory statewide training will be provided for all WCA and JEU staff on all judgment collection methods and practices. Current deputies from every LCO unit and within each field office are being trained as recovery specialists to meet the JEU needs from WCA referrals.
Recommendation 21
To maximize its judgment enforcement efforts, the LCO should, by November 2024, determine whether certain collection methods similar to the mechanic’s lien allowed in the construction industry would be helpful in increasing judgement collection. If so, it should develop and present a proposal to the Legislature that would allow the use of such methods.
Status:
Not fully implemented
Date of implementation:
11/30/2024
Evaluator assessment status:
Pending
60-Day Agency Response
The LCO will review various collection methods to determine which enforcement methods are needed to supplement and strengthen wage recovery efforts. For example, the LCO will evaluate the efficacy of how and to what degree mechanic liens could benefit or increase recovery efforts in certain low-wage industries. This will also include an analysis of the LCO staff required to implement these liens in these low-wage industries.