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The Honorable Arnold Schwarzenegger Governor, State of California State Capitol Sacramento, CA 95814 Dear Governor Schwarzenegger: I request your VETO of AB 448 (Arambula) which would substantially increase penalties that can be awarded against employers in administrative minimum wage claims filed with the Labor Commissioner. Specifically, AB 448 would allow liquidated damages to be awarded against employers in not just court actions but also administrative actions. We oppose this expansion of liquidated damages for the following reasons: First, the availability of liquidated damages in minimum wage claims is unjustified and oppressive. Liquidated damages are a type of punitive damages, equal to the amount of underpaid wages plus interest, that are awarded in addition to: 1) the underpaid wages owed; 2) interest on the underpaid wages; and 3) statutory penalties of $100 or $250 per pay period. Given that apart from liquidated damages, employers must make the employee whole and pay a substantial penalty, yet another penalty is unjustified. This is especially true in light of the fact that California employers are already subject to an expansive number of wage and hour laws and regulations and substantial penalties for each. Second, I believe AB 448’s expansion of liquidated damages to administrative claims will be especially harmful to small businesses. While AB 448 aims to benefit low income workers, it does not consider low income small businesses. Workers who make administrative claims under Labor Code Section 98 have their claims prosecuted at no cost to them by the state. The employer, on the other hand, must expend time and resources to respond to the claim, even when the underpayment is inadvertent or not willful. For these and other reasons, I respectfully request your VETO on AB 448.