Opinion ID: 2630272
Heading Depth: 3
Heading Rank: 5

Heading: Judicial Deference to the IWC's Orders.

Text: (6) The Legislature and the voters have repeatedly demanded the courts' deference to the IWC's authority and orders. In the original 1913 act, the Legislature narrowly confined the scope of judicial review of the commission's orders, making its findings of fact conclusive in the absence of fraud and declaring that the minimum wage fixed by the commission was presumed to be reasonable and lawful. (Stats. 1913, ch. 324, § 12, p. 636; see now Lab. Code, §§ 1185 [IWC's orders shall be valid and operative], 1187 [IWC's findings of fact are conclusive in the absence of fraud].) At the same time, as noted, the Legislature enacted and successfully proposed to the voters a constitutional amendment approving the IWC's creation and providing that no part of the state Constitution would be construed as limiting the Legislature's authority in the matter. (Cal. Const., former article XX, section 17 1/2; see, ante, at p. 54, fn. 20.) The ballot argument in favor of the measure explained the Assembly had proposed the amendment to make sure that after the commission's work is done, its findings and rulings can not be assailed and made useless by the state courts declaring this [the 1913] act unconstitutional. (Ballot Pamp., supra, argument in favor of Assem. Const. Amend. No. 90, at p. 29.) In 1949, the Legislature provided that the IWC's orders shall be valid and operative and exempt from the Administrative Procedure Act (Gov. Code, § 11340 et seq.). (Lab. Code, § 1185; Stats. 1949, ch. 1454, § 12, p. 2538, as amended.) In 1976, as noted, the voters again amended the Constitution to confirm in even stronger terms that [t]he Legislature may provide for minimum wages and for the general welfare of employees and for those purposes may confer on a commission legislative, executive, and judicial powers.  (Cal. Const., art. XIV, § 1, italics added; see, ante, p. 54, fn. 20; see generally Industrial Welfare Com. v. Superior Court, supra, 27 Cal.3d 690, 701.) Obeying these formal expressions of legislative and voter intent, the courts have shown the IWC's wage orders extraordinary deference, both in upholding their validity and in enforcing their specific terms. Concerning the wage orders' validity, [j]udicial authorities have repeatedly emphasized that in fulfilling its broad statutory mandate, the IWC engages in a quasi-legislative endeavor, a task which necessarily and properly requires the commission's exercise of a considerable degree of policy-making judgment and discretion. ( Industrial Welfare Com. v. Superior Court, supra, 27 Cal.3d 690, 702.) Because of the quasi-legislative nature of the IWC's authority, the judiciary has recognized that its review of the commission's wage orders is properly circumscribed. . . . `A reviewing court does not superimpose its own policy judgment upon a quasi-legislative agency in the absence of an arbitrary decision . . . .' ( Ibid., quoting Rivera v. Division of Industrial Welfare (1968) 265 Cal.App.2d 576, 594 [71 Cal.Rptr. 739]) Moreover, past decisions . . . teach that in light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection. ( Industrial Welfare Com. v. Superior Court, supra, at p. 702.) (7) Concerning the specific terms of wage orders, we have explained that [ t ] he power to fix [ the minimum ] wage does not confine the [ IWC ] to that single act. It may adopt rules to make it effective.  ( Cal. Drive-in Restaurant Assn. v. Clark (1943) 22 Cal.2d 287, 303 [140 P.2d 657], italics added.) The power to provide safeguards to insure the receipt of the minimum wage and to prevent evasion and subterfuge, is necessarily an implied power flowing from the power to fix a minimum wage delegated to the commission. [¶] It is true that an administrative agency may not, under the guise of its rule making power, abridge or enlarge its authority or exceed the powers given to it by the statute, the source of its power. [Citations.] However, `the authority of an administrative board or officer . . . to adopt reasonable rules and regulations which are deemed necessary to the due and efficient exercise of the powers expressly granted cannot be questioned. This authority is implied from the power granted.' ( Id., at pp. 302-303, quoting Bank of Italy v. Johnson (1926) 200 Cal. 1, 20 [251 P. 784].) (8) Consistently with these deferential principles of review, we have repeatedly enforced definitional provisions the IWC has deemed necessary, in the exercise of its statutory and constitutional authority (§ 1173; Cal. Const., art. XIV, § 1), to make its wage orders effective, to ensure that wages are actually received, and to prevent evasion and subterfuge. ( Cal. Drive-in Restaurant Assn. v. Clark, supra, 22 Cal.2d 287, 302-303.) Such provisions have, for example, excluded restaurant servers' tips from the legal minimum wage ( id., at p. 290); defined `[h]ours worked' as including the time during which an employee is subject to the control of an employer, even if travelling on the employer's bus and not actually working (e.g., Wage Order No. 14, Cal. Code Regs., tit. 8, § 11140, subd. 2(G); see Morillion v. Royal Packing Co., supra, 22 Cal.4th 575, 581-595); and required that an `[o]utside salesperson,' to be exempt from overtime compensation, [33] must regularly work[] more than half the working time away from the employer's place of business in sales activities (IWC wage order No. 7-2001, Cal. Code Regs., tit. 8, § 11070, subd. (2)(J); see Ramirez v. Yosemite Water Co., supra, 20 Cal.4th 785, 794-803). Such provisions constitute valid exercises of the IWC's authority because, and to the extent, they have a direct relation to minimum wages ( Cal. Drive-in Restaurant Assn. v. Clark, supra, at p. 302) and are reasonably necessary to effectuate the purposes of the statute (see Ramirez v. Yosemite Water Co., supra, 20 Cal.4th 785, 800; see also Cal. Drive-in Restaurant Assn. v. Clark, supra, at p. 302). Courts must enforce such provisions in wage actions because, as we have explained, an employee who sues to recover unpaid minimum wages under section 1194 actually sues to enforce the applicable wage order. Only by deferring to wage orders' definitional provisions do we truly apply section 1194 according to its terms by enforcing the legal minimum wage ( id., subd. (a)).