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Date: |
October 27, 2026 |
04 |
Title
Ratify Application and Accept Funding Related to California Department of Industrial Relations Workers’ Rights Enforcement Grant Program (Districts: All)
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Overview
The State of California (State) established the Workers’ Rights Enforcement Grant Program to support eligible public prosecutors in enforcing state labor laws and combating wage theft and other exploitative labor practices. In 2026, the State allocated $9 million annually to the California Department of Industrial Relations (DIR) to continue administering the Workers’ Rights Enforcement Grant Program. For the July 1, 2026, through June 30, 2027, grant period, approximately $8.55 million is available statewide to eligible public prosecutors, with individual applicants eligible to receive up to $1 million. Grant funds may be used for staff salaries and benefits supporting workers’ rights enforcement activities and required annual audit costs.
The County of San Diego (County), through the Office of County Counsel (OCC) and the Office of Labor Standards and Enforcement (OLSE), has developed a coordinated workers’ rights enforcement framework to investigate labor law violations, recover unpaid wages, promote compliance, and connect workers with enforcement resources. Through participation in prior Workers’ Rights Enforcement Grant cycles, OCC and OLSE expanded the County’s ability to investigate wage theft allegations, develop cases for enforcement, coordinate with community and government partners, and pursue recovery of wages owed to workers. OLSE also provides employers with education, technical assistance, and compliance resources to help businesses understand their obligations under applicable labor laws and prevent violations before they occur, while promoting consistent enforcement of labor standards throughout San Diego County.
Today’s action requests that the Board of Supervisors (Board) ratify OCC’s submission of the grant application to DIR for the Workers’ Rights Enforcement Grant Program for the project period of July 1, 2026, through June 30, 2027. It would also authorize OCC to apply for such grants in future years through July 2030. The requested grant amount is up to $1,000,000 annually. Today’s action would also authorize County Counsel, or designee, to accept funding, if awarded, and execute required grant-related documents, including agreements, extensions, amendments, and revisions that do not materially alter the services or funding levels.
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Recommendation by Chief Administrative Officer:
1) Waive Board Policy B-29, Fees, Grants, Revenue Contracts - Department Responsibility for Cost Recovery, which requires prior approval of grant applications and full cost recovery for grants, as this grant program does not recover full cost.
2) Ratify the submission of the grant application to the California Department of Industrial Relations, Labor Commissioner’s Office, for the Workers’ Rights Enforcement Grant Program for the project period July 1, 2026, through June 30, 2027, and, provided there are no material changes to the grant terms and funding levels, authorize the Office of County Counsel to apply for future project period grants through July 31, 2030.
3) Authorize County Counsel, or designee, in this year and through July 31, 2030, to execute all required grant and grant-related documents, including agreements and any annual extensions, amendments, and/or revisions thereof that do not materially impact or alter the services or funding levels.
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Equity Impact Statement
Wage theft disproportionately impacts low-wage workers and workers who may face barriers to reporting workplace violations or accessing legal and enforcement resources. These barriers may include fear of retaliation, language access needs, limited knowledge of workplace rights, immigration-related concerns, and limited access to legal representation. These conditions can make workers experiencing wage theft less likely to report violations and more likely to experience difficulty recovering wages they have earned.
The Workers’ Rights Enforcement Grant supports the County of San Diego’s ability to address these barriers through increased investigative and enforcement capacity, stronger referral pathways, and partnerships with trusted community organizations and government agencies. Continued funding will help the Offices of Labor Standards and Enforcement and County Counsel improve access to enforcement resources, identify violations affecting vulnerable workers, pursue recovery of unpaid wages, and promote consistent enforcement of labor standards throughout San Diego County.
Sustainability Impact Statement
The proposed action supports economic, social, and health sustainability by strengthening the County of San Diego’s ability to ensure workers receive wages they have earned. Wage theft can undermine household financial stability and affect a worker’s ability to meet basic needs, including housing, food, transportation, childcare, and healthcare.
Strengthened enforcement also supports responsible employers by promoting consistent compliance with state labor laws and reducing the competitive advantage that can result when businesses reduce operating costs through unlawful employment practices. The proposed action therefore supports economic stability for workers and families while contributing to a fair and competitive business environment throughout San Diego County.
Fiscal Impact
There is no fiscal impact associated with the recommended items. If awarded, there will be future fiscal impacts and staff will return to the Board with recommendations for approval of additional appropriations and staffing, up to the awarded amount, and for any material changes to awarded grant funds, as necessary. Grant funds can only be spent on salaries and benefits and a mandatory audit, and therefore a waiver of Board Policy B-29 is requested because the funding does not reimburse overhead costs. These unrecovered costs are already incorporated in the current budget and funded by existing General Purpose Revenue. The public benefit for providing these services far outweighs the B-29 unrecoverable costs. At this time, there will be no change in net General Fund cost and no additional staff years.
Business Impact Statement
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Advisory Board Statement
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Background
The State of California established the Workers’ Rights Enforcement Grant Program to provide funding to eligible public prosecutors to enforce state labor laws and assist workers in combating wage theft, preventing unfair competition, and protecting state revenue. The program is administered by the California Department of Industrial Relations (DIR), Labor Commissioner’s Office. For the July 1, 2026, through June 30, 2027, grant period, $8,550,000 is available statewide to eligible public prosecutors, with a maximum award of $1,000,000 per applicant.
The County of San Diego (County), through the Office of County Counsel (OCC) and the Office of Labor Standards and Enforcement (OLSE), has developed a comprehensive civil workers’ rights enforcement program focused on addressing wage theft and other labor law violations, recovering unpaid wages for workers, and promoting fair competition for employers that comply with California labor laws. Under the prior Workers’ Rights Enforcement Grant, OCC and OLSE worked in partnership with the District Attorney’s Office, recognizing that not all wage theft and workers’ rights matters are appropriate for criminal prosecution and that civil enforcement provides an additional means of securing relief for impacted workers.
During the August 1, 2025, through July 31, 2026, grant period, OLSE, with the assistance of OCC, received 389 complaints, opened 42 wage theft investigations, and successfully recovered $339,012 in stolen wages for workers. Through the Wage Theft Enforcement Program, workers may report wage and labor violations directly to OLSE for investigation and, where appropriate, OLSE may work with employers to resolve claims and recover unpaid wages. During the reporting period, these efforts resulted in $80,521 in unpaid wages recovered for affected workers.
OLSE and OCC also use additional civil enforcement tools to address wage theft and support workers who have been unable to recover wages they are owed. Through the Good Faith Restaurant Owners Program and a related pilot with the Labor Commissioner’s Office, OLSE received 40 referrals, advanced nine cases for further action, and successfully resolved six cases, resulting in $13,754 recovered for workers. The County’s Workplace Justice Fund provides another recovery mechanism for workers who have obtained administrative wage judgments but have been unable to collect. During the reporting period, OLSE received 44 additional applications, approved ten, and successfully recovered 12 judgments totaling $220,058.
OCC and OLSE have also expanded the County’s ability to pursue strategic civil enforcement actions involving broader or systemic labor violations. During the grant period, OLSE, in partnership with OCC, filed a wage theft lawsuit related to the ACE Sushi matter alleging workers were misclassified as independent contractors and required to bear ordinary business expenses. This enforcement action demonstrates the County’s ability to pursue civil remedies involving alleged systemic labor violations that may affect multiple workers while promoting fair competition for employers that comply with California labor laws.
Education and outreach are integral components of OLSE’s enforcement strategy. During the grant period, OLSE conducted 102 outreach and community engagement events focused on wage theft prevention and labor standards compliance, reaching 3,882 workers and employers. These efforts included multilingual trainings, workshops, presentations, community events, and partnerships with community-based organizations, industry associations, and advocacy partners. In addition to connecting workers with enforcement resources, OLSE provides employers with education, technical assistance, and compliance guidance to help businesses understand and meet their obligations under applicable labor laws, respond to questions about labor standards requirements, and prevent violations before they occur. These efforts strengthen access to enforcement resources, support voluntary compliance, help responsible employers avoid unintentional violations, and promote consistent enforcement of labor standards throughout San Diego County.
If approved and awarded, the Workers’ Rights Enforcement Grant will allow OCC and OLSE to continue and expand the County’s civil workers’ rights enforcement program by supporting wage theft investigations, case development, civil enforcement, wage recovery, community partnerships, education, and outreach. Continued funding will build upon the County’s existing enforcement infrastructure and strengthen its capacity to investigate labor law violations, recover unpaid wages for workers, pursue appropriate civil remedies, promote compliance with state labor laws, and support fair competition for law-abiding employers throughout San Diego County.
Linkage To The County Of San Diego Strategic Plan
Today’s proposed action aligns with the Economic Opportunity, Justice, Community, and Health Strategic Initiatives in the County of San Diego’s 2026-2031 Strategic Plan by supporting economic stability, promoting equitable enforcement of labor standards, improving access to workplace protections, and strengthening the County’s ability to recover wages owed to workers. Continued workers’ rights enforcement also supports responsible businesses by promoting consistent compliance with labor standards and helping ensure that employers compete on a fair and lawful basis.
Respectfully submitted,
Ebony N. Shelton
Chief Administrative Officer
Attachment(s)
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