What Is the Industrial Welfare Commission?

What is the Industrial Welfare Commission (IWC) and why is it important now? The IWC has been inoperative for many years and not funded – until now. The June 24, 2023 amendments to AB/SB 102 (Budget Bill Junior) would fund the IWC with $3 million.

In addition to the $3 million in funding, the following would be imposed on the IWC:

Of the amount appropriated in Schedule (5), $3,000,000 shall be available for the Industrial Welfare Commission to convene industry-specific wage boards and adopt orders specific to wages, hours, and working conditions in such industries, provided that any such orders shall not include any standards that are less protective than existing state law. The commission shall prioritize for consideration industries in which more than 10 percent of workers are at or below the federal poverty level. The Industrial Welfare Commission shall convene by January 1, 2024, with any final recommendations for wages, hours, and working conditions in new wage orders adopted by October 31, 2024.

Labor Code Division 1, Chapter 2 establishes the Industrial Welfare Commission. Section 70 provides that there is in the DIR the IWC, which consists of five members who are appointed by the Governor with the consent of the State Senate. Section 70.1 provides that the IWC is composed of two representatives of organized labor, two representatives of employers, and one representative of the general public. The membership includes members of both sexes.

Section 71 specifies that the term of office for the IWC’s members is four years and that the members hold office until the appointment and qualification of their successors. The Industrial Welfare Commission was established to regulate wages, hours and working conditions in California. IWC wage orders must be posted by all employers in an area frequented by employees, where they may be easily read during the workday. 

However, the IWC is currently not in operation because it has not received funding in the state budget. Instead, the Division of Labor Standards Enforcement (DLSE) enforces the provisions of the wage orders. This may change if the Governor signs AB/SB 102 and does not reduce or eliminate the $3 million in funding.