BILL ANALYSIS Ó
AB 2517
Page 1
Date of Hearing: May 25, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2517 (Eng) - As Amended: May 16, 2012
Policy Committee: Labor and
Employment Vote: 4-2
Judiciary 6-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill authorizes wage liens in the car wash industry against
the real and personal property of an employer for unpaid wages,
and makes changes to existing law related to mechanic liens.
Specifically, this bill:
1)Authorizes an employee to file a lien for the amount of wages,
other compensation and related penalties and damages owed on
all of the following:
a) Real and personal property owned by the employer that is
located within the state, with the exception of any
residential real property owned by the employer.
b) Real and personal property used in a commercial car wash
business upon which the employee performed work or bestowed
labor as part of his or her employment. Further authorizes
a lien to attach only for the time the employee performed
work on that property.
2)Requires the employee or his or her representative to record a
notice of lien with the county recorder in the county where
the real property is located, as specified. Further requires
the employee or his or representative to record a notice of
lien with the Secretary of State.
3)Authorizes a lien under these provisions to be used to recover
the entire compensation package agreed to be paid to the
employee, but not less than the amount required by law,
including wages and compensation required to be paid to other
persons or entities, as specified.
AB 2517
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FISCAL EFFECT
1)No direct state fiscal impact.
2)Indeterminate, likely minor costs to the courts due associated
with this measure.
SUMMARY CONTINUED
1)Specifies all liens established have equal priority and
requires funds resulting from the sale of property to be
divided proportionally among all lien claimants (assuming
there are insufficient funds to cover all liens), as
specified.
2)Authorizes an employee or his or her representative to recover
court costs and reasonable attorney's fees in a successful
action to enforce a lien.
3)Establishes a January 1, 2018 sunset for the provisions
related to wage liens for the cash wash industry. Further
requires any lien perfected under these provisions prior to
January 1, 2018 to remain in full force and effect regardless
of the sunset provision.
4)Authorizes a laborer (as defined in current law) to file a
mechanic lien before the earlier of the following: (i) one
year after the completion of the work of improvement or (ii)
180 days after the owner records a notice of completion of
cessation.
5)Requires a laborer to be entitled to the court costs and
attorney's fees incurred as a result of foreclosing on a
mechanic lien, as specified.
COMMENTS
1)Purpose . According to the Division of Labor Standards
Enforcement's (DLSE) 2010 Annual Report, it conducted 618 car
wash establishment inspections/re-inspections and issued a
total of 449 citations for violations of various labor laws
including non-registration and penalty assessments in the
total amount of $2.76 million. In addition, a total of
$271,367 was collected on behalf of workers as wages due.
AB 2517
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According to the author, California leads the nation in the
number of car washes and the number of employees with 1,600
carwashes and 22,000 employees. In March 2008, the Los
Angeles Times reported that many owners pay less than half of
the required minimum wage, and that two-thirds of those
inspected by the state since 2003 were out of compliance with
one or more labor laws. Violations include underpaying
workers, hiring minors without worker's compensation
insurance, and denying workers their meal and rest breaks.
The author states: "AB 2517 ensures that workers have the
opportunity to collect judgments issued in their favor for
unpaid wages by authorizing wage liens in the car wash
industry. This measure will address the extreme difficulty
many employees face in collecting their successful wage claims
by lifting the burden from state agencies and expanding the
usefulness of an existing self-help tool, which is commonly
used by banks to protect loans and lines of credit, lawyers to
secure their fees, doctors who treat patients without upfront
payment, hospitals, architects, storage facilities/warehouses,
tax authorities, and many others."
2)Background . Numerous studies and investigations have found
widespread violations of labor laws within the car wash
industry. These violations include hourly payments below the
minimum wage, hiring minors, operating without workers'
compensation insurance, and denying workers their meal and
rest breaks.
In response to various findings of violations, the Legislature
passed and Governor Davis signed AB 1688 (Goldberg), Chapter
825, Statutes of 2003, which enacted "The Car Wash Worker
Bill." The provisions of the bill, which were scheduled to
expire on January 1, 2007, were extended through 2009 by SB
1468 (Alarcon), Chapter 656, Statutes of 2006. AB 236
(Swanson), Chapter 223, Statutes of 2009 extended these
provisions until January 1, 2014.
In a 2008 report completed on the car wash industry, the DLSE
said the number of registered firms increased from 2007 to
2008 and that the number of citations decreased in that
period. However, the report found that there continue to be
hundreds of violations of labor standards. Many firms had no
workers' compensation for their workers, and there were many
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other violations of labor law (e.g., child labor violations,
and failure to pay minimum wages and overtime pay).
Current statute defines a "laborer" as a person who, acting as
an employee, performs labor upon, or bestows skill or other
necessary services on, a work of improvement. This definition
also includes a person or entity to which a portion of
compensation is paid by agreement with the laborer or his or
her collective bargaining agreement.
Existing law specifies the rights and remedies for those
involved in a construction project with regard to a mechanics
lien and regulates the conditions under which a mechanics lien
may be enforced. Specifically, statute prohibits a claimant
from enforcing a lien unless he or she records a lien within
the following times:
a) After the claimant ceases to provide work.
b) Before the earlier of the following times: (i) 90 days
after completion of the work of improvement or 30 days
after the owner records a notice of completion or
cessation.
This bill proposes to expand the amount a time a laborer can
file a mechanics lien, as specified.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081