BILL NUMBER: AB 1164 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Lowenthal
(Coauthor: Assembly Member Roger Hernández)
FEBRUARY 22, 2013
An act to add Chapter 3 (commencing with Section 3000) to
Title 14 of Part 4 of Division 3 of the Civil Code,
relating to liens.
LEGISLATIVE COUNSEL'S DIGEST
AB 1164, as amended, Lowenthal. Liens: employees and workers.
Existing law grants specified persons, including laborers, as
defined, who contribute labor, skill, or services to a work of
improvement the right to record a mechanic's lien upon the property
so improved.
This bill would state the intent of the Legislature to enact
legislation that would allow an employee or worker to record a lien
on the real or personal property of his or her employer if the
employer fails to pay the wages to which the employee or worker is
entitled.
This bill would authorize an employee to record and enforce a wage
lien upon specified real and personal property for wages, other
compensation, and related penalties and damages owed the employee.
The bill would prescribe requirements relating to the recording and
enforcement of the wage lien. The bill would require a notice of lien
on real property to be executed under penalty of perjury.
By expanding the scope of the crime of perjury, this bill would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no
yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 3 (commencing with Section
3000) is added to Title 14 of Part 4 of Division 3 of the
Civil Code , to read:
CHAPTER 3. WAGE LIENS
3000. (a) An employee shall have a lien for the full amount of
any wages, other compensation, and related penalties and damages owed
to the employee on the following property:
(1) All property of the employer, including any after-acquired
property.
(2) The property upon which the employee bestowed labor, provided
that the amount of the lien on this property shall be equal to the
amount of wages, compensation, and related penalties and damages
accrued during the time the employee bestowed labor on that specific
property.
(b) The amount of this lien shall include unpaid wages, all other
compensation required under California law, penalties and damages
available under the Labor Code, interest at the same rate as for
prejudgment interest in this state, and the costs of filing and
service of the lien. The amount of compensation that may be claimed
as a lien under this section includes the entire compensation package
agreed to be paid to the employee, but no less than the amount
required by law, including direct wages and compensation required to
be paid to other persons or entities, that would qualify as "employer
payments" described in Section 1773.1 of the Labor Code.
(c) An employee's lien upon personal property shall be limited to
property subject to a security interest under the Commercial Code
pursuant to the filing of a financing statement with the Secretary of
State.
(d) Any act authorized or required under this chapter with regard
to an employee may also be undertaken by any person or entity,
including any governmental agency, to which a portion of an employer'
s compensation is payable or that has standing under applicable law
to maintain a direct legal action on behalf of the employee to
collect any portion of compensation owed to the employee.
(e) A lien pursuant to this chapter shall not be claimed by an
employee who is exempt from the protections of Industrial Welfare
Commission wage orders. However, in any action involving such a lien,
the employer or property owner shall plead and prove exempt status
as an affirmative defense.
(f) A lien pursuant to this chapter is in addition to any other
lien rights held by the employee and shall not be construed to limit
these rights.
3001. (a) The lien described in Section 3000 shall be permanently
extinguished unless a notice of lien in accordance with Section 3002
or 3003 is recorded and served within one year of the date that the
employee ceased working for the employer.
(b) The employee shall commence an action to enforce the lien and
prove the amount owed within 180 days of the date of filing or
recording of the notice of lien. If the employee does not commence an
action to enforce the lien within that time, the lien shall be
permanently extinguished and is unenforceable.
(c) (1) Subdivision (b) does not apply if the employee and the
owner of the property subject to the lien agree to extend the time
for enforcing the lien in writing and record or file notice of the
fact and terms of the extension within either of the following
periods:
(A) 180 days after recordation or filing of the notice of lien.
(B) More than 180 days after recordation or filing of the notice
of lien but before a purchaser or encumbrancer acquires rights in the
property for value and in good faith.
(2) In the event of an extension, the employee shall commence an
action to enforce the lien within 180 days after the expiration of
the extension. If the employee does not commence an action to enforce
the lien within that time, the lien shall be permanently
extinguished and is unenforceable.
(d) If the lien has been extinguished pursuant to subdivision (b)
or (c), upon demand and 15 days' notice by any affected party, the
employee shall record or file a release of the lien.
3002. (a) With regard to a lien on real property, the employee
shall record a notice of lien with the county recorder in the county
where the real property is located.
(b) The notice of lien shall be executed under penalty of perjury
and shall include all of the following:
(1) A statement of the employee's demand for unpaid wages, other
compensation, related penalties, and damages. The statement shall
specify the amount owed to the employee, and if the amount is
estimated, shall provide an explanation for the basis of the
estimate.
(2) A general statement of the kind of work furnished by the
employee and the dates of employment.
(3) The name of the person by whom the employee was employed.
(4) The employee's mailing address.
(5) For property described in paragraph (2) of subdivision (a) of
Section 3000, both of the following:
(i) A description of the site upon which the work was performed
sufficient for identification.
(ii) The name of the owner or reputed owner, if known.
(c) The employee or employee representative shall serve the notice
of lien on the employer and the owner or reputed owner of the real
property subject to the lien, as follows:
(1) For an employer, notice of lien shall be served by registered
mail, certified mail, or first-class mail, evidenced by a certificate
of mailing, postage prepaid, addressed to the employer at the
employer's residence or place of business.
(2) For an owner or reputed owner who is not the employer, notice
of lien shall be served by registered mail, certified mail, or
first-class mail, evidenced by a certificate of mailing, postage
prepaid, addressed to the address of the property subject to the lien
or to the residence or place of business of the owner or reputed
owner.
(d) For property described in paragraph (1) of subdivision (a) of
Section 3000, the lien attaches to all real property owned by the
employer at the time of the filing of the notice of lien, or that is
subsequently acquired by the employer, that is located in any county
in which the notice of lien is recorded, regardless of whether the
property is identified in the notice of lien. For property described
in paragraph (2) of subdivision (a) of Section 3000, the lien
attaches only to the property that is specifically identified in the
notice of lien.
3003. (a) With regard to a lien on personal property, the
employee shall file a notice of lien with the Secretary of State.
Except as otherwise provided in this chapter, the manner, form, and
place of filing shall be as described in Chapter 5 (commencing with
Section 9501) of Division 9 of the Commercial Code. The notice of the
lien shall be placed in the same file as financing statements
pursuant to Section 9522 of the Commercial Code.
(b) The notice shall be executed under penalty of perjury and
shall state the following:
(1) The amount of the claim for unpaid wages, other compensation,
related penalties, and damage, and if the amount is estimated, shall
provide an explanation for the basis of the estimation.
(2) A general statement of the kind of work furnished by the
employee and the dates of employment.
(3) The name of the person by whom the employee was employed.
(4) The employee's mailing address.
(5) To the extent known, a description of the property on which
the lien is made. Regardless of whether the property is specifically
described in the notice, the lien attaches to all personal property
owned by the employer or subsequently acquired by the employer that
can be made subject to a security interest under the Commercial Code.
(c) The employee or employee representative shall serve the notice
of lien on the employer and the owner or reputed owner of the
property subject to the lien, as follows:
(1) For an employer, notice of lien shall be served by registered
mail, certified mail, or first-class mail, evidenced by a certificate
of mailing, postage prepaid, addressed to the employer at the
employer's residence or place of business.
(2) For an owner or reputed owner who is not the employer, notice
of lien shall be served by registered mail, certified mail, or
first-class mail, evidenced by a certificate of mailing, postage
prepaid, addressed to the residence or place of business of the owner
or reputed owner.
(d) For property described in paragraph (1) of subdivision (a) of
Section 3000, the lien attaches to all personal property that can be
made subject to a security interest under the Commercial Code that is
owned by the employer at the time of filing of the notice of lien or
that is subsequently acquired by the employer, regardless of whether
the property is identified in the notice of lien. For property
described in paragraph (2) of subdivision (a) of Section 3000, the
lien attaches only to the property that is identified in the notice
of lien.
3004. (a) In order to enforce a lien under Section 3000, the
employee shall demonstrate in a civil action, or in a proceeding
under Section 98 of the Labor Code, that he or she is owed wages or
other compensation and any related penalties and damages. In
addition, if the owner or reputed owner of the property is not the
employer, the employee shall demonstrate that the property was
property subject to the lien under paragraph (2) of subdivision (a)
of Section 3000.
(b) If the employee chooses to pursue the wage claim in an
administrative proceeding before the Labor Commissioner pursuant to
Section 98 of the Labor Code, the Labor Commissioner may establish
the amount of lien if a lien has been recorded. If no lien has been
recorded at the time the administrative claim is filed, the Labor
Commissioner may record the lien on behalf of the employee.
(c) If a notice of lien is recorded or filed pursuant to Sections
3002 or 3003 and an action to recover unpaid wages has been filed by
the employee or employee representative, that action shall also be
deemed an action to enforce the lien and foreclose upon any property
subject to the recorded lien. In the judgment resulting from an
action, the court may order the sale at a sheriff's auction or the
transfer to the plaintiff of title or possession of any property
subject to the lien. Whether or not the court makes an order as part
of the judgment, any property subject to the lien may be foreclosed
upon at any point after a judgment for unpaid wages is issued.
(d) The employee or employee representative is entitled to court
costs and reasonable attorneys' fees for filing a successful action
to enforce a lien pursuant to this section.
(e) If judgment is entered against the employee or employee
representative in the action to enforce the lien or if the case is
dismissed with prejudice, the lien shall be extinguished upon
expiration of the applicable appeals period if no appeal is filed. If
an appeal is filed, the lien shall continue in force until all
issues on the appeal have been decided. If the lien is extinguished,
upon demand and 15 days' notice by the property owner, the employee
or employee representative shall file a release of the lien.
(f) Any number of claims to enforce employee liens against the
same employer may be joined in a single proceeding, but the court may
order separate trials or hearings. If the proceeds of the sale of
the property subject to a lien are insufficient to pay all the
claimants, whether or not claims have been joined together, the court
shall order the claimants to be paid in proportion to the amount due
each claimant.
3005. (a) A lien established pursuant to this chapter takes
precedence over all other liens, claims, or encumbrances perfected
after the date that the notice of lien is filed or recorded, and is
effective against the estate of the employer, or any subsequent
purchaser of the property subject to the lien.
(b) In addition, as to the first fifty thousand dollars ($50,000)
of the amount claimed, a lien established pursuant to this chapter
takes precedence over all other liens, claims, or encumbrances
perfected prior to the date of filing or recording of the notice of
lien, except for the following:
(1) A tax lien or other government lien.
(2) A purchase money mortgage.
(3) Other liens that also arise from the performance of labor,
including, but not limited to, mechanics liens arising under Section
8400.
SEC. 2. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SECTION 1. It is the intent of the Legislature
to enact legislation that would allow an employee or worker to record
a lien on the real or personal property of his or her employer if
the employer fails to pay the wages to which the employee or worker
is entitled.