BILL NUMBER: AB 1164 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 23, 2014
AMENDED IN ASSEMBLY MAY 6, 2013
AMENDED IN ASSEMBLY APRIL 24, 2013
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, with certain exceptions, authorize an employee to
record and enforce a wage lien upon real and personal property of an
employer, or a property owner, as specified, 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 and for its cancellation and
removal . 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: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known, and may be
cited, as the California Fair Paycheck Act.
SECTION 1. SEC. 2. 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, except that if the employer is a natural person, a lien
shall apply to the employer's principal residence only to the extent
that the employee provided labor to the benefit of that household or
residence.
(2) The property upon which the employee bestowed labor for the
benefit of the property owner and with the owner's consent or
knowledge that such labor was being provided. The amount of the lien
on such property shall be limited 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 all wages 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) The lien shall be subject to the following limits:
(1) 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.
(2) The lien described in paragraph (2) of subdivision (a) shall
not apply to a claim relating to property
bought or services furnished primarily for personal, family, or
household purposes, including those benefitting any real
property that is the principal residence of the owner.
(3) The lien described in paragraph (2) of subdivision (a) shall
not attach if the employer has obtained a surety bond or insurance
that provides for payment of the wages, related damages, and
penalties sought by the employee and is in an amount that is adequate
to fully satisfy the employee's claim. If the surety bond or
insurance contract is inadequate to cover the entire amount of the
employee's claim, the lien shall be limited to the amount of the
claim that exceeds the bond or insurance coverage. Within 30 days of
being provided with proof of a valid surety bond or insurance
contract that applies to the claim, the employee shall file a release
of any lien recorded against that property or a notice reducing the
lien to the amount that exceeds the bond or insurance coverage.
(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 under the administrative, executive, or
professional exemptions . 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
180 days 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 90
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 Ninety days after
recordation or filing of the notice of lien.
(B) More than 180 90 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 90
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. If an
employee or employee representative refuses to file a release of the
lien after proper notice, an employer or property owner may petition
the court for an order to file a release of the lien and the employer
or property owner shall be entitled to attorney's fees and costs
incurred in the action. The court in its discretion may also issue a
fine, not to exceed one thousand dollars ($1,000), for refusing to
file a release of lien after proper notice.
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
, as defined in Section 118 of the Penal Code, 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:
(A) A description of the site upon which the work was performed
sufficient for identification.
(B) 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,
certified mail with return receipt requested,
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, certified mail with
return receipt requested, 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 ,
as defined in Section 118 of the Penal Code, 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,
certified mail with return receipt requested,
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, certified mail with
return receipt requested, 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.
(e) This section shall become operative on July 1, 2016, or on a
date that the Secretary of State determines, whichever is sooner.
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 extinguished. The judgment shall
include the date the notice of lien was recorded, the county in which
it was recorded, the book and page or series number of
the place in the legal records in which the lien was recorded, and a
legal description of the property to which the lien attaches. The
judgment may be appealed by filing a notice of appeal on or before 60
days after the entry of judgment . If an appeal is filed, the
lien shall continue in force until all issues on the appeal have been
decided. If the period for appeal runs without an
appeal having been filed, or if the appeal fails, the judgment
entered under this section shall be equivalent to cancellation of the
lien and its removal from the record. A judgment entered pursuant to
this subdivision is a recordable instrument. Upon recordation of a
certified copy of the judgment, the property described in the
judgment is released from claim of lien. Alternatively, 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. If an employee or employee
representative refuses to file a release of the lien after proper
notice, an employer or property owner may petition the court for an
order to file a release of the lien and the employer or property
owner shall be entitled to attorney's fees and costs incurred in the
action. The court in its discretion may also issue a fine, not to
exceed one thousand dollars ($1,000), for refusing to file a r
elease of lien after proper notice.
(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.
(g) If a court finds that false information was knowingly and in
bad faith included in a notice of lien by an employee or an employee'
s representative with an intent to defraud, the following shall
apply:
(1) The lien shall be extinguished and the right to a lien as
provided by this chapter shall be forfeited.
(2) The court may award reasonable attorney's fees and court costs
to the property owner or employer for action taken to defeat the
lien claim.
3005. If the judgment in the action is against the property of a
property owner who is not the employer, the owner may deduct the
amount of the judgment and costs from any amount owed to the
employer. If the amount of the judgment and costs exceed the amount
owed to the employer, the owner may recover from the employer, or the
sureties on a bond given by the employer, if any, the remaining
amount of the judgment and costs.
SEC. 2. SEC. 3. 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.