BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1386|
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THIRD READING
Bill No: AB 1386
Author: Assembly Labor and Employment Committee
Amended: As introduced
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 4-0, 6/12/13
AYES: Monning, Leno, Padilla, Yee
NO VOTE RECORDED: Wyland
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 70-0, 5/16/13 (Consent) - See last page for
vote
SUBJECT : Employment: employee complaints: final orders
SOURCE : Author
DIGEST : This bill authorizes the Labor Commissioner (LC) to
file, within 10 days of a wage claim order becoming final, a
certified copy of the final order with the county recorder of
any county in which the employer's property may be located, as
specified.
ANALYSIS : Existing law allows an employee to bring a claim
for unpaid wages, penalties, and damages before the LC.
Existing law vests with the LC the authority to hear employee
complaints regarding the payment of wages and other
employment-related issues. Among other things, existing law
requires the LC to do the following:
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1.File an order, decision, or award within 15 days of hearing an
employee complaint. If no party to the action appeals within
10 days after its service, the order, decision, or award
becomes the final order for the action.
An employer seeking to appeal a decision must first
post an undertaking (bond or cash deposit) with the
reviewing court in the amount of the order, decision or
award.
1.File the final order with the clerk of the superior court of
the appropriate county within 10 days of the order, decision,
or award becoming final, unless the parties reach a settlement
agreement approved by the LC.
Existing law then requires the clerk of the superior court to
enter judgment in conformity with the final order, which has the
same force and effect as a judgment entered in a civil action.
This bill authorizes the LC to take some additional steps to
streamline the collection procedure for employee wage claims
that are final. Specifically, the bill:
1.Authorizes the LC to file, within 10 days of the order
becoming final, a certified copy of the final order with the
county recorder of any county in which the employer's property
may be located.
2.Specifies that the order may be filed in any and all counties
of the state depending upon information obtained concerning
the employer's assets.
3.Specifies that the amount found due under the order shall be a
lien in favor of the employee named in the order, and against
the personal and real property of the employer named, within
the county in which the order is filed.
4.Provides that the recorder shall accept and file the order and
record it as a mortgage on real estate, shall file the same as
a security interest, and shall index the same as a mortgage on
real estate and as a security interest.
5.Provides that the recorder shall include all charges for the
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services to be performed by him or her in the amount due under
the lien.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 6/24/13)
California Rural Legal Assistance Foundation
OPPOSITION : (Verified 6/24/13)
Commercial Transactions Committee of the California Business Law
Section of the
California State Bar
ARGUMENTS IN SUPPORT : According to the author, under the
current procedure, the LC files a certified copy of the order,
decision or award with the clerk of the superior court who then
enters it as a judgment on the judgment rolls of the court.
This is a ministerial act of the clerk and does not require any
action by the court itself in oversight or approval. The author
argues that in order to record the judgment debt, the employee
must first obtain an Abstract of Judgment from the court which
often takes several weeks, and unfortunately, during that time
the employer may have liquidated its business, or otherwise
divested itself of tangible and real property, thereby denying
the employee the opportunity to collect the wages found due and
owing by the LC.
This bill allows the LC to simply record a final order, decision
or award with the local county recorder, eliminating the
two-step process requiring action by the Superior Court. The
author argues that this will speed collection activity and will
help ensure that employees are able to collect on their wage
claims before an unscrupulous employer is able to move or hide
their assets.
ARGUMENTS IN OPPOSITION : The Commercial Transactions
Committee of the Business Law Section of the State Bar of
California (Committee) is opposed to this measure, not because
the legislation would shorten the time necessary to obtain a
lien after an order is issued, but because the specific
procedures for creating the lien, and the interaction between
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this lien and other liens are likely to create unnecessary
confusion and litigation. Among other things, the Committee
cites the following arguments in opposition:
The method for creating the lien in personal property is
inconsistent with the means by which other liens are created,
which is by a filing with the California Secretary of State.
The bill would provide for the recording of the order with the
county recorder to obtain a lien on the personal property of
the employer. Additionally, they argue that this new method
would make it difficult to locate liens because a person would
have to search every county in which the employer may be
located - increasing the costs for businesses to obtain
financing.
The bill conflicts with other state and federal laws that
govern property rights. The bill provides for a lien on all
personal property of an employer located within a particular
geographical area. By extending the lien to all personal
property, the lien would cover personal property in which
property rights may be governed by other state laws or even
pre-empted by federal laws. For example, liens over vehicles
and certain vessels are required to be registered with the
California Department of Motor Vehicles, or aircrafts which
are registered with the FAA, or vessels documented with the
U.S. Coast Guard which may be governed by U.S. federal law.
The bill provides for a lien on property in which a judgment
lien is not permitted. Under current law, a judgment lien can
only be created in property that is subject to enforcement of
money judgments; specifically listed types of personal
property (namely, and subject to other limitations, accounts
receivable, equipment, farm products, inventory and negotiable
documents of title). By allowing the proposed lien to cover a
broader range of assets, the bill puts other judgment
creditors, including employees that have obtained judgments,
at a disadvantage to an employee that has obtained a lien by
the filing of a LC's order.
Additionally, opponents argue that current provisions governing
judgment liens are covered in over 40 sections of the Code of
Civil Procedure. With the brevity of the bill, there are a
number of significant procedural and protective provisions
applicable to judgment liens that are not covered or addressed.
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Among the questions not addressed by the bill are the term of a
lien, the timing of creation of a lien, issues with property
acquired after the creation of a lien, removal of property from
applicable county, lien priorities, and termination of a lien
upon satisfaction, among others.
ASSEMBLY FLOOR : 70-0, 5/16/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Fong, Fox, Frazier, Garcia,
Gatto, Gomez, Gordon, Gorell, Gray, Hagman, Hall, Harkey,
Roger Hern�ndez, Jones, Jones-Sawyer, Levine, Linder, Logue,
Lowenthal, Maienschein, Mansoor, Medina, Mitchell, Mullin,
Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,
V. Manuel P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Ting, Torres, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Allen, Buchanan, Eggman, Beth Gaines, Grove,
Holden, Melendez, Morrell, Stone, Vacancy
PQ:nl 6/24/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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