BILL NUMBER: AB 1897 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 1, 2014
AMENDED IN ASSEMBLY MAY 28, 2014
AMENDED IN ASSEMBLY MAY 23, 2014
AMENDED IN ASSEMBLY APRIL 10, 2014
AMENDED IN ASSEMBLY MARCH 28, 2014
INTRODUCED BY Assembly Member Roger Hernández
FEBRUARY 19, 2014
An act to add Section 2810.3 to the Labor Code, relating to
private employment.
LEGISLATIVE COUNSEL'S DIGEST
AB 1897, as amended, Roger Hernández. Labor contracting: client
liability.
Existing law regulates the terms and conditions of employment and
establishes specified obligations of employers to employees. Existing
law prohibits a person or entity from entering into a contract for
labor or services with a construction, farm labor, garment,
janitorial, security guard, or warehouse contractor, if the person or
entity knows or should know that the contract or agreement does not
include sufficient funds for the contractor to comply with laws or
regulations governing the labor or services to be provided.
This bill would require a client employer to share with a labor
contractor all civil legal responsibility and civil liability for the
payment of wages, the failure to report and pay all
required employer contributions, worker contributions, and personal
income tax withholdings, the obligation to provide a
safe work environment, as specified, and the failure to obtain
valid workers' compensation coverage. The bill would define a client
employer as a business entity that obtains or is provided workers to
perform labor or services within the usual course of business from a
labor contractor, except as specified. The bill would define a labor
contractor as an individual or entity that supplies workers, either
with or without a contract, to a client employer to perform labor or
services within the client employer's usual course of business and
would except from this definition specified nonprofit, labor, and
motion picture payroll services organizations. The bill would specify
that it does not prohibit client employers and labor contractors
from mutually contracting for otherwise lawful remedies for
violations of its provisions by the other party. The bill would
require a client employer or labor contractor to provide to a
requesting enforcement agency or department, and make available for
copying, information within its possession, custody, or control
required to verify compliance with applicable state laws. The bill
would authorize the Labor Commissioner, the Division of Occupational
Safety and Health, and the Employment Development Department to adopt
necessary regulations and rules to administer and enforce the bill's
provisions. The bill would provide that waiver of its provisions is
contrary to public policy, void, and unenforceable.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2810.3 is added to the Labor Code, to read:
2810.3. (a) As used in this section:
(1) "Client employer" means a business entity, regardless of its
form, that obtains or is provided workers to perform labor or
services within its usual course of business from a labor contractor.
"Client employer" does not include a business entity with a
workforce of less than 25 workers, including those hired directly by
the client employer and those obtained from, or provided by, any
labor contractor. contractor, and five or
fewer workers supplied by a labor contractor at any given
time. "Client employer" does not include the state or any
political subdivision of the state, including any city, county, city
and county, or special district.
(2) "Labor contractor" means an individual or entity that
supplies, either with or without a contract, a client employer with
workers to perform labor or services within the client employer's
usual course of business. "Labor contractor" does not include any of
the following:
(A) A bona fide nonprofit, community-based organization that
provides services to low-wage workers.
(B) A bona fide labor organization or apprenticeship program or
hiring hall operated pursuant to a collective bargaining agreement.
(C) A motion picture payroll services company as defined in
subparagraph (A) of paragraph (4) of subdivision (f) of Section 679
of the Unemployment Insurance Code.
(3) "Wages" has the same meaning provided by Section 200 and all
sums payable to an employee or the state based upon any failure to
pay wages, as provided by law.
(4) "Worker" does not include an employee who is exempt from the
payment of an overtime rate of compensation for executive,
administrative, and professional employees pursuant to wage orders by
the Industrial Welfare Commission described in Section 515.
(5) "Usual course of business" means the regular and customary
work of a business, performed within or upon the premises or worksite
of the client employer.
(b) A client employer shall share with a labor contractor all
civil legal responsibility and civil liability for all of
the following:
(1) The payment of wages to workers provided by a labor
contractor.
(2) The failure to report and pay all required employer
contributions, worker contributions, and personal income tax
withholdings as required by the Unemployment Insurance Code
obligation to provide a safe work environment under the
provisions of Division 5 (commencing with Section 6300) .
(3) Failure to secure valid workers' compensation coverage as
required by Section 3700.
(c) A client employer shall not shift to the labor contractor any
legal duties or liabilities under the provisions of Division 5
(commencing with Section 6300) with respect to workers supplied by
the labor contractor.
(c) At least 30 days prior to filing a claim against a client
employer for violations covered by this section, a worker or his or
her representative shall notify the client employer of violations
under subdivision (b).
(d) Neither the client employer nor the labor contractor may take
any adverse action against any worker for providing notification of
violations or filing a claim.
(d)
(e ) The provisions of subdivisions
(b) and (c) subdivision (b) are in addition to,
and shall be supplemental of, any other theories of liability or
requirement established by statute or common law.
(e)
( f) This section does not prohibit a client
employer from establishing, exercising, or enforcing by contract any
otherwise lawful remedies against a labor contractor for liability
created by acts of a labor contractor.
(f)
(g) This section does not prohibit a labor contractor
from establishing, exercising, or enforcing by contract any otherwise
lawful remedies against a client employer for liability created by
acts of a client employer.
(g)
(h) Upon request by a state enforcement agency or
department, a client employer or a labor contractor shall provide to
the agency or department any information within its possession,
custody, or control required to verify compliance with applicable
state laws. Upon request, these records shall be made available
promptly for inspection, and the state agency or department shall be
permitted to copy them. This subdivision does not require the
disclosure of information that is not otherwise required to be
disclosed by employers upon request by a state enforcement agency or
department.
(h)
(i) The Labor Commissioner may adopt regulations and
rules of practice and procedure necessary to administer and enforce
the provisions of subdivisions (b) and (g)
(h) that are under his or her jurisdiction.
(i)
(j) The Division of Occupational Safety and Health may
adopt regulations and rules of practice and procedure necessary to
administer and enforce the provisions of subdivisions (c)
and (g) (b) and (h) that are under its
jurisdiction.
(j)
(k) The Employment Development Department may adopt
regulations and rules of practice and procedure necessary to
administer and enforce the provisions of subdivisions (b) and
(g) (h) that are under its
jurisdiction.
(k)
(l) A waiver of this section is contrary to public
policy, and is void and unenforceable.
(l)
(m) This section shall not be interpreted to impose
individual liability on a homeowner for labor or services received at
the home or the owner of a home-based business for labor or services
received at the home.
(m)
(n) This section shall not be interpreted to impose
liability on a client employer for the use of a bona fide independent
contractor or to change the definition of independent contractor.