Amended in Senate August 19, 2014

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

California Legislature—2013–14 Regular Session

Assembly BillNo. 1897


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 forbegin insert all workers supplied by that labor contractor forend insert the payment of wages, 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 laborbegin delete or servicesend delete 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 laborbegin delete or servicesend delete 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.begin insert The bill would prohibit its provisions from being interpreted to impose liability in specified circumstances.end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 2810.3 is added to the Labor Code, to
2read:

3

2810.3.  

(a) As used in this section:

4(1) “Client employer” means a business entity, regardless of its
5form, that obtains or is provided workers to perform laborbegin delete or
6servicesend delete
within its usual course of business from a labor contractor.
7“Client employer” does not include a business entity with a
8workforce of less than 25 workers, including those hired directly
9by the client employer and those obtained from, or provided by,
10any labor contractor, and five or fewer workers supplied by a labor
11contractor at any given time. “Client employer” does not include
P3    1the state or any political subdivision of the state, including any
2city, county, city and county, or special district.

begin insert

3(2) “Labor” has the same meaning provided by Section 200.

end insert
begin delete

4(2)

end delete

5begin insert(3)end insert “Labor contractor” means an individual or entity that
6supplies, either with or without a contract, a client employer with
7workers to perform laborbegin delete or servicesend delete within the client employer’s
8usual course of business. “Labor contractor” does not include any
9of the following:

10(A) A bona fide nonprofit, community-based organization that
11provides services tobegin delete low-wageend delete workers.

12(B) A bona fide labor organization or apprenticeship program
13or hiring hall operated pursuant to a collective bargaining
14agreement.

15(C) A motion picture payroll services company as defined in
16subparagraph (A) of paragraph (4) of subdivision (f) of Section
17679 of the Unemployment Insurance Code.

begin delete

18(3)

end delete

19begin insert(4)end insert “Wages” has the same meaning provided by Section 200
20and all sums payable to an employee or the state based upon any
21failure to pay wages, as provided by law.

begin delete

19 22(4)

end delete

23begin insert(5)end insert “Worker” does not include an employee who is exempt from
24the payment of an overtime rate of compensation for executive,
25administrative, and professional employees pursuant to wage orders
26by the Industrial Welfare Commission described in Section 515.

begin delete

23 27(5)

end delete

28begin insert(6)end insert “Usual course of business” means the regular and customary
29work of a business, performed within or upon the premises or
30worksite of the client employer.

31(b) A client employer shall share with a labor contractor all civil
32legal responsibility and civil liability for allbegin insert workers supplied by
33that labor contractor for allend insert
of the following:

34(1) The payment ofbegin delete wages to workers provided by a labor
35contractor.end delete
begin insert wages.end insert

36(2) The obligation to provide a safe work environment under
37the provisions of Division 5 (commencing with Section 6300).

38(3) Failure to secure valid workers’ compensation coverage as
39required by Section 3700.

P4    1(c) At least 30 days prior to filing a claim against a client
2 employer for violations covered by this section, a worker or his
3or her representative shall notify the client employer of violations
4under subdivision (b).

5(d) Neither the client employer nor the labor contractor may
6take any adverse action against any worker for providing
7notification of violations or filing a claim.

8(e) The provisions of subdivision (b) are in addition to, and shall
9be supplemental of, any other theories of liability or requirement
10established by statute or common law.

11(f) This section does not prohibit a client employer from
12establishing, exercising, or enforcing by contract any otherwise
13lawful remedies against a labor contractor for liability created by
14acts of a labor contractor.

15(g) This section does not prohibit a labor contractor from
16establishing, exercising, or enforcing by contract any otherwise
17lawful remedies against a client employer for liability created by
18acts of a client employer.

19(h) Upon request by a state enforcement agency or department,
20a client employer or a labor contractor shall provide to the agency
21or department any information within its possession, custody, or
22control required to verify compliance with applicable state laws.
23Upon request, these records shall be made available promptly for
24inspection, and the state agency or department shall be permitted
25to copy them. This subdivision does not require the disclosure of
26information that is not otherwise required to be disclosed by
27employers upon request by a state enforcement agency or
28department.

29(i) The Labor Commissioner may adopt regulations and rules
30of practice and procedure necessary to administer and enforce the
31provisions of subdivisions (b) and (h) that are under his or her
32jurisdiction.

33(j) The Division of Occupational Safety and Health may adopt
34regulations and rules of practice and procedure necessary to
35administer and enforce the provisions of subdivisions (b) and (h)
36that are under its jurisdiction.

37(k) The Employment Development Department may adopt
38regulations and rules of practice and procedure necessary to
39administer and enforce the provisions of subdivisions (b) and (h)
40that are under its jurisdiction.

P5    1(l) A waiver of this section is contrary to public policy, and is
2void and unenforceable.

3(m) This section shall not be interpreted to impose individual
4liability on a homeowner for labor or services received at the home
5or the owner of a home-based business for labor or services
6received at the home.

7(n) This section shall not be interpreted to impose liability on
8a client employer for the use ofbegin delete a bona fideend deletebegin insert anend insert independent
9contractorbegin insert other than a labor contractor end insert or to change the definition
10of independent contractor.

begin insert

11(o) This section shall not be interpreted to impose liability on
12the following:

end insert
begin insert

13(1) A client employer that is not a motor carrier of property
14based solely on the employer’s use of a third-party motor carrier
15of property with interstate or intrastate operating authority to ship
16or receive freight.

end insert
begin insert

17(2) A client employer that is a motor carrier of property
18subcontracting with, or otherwise engaging, another motor carrier
19of property to provide transportation services using its own
20employees and commercial motor vehicles, as defined in Section
2134601 of the Vehicle Code.

end insert
begin insert

22(3) A client employer that is a cable operator, as defined by
23Section 8350 of the Public Utilities Code, based upon its
24subcontracting with a company to build, install, maintain, or
25perform repair work utilizing the employees and vehicles of the
26subcontractor if the name of the subcontractor is visible on
27employee uniforms and vehicles.

end insert


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