Amended in Senate April 20, 2015

Senate Bill No. 588

Introduced by Senator De León

February 26, 2015

begin delete An act to amend Section 2810 of the Labor Code, relating to employment. end delete begin insert An act to add Chapter 10 (commencing with Section 690.020) to Division 1 of Title 9 of Part 2 of the Code of Civil Procedure, and to amend Section 98 of, and to add Sections 96.8, 238, 238.1, 238.2, 238.3, 238.4, 238.5, and 558.1 to, the Labor Code, relating to employment. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 588, as amended, De León. begin delete Employment. end delete begin insert Employment: nonpayment of wages: Labor Commissioner: judgment enforcement. end insert

begin insert

(1) The Enforcement of Judgments Law provides for the enforcement of money judgments and other civil judgments. Under that law, a judgment creditor may levy upon the property of a judgment debtor to satisfy a judgment, and a levying officer holds the property until the final determination of any exemptions claimed by the judgment debtor.

end insert begin insert

This bill would enact special provisions for the enforcement of judgments against an employer arising from the employer’s nonpayment of wages for work performed in this state. The bill would authorize the Labor Commissioner to use any of the existing remedies available to a judgment creditor and to act as a levying officer when enforcing a judgment pursuant to a writ of execution, as provided.

end insert begin insert

The bill would also authorize the Labor Commissioner to issue a notice of levy, as specified, if the levy is for a deposit, credits, money, or property in the possession or under the control of a bank or savings and loan association or for an account receivable or other general intangible owed to the judgment debtor by an account debtor.

end insert begin insert

(2) Existing law authorizes the Labor Commissioner to investigate employee complaints and to provide for a hearing in any action to recover wages, penalties, and other demands for compensation. Existing law requires the Labor Commissioner to determine all matters arising under his or her jurisdiction. Existing law makes any employer or other person acting on behalf of an employer who violates or causes to be violated specified provisions regulating hours and days of work in any order of the Industrial Welfare Commission to be subject to a civil penalty, as specified.

end insert begin insert

This bill would authorize the Labor Commissioner to provide for a hearing against any employer or other person acting on behalf of an employer for a violation of those provisions regulating hours and days of work in any order of the Industrial Welfare Commission. The bill would also authorize any person liable for a violation of those provisions to be held liable in various other actions relating to, among other things, an employer’s failure to pay wages.

end insert begin insert

Under existing law, within a specified period of time after service of notice of an order, decision, or award, the parties are authorized to seek review by filing an appeal to the superior court, where the appeal is required to be heard de novo.

end insert begin insert

This bill, after a judgment is entered by a court of competent jurisdiction in favor of the Labor Commissioner or in favor of any employee pursuant to an appeal, would authorize the Labor Commissioner to, with the consent of any employee in whose favor the judgment is entered, collect any outstanding amount of the judgment by mailing a notice of levy upon all persons having in their possession, or who will have in their possession or under their control, any credits, money, or property, belonging to the judgment debtor, or who owe any debt to the judgment debtor at the time they receive the notice of levy. The bill would also require the judgment debtor to be served with a copy of the notice of levy. The bill would require any person who surrenders to the commissioner any credits, money, or property, or pays the debts owing the judgment debtor to be discharged from any obligation or liability to the judgment debtor to the extent of the amount paid to the commissioner as a result of the levy. The bill would make any person noticed with a levy who fails or refuses to surrender any credits, money, or property or pay any debts owing to the judgment debtor liable in his or her own person or estate to the commissioner in an amount equal to the value of the credits, money, or property or in the amount of the levy, as provided.

end insert begin insert

If a final judgment against an employer arising from the employer’s nonpayment of wages for work performed in this state remains unsatisfied after a specified period of time after the time to appeal has expired and no appeal is pending, the bill would prohibit an employer from continuing to conduct business in this state unless the employer has obtained a bond from a surety company admitted and has filed a copy of that bond with the Labor Commissioner, as provided. As an alternative to the bond requirement, the bill would authorize the employer to provide the Labor Commissioner with a notarized copy of an accord reached with an individual holding an unsatisfied final judgment. The bill would make any employer conducting business without satisfying the bond requirement subject to a specified civil fine. The bill, where an employer is conducting business in violation of the bond requirement, would authorize the Labor Commissioner to issue and serve on such employer a stop order prohibiting the use of employee labor by the employer until the employer complies with the bond requirement provided that the stop order would not compromise or imperil public safety or the life, health, and care of vulnerable individuals. The bill would make the failure of an employer, officer, or anyone having direction, management, or control of any place of employment or of employees to observe a stop order guilty of a misdemeanor. By creating a new crime, the bill would impose a state-mandated local program. Subject to required prior notice to the employer, the bill would authorize the Labor Commissioner to create a lien on any real or personal property in California of an employer that is conducting business without satisfying the bond requirement for the full amount of any wages, interest, penalties, and attorney’s fees claimed to be owed to an employee.

end insert begin insert

Existing law generally provides for the licensure and regulation of various types of long-term care facilities by the State Department of Public Health and the State Department of Social Services.

end insert begin insert

If a final judgment against an employer arising from the employer's nonpayment of wages remains unsatisfied after the time to appeal has expired and there is no pending appeal, this bill would prohibit an employer in the long-term care industry, as specified, from obtaining a license or renewing that license if the employer is conducting business without obtaining a bond or reaching an accord with an individual holding an unsatisfied judgment, as described above. The bill would make a specified entity that contracts with an employer to perform services in the property services, as defined, or long-term care industries jointly and severally liable where the entity has been named as a defendant with the employer for any unpaid wages and the employer was found liable for those unpaid wages pursuant to a specified action, as provided.

end insert begin insert

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.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert begin delete

Existing law prohibits a person or entity from entering into a contract or agreement for labor or services with specified types of contractors if the person or entity knows or should know that the contract or agreement does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided, and provides there is a rebuttable presumption affecting the burden of proof that there has been no violation of this provision if the contract or agreement meets specified requirements.

end delete begin delete

This bill would make nonsubstantive changes to these provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Chapter 10 (commencing with Section 690.020)
is added to Division 1 of Title 9 of Part 2 of the end insert begin insert Code of Civil
Procedure end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 10. end insert Enforcement of Judgments by Labor
Commissioner

 

begin insert 690.020. end insert   

For the purpose of the remedies provided under this
chapter, jurisdiction is conferred upon the superior court.

begin insert 690.030. end insert   

(a) Except as otherwise provided by statute, whenever
a warrant or notice of levy may properly be issued by the Labor
Commissioner pursuant to Section 96.8 of the Labor Code, and
the warrant may be levied with the same effect as a levy pursuant
to a writ of execution, the commissioner may use any of the
remedies available to a judgment creditor, including, but not
limited to, those provided in Chapter 6 (commencing with Section
708.010) of Division 2.

(b) The proper court for the enforcement of the remedies
provided under this chapter is the superior court of any of the
following counties:

(1) The county where the employee resides.

(2) The county where the judgment debtor resides.

(3) The county where the person against whom the levy or
warrant was issued resides.

begin insert 690.040. end insert   

(a) Whenever the Labor Commissioner, pursuant to
Section 96.8 of the Labor Code, levies upon property pursuant to
a warrant or notice of levy for the collection of an unsatisfied
judgment or award:

(1) If the debtor is a natural person, the debtor is entitled to the
same exemptions to which a judgment debtor is entitled. Except
as provided in subdivisions (b) and (c), the claim of exemption
shall be made, heard, and determined as provided in Chapter 4
(commencing with Section 703.010) of Division 2 in the same
manner as if the property were levied upon under a writ of
execution.

(2) A third person may claim ownership or the right to
possession of the property or a security interest in or lien on the
property. Except as provided in subdivisions (b) and (c) or as
otherwise provided by statute, the third-party claim shall be made,
heard, and determined as provided in Division 4 (commencing
with Section 720.010) in the same manner as if the property were
levied upon under a writ of execution.

(b) In the case of a warrant or notice of levy issued pursuant to
Section 96.8 of the Labor Code, the claim of exemption or the
third-party claim shall be filed with the Labor Commissioner.

(c) A claim of exemption or a third-party claim pursuant to this
section shall be heard and determined in a superior court specified
in subdivision (b) of Section 690.030.

begin insert 690.050. end insert   

(a) Notwithstanding any other law, in the case of a
writ of execution issued by a court of competent jurisdiction
pursuant to Chapter 3 (commencing with Section 699.010) and
Chapter 5 (commencing with Section 706.010) of Division 2, the
Labor Commissioner, when collecting an unsatisfied judgment or
award pursuant to Section 96.8 of the Labor Code, may perform
the duties of the levying officer, except that the commissioner need
not give himself or herself the notices that the levying officer is
required to serve on a judgment creditor or the notices that a
judgment creditor is required to give to the levying officer.

(b) Notwithstanding subdivision (a) of Section 700.140 and
Section 700.170, if the levy is for a deposit, credits, money, or
property in the possession or under the control of a bank or savings
and loan association or for an account receivable or other general
intangible owed to the judgment debtor by an account debtor, the
commissioner may deliver or mail a notice of levy to a centralized
location designated by the bank or savings and loan association
or, in the case of an account receivable or other general intangible,
to the agent for service of process of the account debtor. If the
notice of levy is received at the designated central location for the
bank or savings and loan association, it will apply to all deposits,
credits, money, and personal property held by the bank or savings
and loan association regardless of the location of that property.
The notice of levy may be issued directly by the commissioner,
whether or not a court has issued a writ of execution, and shall
contain all of the information required to be included in a writ of
execution under Section 699.520 and in a notice of levy under
Section 699.540.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 96.8 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 96.8. end insert   

(a) Notwithstanding any other law, after a judgment is
entered by a court of competent jurisdiction in favor of the Labor
Commissioner or in favor of any employee pursuant to Section
98.2, the Labor Commissioner may, with the consent of any
employee in whose favor the judgment is entered, collect any
outstanding amount of the judgment by mailing a notice of levy
upon all persons having in their possession, or who will have in
their possession or under their control, any credits, money, or
property belonging to the judgment debtor, or who owe any debt
to the judgment debtor at the time they receive the notice of levy.

(b) Notwithstanding any other law, the Labor Commissioner
may execute a levy on any property that may be levied under
Section 700.140 or 700.170 of the Code of Civil Procedure by
mailing a notice of levy to the person against whom the levy is
directed and serving a copy on the judgment debtor. The notice of
levy shall contain all of the information required to be included
in a writ of execution under Section 699.520 of the Code of Civil
Procedure and in a notice of levy under Section 699.540 of the
Code of Civil Procedure.

(c) Any person, upon whom a levy has been noticed having in
his or her possession or under his or her control any credits,
money, or property belonging to the judgment or owing any debts
to the judgment debtor at the time of receipt of the levy or coming
into his or her possession or under his or her control within one
year of receipt of the notice of levy, shall surrender the credits,
money, or property to the commissioner or pay to the commissioner
the amount of any debt owing the judgment debtor within 10 days
of service of the levy, and shall surrender the credits or property,
or the amount of any debt owing to the judgment debtor coming
into his or her own possession or control within one year of receipt
of the notice of levy within 10 days of the date of coming into
possession or control of the credits or property or the amount of
any debt owing to the judgment debtor.

(d) Any person who surrenders to the commissioner pursuant
to this section any credits, money, or property, or pays the debts
owing the judgment debtor, shall be discharged from any obligation
or liability to the judgment debtor to the extent of the amount paid
to the commissioner as a result of the levy.

(e) If the levy is made on a deposit or credits, money, or property
in the possession or under the control of a bank, savings and loan
association, or other financial institution as defined by Section
669a(d)(1) of Title 42 of the United States Code, the notice of levy
may be delivered or mailed to a centralized location designated
by the bank, savings and loan association, or other financial
institution pursuant to Section 690.050 of the Code of Civil
Procedure.

(f) Any person who is noticed with a levy pursuant to this section
and who fails or refuses to surrender any credits, money, or
property or pay any debts owing to the judgment debtor shall be
liable in his or her own person or estate to the commissioner in
an amount equal to the value of the credits, money, or other
property or in the amount of the levy, up to the amount specified
in the levy.

(g) The fees, commissions, expenses, and the reasonable costs
associated with the sale of property levied upon by warrant or levy
pursuant to this section, including, but not limited to, appraisers’
fees, auctioneers’ fees, and advertising fees are an obligation of
the judgment debtor and may be collected from the judgment debtor
by virtue of the warrant or levy or in any other manner as though
these items were part of the judgment or award outstanding.

(h) This section shall not apply to the judgment debtor’s interest
in real property.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 98 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

98.  

(a) The Labor Commissioner is authorized to investigate
employee complaints. The Labor Commissioner may provide for
a hearing in any action to recover wages, penalties, and other
demands for compensation, including liquidated damages if the
complaint alleges payment of a wage less than the minimum wage
fixed by an order of the Industrial Welfare Commission or by
statute, properly before the division or the Labor Commissioner,
including orders of the Industrial Welfare Commission, and shall
determine all matters arising under his or her jurisdiction. begin insert The
Labor Commissioner may also provide for a hearing against any
employer or other person acting on behalf of an employer for a
violation of Section 558. end insert It is within the jurisdiction of the Labor
Commissioner to accept and determine claims from holders of
payroll checks or payroll drafts returned unpaid because of
insufficient funds, if, after a diligent search, the holder is unable
to return the dishonored check or draft to the payee and recover
the sums paid out. Within 30 days of the filing of the complaint,
the Labor Commissioner shall notify the parties as to whether a
hearing will be held, whether action will be taken in accordance
with Section 98.3, or whether no further action will be taken on
the complaint. If the determination is made by the Labor
Commissioner to hold a hearing, the hearing shall be held within
90 days of the date of that determination. However, the Labor
Commissioner may postpone or grant additional time before setting
a hearing if the Labor Commissioner finds that it would lead to an
equitable and just resolution of the dispute. A party who has
received actual notice of a claim before the Labor Commissioner
shall, while the matter is before the Labor Commissioner, notify
the Labor Commissioner in writing of any change in that party’s
business or personal address within 10 days after the change in
address occurs.

It is the intent of the Legislature that hearings held pursuant to
this section be conducted in an informal setting preserving the
rights of the parties.

(b) When a hearing is set, a copy of the complaint, which shall
include the amount of compensation requested, together with a
notice of time and place of the hearing, shall be served on all
parties, personally or by certified mail, or in the manner specified
in Section 415.20 of the Code of Civil Procedure.

(c) Within 10 days after service of the notice and the complaint,
a defendant may file an answer with the Labor Commissioner in
any form as the Labor Commissioner may prescribe, setting forth
the particulars in which the complaint is inaccurate or incomplete
and the facts upon which the defendant intends to rely.

(d) No pleading other than the complaint and answer of the
defendant or defendants shall be required. Both shall be in writing
and shall conform to the form and the rules of practice and
procedure adopted by the Labor Commissioner.

(e) Evidence on matters not pleaded in the answer shall be
allowed only on terms and conditions the Labor Commissioner
shall impose. In all these cases, the claimant shall be entitled to a
continuance for purposes of review of the new evidence.

(f) If the defendant fails to appear or answer within the time
allowed under this chapter, no default shall be taken against him
or her, but the Labor Commissioner shall hear the evidence offered
and shall issue an order, decision, or award in accordance with the
evidence. A defendant failing to appear or answer, or subsequently
contending to be aggrieved in any manner by want of notice of the
pendency of the proceedings, may apply to the Labor
Commissioner for relief in accordance with Section 473 of the
Code of Civil Procedure. The Labor Commissioner may afford
this relief. No right to relief, including the claim that the findings
or award of the Labor Commissioner or judgment entered thereon
are void upon their face, shall accrue to the defendant in any court
unless prior application is made to the Labor Commissioner in
accordance with this chapter.

(g) All hearings conducted pursuant to this chapter are governed
by the division and by the rules of practice and procedure adopted
by the Labor Commissioner.

(h) (1) Whenever a claim is filed under this chapter against a
person operating or doing business under a fictitious business
name, as defined in Section 17900 of the Business and Professions
Code, which relates to the person’s business, the division shall
inquire at the time of the hearing whether the name of the person
is the legal name under which the business or person has been
licensed, registered, incorporated, or otherwise authorized to do
business.

(2) The division may amend an order, decision, or award to
conform to the legal name of the business or the person who is the
defendant to a wage claim, if it can be shown that proper service
was made on the defendant or his or her agent, unless a judgment
had been entered on the order, decision, or award pursuant to
subdivision (d) of Section 98.2. The Labor Commissioner may
apply to the clerk of the superior court to amend a judgment that
has been issued pursuant to a final order, decision, or award to
conform to the legal name of the defendant, if it can be shown that
proper service was made on the defendant or his or her agent.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 238 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 238. end insert   

(a) If a final judgment against an employer arising from
the employer’s nonpayment of wages for work performed in this
state remains unsatisfied after a period of 10 days after the time
to appeal therefrom has expired and no appeal therefrom is
pending, the employer shall not continue to conduct business in
this state related to that final judgment unless the employer has
obtained a bond from a surety company admitted to do business
in this state and has filed a copy of that bond with the Labor
Commissioner. The principal sum of the bond shall not be less
than one hundred and fifty thousand dollars ($150,000).

(b) In lieu of filing and maintaining the bond required by this
section, the employer may provide the Labor Commissioner with
a notarized copy of an accord reached with an individual holding
an unsatisfied final judgment.

(c) (1) The bond required by this section shall be in favor of,
and payable to, the people of the State of California, and shall be
for the benefit of any employee damaged by his or her employer’s
failure to pay wages, including any interest, penalties, and
attorney’s fees.

(2) This section shall not require a bond in favor of employees
covered by a bona fide collective bargaining agreement, if the
agreement expressly provides for wages, hours of work, working
conditions, a process to resolve disputes concerning nonpayment
of wages, and a waiver of the bond required by this section.

(3) Thirty days prior to the cancellation or termination of any
bond required by this section, the surety shall send written notice
to both the employer and the Labor Commissioner, identifying the
bond and the date of the cancellation or termination. If the bond
is terminated or canceled, the employer shall obtain a new surety
bond and file a copy of that bond with the Labor Commissioner
to remain in compliance with this section.

(d) For purposes of this section, a judgment also includes any
final arbitration award where the time to file a petition for a trial
de novo or a petition to vacate or correct the arbitration award
has expired and no petition is pending.

(e) Subject to written notice to a subsequent employer about
any unsatisfied judgments against the employer for nonpayment
of wages, a subsequent employer similar in operation and
ownership to an employer with an unsatisfied final judgment for
unpaid wages shall be deemed the same employer for purposes of
this section if (1) the employees of the subsequent employer are
engaged in substantially the same work in substantially the same
working conditions under substantially the same supervisors or
(2) if the new entity has substantially the same production process
or operations, produces substantially the same products or offers
substantially the same services, and has substantially the same
body of customers.

(f) Any employer, or other person acting on behalf of an
employer, that conducts business in violation of this section shall
be subject to a civil fine of two thousand five hundred dollars
($2,500). Any employer that has previously paid a fine pursuant
to this section shall be subject to an additional fine of one hundred
dollars ($100) for each calendar day that the employer conducts
business in violation of this section; however, this additional
amount shall not exceed one hundred thousand dollars ($100,000).

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 238.1 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 238.1. end insert   

(a) Where an employer is conducting business in
violation of Section 238, the Labor Commissioner may issue and
serve on that employer a stop order prohibiting the use of employee
labor by that employer until the employer’s compliance with
Section 238, provided that the stop order would not compromise
or imperil public safety or the life, health, and care of vulnerable
individuals. The stop order shall also prohibit the employer from
continuing to provide services by subcontracting for labor. The
stop order shall become effective immediately upon the service of
the order. Any employee affected by the work stoppage shall be
paid by the employer for such time lost, not exceeding 10 days,
pending compliance by the employer. The employer may protest
the stop order by making and filing with the Labor Commissioner
a written request for a hearing within 20 days after service of the
stop order. The hearing shall be held within 5 days from the date
of filing the request. The Labor Commissioner shall notify the
employer of the time and place of the hearing by mail. At the
conclusion of the hearing, the stop order shall be immediately
affirmed or dismissed, and within 24 hours thereafter, the Labor
Commissioner shall issue and serve on all parties to the hearing
by registered or certified mail a written notice of findings,
accompanied by written findings. A writ of mandate may be taken
from the findings to the appropriate superior court. The writ shall
be taken within 45 days after the mailing of the notice of findings
and findings.

(b) Failure of an employer, officer, or anyone having direction,
management, or control of any place of employment or of
employees to observe a stop order issued and served upon him or
her pursuant to this section is guilty of a misdemeanor punishable
by imprisonment in the county jail not exceeding 60 days or by a
fine not exceeding ten thousand dollars ($10,000), or both. The
Labor Commissioner may also obtain injunctive and other relief
from the courts to carry out the purposes of this section.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 238.2 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 238.2. end insert   

(a) The Labor Commissioner may create a lien on any
real property in California of an employer that is conducting
business in violation of Section 238 for the full amount of any
wages, interest, penalties, and attorney’s fees claimed to be owed
to any employee.

(b) The Labor Commissioner may create the lien provided in
this section by recording a certificate of lien using the same
procedure applicable under subsection (g) of Section 98.2.

(c) The Labor Commissioner shall issue a certificate of release,
releasing the lien created under this section, upon final satisfaction
of any judgment entered in favor of the employee, upon
adjudication of the claim in favor of the employer, upon the filing
of a surety bond pursuant to Section 238. The certificate of release
may be recorded by the employer at the employer’s expense.

(d) Unless the lien is satisfied or released, a lien under this
section shall continue until 10 years from the date of its creation.

(e) Prior to using this lien procedure in this section, the Labor
Commissioner shall provide at least 20 days’ preliminary notice
to the employer. The preliminary notice shall advise the employer
of the nature and amount of the employee’s claim and of the Labor
Commissioner’s authority to create a lien on the employer’s
property to secure payment of the claim.

(f) The Labor Commissioner shall serve the preliminary notice
on the employer by 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.
The Labor Commissioner shall serve a copy of any notice of lien
on the employer in the same manner.

(g) Upon entry of a final order, decision, or award issued in an
appeal pursuant to Section 98.2 against the employer for unpaid
wages, or entry of a final judgment against the employer for unpaid
wages in an action filed in the superior court, the Labor
Commissioner may bring an action to foreclose on any lien created
pursuant to this section.

(h) A lien created pursuant to this section is in addition to any
other lien rights available to an employee or to the Labor
Commissioner and shall not be construed to limit those rights.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 238.3 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 238.3. end insert   

(a) The Labor Commissioner may create a lien on any
personal property in California of an employer that conducts
business in violation of Section 238 for the full amount of any
wages, interest, penalties, and attorney’s fees claimed to be owed
to any employee.

(b) The Labor Commissioner may create the lien provided in
this section by filing a notice of lien with the Secretary of State on
the standard form of initial financing statement pursuant to Section
9521 of the Commercial Code. The standard form shall be
completed in the following manner:

(1) The Labor Commissioner shall be identified as the secured
party.

(2) The employer shall be identified as the debtor.

(3) The description of the collateral shall include the following
statements:

(A) A statement of the Labor Commissioner’s demand for
payment of the wages, penalties, interest, and attorney’s fees. 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.

(B) A general statement of the kind of work furnished by the
employee and the dates of employment.

(c) For the purpose of the Secretary of State’s index pursuant
to Sections 9515, 9516, and 9522 of the Commercial Code and for
the purpose of the issuance of a certificate pursuant to Section
9519 or 9528 of the Commercial Code, the Secretary of State shall
treat a notice of lien pursuant to this section as a financing
statement.

(d) The lien attaches to all personal property that is owned by
the employer at the time of the filing of the notice of lien, or that
is subsequently acquired by the employer, that can be made subject
to a security interest under the Commercial Code.

(e) The Labor Commissioner shall file a termination statement,
releasing the lien created under this section, upon final satisfaction
of any judgment entered in favor of the employee, upon
adjudication of the claim in favor of the employer, upon the filing
of a surety bond in a form acceptable to the Labor Commissioner
sufficient to secure the claim.

(f) The notice of claim of lien to which the termination statement
relates ceases to be effective upon the filing of a termination
statement with the office of the Secretary of State. A termination
statement for a notice of lien may be filed in the same manner as
a termination statement for a financing statement filed pursuant
to Section 9513 of the Commercial Code.

(g) Unless the lien is satisfied or released, a lien under this
section shall continue until 10 years from the date of its creation.

(h) Prior to using this lien procedure in this section, the Labor
Commissioner shall provide at least 20 days’ preliminary notice
to the employer. The preliminary notice shall advise the employer
of the nature and amount of the employee’s claim and of the Labor
Commissioner’s authority to create a lien on the employer’s
personal property to secure payment of the claim.

(i) The Labor Commissioner shall serve the preliminary notice
on the employer by 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.
The Labor Commissioner shall serve a copy of any notice of lien
on the employer in the same manner.

(j) Upon entry of a final order, decision, or award issued in an
appeal pursuant to Section 98.2 against the employer for unpaid
wages, or entry of a final judgment against the employer for unpaid
wages in an action filed in the superior court, the Labor
Commissioner may bring an action to foreclose on any lien created
pursuant to this section.

(k) A lien created pursuant to this section in addition to any
other lien rights available to an employee or to the Labor
Commissioner shall not be construed to limit those rights.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 238.4 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 238.4. end insert   

(a) An employer in the long-term care industry that is
also required to obtain a license from the State Department of
Public Health or the State Department of Social Services pursuant
to Division 2 (commencing with Section 1200) of the Health and
Safety Code may not obtain a license or renew that license if the
employer is conducting business in violation of Section 238.

(b) For purposes of this section “long-term care” means the
operation of a skilled nursing facility, intermediate care facility,
congregate living facility, hospice facility, adult residential facility,
residential care facility for persons with chronic life-threatening
illness, residential care facility for the elderly, continuing care
retirement community, home health agency, or home care
organization, as those terms are used in Division 2 (commencing
with Section 1200) of the Health and Safety Code.

end insert

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 238.5 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 238.5. end insert   

(a) An individual, partnership, corporation, limited
liability company, joint venture, or association that, as part of its
business, contracts with an employer to perform services in the
property services or long-term care industries shall be jointly and
severally liable, where the individual, partnership, corporation,
limited liability company, joint venture, or association has been
named as a defendant and provided notice pursuant to subdivision
(c), with the employer for any unpaid wages, including interest,
and the employer was found liable for those unpaid wages by an
order, decision or award issued pursuant to Section 98.2, to the
extent the amounts are for services performed under that contract.
The issue of joint and several liability under this section may be
determined by the Labor Commissioner in a proceeding under
Section 98.

(b) The joint and several liability provided by this section shall
not apply to unpaid wages owed to employees covered by a bona
fide collective bargaining agreement, if the agreement expressly
provides for wages, hours of work, working conditions, a process
to resolve disputes concerning nonpayment of wages, and a waiver
of the joint and several liability provided by this section.

(c) An employer that contracts to provide services in the
property services or long-term care industries shall, prior to
entering into such a contract, provide written notice to the other
party to the prospective contract of any unsatisfied final judgments
against the employer for nonpayment of wages. The notice shall
also provide the text of this section. The employer shall provide,
within thirty (30) days of the entry of the judgment, written notice
of any unsatisfied final judgments against the employer for
nonpayment of wages to any parties with which the employer is
presently under contract to provide services in the property
services or long-term care industries. The failure of the employer
to provide such notices shall not be a defense to the joint and
several liability provided by this section.

(d) For purposes of this section:

(1) “Property services” means janitorial, security guard, valet
parking, landscaping and gardening services.

(2) “Long-term care” has the same definition as in Section
238.4.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 558.1 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 558.1. end insert   

Any person who would be liable for any violation under
Section 558 may also be held liable in an action pursuant to Section
98, 203, 226, 1193.6, 1194, or 2802.

end insert

begin insert

begin insert SEC. 11. end insert   

end insert begin insert

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.

end insert

All matter omitted in this version of the bill appears in the bill as introduced in the Senate, February. (JR11)