Amended in Assembly September 1, 2015

Amended in Assembly July 1, 2015

Amended in Senate April 30, 2015

Amended in Senate April 20, 2015

Senate Bill No. 588

Introduced by Senator De León

(Principal coauthor: Assembly Member Roger Hernández)

(Coauthors: Assembly Members begin delete Alejo and Gray end delete begin insert Alejo, Atkins, Gray, and Low end insert )

February 26, 2015

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.

LEGISLATIVE COUNSEL’S DIGEST

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

(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.

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.

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.

(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. begin insert A violation of the general provisions governing working hours is a crime. end insert

This bill would authorize the Labor Commissioner to provide for a hearing begin insert to recover civil penalties end insert against any employer or other person acting on behalf of an begin delete employer end delete begin insert employer, as defined, end insert for a violation of those provisions regulating hours and days of work in any order of the Industrial Welfare begin delete 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 delete begin insert Commission, as specified. This bill would provide that any employer or other person acting on behalf of an employer, as defined, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, other related provisions of law is authorized to be held liable as the employer for such violation. Because the bill expands liability and a violation of those provisions would be a crime, the bill would impose a state-mandated local program. end 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.

This bill, beginning 20 days 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 Labor Commissioner any credits, money, or property, or pays the debts owed to the judgment debtor to be discharged from any obligation or liability to the judgment debtor to the extent of the amount paid to the Labor 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 owed to the judgment debtor liable in his or her own person or estate to the Labor Commissioner in an amount equal to the value of the credits, money, or property or in the amount of the levy, as provided.

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 begin delete state end delete begin insert state, as specified, end insert unless the employer has obtained a bond from a surety company begin delete admitted end delete 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 begin delete penalty end delete begin insert penalty, as provided end insert . 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, begin delete officer, or anyone having direction, management, or control of any place of employment or of employees end delete begin insert owner, director, officer, or managing agent of the employer end insert 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 begin insert or a successor employer with respect to real property, as described, end insert that is conducting business without satisfying the bond requirement for the full amount of any wages, interest, and penalties claimed to be owed to an employee, as specified.

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.

If a final judgment against an employer arising from the begin delete employer's end delete begin insert employer’s end insert 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. begin delete 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 delete begin insert The bill would require any individual or business entity that contracts for services in the property services or long-term care industries to be jointly and severally liable for any unpaid wages where the individual or business entity has been provided notice, by any party, of any proceeding or investigation by the Labor Commissioner in which the employer is found liable for those unpaid wages, to the extent the amounts are for services performed under that contract, as provided. end 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.

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.  

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

 

Chapter  10. Enforcement of Judgments by Labor
Commissioner

 

690.020.  

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

690.030.  

(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 Labor 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.

690.040.  

(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.

690.050.  

(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 Labor
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
Sections 700.150, 700.160, and 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 Labor 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, the notice of levy 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 Labor 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.

SEC. 2.  

Section 96.8 is added to the Labor Code, to read:

96.8.  

(a) Notwithstanding any other law, beginning 20 days
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 subdivision (e) of 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, 700.150, 700.160, 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 debtor 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 Labor Commissioner or pay to the Labor
Commissioner the amount of any debt owed to 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 owed to the judgment debtor.

(d) Any person who surrenders to the Labor Commissioner
pursuant to this section any credits, money, or property, or pays
the debts owed to the judgment debtor, shall be discharged from
any obligation or liability to the judgment debtor to the extent of
the amount paid to the Labor 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 owed to the judgment debtor shall be
liable in his or her own person or estate to the Labor 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.

(i) This section shall not apply if enforcement of the judgment
has been stayed on appeal pursuant to Chapter 2 (commencing
with Section 916) of Title 13 of Part 2 of the Code of Civil
Procedure.

SEC. 3.  

Section 98 of the Labor Code is amended to read:

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. The
Labor Commissioner may also provide for a hearing begin delete against any
employer or other person acting on behalf of an employer for a
violation of Section 558. end delete begin insert to recover civil penalties due pursuant
to Section 558 against any employer or other person acting on
behalf of an employer, including, but not limited to, an individual
liable pursuant to Section 558.1. 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.

SEC. 4.  

Section 238 is added to the Labor Code, to read:

238.  

(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 begin delete 20 end delete begin insert 30 end insert 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 begin delete state end delete
begin insert state, including conducting business using the labor of another
business, contractor, or subcontractor instead of the labor of an
employee, end insert 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. begin insert The bond shall be
effective and maintained until satisfaction of all judgments for
nonpayment of wages. end insert The principal sum of the bond shall not be
less than begin delete one hundred fifty thousand dollars ($150,000). end delete begin insert the
following: end insert

begin insert

(1) Fifty thousand dollars ($50,000) if the unsatisfied portion
of the judgment is no more than five thousand dollars ($5,000).

end insert begin insert

(2) One hundred thousand dollars ($100,000) if the unsatisfied
portion of the judgment is more than five thousand dollars ($5,000)
and no more than ten thousand dollars ($10,000).

end insert begin insert

(3) One hundred fifty thousand dollars ($150,000) if the
unsatisfied portion of the judgment is more than ten thousand
dollars ($10,000).

end insert

(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. If the accord provides for the
judgment to be paid in installments, and an installment payment
is not made, the employer is no longer excused from satisfying the
bond requirement of this section.

(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)  begin delete An end delete begin insert Subject to subdivision (f), an end insert employer similar in
operation and ownership to an employer with an unsatisfied final
judgment for unpaid wages, upon receiving written notice of the
unsatisfied judgment, shall be deemed the same employer for
purposes of this section if (1) the employees of the begin delete subsequent end delete
begin insert successor end insert 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 penalty of two thousand five hundred dollars
($2,500). Any employer that has previously begin delete paid end delete begin insert been assessed
and failed to pay end insert a penalty pursuant to this section shall be subject
to an additional penalty 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). begin insert These civil penalties may
be assessed under a citation issued by the Labor Commissioner
and the procedures for issuing, contesting, and enforcing judgments
shall be the same as those set forth in Section 1197.1. The Labor
Commissioner shall not assess these civil penalties against an
entity determined to be a successor employer pursuant to
subdivision (e) within the first 30 days after notice of the judgment. end insert

SEC. 5.  

Section 238.1 is added to the Labor Code, to read:

238.1.  

(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 begin delete subcontracting for labor. end delete
begin insert conducting business using the labor of another business,
contractor, or subcontractor. end insert 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 five 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 accompanied by written findings. begin insert The Labor
Commissioner may file an action in superior court for injunctive
and other appropriate relief to enforce the stop order and shall
be entitled to recovery of costs and attorney’s fees if any relief is
obtained by the Labor Commissioner. end insert

(b) Failure of an employer, begin delete officer, or anyone having direction,
management, or control of any place of employment or of
employees end delete begin insert owner, director, officer, or managing agent of the
employer end insert 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 begin delete the end delete county jail not exceeding 60 days or by a
fine not exceeding ten thousand dollars ($10,000), or both. begin delete The
Labor Commissioner may also obtain injunctive and other relief
from the courts to carry out the purposes of this section. end delete begin insert For the
purposes of this section, the term “managing agent” has the same
meaning as in subdivision (b) of Section 3294 of the Civil Code. end insert

SEC. 6.  

Section 238.2 is added to the Labor Code, to read:

238.2.  

(a) The Labor Commissioner may create a lien on any
real property in California of an begin delete employer end delete begin insert employer, or a successor
employer pursuant to subdivision (e) of Section 238, end insert that is
conducting business in violation of Section 238 for the full amount
of any wages, interest, and penalties claimed to be owed to any
employee. To the extent attorney’s fees are specifically allowed
to be recovered by this code, such as by, but not limited to,
subdivision (f) of Section 2673.1 and Section 2802, during a
hearing pursuant to Section 98, the Labor Commissioner may
include that amount in the lien.

(b) The Labor Commissioner may create the lien provided in
this section by recording a certificate of lien using the same
procedure applicable under begin delete subsection end delete begin insert subdivision end insert (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.

begin delete

(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.

end delete begin insert

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

end insert begin insert

(f) The Labor Commissioner may serve the notice with and in
the same manner as the order, decision, and award in accordance
with Section 98.1.

end insert begin delete

(h)

end delete

begin insert (g) end insert  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.

SEC. 7.  

Section 238.3 is added to the Labor Code, to read:

238.3.  

(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, and penalties claimed to be owed to any employee.
To the extent attorney’s fees are specifically allowed to be
recovered by this code, such as by, but not limited to, subdivision
(f) of Section 2673.1 and Section 2802, during a hearing pursuant
to Section 98, the Labor Commissioner may include that amount
in the lien.

(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, if
applicable. 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.

SEC. 8.  

Section 238.4 is added to the Labor Code, to read:

238.4.  

(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.

SEC. 9.  

Section 238.5 is added to the Labor Code, to read:

begin delete

238.5.  

(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
(b) of Section 98, 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.

end delete

begin insert

begin insert 238.5. end insert   

end insert begin insert

(a) (1) Any individual or business entity, regardless
of its form, that, as part of its business, contracts for services in
the property services or long-term care industries shall be jointly
and severally liable for any unpaid wages, including interest,
where the individual or business entity has been provided notice,
by any party, of any proceeding or investigation by the Labor
Commissioner in which the employer is found liable for those
unpaid wages, to the extent the amounts are for services performed
under that contract.

end insert begin insert

(2) The issue of joint and several liability under this section
shall be determined (A) in a proceeding under Section 98 if the
individual or contracting business is provided notice in the
administrative complaint alleging such liability and named a
defendant in the course of the Section 98 proceeding, (B) in an
administrative proceeding brought by the Labor Commissioner to
investigate, prosecute, or recover unpaid wages and interest
pursuant to a citation, or in a court action brought by the Labor
Commissioner, if the contracting individual or business is provided
preliminary notice by the Labor Commissioner of joint and several
liability under this section at least 30 days prior to issuance of a
citation, or filing of a court action, or (C) by a court in an action
pursuant to Section 98.2. No action for a violation or enforcement
of this section shall be brought under Part 13 (commencing with
Section 2698) of Division 2.

end insert

(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. begin delete The employer end delete begin insert The failure of the employer
to provide notice under this subdivision shall not be a defense to
the joint and several liability provided by this section. end insert

begin insert (d) end insert begin insert   end insert begin insert An employer that contracts to provide services in the
property services or long-term care industries end insert shall provide, within
begin delete thirty (30) end delete begin insert 30 end insert 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
begin delete such notices end delete begin insert notice under this subdivision end insert shall not be a defense
to the joint and several liability provided by this section.

begin delete

(d)

end delete

begin insert (e) end insert  For begin insert the end insert purposes of this begin delete section: end delete begin insert section, the following apply: end insert

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

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

begin insert

(f) This section shall not be interpreted to impose joint liability
on an individual or the owner of a home-based business, for any
property services, to the extent that the property services are
provided at the individual or home-based business owner’s primary
residence, provided that the primary residence does not have
multiple housing units.

end insert

SEC. 10.  

Section 558.1 is added to the Labor Code, to read:

begin delete

558.1.  

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 delete

begin insert

begin insert 558.1. end insert   

end insert begin insert

(a) Any employer or other person acting on behalf of
an employer, who violates, or causes to be violated, any provision
regulating minimum wages or hours and days of work in any order
of the Industrial Welfare Commission, or violates, or causes to be
violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be
held liable as the employer for such violation.

end insert begin insert

(b) For purposes of this section, the term “other person acting
on behalf of an employer” is limited to a natural person who is
an owner, director, officer, or managing agent of the employer,
and the term “managing agent” has the same meaning as in
subdivision (b) of Section 3294 of the Civil Code.

end insert begin insert

(c) Nothing in this section shall be construed to limit the
definition of employer under existing law.

end insert

SEC. 11.  

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.

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CORRECTIONS:

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