Amended in Assembly September 4, 2015

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 BillNo. 588


Introduced by Senator De León

(Principal coauthor: Assembly Member Roger Hernández)

(Coauthors: Assembly Members Alejo, Atkins, Gray, and Low)

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. A violation of the general provisions governing working hours is a crime.

This bill would authorize the Labor Commissioner to provide for a hearing to recover civil penalties against any employer or other person acting on behalf of an employer, as defined, for a violation of those provisions regulating hours and days of work in any order of the Industrial Welfare 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.

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 state, as specified, unless the employer has obtained a bond from a surety company 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 penalty, as provided. 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, owner, director, officer, or managing agent of the employer 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 or a successor employer with respect to real property, as described, 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 employer’s nonpayment of wages remains unsatisfied after the time to appeal has expired and there is no pendingbegin delete appeal, this bill would prohibitend deletebegin insert appeal andend insert an employer in the long-term care industry, as specified,begin delete from obtaining a license or renewing that license if the employerend delete isbegin insert found to beend insert conducting business without obtaining a bond or reaching an accord with an individual holding an unsatisfiedbegin delete judgment, as described above.end deletebegin insert judgment, this bill would authorize those departments to deny a new license or the renewal of an existing license. The bill would also authorize the Labor Commissioner to notify those departments of such a violation.end 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.

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:

P4    1

SECTION 1.  

Chapter 10 (commencing with Section 690.020)
2is added to Division 1 of Title 9 of Part 2 of the Code of Civil
3Procedure
, to read:

 

P5    1Chapter  10. Enforcement of Judgments by Labor
2Commissioner
3

 

4

690.020.  

For the purpose of the remedies provided under this
5chapter, jurisdiction is conferred upon the superior court.

6

690.030.  

(a) Except as otherwise provided by statute, whenever
7a warrant or notice of levy may properly be issued by the Labor
8Commissioner pursuant to Section 96.8 of the Labor Code, and
9the warrant may be levied with the same effect as a levy pursuant
10to a writ of execution, the Labor Commissioner may use any of
11the remedies available to a judgment creditor, including, but not
12limited to, those provided in Chapter 6 (commencing with Section
13708.010) of Division 2.

14(b) The proper court for the enforcement of the remedies
15provided under this chapter is the superior court of any of the
16following counties:

17(1) The county where the employee resides.

18(2) The county where the judgment debtor resides.

19(3) The county where the person against whom the levy or
20warrant was issued resides.

21

690.040.  

(a) Whenever the Labor Commissioner, pursuant to
22Section 96.8 of the Labor Code, levies upon property pursuant to
23a warrant or notice of levy for the collection of an unsatisfied
24judgment or award:

25(1) If the debtor is a natural person, the debtor is entitled to the
26same exemptions to which a judgment debtor is entitled. Except
27as provided in subdivisions (b) and (c), the claim of exemption
28shall be made, heard, and determined as provided in Chapter 4
29(commencing with Section 703.010) of Division 2 in the same
30manner as if the property were levied upon under a writ of
31execution.

32(2) A third person may claim ownership or the right to
33possession of the property or a security interest in or lien on the
34property. Except as provided in subdivisions (b) and (c) or as
35otherwise provided by statute, the third-party claim shall be made,
36heard, and determined as provided in Division 4 (commencing
37with Section 720.010) in the same manner as if the property were
38levied upon under a writ of execution.

P6    1(b) In the case of a warrant or notice of levy issued pursuant to
2Section 96.8 of the Labor Code, the claim of exemption or the
3third-party claim shall be filed with the Labor Commissioner.

4(c) A claim of exemption or a third-party claim pursuant to this
5section shall be heard and determined in a superior court specified
6in subdivision (b) of Section 690.030.

7

690.050.  

(a) Notwithstanding any other law, in the case of a
8writ of execution issued by a court of competent jurisdiction
9pursuant to Chapter 3 (commencing with Section 699.010) and
10Chapter 5 (commencing with Section 706.010) of Division 2, the
11Labor Commissioner, when collecting an unsatisfied judgment or
12award pursuant to Section 96.8 of the Labor Code, may perform
13the duties of the levying officer, except that the Labor
14Commissioner need not give himself or herself the notices that the
15levying officer is required to serve on a judgment creditor or the
16notices that a judgment creditor is required to give to the levying
17officer.

18(b) Notwithstanding subdivision (a) of Section 700.140 and
19Sections 700.150, 700.160, and 700.170, if the levy is for a deposit,
20credits, money, or property in the possession or under the control
21of a bank or savings and loan association or for an account
22receivable or other general intangible owed to the judgment debtor
23by an account debtor, the Labor Commissioner may deliver or
24mail a notice of levy to a centralized location designated by the
25bank or savings and loan association or, in the case of an account
26receivable or other general intangible, to the agent for service of
27process of the account debtor. If the notice of levy is received at
28the designated central location for the bank or savings and loan
29association, the notice of levy will apply to all deposits, credits,
30money, and personal property held by the bank or savings and loan
31association regardless of the location of that property. The notice
32of levy may be issued directly by the Labor Commissioner, whether
33or not a court has issued a writ of execution, and shall contain all
34of the information required to be included in a writ of execution
35under Section 699.520 and in a notice of levy under Section
36699.540.

37

SEC. 2.  

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

38

96.8.  

(a) Notwithstanding any other law, beginning 20 days
39after a judgment is entered by a court of competent jurisdiction in
40favor of the Labor Commissioner, or in favor of any employee
P7    1pursuant to subdivision (e) of Section 98.2, the Labor
2Commissioner may, with the consent of any employee in whose
3favor the judgment is entered, collect any outstanding amount of
4the judgment by mailing a notice of levy upon all persons having
5in their possession, or who will have in their possession or under
6their control, any credits, money, or property belonging to the
7judgment debtor, or who owe any debt to the judgment debtor at
8the time they receive the notice of levy.

9(b) Notwithstanding any other law, the Labor Commissioner
10may execute a levy on any property that may be levied under
11Section 700.140, 700.150, 700.160, or 700.170 of the Code of
12Civil Procedure by mailing a notice of levy to the person against
13whom the levy is directed and serving a copy on the judgment
14debtor. The notice of levy shall contain all of the information
15required to be included in a writ of execution under Section
16699.520 of the Code of Civil Procedure and in a notice of levy
17under Section 699.540 of the Code of Civil Procedure.

18(c) Any person, upon whom a levy has been noticed having in
19his or her possession or under his or her control any credits, money,
20or property belonging to the judgment debtor or owing any debts
21to the judgment debtor at the time of receipt of the levy or coming
22into his or her possession or under his or her control within one
23year of receipt of the notice of levy, shall surrender the credits,
24money, or property to the Labor Commissioner or pay to the Labor
25Commissioner the amount of any debt owed to the judgment debtor
26within 10 days of service of the levy, and shall surrender the credits
27or property, or the amount of any debt owing to the judgment
28debtor coming into his or her own possession or control within
29one year of receipt of the notice of levy within 10 days of the date
30of coming into possession or control of the credits or property or
31the amount of any debt owed to the judgment debtor.

32(d) Any person who surrenders to the Labor Commissioner
33pursuant to this section any credits, money, or property, or pays
34the debts owed to the judgment debtor, shall be discharged from
35any obligation or liability to the judgment debtor to the extent of
36the amount paid to the Labor Commissioner as a result of the levy.

37(e) If the levy is made on a deposit or credits, money, or property
38in the possession or under the control of a bank, savings and loan
39association, or other financial institution as defined by Section
40669a(d)(1) of Title 42 of the United States Code, the notice of levy
P8    1may be delivered or mailed to a centralized location designated
2by the bank, savings and loan association, or other financial
3institution pursuant to Section 690.050 of the Code of Civil
4Procedure.

5(f) Any person who is noticed with a levy pursuant to this section
6and who fails or refuses to surrender any credits, money, or
7property or pay any debts owed to the judgment debtor shall be
8liable in his or her own person or estate to the Labor Commissioner
9in an amount equal to the value of the credits, money, or other
10property or in the amount of the levy, up to the amount specified
11in the levy.

12(g) The fees, commissions, expenses, and the reasonable costs
13associated with the sale of property levied upon by warrant or levy
14pursuant to this section, including, but not limited to, appraisers’
15fees, auctioneers’ fees, and advertising fees are an obligation of
16the judgment debtor and may be collected from the judgment debtor
17by virtue of the warrant or levy or in any other manner as though
18these items were part of the judgment or award outstanding.

19(h) This section shall not apply to the judgment debtor’s interest
20in real property.

21(i) This section shall not apply if enforcement of the judgment
22has been stayed on appeal pursuant to Chapter 2 (commencing
23with Section 916) of Title 13 of Part 2 of the Code of Civil
24Procedure.

25

SEC. 3.  

Section 98 of the Labor Code is amended to read:

26

98.  

(a) The Labor Commissioner is authorized to investigate
27employee complaints. The Labor Commissioner may provide for
28a hearing in any action to recover wages, penalties, and other
29demands for compensation, including liquidated damages if the
30complaint alleges payment of a wage less than the minimum wage
31fixed by an order of the Industrial Welfare Commission or by
32statute, properly before the division or the Labor Commissioner,
33including orders of the Industrial Welfare Commission, and shall
34determine all matters arising under his or her jurisdiction. The
35Labor Commissioner may also provide for a hearing to recover
36civil penalties due pursuant to Section 558 against any employer
37or other person acting on behalf of an employer, including, but not
38limited to, an individual liable pursuant to Section 558.1. It is
39within the jurisdiction of the Labor Commissioner to accept and
40determine claims from holders of payroll checks or payroll drafts
P9    1returned unpaid because of insufficient funds, if, after a diligent
2search, the holder is unable to return the dishonored check or draft
3to the payee and recover the sums paid out. Within 30 days of the
4filing of the complaint, the Labor Commissioner shall notify the
5parties as to whether a hearing will be held, whether action will
6be taken in accordance with Section 98.3, or whether no further
7action will be taken on the complaint. If the determination is made
8by the Labor Commissioner to hold a hearing, the hearing shall
9be held within 90 days of the date of that determination. However,
10the Labor Commissioner may postpone or grant additional time
11before setting a hearing if the Labor Commissioner finds that it
12would lead to an equitable and just resolution of the dispute. A
13party who has received actual notice of a claim before the Labor
14Commissioner shall, while the matter is before the Labor
15Commissioner, notify the Labor Commissioner in writing of any
16change in that party’s business or personal address within 10 days
17after the change in address occurs.

18It is the intent of the Legislature that hearings held pursuant to
19this section be conducted in an informal setting preserving the
20rights of the parties.

21(b) When a hearing is set, a copy of the complaint, which shall
22include the amount of compensation requested, together with a
23notice of time and place of the hearing, shall be served on all
24parties, personally or by certified mail, or in the manner specified
25in Section 415.20 of the Code of Civil Procedure.

26(c) Within 10 days after service of the notice and the complaint,
27a defendant may file an answer with the Labor Commissioner in
28any form as the Labor Commissioner may prescribe, setting forth
29the particulars in which the complaint is inaccurate or incomplete
30and the facts upon which the defendant intends to rely.

31(d) No pleading other than the complaint and answer of the
32defendant or defendants shall be required. Both shall be in writing
33and shall conform to the form and the rules of practice and
34procedure adopted by the Labor Commissioner.

35(e) Evidence on matters not pleaded in the answer shall be
36allowed only on terms and conditions the Labor Commissioner
37shall impose. In all these cases, the claimant shall be entitled to a
38continuance for purposes of review of the new evidence.

39(f) If the defendant fails to appear or answer within the time
40allowed under this chapter, no default shall be taken against him
P10   1or her, but the Labor Commissioner shall hear the evidence offered
2and shall issue an order, decision, or award in accordance with the
3evidence. A defendant failing to appear or answer, or subsequently
4contending to be aggrieved in any manner by want of notice of the
5pendency of the proceedings, may apply to the Labor
6Commissioner for relief in accordance with Section 473 of the
7Code of Civil Procedure. The Labor Commissioner may afford
8this relief. No right to relief, including the claim that the findings
9or award of the Labor Commissioner or judgment entered thereon
10are void upon their face, shall accrue to the defendant in any court
11unless prior application is made to the Labor Commissioner in
12accordance with this chapter.

13(g) All hearings conducted pursuant to this chapter are governed
14by the division and by the rules of practice and procedure adopted
15by the Labor Commissioner.

16(h) (1) Whenever a claim is filed under this chapter against a
17person operating or doing business under a fictitious business
18name, as defined in Section 17900 of the Business and Professions
19Code, which relates to the person’s business, the division shall
20inquire at the time of the hearing whether the name of the person
21is the legal name under which the business or person has been
22licensed, registered, incorporated, or otherwise authorized to do
23business.

24(2) The division may amend an order, decision, or award to
25conform to the legal name of the business or the person who is the
26defendant to a wage claim, if it can be shown that proper service
27was made on the defendant or his or her agent, unless a judgment
28had been entered on the order, decision, or award pursuant to
29subdivision (d) of Section 98.2. The Labor Commissioner may
30apply to the clerk of the superior court to amend a judgment that
31has been issued pursuant to a final order, decision, or award to
32conform to the legal name of the defendant, if it can be shown that
33proper service was made on the defendant or his or her agent.

34

SEC. 4.  

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

35

238.  

(a) If a final judgment against an employer arising from
36the employer’s nonpayment of wages for work performed in this
37state remains unsatisfied after a period of 30 days after the time
38to appeal therefrom has expired and no appeal therefrom is pending,
39the employer shall not continue to conduct business in this state,
40including conducting business using the labor of another business,
P11   1contractor, or subcontractor instead of the labor of an employee,
2unless the employer has obtained a bond from a surety company
3admitted to do business in this state and has filed a copy of that
4bond with the Labor Commissioner. The bond shall be effective
5and maintained until satisfaction of all judgments for nonpayment
6of wages. The principal sum of the bond shall not be less than the
7following:

8(1) Fifty thousand dollars ($50,000) if the unsatisfied portion
9of the judgment is no more than five thousand dollars ($5,000).

10(2) One hundred thousand dollars ($100,000) if the unsatisfied
11portion of the judgment is more than five thousand dollars ($5,000)
12and no more than ten thousand dollars ($10,000).

13(3) One hundred fifty thousand dollars ($150,000) if the
14unsatisfied portion of the judgment is more than ten thousand
15dollars ($10,000).

16(b) In lieu of filing and maintaining the bond required by this
17section, the employer may provide the Labor Commissioner with
18a notarized copy of an accord reached with an individual holding
19an unsatisfied final judgment. If the accord provides for the
20judgment to be paid in installments, and an installment payment
21is not made, the employer is no longer excused from satisfying the
22bond requirement of this section.

23(c) (1) The bond required by this section shall be in favor of,
24and payable to, the people of the State of California, and shall be
25for the benefit of any employee damaged by his or her employer’s
26failure to pay wages, including any interest, penalties, and
27attorney’s fees.

28(2) This section shall not require a bond in favor of employees
29covered by a bona fide collective bargaining agreement, if the
30agreement expressly provides for wages, hours of work, working
31conditions, a process to resolve disputes concerning nonpayment
32of wages, and a waiver of the bond required by this section.

33(3) Thirty days prior to the cancellation or termination of any
34bond required by this section, the surety shall send written notice
35to both the employer and the Labor Commissioner, identifying the
36bond and the date of the cancellation or termination. If the bond
37is terminated or canceled, the employer shall obtain a new surety
38bond and file a copy of that bond with the Labor Commissioner
39to remain in compliance with this section.

P12   1(d) For purposes of this section, a judgment also includes any
2final arbitration award where the time to file a petition for a trial
3de novo or a petition to vacate or correct the arbitration award has
4expired and no petition is pending.

5(e) Subject to subdivision (f), an employer similar in operation
6and ownership to an employer with an unsatisfied final judgment
7for unpaid wages, upon receiving written notice of the unsatisfied
8judgment, shall be deemed the same employer for purposes of this
9section if (1) the employees of the successor employer are engaged
10in substantially the same work in substantially the same working
11conditions under substantially the same supervisors or (2) if the
12new entity has substantially the same production process or
13operations, produces substantially the same products or offers
14substantially the same services, and has substantially the same
15body of customers.

16(f) Any employer, or other person acting on behalf of an
17employer, that conducts business in violation of this section shall
18be subject to a civil penalty of two thousand five hundred dollars
19($2,500). Any employer that has previously been assessed and
20failed to pay a penalty pursuant to this section shall be subject to
21an additional penalty of one hundred dollars ($100) for each
22calendar day that the employer conducts business in violation of
23this section; however, this additional amount shall not exceed one
24hundred thousand dollars ($100,000). These civil penalties may
25be assessed under a citation issued by the Labor Commissioner
26and the procedures for issuing, contesting, and enforcing judgments
27shall be the same as those set forth in Section 1197.1. The Labor
28Commissioner shall not assess these civil penalties against an entity
29determined to be a successor employer pursuant to subdivision (e)
30within the first 30 days after notice of the judgment.

31

SEC. 5.  

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

32

238.1.  

(a) Where an employer is conducting business in
33violation of Section 238, the Labor Commissioner may issue and
34serve on that employer a stop order prohibiting the use of employee
35labor by that employer until the employer’s compliance with
36Section 238, provided that the stop order would not compromise
37or imperil public safety or the life, health, and care of vulnerable
38individuals. The stop order shall also prohibit the employer from
39continuing to provide services by conducting business using the
40labor of another business, contractor, or subcontractor. The stop
P13   1order shall become effective immediately upon the service of the
2order. Any employee affected by the work stoppage shall be paid
3by the employer for such time lost, not exceeding 10 days, pending
4compliance by the employer. The employer may protest the stop
5order by making and filing with the Labor Commissioner a written
6request for a hearing within 20 days after service of the stop order.
7The hearing shall be held within five days from the date of filing
8the request. The Labor Commissioner shall notify the employer
9of the time and place of the hearing by mail. At the conclusion of
10the hearing, the stop order shall be immediately affirmed or
11dismissed, and within 24 hours thereafter, the Labor Commissioner
12shall issue and serve on all parties to the hearing by registered or
13certified mail a written notice of findings, accompanied by written
14findings. A writ of mandate may be taken from the findings to the
15appropriate superior court. The writ shall be taken within 45 days
16after the mailing of the notice of findings accompanied by written
17findings. The Labor Commissioner may file an action in superior
18court for injunctive and other appropriate relief to enforce the stop
19order and shall be entitled to recovery of costs and attorney’s fees
20if any relief is obtained by the Labor Commissioner.

21(b) Failure of an employer, owner, director, officer, or managing
22agent of the employer to observe a stop order issued and served
23upon him or her pursuant to this section is guilty of a misdemeanor
24punishable by imprisonment in county jail not exceeding 60 days
25or by a fine not exceeding ten thousand dollars ($10,000), or both.
26For the purposes of this section, the term “managing agent” has
27the same meaning as in subdivision (b) of Section 3294 of the Civil
28Code.

29

SEC. 6.  

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

30

238.2.  

(a) The Labor Commissioner may create a lien on any
31real property in California of an employer, or a successor employer
32pursuant to subdivision (e) of Section 238, that is conducting
33business in violation of Section 238 for the full amount of any
34wages, interest, and penalties claimed to be owed to any employee.
35To the extent attorney’s fees are specifically allowed to be
36recovered by this code, such as by, but not limited to, subdivision
37(f) of Section 2673.1 and Section 2802, during a hearing pursuant
38to Section 98, the Labor Commissioner may include that amount
39in the lien.

P14   1(b) The Labor Commissioner may create the lien provided in
2this section by recording a certificate of lien using the same
3procedure applicable under subdivision (g) of Section 98.2.

4(c) The Labor Commissioner shall issue a certificate of release,
5releasing the lien created under this section, upon final satisfaction
6of any judgment entered in favor of the employee, upon
7adjudication of the claim in favor of the employer, upon the filing
8of a surety bond pursuant to Section 238. The certificate of release
9may be recorded by the employer at the employer’s expense.

10(d) Unless the lien is satisfied or released, a lien under this
11section shall continue until 10 years from the date of its creation.

12(e) Prior to using the lien procedure in this section, the Labor
13Commissioner shall provide at least 20 days’ notice to the
14employer. The notice shall advise the employer of the Labor
15Commissioner’s authority to create a lien on the property to secure
16payment of the claim.

17(f) The Labor Commissioner may serve the notice with and in
18the same manner as the order, decision, and award in accordance
19with Section 98.1.

20(g) A lien created pursuant to this section is in addition to any
21other lien rights available to an employee or to the Labor
22Commissioner and shall not be construed to limit those rights.

23

SEC. 7.  

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

24

238.3.  

(a) The Labor Commissioner may create a lien on any
25personal property in California of an employer that conducts
26business in violation of Section 238 for the full amount of any
27wages, interest, and penalties claimed to be owed to any employee.
28To the extent attorney’s fees are specifically allowed to be
29recovered by this code, such as by, but not limited to, subdivision
30(f) of Section 2673.1 and Section 2802, during a hearing pursuant
31to Section 98, the Labor Commissioner may include that amount
32in the lien.

33(b) The Labor Commissioner may create the lien provided in
34this section by filing a notice of lien with the Secretary of State
35on the standard form of initial financing statement pursuant to
36Section 9521 of the Commercial Code. The standard form shall
37be completed in the following manner:

38(1) The Labor Commissioner shall be identified as the secured
39party.

40(2) The employer shall be identified as the debtor.

P15   1(3) The description of the collateral shall include the following
2statements:

3(A) A statement of the Labor Commissioner’s demand for
4payment of the wages, penalties, interest, and attorney’s fees, if
5applicable. The statement shall specify the amount owed to the
6employee, and if the amount is estimated, shall provide an
7explanation for the basis of the estimate.

8(B) A general statement of the kind of work furnished by the
9employee and the dates of employment.

10(c) For the purpose of the Secretary of State’s index pursuant
11to Sections 9515, 9516, and 9522 of the Commercial Code and for
12the purpose of the issuance of a certificate pursuant to Section
139519 or 9528 of the Commercial Code, the Secretary of State shall
14treat a notice of lien pursuant to this section as a financing
15statement.

16(d) The lien attaches to all personal property that is owned by
17the employer at the time of the filing of the notice of lien, or that
18is subsequently acquired by the employer, that can be made subject
19to a security interest under the Commercial Code.

20(e) The Labor Commissioner shall file a termination statement,
21releasing the lien created under this section, upon final satisfaction
22of any judgment entered in favor of the employee, upon
23adjudication of the claim in favor of the employer, upon the filing
24of a surety bond in a form acceptable to the Labor Commissioner
25sufficient to secure the claim.

26(f) The notice of claim of lien to which the termination statement
27relates ceases to be effective upon the filing of a termination
28statement with the office of the Secretary of State. A termination
29statement for a notice of lien may be filed in the same manner as
30a termination statement for a financing statement filed pursuant
31to Section 9513 of the Commercial Code.

32(g) Unless the lien is satisfied or released, a lien under this
33section shall continue until 10 years from the date of its creation.

34(h) Prior to using this lien procedure in this section, the Labor
35Commissioner shall provide at least 20 days’ preliminary notice
36to the employer. The preliminary notice shall advise the employer
37of the nature and amount of the employee’s claim and of the Labor
38 Commissioner’s authority to create a lien on the employer’s
39personal property to secure payment of the claim.

P16   1(i) The Labor Commissioner shall serve the preliminary notice
2on the employer by certified mail with return receipt requested,
3evidenced by a certificate of mailing, postage prepaid, addressed
4to the employer at the employer’s residence or place of business.
5The Labor Commissioner shall serve a copy of any notice of lien
6on the employer in the same manner.

7(j) Upon entry of a final order, decision, or award issued in an
8appeal pursuant to Section 98.2 against the employer for unpaid
9wages, or entry of a final judgment against the employer for unpaid
10wages in an action filed in the superior court, the Labor
11Commissioner may bring an action to foreclose on any lien created
12pursuant to this section.

13(k) A lien created pursuant to this section in addition to any
14other lien rights available to an employee or to the Labor
15Commissioner shall not be construed to limit those rights.

16

SEC. 8.  

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

17

238.4.  

(a) begin deleteAn end deletebegin insertIf an end insertemployer in the long-term care industry
18that is also required to obtain a license from the State Department
19of Public Health or the State Department of Social Services
20pursuant to Division 2 (commencing with Section 1200) of the
21Health and Safetybegin delete Code may not obtain a license or renew that
22license if the employer is conducting businessend delete
begin insert Code, is found to
23beend insert
in violation of Sectionbegin delete 238.end deletebegin insert 238, the State Department of Public
24Health or the State Department of Social Services may deny a new
25licence or the renewal of an existing license for that employer.end insert

begin insert

26(b) If the Labor Commissioner finds that an employer in the
27long-term care industry is conducting business in violation of
28Section 238, the Labor Commissioner shall notify the State
29Department of Public Health or the State Department of Social
30Services.

end insert
begin delete

31(b)

end delete

32begin insert (c)end insert For purposes of this section “long-term care” means the
33operation of a skilled nursing facility, intermediate care facility,
34congregate livingbegin insert healthend insert facility, hospice facility, adult residential
35facility, residential care facility for persons with chronic
36life-threatening illness, residential care facility for the elderly,
37continuing care retirement community, home health agency, or
38home care organization, as those terms are used in Division 2
39(commencing with Section 1200) of the Health and Safety Code.

40

SEC. 9.  

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

P17   1

238.5.  

(a) (1) Any individual or business entity, regardless of
2its form, that, as part of its business, contracts for services in the
3property services or long-term care industries shall be jointly and
4severally liable for any unpaid wages, including interest, where
5the individual or business entity has been provided notice, by any
6party, of any proceeding or investigation by the Labor
7Commissioner in which the employer is found liable for those
8unpaid wages, to the extent the amounts are for services performed
9under that contract.

10 (2) The issue of joint and several liability under this section
11shall be determined (A) in a proceeding under Section 98 if the
12individual or contracting business is provided notice in the
13administrative complaint alleging such liability and named a
14defendant in the course of the Section 98 proceeding, (B) in an
15administrative proceeding brought by the Labor Commissioner to
16investigate, prosecute, or recover unpaid wages and interest
17pursuant to a citation, or in a court action brought by the Labor
18Commissioner, if the contracting individual or business is provided
19preliminary notice by the Labor Commissioner of joint and several
20liability under this section at least 30 days prior to issuance of a
21citation, or filing of a court action, or (C) by a court in an action
22pursuant to Section 98.2. No action for a violation or enforcement
23of this section shall be brought under Part 13 (commencing with
24Section 2698) of Division 2.

25(b) The joint and several liability provided by this section shall
26not apply to unpaid wages owed to employees covered by a bona
27fide collective bargaining agreement, if the agreement expressly
28provides for wages, hours of work, working conditions, a process
29to resolve disputes concerning nonpayment of wages, and a waiver
30of the joint and several liability provided by this section.

31(c) An employer that contracts to provide services in the property
32services or long-term care industries shall, prior to entering into
33such a contract, provide written notice to the other party to the
34prospective contract of any unsatisfied final judgments against the
35employer for nonpayment of wages. The notice shall also provide
36the text of this section. The failure of the employer to provide
37notice under this subdivision shall not be a defense to the joint and
38several liability provided by this section.

39(d) An employer that contracts to provide services in the
40property services or long-term care industries shall provide, within
P18   1 30 days of the entry of the judgment, written notice of any
2unsatisfied final judgments against the employer for nonpayment
3of wages to any parties with which the employer is presently under
4contract to provide services in the property services or long-term
5care industries. The failure of the employer to provide notice under
6this subdivision shall not be a defense to the joint and several
7liability provided by this section.

8(e) For the purposes of this section, the following apply:

9(1) “Property services” means janitorial, security guard, valet
10parking, landscaping, and gardening services.

11(2) “Long-term care” has the same definition as in Section 238.4.

12(f) This section shall not be interpreted to impose joint liability
13on an individual or the owner of a home-based business, for any
14property services, to the extent that the property services are
15provided at the individual or home-based business owner’s primary
16residence, provided that the primary residence does not have
17multiple housing units.

18

SEC. 10.  

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

19

558.1.  

(a) Any employer or other person acting on behalf of
20an employer, who violates, or causes to be violated, any provision
21regulating minimum wages or hours and days of work in any order
22of the Industrial Welfare Commission, or violates, or causes to be
23violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be
24held liable as the employer for such violation.

25(b) For purposes of this section, the term “other person acting
26on behalf of an employer” is limited to a natural person who is an
27owner, director, officer, or managing agent of the employer, and
28the term “managing agent” has the same meaning as in subdivision
29(b) of Section 3294 of the Civil Code.

30(c) Nothing in this section shall be construed to limit the
31definition of employer under existing law.

32

SEC. 11.  

No reimbursement is required by this act pursuant to
33Section 6 of Article XIII B of the California Constitution because
34the only costs that may be incurred by a local agency or school
35district will be incurred because this act creates a new crime or
36infraction, eliminates a crime or infraction, or changes the penalty
37for a crime or infraction, within the meaning of Section 17556 of
38the Government Code, or changes the definition of a crime within
P19   1the meaning of Section 6 of Article XIII B of the California
2Constitution.



O

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