BILL ANALYSIS �
AB 1164
Page 1
ASSEMBLY THIRD READING
AB 1164 (Lowenthal)
As Amended January 23, 2014
Majority vote
JUDICIARY 6-3 LABOR & EMPLOYMENT 4-2
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|Ayes:|Wieckowski, Alejo, Chau, |Ayes:|Roger Hern�ndez, Chau, |
| |Dickinson, Muratsuchi, | |Gomez, Holden |
| |Stone | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wagner, Gorell, | | |
| |Maienschein |Nays:|Morrell, Gorell |
| | | | |
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APPROPRIATIONS 12-4
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|Ayes:|Gatto, Bocanegra, | | |
| |Bradford, | | |
| |Ian Calderon, Campos, | | |
| |Eggman, Gomez, Holden, | | |
| |Pan, Quirk, | | |
| |Ridley-Thomas, Weber | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bigelow, Allen, Linder, | | |
| |Wagner | | |
| | | | |
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SUMMARY : Authorizes an employee to record and enforce a wage
lien upon an employer's property, as specified. Specifically,
this bill :
1)Provides that an employee shall have a lien for the full
amount of any wages, other compensation, and related penalties
and damages owed to the employee on the following property:
a) All property of the employer, except that if the
employer is a natural person, a lien shall apply to the
employer's personal residence only to the extent that the
AB 1164
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employee provided labor to the benefit of that household or
residence.
b) The property upon which the employee bestowed labor for
the benefit of the property owner, except as specified.
2)Provides that the wage lien shall be permanently extinguished
unless a notice of lien is recorded and served within 180 days
of the date that the employee ceased working for the employer.
Requires the employee to commence action to enforce the lien
within 90 days of filing or recording notice of the lien.
3)Requires, with regard to a lien on real property, the employee
to record notice of the lien with the county recorder in the
county in which the property is located, and further requires
the lien to be executed under penalty of perjury and include
specified information.
4)Requires, with regard to a lien on personal property, the
employee to file a notice of lien with the Secretary of State
(SOS), as specified, and further requires the notice to be
executed under penalty of perjury and include specified
information. Delays implementation of this provision until
the SOS system is operational, but not later than July 1,
2016.
5)Specifies that in order to enforce a lien authorized by this
bill, the employee shall demonstrate in a civil action or in
an administrative proceeding before the Labor Commissioner,
that he or she is owed wages, compensation, or penalties and
damages.
6)Provides that the employee is entitled to court costs and
reasonable attorneys' fees for filing a successful action to
enforce the lien.
7)Authorizes an award of attorney's fees to a property owner if
the court determines that an employee's claim contained false
information with an intent to defraud.
8)Authorizes a court to provide for the recovery of employer's
attorney's fees if the employee fails to file a release of the
lien.
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9)Specifies that a wage lien shall not attach to the extent that
the employer has a surety bond or insurance to cover the
employee's claim.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)The Department of Industrial Relations' Division of Labor
Standards Enforcement (DLSE) has processed more than 33,000
wage claims annually in recent years. The number of such
cases that will involve wage liens is unknown. The department
estimates ongoing special fund costs (Labor Enforcement and
Compliance Fund) of about $1.6 million for 16 additional
positions related to increased workload involving:
a) Determining whether specific property on which an
employee bestowed labor implicates rights of property
owners, other than employers, who would have to be an
additional party in an administrative proceeding involving
the Labor Commissioner.
b) Additional prehearing investigation of wage claims to
confirm the appropriateness of a lien's contents, including
whether an employee claimant is likely not eligible to
obtain a lien for being exempt from the protections of
Industrial Welfare Commission wage orders, and performing
actions necessary to record the lien with either the
recorder's office or the SOS.
c) Performing additional administrative functions,
including preparing the lien form, providing notices to
parties, and service of documents.
The Department of Industrial Relations also may incur one-time
costs should a rulemaking or regulations be required to
implement the bill's provisions. The above costs could be
partially offset to the extent authorization for wage liens
has a deterrent impact on incidents of wage theft, which
reduces the DLSE's base workload.
2)The SOS will incur minor one-time costs to incorporate the
lien filing requirement into the new business filing system
and minor ongoing costs, offset to some extent by fees,
associated with filing the liens.
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3)Unknown, potentially significant court costs associated with
additional proceedings regarding wage claims.
COMMENTS : Under existing law, when an employer fails to pay
wages due, the employee has the right to file a claim against
his or her employer (or former employer) with the DLSE, which is
directed by the State Labor Commissioner. The Labor
Commissioner has jurisdiction over most private sector
employees, except those that are bona fide independent
contractors. After conducting an investigation, the Labor
Commissioner may hold an administrative conference or hearing,
or both. If a party is unhappy with the Labor Commissioner's
decision, it may appeal to the appropriate civil court.
However, the author contends that even where a worker wins a
favorable decision, the process of collecting the award is often
difficult and ineffective. Giving employees a "wage lien"
would, the author contends, provide an additional and arguably
more effective tool for an employee to recover unpaid wages.
This bill would, subject to certain exemptions, permit a worker
who has not been paid his or her wages to file a lien against
the employer's real or personal property, or a property upon
which the employee bestowed labor, for the amount of wages or
other compensation owed. The bill also sets forth procedures
and timelines for filing, enforcing, and extinguishing liens.
The wage lien bears some resemblance - both in form and intent -
to the more familiar "mechanics lien," the general right to
which is guaranteed by the California Constitution. As this
state constitutional right has been implemented in statutes,
however, the mechanic's lien is usually only available to
workers on construction projects and a few others specifically
provided for in statute.
This bill is supported by labor and employee rights
organizations who argue that the wage liens provided by this
bill will give employees a more effective tool for collecting
unpaid wages from irresponsible employers than is the case under
existing law.
Several business associations and employer groups oppose this
bill, arguing that employees should not be allowed to interfere
with an employer's business or property by filing liens without
first having to prove the merit of their allegations.
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Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334
FN: 0002998