Amended in Assembly April 10, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1897

Introduced by Assembly Member Roger Hernández

February 19, 2014

An act to add Section 2810.3 to the Labor Code, relating to begin delete privateemployment end delete begin insert private employment end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 1897, as amended, Roger Hernández. Labor contracting: client liability.

Existing law regulates the terms and conditions of employment and establishes specified obligations of employers to employees. Existing law prohibits a person or entity from entering into a contract for labor or services with a construction, farm labor, garment, janitorial, security guard, or warehouse contractor, if the person or entity knows or should know that the contract or agreement does not include sufficient funds for the contractor to comply with laws or regulations governing the labor or services to be provided.

This bill would require a client employer, as defined, to share with a labor contractor all begin insert civil end insert legal responsibility and begin insert civil end insert liability for the payment of wages, the failure to report and pay all required employer contributions, worker contributions, and personal income tax withholdings, and the failure to obtain valid workers’ compensation coverage. The bill would define a client employer as an individual or entity that begin delete receives end delete begin insert obtains or is provided end insert workers to perform labor or services within the usual course of business of the individual or entity from a labor contractor. The bill would define a labor contractor as an individual or entity that supplies workers, by contract or otherwise, to perform labor or services within the usual course of business for a client employer. The bill would specify that it does not prohibit client employers and labor contractors from mutually contracting for begin insert otherwise lawful end insert remedies begin delete , including indemnification, end delete for violations of its provisions by the other party. The bill would require a client employer or labor contractor to provide to a requesting begin insert enforcement end insert agency or department, and make available for copying, information required to verify compliance with applicable state laws. The bill would authorize the Labor Commissioner begin delete and end delete begin insert , end insert the Division of Occupational Safety and Health begin insert , and the Employment Development Department end insert to adopt necessary regulations and rules to administer and enforce the bill’s provisions. The bill would provide that waiver of its provisions is contrary to public policy, void, and unenforceable.

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

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

SECTION 1.  

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

2810.3.  

(a) As used in this section:

(1) “Client employer” means an individual or entity that begin delete receives end delete
begin insert obtains or is provided end insert workers to perform labor or services within
the usual course of business of the individual or entity from a labor
contractor.

(2) “Labor contractor” means an individual or entity that
contracts with a client employer to supply workers to perform
labor or services within the usual course of business or otherwise
provides workers to perform labor or services within the usual
course of business for the client employer.

(3) “Wages” has the same meaning provided by Section 200
and all sums payable to an employee or the state begin delete because of end delete begin insert based
upon end insert any failure to pay wages, as begin delete may be required end delete begin insert provided end insert by
law.

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

(b) A client employer shall share with a labor contractor all begin insert civil end insert
legal responsibility and begin insert civil end insert liability for the following:

(1) The payment of wages to workers provided by a labor
contractor.

(2) The failure to report and pay all required employer
contributions, worker contributions, and personal income tax
withholdings as required by the Unemployment Insurance Code.

(3) Failure to begin delete obtain end delete begin insert secure end insert valid workers’ compensation
coverage as required by begin delete law end delete begin insert Section 3700 end insert .

(c) A client employer shall not shift to the labor contractor any
legal duties or liabilities under the provisions of Division 5
(commencing with Section 6300) with respect to workers supplied
by the labor contractor.

(d) The provisions of subdivisions (b) and (c) are in addition
to, and shall be supplemental of, any other liability or requirement
established by statute or common law.

(e) This section does not prohibit a client employer from
establishing, exercising, or enforcing by contract any begin insert otherwise
lawful end insert remedies against a labor contractor begin delete , including, but not
limited to, end delete begin insert for end insert indemnification for liability created by acts of a
labor contractor.

(f) This section does not prohibit a labor contractor from
establishing, exercising, or enforcing by contract any begin insert otherwise
lawful end insert remedies against a client employer begin delete , including, but not
limited to, end delete begin insert for end insert indemnification for liability created by acts of a
client employer.

(g) Upon request by a state begin insert enforcement end insert agency or department,
a client employer or a labor contractor shall provide to the agency
or department any information required to verify compliance with
applicable state laws. Upon request, these records shall be made
available promptly for inspection, and the state agency or
department shall be permitted to copy them.

(h) The Labor Commissioner begin delete and the Division of Occupational
Safety and Health end delete may adopt regulations and rules of practice and
procedure necessary to administer and enforce begin delete this section end delete begin insert the
provisions of subdivisions (b) and (g) that are under his or her
jurisdiction end insert .

begin insert

(i) The Division of Occupational Safety and Health may adopt
regulations and rules of practice and procedure necessary to
administer and enforce the provisions of subdivisions (c) and (g)
that are under its jurisdiction.

end insert begin insert

(j) The Employment Development Department may adopt
regulations and rules of practice and procedure necessary to
administer and enforce the provisions of subdivisions (b) and (g)
that are under its jurisdiction.

end insert begin delete

(i)

end delete

begin insert (k) end insert  A waiver of this section is contrary to public policy, and is
void and unenforceable.