Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2416

Introduced by Assembly Member Stone

February 21, 2014

An act begin insert to add Chapter 3 (commencing with Section 3000) to Title 14 of Part 4 of Division 3 of the Civil Code, end insert relating to liens.

LEGISLATIVE COUNSEL’S DIGEST

AB 2416, as amended, Stone. Liens: laborers and employees.

Existing law grants specified persons, including laborers, as defined, who contribute labor, skill, or services to a work of improvement the right to record a begin delete mechanics end delete begin insert end insert begin insert mechanic’s end insert lien upon the property so improved. begin insert 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 Division of Labor Standards Enforcement, which is authorized to conduct investigations, hold hearings, and impose fines and penalties for nonpayment of wages. end insert

begin insert

This bill would, with certain exceptions, authorize an employee to record and enforce a wage lien upon real and personal property of an employer, or a property owner, as specified, for wages, other compensation, and related penalties and damages owed the employee. The bill would prescribe requirements relating to the recording and enforcement of the wage lien and for its cancellation and removal. The bill would require a notice of lien on real property to be executed under penalty of perjury.

end insert begin insert

By expanding the scope of the crime of perjury, this bill would impose a state-mandated local program.

end insert begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

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

end insert begin delete

This bill would state the intent of the Legislature to enact legislation that would specify a procedure for various classes of laborers to effectuate a lien for unpaid wages and allow employees to effectuate a lien on the property of their employer for unpaid wages.

end delete

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

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

begin insert

begin insert SECTION 1. end insert   

end insert begin insert

This act shall be known, and may be cited, as the
California Wage Theft Prevention Act.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Chapter 3 (commencing with Section 3000) is added
to Title 14 of Part 4 of Division 3 of the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 3. end insert Wage Liens

 

begin insert 3000. end insert   

(a) An employee shall have a lien on all property of the
employer in California, including after-acquired property, for the
full amount of any wages and other compensation, penalties, and
interest owed to the employee.

(b) If the employer is a natural person, a lien under this section
shall apply to the employer’s principal residence only to the extent
that the employee provided labor to the benefit of the employer’s
household or principal residence.

(c) The amount of the lien under this section shall include unpaid
wages and other compensation required by California law,
penalties available under the Labor Code, interest at the same
rate as for prejudgment interest in this state, and the costs of filing
and service of the lien. The amount of compensation that may be
claimed as lien under this section includes all wages agreed to be
paid to the employee, but no less than the amount required by law,
including direct wages and compensation required to be paid to
other persons or entities, that would qualify as “employer
payments” described in Section 1773.1 of the Labor Code.

(d) An employee’s lien upon personal property shall be limited
to property subject to a security interest under the Commercial
Code pursuant to the filing of a financing statement with the
Secretary of State.

(e) Any act authorized or required under this chapter with
regard to an employee may also be undertaken by any person or
entity, including any governmental agency, to which a portion of
an employer’s compensation is payable or that has standing under
applicable law to maintain a direct legal action on behalf of the
employee to collect any portion of compensation owed to the
employee, or that is authorized by the employee to act on the
employee’s behalf.

(f) A lien pursuant to this section shall not be claimed by an
employee who is exempt from the protections of Industrial Welfare
Commission wage orders under the administrative, executive, or
professional exemptions. In any action involving such a lien, the
employer shall plead and prove exempt status as an affirmative
defense.

(g) A lien pursuant to this section is in addition to any other
lien rights held by the employee and shall not be construed to limit
these rights.

begin insert 3001. end insert   

(a) The lien described in Section 3000 shall not attach
if the employer has obtained a surety bond or insurance that
provides for payment of the wages and other compensation,
penalties, and interest, claimed by the employee and is in an
amount that is adequate to fully satisfy the employee’s claim. If
the surety bond or insurance contract is inadequate to cover the
entire amount of the employee’s claim, the lien shall be limited to
the amount of the claim that exceeds the bond or insurance
coverage. Within 30 days of being provided with proof of a valid
surety bond or insurance contract that applies to the claim, the
employee shall file a release of any lien recorded or a notice
reducing the lien to the amount that exceeds the bond or insurance
coverage.

(b) The lien described in Section 3000 shall not attach for labor
performed under a valid collective bargaining agreement if the
agreement expressly provides for a regular hourly pay of not less
than 30 percent more than the state minimum wage rate, addresses
the issue of security for the payment of wages, and expressly waives
requirements of this chapter in clear and unambiguous terms. If
part of the labor was performed under a collective bargaining
agreement as so described the lien shall be limited to the amount
of the claim based on labor that was not performed under the
agreement. Within 30 days of being provided with proof of such
a collective bargaining agreement, the employee shall file a release
of any lien recorded or a notice reducing the lien to the amount
permitted by this chapter.

(c) If an employee, after receiving proper notice under this
section, acts unreasonably and in bad faith in recording or filing
a notice of lien or in refusing to file a release or reduction of the
lien, the employer shall be entitled to recover attorney’s fees and
costs in an action to remove or reduce the lien, and the court in
its discretion may also issue a fine, not to exceed one thousand
dollars ($1,000).

begin insert 3001.5. end insert   

(a) At least five days prior to recording a notice of
lien with a county recorder pursuant to Section 3003 or filing a
notice of lien with the Secretary of State pursuant to Section 3004,
the employee shall provide the owner or reputed owner of the
property against which the lien is to be recorded preliminary
written notice of the intent to record a notice of lien.

(b) Notice under this part shall include the following:

(1) All of the information required by subdivision (b) of Section
3003, to the extent known to the person giving the notice.

(2) The following statement in boldface type:

NOTICE TO EMPLOYER, if the person that has given you this
notice is not paid in full for work performed in your employ, a lien
may be placed on your property after a period of five days after
this notice is served. Foreclosure of the lien may lead to loss of
all or part of your property. You may wish to protect yourself
against this by (1) ensuring that the person that has given you this
notice is paid in full for work performed in your employ, or (2)
any other method that is appropriate under the circumstances.
This notice is required by law to be served by the undersigned as
a statement of your legal rights.

(c) Notice is not invalid by reason of any variance from the
requirements of this section if the notice is sufficient to substantially
inform the person given notice of the information required by this
section and other information required in the notice.

(d) Service of the notice required by this section shall be by the
means described in subdivision (c) of Section 3004 and shall be
deemed to have been given three business days after mailing of
the notice.

begin insert 3002. end insert   

(a) The lien described in Section 3000 shall be
permanently extinguished unless a notice of lien in accordance
with Section 3003 or 3004 is recorded or filed, and served upon
the employer, within 180 days of the date that the employee ceased
working for the employer.

(b) The employee shall commence an action to enforce the lien
and prove the amount owed within 180 days of the date of filing
or recording of the notice of lien. If the employee does not
commence an action to enforce the lien within that time, the lien
shall be permanently extinguished and is unenforceable, unless
the employee and the owner of the property subject to the lien
agree to extend the time for enforcing the lien in writing and record
or file notice of the fact and terms of the extension prior to the
expiration of the time for commencing an action to enforce the
lien. If the employee does not commence an action to enforce the
lien within the extended time period, the lien shall be permanently
extinguished and is unenforceable.

(c) If the lien has been extinguished pursuant to subdivision (a)
or (b), upon demand and 15 days’ notice by the employer or any
affected party, the employee shall record or file a release of the
lien. If an employee fails to file a release of the lien after proper
notice has been mailed to the employee’s address as indicated on
the notice of the lien, the employer or affected party may petition
the court for an order releasing the lien. If the employee acted
unreasonably and in bad faith in refusing to file a release of lien,
the employer or affected party shall be entitled to recover its
attorney’s fees and costs incurred in the action, and the court in
its discretion may also issue a fine not to exceed one thousand
dollars ($1,000).

begin insert 3003. end insert   

(a) With regard to a lien on real property under Section
3000, the employee shall record a notice of lien with the county
recorder in the county where the real property is located.

(b) The notice of lien shall be executed under penalty of perjury,
as defined in Section 118 of the Penal Code, and shall include all
of the following:

(1) A statement of the employee’s demand for payment of the
wages and other compensation, penalties, and interest. 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.

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

(3) The name of the person or entity by whom the employee was
employed.

(4) The employee’s mailing address.

(c) The employee shall serve the notice of lien 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.

(d) The lien attaches to all real property owned by the employer
at the time of the filing of the notice of lien, or that is subsequently
acquired by the employer, that is located in any county in which
the notice of lien is recorded, regardless of whether the property
is identified in the notice of lien.

begin insert 3004. end insert   

(a) With regard to a lien on personal property under
Section 3000, the employee shall file a notice of lien with the
Secretary of State. Except as otherwise provided in this chapter,
the manner, form, and place of filing shall be as described in
Chapter 5 (commencing with Section 9501) of Division 9 of the
Commercial Code. The notice of the lien shall be placed in the
same file as financing statements pursuant to Section 9522 of the
Commercial Code.

(b) The notice shall be executed under penalty of perjury, as
defined in Section 118 of the Penal Code, and shall state the
following:

(1) A statement of the employee’s demand for payment of the
wages and other compensation, penalties, and interest. 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.

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

(3) The name of the person by whom the employee was
employed.

(4) The employee’s mailing address.

(c) The employee shall serve the notice of lien 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.

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

begin insert 3005. end insert   

(a) In order to enforce a lien under Section 3000, the
employee shall demonstrate in a civil action, or in a proceeding
under Section 98 of the Labor Code, that he or she is owed wages
or other compensation and any related penalties and interest, or
the employer’s liability shall be established pursuant to a citation
issued under Section 1197.2 of the Labor Code and the process
for contesting such a citation.

(b) If the employee chooses to pursue the wage claim in an
administrative proceeding before the Labor Commissioner
pursuant to Section 98 of the Labor Code, the Labor Commissioner
may establish the amount of lien if a lien has been recorded. If no
lien has been recorded at the time the administrative claim is filed,
the Labor Commissioner may provide the notice and record the
lien on behalf of the employee.

(c) If the Labor Commissioner issues a citation under Section
1197.2 of the Labor Code for the failure to pay wages to an
employee, the Labor Commissioner may provide preliminary notice
and record a lien on behalf of the employee.

(d) If a notice of lien is recorded or filed pursuant to Section
3003 or 3004 and an action to recover unpaid wages has been
filed by the employee, that action shall also be deemed an action
to enforce the lien and foreclose upon any property subject to the
recorded lien. In the judgment resulting from an action, the court
may order the sale at a sheriff’s auction or the transfer to the
plaintiff of title or possession of any property subject to the lien.
Whether or not the court makes an order as part of the judgment,
any property subject to the lien may be foreclosed upon at any
point after a judgment for unpaid wages is issued.

(e) The employee is entitled to court costs and reasonable
attorney’s fees for filing a successful action to enforce a lien
pursuant to this section.

(f) If judgment is entered against the employee in the action to
enforce the lien or if the case is dismissed with prejudice, the lien
shall be extinguished. The judgment shall include the date the
notice of lien was recorded and, to the extent applicable, the county
in which it was recorded, the book and page or series number of
the place in the legal records in which the lien was recorded, and
a legal description of the property to which the lien attaches. The
judgment may be appealed by filing a notice of appeal on or before
60 days after the entry of judgment. If an appeal is filed, the lien
shall continue in force until all issues on the appeal have been
decided. If the period for appeal runs without an appeal having
been filed, or if the appeal fails, the judgment entered under this
section shall be equivalent to cancellation of the lien and its
removal from the record. A judgment entered pursuant to this
subdivision is a recordable instrument. Upon recordation of a
certified copy of the judgment, the property described in the
judgment is released from claim of lien. Alternatively, if the lien
is extinguished, upon demand and 15 days’ notice by the property
owner, the employee shall file a release of the lien. If an employee
refuses to file a release of the lien after proper notice, an employer
or property owner may petition the court for an order to file a
release of the lien. If the employee acted unreasonably and in bad
faith in refusing to file a release of the lien, the employer or
property owner shall be entitled to attorney’s fees and costs
incurred in the action, and the court in its discretion may also
issue a fine not to exceed one thousand dollars ($1,000).

(g) Any number of claims to enforce employee liens against the
same employer may be joined in a single proceeding, but the court
may order separate trials or hearings. If the proceeds of the sale
of the property subject to a lien are insufficient to pay all the
claimants, whether or not claims have been joined together, the
court shall order the claimants to be paid in proportion to the
amount due each claimant.

(h) If a court finds that false information was knowingly and in
bad faith included in a notice of lien by an employee with an intent
to defraud, both of the following shall apply:

(1) The lien shall be extinguished and the right to a lien as
provided by this chapter shall be forfeited.

(2) The court may award reasonable attorney’s fees and court
costs to the property owner or employer for action taken to defeat
the lien claim.

begin insert 3006. end insert   

A lien established pursuant to Section 3000 takes
precedence over all other claims, debts, judgments, decrees, liens,
encumbrances, or mortgages, originating after the date that the
notice of lien is filed or recorded, except as to the following:

(a) A tax lien or other government lien.

(b) A purchase money mortgage.

(c) A security interest in personal property retained by the seller
of that personal property in a sales transaction.

(d) Other liens that also arise from the performance of labor,
including, but not limited to, mechanic’s liens arising under Section
8400.

begin insert 3007. end insert   

As to the first fifty thousand dollars ($50,000) of the
amount claimed, a lien established pursuant to Section 3000 takes
precedence over all other claims, debts, judgments, decrees, liens,
encumbrances, or mortgages originating prior to the date that the
notice of lien is filed or recorded and after January 1, 2016, except
as to the following:

(a) A tax lien or other government lien.

(b) A purchase money mortgage.

(c) A security interest in personal property retained by the seller
of that personal property in a sales transaction.

(d) Other liens that also arise from the performance of labor,
including, but not limited to, mechanic’s liens arising under Section
8400.

(e) The lien of a financial institution for any amount advanced
by the financial institution pursuant to a contract entered into
prior to January 1, 2016, including any extension or renewal of a
contract.

begin insert 3010. end insert   

(a) An employee shall have a lien on the real property
at which the employee performed work, for the amount of any
wages and other compensation, penalties, and interest owed to
the employee for performing work at that property, under any of
the following circumstances:

(1) The property owner and the employee’s employer are related
parties. If the property owner is a natural person, this lien shall
apply to the property owner’s principal residence only to the extent
that the employee provided labor to the benefit of that household
or residence.

(2) The employee was employed by a contractor or
subcontractor performing services for the property owner or its
agent, or for a related party to the property owner, or for the
related party’s agent, regardless of whether a written contract
exists. This subdivision shall not apply if the services were provided
to a household or residence.

(3) The employee was employed on commercial property by the
property owner’s lawful tenant or subtenant, if the work was
performed in an industry with a traditionally high risk of wage
theft. For purposes of this subdivision, an industry with a
traditionally high risk of wage theft means the restaurant, garment,
car wash, grocery store, recycling and waste collection, trucking
and hauling, and warehouse industries. This subdivision shall not
apply if the commercial property was leased by the property owner
pursuant to a lease entered into prior to January 1, 2015, unless
the lease is modified or extended after that date.

(4) The employee was employed to perform property services
work on commercial property by the property owner's lawful tenant
or subtenant or by the tenant’s or subtenant’s agent, or by a
contractor or subcontractor in the execution of a contract awarded
by the tenant or subtenant or by the tenant’s or subtenant’s agent,
regardless of whether a written contract exists. For purposes of
this subdivision, “property services work” means work in the
janitorial, security guard, parking services, and landscaping and
gardening industries. This subdivision shall not apply if the
commercial property was leased by the property owner pursuant
to a lease entered into prior to January 1, 2015, unless the lease
is modified or extended after that date.

(b) For purposes of this section, “related parties” means a party
owns or controls, or is owned or controlled, or is under common
ownership or control, with the other party. For purposes of defining
“related parties,” “ownership” means 50 percent or greater
ownership, and “control” means the right granted by law to
exercise decision power over administration, finances, and
operations.

(c) The amount of the lien under this section shall include unpaid
wages and other compensation required by California law,
penalties available under the Labor Code, interest at the same
rate as for prejudgment interest in this state, and the costs of filing
and service of the lien. The amount of compensation that may be
claimed as lien under this section includes all wages agreed to be
paid to the employee, but no less than the amount required by law,
including direct wages and compensation required to be paid to
other persons or entities, that would qualify as “employer
payments” described in Section 1773.1 of the Labor Code.

(d) Any act authorized or required under this chapter with
regard to an employee may also be undertaken by any person or
entity, including any governmental agency, to which a portion of
an employee’s compensation is payable or that has standing under
applicable law to maintain a direct legal action on behalf of the
employee to collect any portion of compensation owed to the
employee, or that is authorized by the employee to act on the
employee’s behalf.

(e) A lien pursuant to this section shall not be claimed by an
employee who is exempt from the protections of Industrial Welfare
Commission wage orders under the administrative, executive, or
professional exemptions. In any action involving a lien, the
property owner shall plead and prove exempt status as an
affirmative defense.

(f) This section shall not apply to the extent that the employee
would be entitled to a mechanic’s lien on the same property under
Section 8400.

(g) A lien pursuant to this section is in addition to any other
lien rights held by the employee and shall not be construed to limit
these rights.

begin insert 3011. end insert   

(a) The lien described in Section 3010 shall not attach
if the employer or property owner has obtained a surety bond or
insurance that provides for payment of the wages and other
compensation, penalties, and interest claimed by the employee
and is in an amount that is adequate to fully satisfy the employee’s
claim. If the surety bond or insurance contract is inadequate to
cover the entire amount of the employee’s claim, the lien shall be
limited to the amount of the claim that exceeds the bond or
insurance coverage. Within 30 days of being provided with proof
of a valid surety bond or insurance contract that applies to the
claim, the employee shall file a release of any lien recorded or a
notice reducing the lien to the amount that exceeds the bond or
insurance coverage.

(b) The lien described in Section 3010 shall not attach for labor
performed under a valid collective bargaining agreement if the
agreement expressly provides for a regular hourly pay of not less
than 30 percent more than the state minimum wage rate, addresses
the issue of security for the payment of wages, and expressly waives
requirements of this chapter in clear and unambiguous terms. If
part of the labor was performed under a collective bargaining
agreement as so described, the lien shall be limited to the amount
of the claim based on labor that was not performed under the
agreement. Within 30 days of being provided with proof of such
a collective bargaining agreement, the employee shall file a release
of any lien recorded or a notice reducing the lien to the amount
permitted by this chapter.

(c) If an employee, after receiving proper notice under this
section, acts unreasonably and in bad faith in recording or filing
a notice of lien or in refusing to file a release or reduction of the
lien, the property owner shall be entitled to recover attorney’s fees
and costs in an action to remove or reduce the lien, and the court
in its discretion may also issue a fine not to exceed one thousand
dollars ($1,000).

begin insert 3012. end insert   

(a) At least 20 days prior to recording a notice of lien
with a county recorder pursuant to Section 3014, the employee
shall provide the owner or reputed owner of the property against
which the lien is to be recorded preliminary written notice of the
intent to record a notice of lien.

(b) Notice under this part shall include the following:

(1) All of the information required by subdivision (b) of Section
3014.

(2) The name and address of any entity with which the
employee’s employer has contracted to provide the labor for which
the employee seeks past due wages or other compensation, to the
extent known by the person giving notice.

(3) The following statement in boldface type:

NOTICE TO PROPERTY OWNER, if the person that has given
you this notice is not paid in full for work performed at real
property you own, a lien may be placed on your property after a
period of 20 days from the date this notice is served. Foreclosure
of the lien may lead to loss of all or part of your property. You
may wish to protect yourself against this by (1) ensuring that the
person that has given you this notice is paid in full for work
performed, or (2) any other method that is appropriate under the
circumstances. This notice is required by law to be served by the
undersigned as a statement of your legal rights. This notice is not
intended to reflect upon the financial condition of your related
party, contractor, subcontractor, tenant, or subtenant.

(c) Notice is not invalid by reason of any variance from the
requirements of this section if the notice is sufficient to substantially
inform the person given notice of the information required by this
section and other information required in the notice.

(d) An employer, contractor, subcontractor, tenant, or subtenant
shall make available to any person seeking to give preliminary
notice the name and address of the property owner.

(e) Service of the notice required by this Section shall be by the
means described in subdivision (c) of Section 3014 and shall be
deemed to have been given three business days after mailing of
the notice.

begin insert 3013. end insert   

(a) The lien described in Section 3010 shall be
permanently extinguished unless a notice of lien in accordance
with Section 3014 is recorded, and served upon the property owner,
within 180 days of the date that the employee ceased to perform
work at the property.

(b) The employee shall commence an action to enforce the lien
and prove the amount owed within 180 days of the date of filing
or recording of the notice of lien. If the employee does not
commence an action to enforce the lien within that time, the lien
shall be permanently extinguished and is unenforceable, unless
the employee and the owner of the property subject to the lien
agree to extend the time for enforcing the lien in writing and record
or file notice of the fact and terms of the extension prior to the
expiration of the time for commencing an action to enforce the
lien. If the employee does not commence an action to enforce the
lien within the extended time period, the lien shall be permanently
extinguished and is unenforceable.

(c) If the lien has been extinguished pursuant to subdivision (a)
or (b), upon demand and 15 days’ notice by the property owner
or any affected party, the employee shall record or file a release
of the lien. If an employee fails to file a release of the lien after
proper notice has been mailed to the employee’s address as
indicated on the notice of the lien, the employer or affected party
may petition the court for an order releasing the lien. If the
employee acted unreasonably and in bad faith in refusing to file
a release of the lien, the property owner or affected party shall be
entitled to recover its attorney’s fees and costs incurred in the
action, and the court in its discretion may also issue a fine not to
exceed one thousand dollars ($1,000).

begin insert 3014. end insert   

(a) The employee shall record a notice of lien with the
county recorder in the county where the real property is located.

(b) The notice of lien shall be executed under penalty of perjury,
as defined in Section 118 of the Penal Code, and shall include all
of the following:

(1) A statement of the employee’s demand for payment of the
wages and other compensation, penalties, and interest. 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.

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

(3) The name of the person or entity by whom the employee was
employed.

(4) The employee’s mailing address.

(5) A description of the address or site of the property at which
the work was performed sufficient for identification.

(6) The name of the property owner or reputed owner, if known.

(c) The employee shall serve the notice of lien on the employer
and the property owner or reputed owner, 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, to the address of the property
subject to the lien, and to the residence or place of business of the
property owner or reputed owner.

(d) The lien attaches only to the property that is specifically
identified in the notice of lien.

begin insert 3015. end insert   

(a) In order to enforce a lien under Section 3010, the
employee shall demonstrate in a civil action that he or she is owed
wages or other compensation and any related penalties and interest
and that the property is property subject to a lien under Section
3010.

(b) If a notice of lien is recorded or filed pursuant to Section
3014 and an action to recover unpaid wages has been filed by the
employee against the employer, and the property owner has been
joined as a party, that action shall also be deemed an action to
enforce the lien and foreclose upon any property subject to the
recorded lien. In the judgment resulting from an action, the court
may order the sale at a sheriff’s auction or the transfer to the
plaintiff of title or possession of any property subject to the lien.
Whether or not the court makes an order as part of the judgment,
any property subject to the lien may be foreclosed upon at any
point after a judgment for unpaid wages is issued.

(c) The employee is entitled to court costs and reasonable
attorney’s fees for filing a successful action to enforce a lien
pursuant to this section.

(d) If judgment is entered against the employee in the action to
enforce the lien or if the case is dismissed with prejudice, the lien
shall be extinguished. The judgment shall include the date the
notice of lien was recorded, the county in which it was recorded,
the book and page or series number of the place in the legal
records in which the lien was recorded, and a legal description of
the property to which the lien attaches. The judgment may be
appealed by filing a notice of appeal on or before 60 days after
the entry of judgment. If an appeal is filed, the lien shall continue
in force until all issues on the appeal have been decided. If the
period for appeal runs without an appeal having been filed, or if
the appeal fails, the judgment entered under this section shall be
equivalent to cancellation of the lien and its removal from the
record. A judgment entered pursuant to this subdivision is a
recordable instrument. Upon recordation of a certified copy of the
judgment, the property described in the judgment is released from
claim of lien. Alternatively, if the lien is extinguished, upon demand
and 15 days’ notice by the property owner, the employee shall file
a release of the lien. If an employee refuses to file a release of the
lien after proper notice, a property owner may petition the court
for an order to file a release of the lien. If the employee acted
unreasonably and in bad faith in refusing to file a release of the
lien, the property owner shall be entitled to attorney’s fees and
costs incurred in the action, and the court in its discretion may
also issue a fine not to exceed one thousand dollars ($1,000).

(e) Any number of claims to enforce employee liens against the
same property owner may be joined in a single proceeding, but
the court may order separate trials or hearings. If the proceeds of
the sale of the property subject to a lien are insufficient to pay all
the claimants, whether or not claims have been joined together,
the court shall order the claimants to be paid in proportion to the
amount due each claimant.

(f) If a court finds that false information was knowingly and in
bad faith included in a notice of lien by an employee with an intent
to defraud, the following shall apply:

(1) The lien shall be extinguished and the right to a lien as
provided by this chapter shall be forfeited.

(2) The court may award reasonable attorney’s fees and court
costs to the property owner for action taken to defeat the lien claim.

begin insert 3016. end insert   

If the judgment in an action is against the property of a
property owner who is not the employer, the owner may deduct
the amount of the judgment and costs from any amount owed to
the employer. If the amount of the judgment and costs exceed the
amount owed to the employer, the owner may recover from the
owner, or the sureties on a bond given by the employer, if any, the
remaining amount of the judgment and costs.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

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

end insert

begin delete

SECTION 1.  

It is the intent of the Legislature to enact
legislation that would specify a procedure for various classes of
laborers to effectuate a lien for unpaid wages, and allow employees
to effectuate a lien on the property of their employer for unpaid
wages.

end delete