BILL ANALYSIS �
AB 2416
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ASSEMBLY THIRD READING
AB 2416 (Stone)
As Amended May 23, 2014
Majority vote
LABOR & EMPLOYMENT 5-2 JUDICIARY 7-3
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|Ayes:|Roger Hern�ndez, Alejo, |Ayes:|Wieckowski, Alejo, Chau, |
| |Chau, Holden, | |Dickinson, Garcia, |
| |Ridley-Thomas | |Muratsuchi, Stone |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Grove, Gorell |Nays:|Wagner, Gorell, |
| | | |Maienschein |
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APPROPRIATIONS 12-5
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|Ayes:|Gatto, Bocanegra, | | |
| |Bradford, | | |
| |Ian Calderon, Campos, | | |
| |Eggman, Gomez, Holden, | | |
| |Pan, Quirk, | | |
| |Ridley-Thomas, Weber | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bigelow, Donnelly, Jones, | | |
| |Linder, Wagner | | |
| | | | |
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SUMMARY : Authorizes an employee to record and enforce a wage
lien upon: 1) an employer's property; and 2) the real property
at which the employee performed work, as specified.
Specifically, this bill :
1)Provides that an employee shall have a lien on all property of
the employer for the full amount of any wages and other
compensation, penalties, and interest owed to the employee,
subject to the following:
a) If the employer is a natural person, the lien shall only
apply to employer's principal place of residence only to
the extent that the employee provided labor to the benefit
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of the employer's household or principal residence.
b) A lien shall not be claimed by an employee who is exempt
from specified administrative, executive, or professional
exemptions under current law.
c) The lien shall not attach if the employer has obtained a
surety bond or insurance in an amount adequate to fully
satisfy the employee's claim, as specified.
d) The lien shall not apply to work performed under a valid
collective bargaining agreement, as specified.
e) The lien action may be also be undertaken by any person
or entity to which a portion of an employee's compensation
is payable or that has standing under applicable law, or
that is authorized by the employee to act on the employee's
behalf.
2)Provides that 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 under any of the following circumstances:
a) The property owner and the employee's employer are
related parties, as defined.
b) 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.
c) The employee was employed to perform "property services
work" on commercial property. "Property services work" is
defined to mean work in the janitorial, security guard,
parking services, and landscaping and gardening industries.
3)Provides that a lien on the real property at which the
employee performed work shall be subject to the following:
a) If the property owner is a natural person, the 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.
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b) A lien shall not be claimed by an employee who is exempt
from specified administrative, executive, or professional
exemptions under current law.
c) The lien shall not attach if the employer or property
owner has obtained a surety bond or insurance in an amount
adequate to fully satisfy the employee's claim, as
specified.
d) The lien shall not apply to work performed under a valid
collective bargaining agreement, as specified.
e) The lien action may be also be undertaken by any person
or entity to which a portion of an employee's compensation
is payable or that has standing under applicable law, or
that is authorized by the employee to act on the employee's
behalf.
f) The lien attaches only to real property owned by the
property owner at the time of the recording of the notice
of lien.
4)Requires the employee, (at least five days prior to recording
a notice of lien for an employer's property, and at least 20
days prior to recording a notice of lien for a property owner
at whose property the employee performed work), to provide the
owner of the property with a preliminary written notice of the
intent to record a lien, as specified.
5)Provides that the notice of lien shall be executed under
penalty of perjury and shall include specified information.
6)Provides that the lien shall be permanently extinguished
unless the notice of lien is served on the employer or
property owner within 180 days of the date the employee ceased
working for the employer, and shall be permanently
extinguished as to property that transferred or sold unless a
notice of lien had been recorded or filed prior to the
transfer or sale, as specified.
7)Establishes timelines and procedures for the commencement of
civil actions to enforce the lien, as specified, including
that the action shall be commenced within 90 days of the
filing or recording of the notice of lien.
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8)Provides that if an employee acted unreasonably or in bad
faith is refusing to file a release of lien, the employer or
property owner shall be entitled to recover attorney's fees
and costs, and authorizes the court to issue a fine against
the employee not to exceed $1,000.
9)Provides that if a court finds that false information was
knowingly and in bad faith included in a notice of lien with
an intent to defraud, the lien shall be extinguished and the
right to a lien forfeited, and the court may award reasonable
attorney's fees and costs to the property owner or employer.
10)Establishes additional procedures for an employer or property
owner to release the lien, as specified under certain
conditions.
11)Makes other related and conforming changes.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)It is difficult to predict the number of liens that could be
recorded as a result of this bill. The Department of
Industrial Relations' Division of Labor Standards Enforcement
(DSLE) estimates ongoing special fund costs (Labor Enforcement
and Compliance Fund) of approximately $6.1 million. The
increased workload is related to third-party administrative
proceedings and investigation and /or removal of the lien in
the majority of all wage claims. DIR also may incur one-time
costs should rulemaking or regulations be required to
implement the bill's provisions.
2)The Secretary of State (SOS) will incur costs, likely in the
range of $100,000 to $110,000, to the extent wage liens are
treated the same as mechanics liens.
3)Unknown, potentially significant court costs associated with
additional proceedings regarding wage claims.
COMMENTS : This bill is co-sponsored by the Service Employees
International Union (SEIU), which states that it is an attempt
to fight the high rate of wage theft in California by
authorizing a simple wage lien process for low-wage workers to
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use against employers who rob them of their wages. They argue
that California has strong labor protections on paper, but in
reality companies can pick and choose whether they want to
follow the law or break it. As a result, billions of dollars are
stolen every year from workers' paychecks, which hurts workers,
their families, their communities, and law-abiding businesses.
SEIU concludes that this bill creates a clear standard to
prevent unscrupulous businesses from stealing from workers.
Workers need better tools that will help them recover the wages
they are owed, and good businesses need a level playing field.
Opponents, including the California Chamber of Commerce, contend
that this bill would cripple California businesses by allowing
any employee, governmental agency, or anyone "authorized by the
employee to act on the employee's behalf" to file liens on an
employer's real property or any property where an employee
"performed work" for an alleged, yet unproven, wage claim.
Moreover, opponents argue that this bill forces property owners
to resort to courts that are already underfunded. They argue
that if a lien is improperly filed against an employer's
property or third party's property, and the employee fails to
withdraw the lien but does not necessarily act in bad faith or
with the intent to defraud, there is no consequence. Rather,
the employer or property owner must petition the court for
removal of the lien before being able to fully utilize their
property. Opponents state that it is undisputed that the
judicial branch has suffered severe budget cuts in recent years
that has created a significant backlog of civil cases. Unless
the judicial branch receives additional funding in this year's
budget, it will have to continue to cut services and reduce
staff. Under this bill, property owners who cannot locate the
employee who filed the lien to have it removed or where the
employee refuses to remove the lien, will have the property
essentially frozen for months, even years, until the judicial
branch can actually calendar the petition for adjudication.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN: 0003624
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