BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Senator Ben Hueso, Chair
Date of Hearing: June 25, 2014 2013-2014 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: No
Bill No: AB 2416
Author: Stone
As Introduced/Amended: May 23, 2014
SUBJECT
Liens: laborers and employers.
KEY ISSUE
Should the Legislature allow an employee to file a pre-judgment
lien on an employer's real and personal property in order to
assist the employee in collecting unpaid wages in the event of a
judgment against the employer?
ANALYSIS
Existing law provides mechanics, persons furnishing materials,
artisans, and laborers of every class the right to file a lien
upon the property upon which they have bestowed labor or
furnished material for the value of such labor and material.
Existing law also requires the Legislature to provide, by law,
for the speedy and efficient enforcement of such liens.
(California Constitution Article XIV, Section 3)
Existing law provides for mechanics liens relating to services
and supplies authorized and provided on a work of improvement.
Existing law also regulates the conditions under which a
mechanics lien may be enforced. (Civil Code ��8400-8494)
Existing law recognizes prejudgment wage liens against property
as a remedy in certain industries, including mining (Civil Code
�3060), agriculture (Civil Code ��3061.5-3061.6), and logging
(Civil Code �3065).
Existing law requires the Labor Commissioner and his or her
deputies and representatives authorized by him or her in
writing, upon the filing of a claim therefor by an employee, or
an employee representative authorized in writing by an employee,
with the Labor Commissioner, to take assignments of, among other
things, wage claims and incidental expense accounts and advances
and mechanics and other liens of employees. (Labor Code �96)
Existing law authorizes the Labor Commissioner, after
investigation and upon determination that wages or monetary
benefits are due and unpaid to any worker in the State of
California, to collect such wages or benefits on behalf of the
worker without assignment of such wages or benefits to the
Commissioner. (Labor Code �96.7)
Existing law authorizes the Labor Commissioner to investigate
employee complaints and provide for a hearing in any action to
recover wages, penalties, and other demands for compensation,
including liquidated damages if the complaint alleges payment of
a wage less than the minimum wage fixed by an order of the
Industrial Welfare Commission or by statute, properly before the
division or the Labor Commissioner, including orders of the
Industrial Welfare Commission, and is required to determine all
matters arising under his or her jurisdiction. (Labor Code �98)
Existing law authorizes the Labor Commissioner, at the
Commissioner's discretion and upon a final order, to place a
lien on real property for amounts due under the final order and
in favor of the employee or employees named in the order, with
the county recorder of any county in which the employer's real
property may be located. (Labor Code �98.2(g))
This bill would establish the California Wage Theft Prevention
Act, which would authorize an employee to 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.
Specifically, this bill would provide:
1. That the amount of the lien would include unpaid wages
and other compensation required by California law,
penalties available under the Labor Code, interest at the
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 2
Senate Committee on Labor and Industrial Relations
same rate as for prejudgment interest in this state, and
the costs of filing and service of the lien, but not 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," as
defined.
2. That a lien may be filed by any person or entity,
including any governmental agency, to which a portion of an
employer's compensation is payable or has standing under
applicable law to maintain a direct legal action on behalf
of the employee.
3. That a lien pursuant to this bill is in addition to any
other lien rights held by the employee and shall not be
construed to limit these rights.
This bill would limit an employee's lien upon personal property
to property subject to a security interest under the Commercial
Code pursuant to the filing of a financing statement with the
Secretary of State.
This bill would PROHIBIT the following in the filing of a lien:
1. Prohibit a lien from being claimed by an employee who is
exempt from the protections of Industrial Welfare
Commission wage orders under the administrative, executive,
or professional exemptions, and, in any action involving
such a lien, the employer would be required to plead and
prove exempt status as an affirmative defense.
2. Prohibit a lien from attaching 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, this bill would
require the lien to be limited to the amount of the claim
that exceeds the bond or insurance coverage.
3. Prohibit the lien from attaching for labor performed
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 3
Senate Committee on Labor and Industrial Relations
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.
This bill would create the following FILING requirements:
1. Require the employee, at least five days prior to
recording a notice of lien with a county recorder or filing
a notice of lien with the Secretary of State, to provide
the owner of the property against which the lien is to be
recorded preliminary written notice of the intent to record
a notice of lien.
2. Require the employee to record a notice of lien on real
property with the county recorder in the county where the
real property is located.
3. Require the employee to file a notice of lien on
personal property with the Secretary of State in the
manner, form, and place of filing as specified. A notice
of lien would be required to be placed in the same file as
financing statements, as specified.
4. Provide that 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.
5. Provide that the lien attaches to all personal property
that is owned by the employer at the time of the filing of
the notice of lien, or that is subsequently acquired by the
employer, that can be made subject to a security interest
under the Commercial Code.
6. Provide that the lien would be permanently extinguished
unless a notice of lien is recorded or filed, and served
upon the employer, within 180 days of the date that the
employee ceased working for the employer. That lien would
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 4
Senate Committee on Labor and Industrial Relations
also be permanently extinguished as to property that is
transferred or sold by the employer, unless a notice of
lien was recorded or filed before the transfer or sale, as
specified.
7. Provide that if an employee, after receiving proper
notice under this bill, 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 would
be entitled to recover attorney's fees and costs in an
action to remove or reduce the lien, and the court in its
discretion would be authorized to issue a fine, not to
exceed $1,000.
This bill would require the following NOTICE requirements in
filing the lien:
1. Require that notice to include specified information to
the extent known to the person giving the notice, proscribe
an informational statement for the employer, and also
provide that the notice would not be invalid by reason of
any variance from these requirements 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.
2. Require that notice to be made as specified and would be
deemed to have been given three business days after mailing
of the notice.
3. Require a notice of lien for real or personal property
to be executed under penalty of perjury and include the
following information:
A statement of the employee's demand for payment of
the wages and other compensation, penalties, and
interest, the amount owed to the employee, and if the
amount is estimated, an explanation for the basis of the
estimate;
A general statement of the kind of work furnished by
the employee and the dates of employment;
The name of the person by whom the employee was
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 5
Senate Committee on Labor and Industrial Relations
employed; and
The employee's mailing address.
1. Require the employee to 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.
2. Require the employee, in order to enforce a lien under
this bill, to demonstrate in a civil action, or in a Labor
Commissioner proceeding, as specified, 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, as specified,
and the process for contesting such a citation.
This bill would create the following general LIEN ENFORCEMENT
requirements:
1. Require the employee to commence an action to enforce
the lien and prove the amount owed within 90 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 would be permanently
extinguished and unenforceable, unless the employee and the
owner of the property subject to the lien agree to extend
the time.
2. Require the employee, if the lien has been extinguished,
upon demand and 15 days' notice by the employer or any
affected party, to 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 would be authorized to petition the court
for an order releasing the lien.
3. Provide that if the employee acted unreasonably and in
bad faith in refusing to file a release of lien, the
employer or affected party would be entitled to recover its
attorney's fees and costs incurred in the action, and the
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 6
Senate Committee on Labor and Industrial Relations
court in its discretion would be authorized to also issue a
fine not to exceed $1,000.
4. Provide that if a notice of lien is recorded or filed
and an action to recover unpaid wages has been filed by the
employee, that action would 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 would be authorized to 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 could be
foreclosed upon at any point after a judgment for unpaid
wages is issued.
5. Require the court, 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,
to order the claimants to be paid in proportion to the
amount due each claimant.
6. Provide that 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 lien would be
extinguished, the right to a lien would be forfeited, and
the court would be authorized to award reasonable
attorney's fees and court costs to the property owner or
employer for action taken to defeat the lien claim.
This bill would create the following LIEN ENFORCEMENT provisions
for the LABOR COMMISSIONER:
1. Provide that if the employee chooses to pursue the wage
claim in an administrative proceeding before the Labor
Commissioner, 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 would be authorized to
provide the notice and record the lien on behalf of the
employee.
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 7
Senate Committee on Labor and Industrial Relations
2. Provide that if the Labor Commissioner issues a
citation, as specified, 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.
This bill would create the following LIEN ENFORCEMENT provisions
for the COURTS:
1. Authorize the employee be awarded court costs and
reasonable attorney's fees for filing a successful action
to enforce the lien.
2. Authorize an appeal of the judgment by filing a notice
of appeal on or before 60 days after the entry of judgment.
If an appeal is filed, the lien would 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 would be
equivalent to cancellation of the lien and its removal from
the record, and the judgment would be a recordable
instrument.
3. Authorize any number of claims to enforce employee liens
against the same employer to be joined in a single
proceeding, but the court would be authorized to order
separate trials or hearings.
This bill would provide the following process for the
RELEASE/EXTINCTION of Lien:
1. Require a lien on real or personal property to be
extinguished if judgment is entered against the employee in
the action to enforce the lien or if the case is dismissed
with prejudice and require the judgment to 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.
2. Release the property described in the judgment from
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 8
Senate Committee on Labor and Industrial Relations
claim of lien upon recordation of a certified copy of the
judgment. Alternatively, if the lien is extinguished, upon
demand and 15 days' notice by the property owner, the
employee would be required to file a release of the lien.
3. Provide that, if an employee refuses to file a release
of the lien after proper notice, an employer or property
owner would be authorized to 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 would be
entitled to attorney's fees and costs incurred in the
action, and the court in its discretion would be authorized
to also issue a fine not to exceed $1,000.
4. Would authorize an employer to release the notice of
lien if the employer contends any of the following:
That a notice of lien is not effective;
That the lien has been extinguished because required
circumstances, as specified, are not present;
All wages due the employee have been paid;
The employer has obtained a surety bond;
The lien is for labor performed under a valid
collective bargaining agreement, as specified;
The employee has failed to provide the required
notice;
The employee or Labor Commissioner has failed to
commence an action to enforce the lien within the
specified time; or
The action has been resolved against the employee.
1. Would proscribe the following procedure to release the
notice of lien:
The employer provides notice to the employee that
the employer believes that the lien should be released
and the basis for that belief, and request that the
employee record or file a release of the notice of lien;
The employee fails to respond within 30 days of the
date of mailing of the notice, the employer may give
notice to the Labor Commissioner that the employee did
not respond, and request that the Labor Commissioner file
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 9
Senate Committee on Labor and Industrial Relations
or record a release of the notice of lien; and
Upon receiving the employer's request, the Labor
Commissioner would be required to notify the employee
that unless the employee serves an objection on the Labor
Commissioner within 30 days, the Labor Commissioner would
release the notice of lien;
This bill would create a parallel wage lien process for a lien
on PROPERTY WHERE WORK WAS PERFORMED:
Authorize an employee to 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:
The property owner and the employee's employer are
related parties ; if the property owner is a natural
person, this lien would 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;
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 provision would
not apply if the services were provided to a household or
residence; or
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. This
bill would define "property services work" to mean work
in the janitorial, security guard, parking services, and
landscaping and gardening industries;
This bill would define "related parties" to mean a party owns or
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 10
Senate Committee on Labor and Industrial Relations
controls, or is owned or controlled, or is under common
ownership or control, with the other party; "ownership" would
mean 50 percent or greater ownership and "control" would mean
the right granted by law to exercise decision power over
administration, finances, and operations.
This bill would not apply to the extent that the employee would
be entitled to a mechanic's lien on the same property.
COMMENTS
1. Amendments Taken in the Senate Committee on the Judiciary:
Due to the double-referral of AB 2416 and pending legislative
deadline, amendments agreed to by the Judiciary Committee were
NOT TAKEN so this Committee could receive AB 2416 in a timely
manner. This Committee will need adopt the Judiciary
Committee's amendments if AB 2416 is passed today . The
Judiciary Amendments were as follows:
1) Prohibit the filing of any wage lien on an employer's
personal residence;
2) Require the clear identification of the property the
wage lien would attach to; and
3) Change the name of the AB 2416's title to the
"California Wage Theft Recovery Act".
2. Wage Theft: A Brief Background
In 2008, the Ford Foundation sponsored a survey of 4,387
workers in low-wage industries in the three largest U.S.
cities: Chicago, Los Angeles and New York City. The report of
that survey, titled Broken Laws, Unprotected Workers:
Violations of Employment and Labor Laws in America's Cities,
revealed that 26 percent of workers in the sample were paid
less than the legally required minimum wage the prior work
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 11
Senate Committee on Labor and Industrial Relations
week, and 60 percent of these workers were underpaid by more
than $1 per hour. In addition, 76 percent of the respondents
who worked overtime in the previous week were not paid the
legally required overtime rate by their employers.
The study also notes that minimum wage violation rates vary
significantly by industry, and occupation. For example, some
industries, such as apparel and textile manufacturing and
personal and repair services have minimum wage violation rates
that exceed 40 percent, while others, including restaurants,
and retail and grocery stores, have rates of 20 to 25 percent.
However, the study found that undocumented immigrant women
were at the greatest risk of minimum wage violations. The
study estimated that the workers in low-wage industries
Chicago, Los Angeles, and New York City lose more than $56.4
million per week due to labor law violations.
A follow-up study by the UCLA Institute for Research and Labor
and Employment was published earlier this year, and that study
utilized the data from the 2008 survey, but focused
specifically on Los Angeles County. This study, titled Wage
Theft and Workplace Violations in Los Angeles: The Failure of
Employment and Labor Law for Low-Wage Workers focused on a
survey results of 1,815 workers in Los Angeles County.
This study found similar results to the national survey:
almost 30 percent of the workers sampled were paid less than
the minimum wage in the prior work week, and 63.3 percent of
these workers were underpaid by more than $1 per hour.
Assuming a full-year work schedule, Los Angeles County survey
respondents lost an average of $2,070.00 annually out of total
earnings of $16,536.00. The study estimated that workers in
low-wage industries in Los Angeles County lose more than $26.2
million per week as a result of employment and labor law
violations.
Both of the studies make the same public policy
recommendations to address these issues, which included
strengthening government enforcement of existing employment
and labor laws and stiffening the penalties.
3. Wage Theft in California: Collecting Unpaid Wages
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 12
Senate Committee on Labor and Industrial Relations
Equally troubling, if not more troubling, than the high rate
of wage theft in California is the low rate of collections.
According to a 2013 report published by the National
Employment Law Project (NELP) and the UCLA Labor Center, only
17% of workers who PREVAILED in their wage claims before the
DLSE and won a judgment were able to receive any payment
between 2008 and 2011. Of those who did receive payment
between 2008 and 2011, workers were able to collect 15% of
what was OWED . In short, the vast majority of wage theft
victims received nothing, and those that received anything
received little of what they were legally due.
The 2013 report noted that there are several tools for wage
collection in California, including the administrative court
system, the court system, and post-judgment liens, the study's
authors argued that these tools were not effective as 60% of
businesses were no longer active by the time the wage judgment
became final . With no active business to file against, a lien
for unpaid wages had no property or business entity to attach
to. The authors' specifically argued that a post-judgment
lien attachment was necessary, pointing to the successes of
Wisconsin as a model for California.
4. Wage Theft in Wisconsin: Collecting Unpaid Wages
Since 1993, Wisconsin has allowed workers who claim to be
victims of wage theft to file a lien on their employers'
personal and real property. Employees can work through the
Wisconsin Department of Workforce Development's Equal Rights
Division (roughly equivalent to California's Division of Labor
Standards Enforcement), or they can file their own wage liens
with an attorney. Workers who pursue their wage liens can be
represented by the Wisconsin Department of Justice, however.
According to the 2013 NELP-UCLA Labor Center report, 80% of
workers in Wisconsin were paid in part or in full through the
wage lien collection process. 55% of the wage liens were paid
in full, and 25% of claimed wages were collected. As was
noted in the report, Wisconsin appears to be doing a better
job of collecting on wage claims by every possible metric.
The report also notes that Wisconsin files a small number of
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 13
Senate Committee on Labor and Industrial Relations
liens each year (about 3,300), suggesting that the wage lien
provisions may provide a significant deterrent to wage theft.
Committee staff reached out to Wisconsin officials in both
Wisconsin's Department of Justice (DOJ) and Department of
Workforce Development (DWD) in order to find out of the wage
lien statute was a source of nuisance liens or frictional
litigation. Both Wisconsin DOJ and DWD staff reported that
they were unaware of any such abuses. This is particularly
noteworthy, as the Wisconsin statute has been in effect for
over 20 years.
5. AB 2416 and the Wisconsin Wage Theft Statute:
Closely modeled after the Wisconsin wage theft statute, AB
2416 would create an ability for workers to file a
pre-judgment lien on the real and personal property of their
employer in order to collect unpaid wages. A pre-judgment
lien could be filed by either the Division of Labor Standards
Enforcement or an attorney representing an aggrieved worker.
The author believes that AB 2416 will improve California's
wage theft collection rates, moving California towards
Wisconsin's wage theft collection rates.
One notable difference , however, between Wisconsin and
California is how the wage liens would be filed. In
Wisconsin, a wage lien can be filed through an online portal
run by Wisconsin's Department of Financial Institutions
(WIDFI). WIDFI's portal allows liens to be filed and
extinguished through a simple, one-stop online website . AB
2416 would require a filing under the penalty of perjury at
both the Secretary of State's office and the relevant County
Registrar. This is considerably more complex, and it may pose
implementation challenges in California that were not faced by
Wisconsin.
6. Staff Comments:
AB 2416: A Significant Experiment in Improving Wage Theft
Collection Rates
As noted above, AB 2416 stands as a significant experiment in
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 14
Senate Committee on Labor and Industrial Relations
improving wage theft collection rates. While California may
improve and approach the wage theft collection rates of
Wisconsin, it not all guaranteed, nor is there a clear
mechanism on how that would be measured. Therefore, the
Committee may wish to consider requiring that DLSE studies the
impact of AB 2416.
Including a Sunset Clause to Allow for Further Review?
Noting the experimental nature of AB 2416 in California, the
author may wish to consider including a 7-year sunset in order
to allow for the Legislature to return to the issue of
pre-judgment wage liens and wage theft collection rates in the
future. Paired with a study, such an approach would give the
Legislature and stakeholders a firm sense of the successes and
challenges of allowing pre-judgment wage liens in wage theft
collections.
Suggested Amendments
In reviewing the bill, Committee Staff noted several technical
issues that would strengthen the bill moving forward,
including requiring a DLSE study. These suggested amendments
are below, and would be taken with the amendments from the
Senate Judiciary Committee:
1) Conforming the Timeline for Wage Lien Notices
Currently, the timeline for notifying an employer of a wage
lien being filed with the Secretary of State is 5 days,
while filing a wage lien notice on a property owner is 20
days. It would make more sense to conform these timelines.
On page 4, line 21, strike "five" and insert "twenty";
On page 4, line 34, strike "five" and insert "twenty";
2) Tightening the Timelines
Currently, AB 2416 provides 90 days for an employee to take
action on his or her lien, after which it is extinguished.
As the lien has already been filed, this length of time
seems longer than necessary to create a negotiated release
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 15
Senate Committee on Labor and Industrial Relations
of the lien, and would seem to invite delaying tactics to
the detriment of a property owner. Shortening the timeline
to 45 days would provide sufficient for negotiations but
limit delaying tactics.
On page 5, line 22, strike "90" and insert "45";
On page 14, line 22, strike "90" and insert "45";
3) Removing Inadvertent "Double Jeopardy"
Under a strict interpretation of the timelines, it would be
possible to fail to pursue a lien within the current 90 day
window (the above amendment would change that to 45 days)
but still pursue it within a 180 day period due to an
unrelated timeline. This amendment would correct that
inadvertent issue.
On page 5, after line 33, insert: "If a lien has been
permanently extinguished pursuant to this subdivision
because the employee has not commenced an action to enforce
the lien within the applicable time period, the employee
may not record or file another lien under Section 3000
claiming the same unpaid wages, compensation, penalties
and/or costs claimed by the extinguished lien."
On page 14, after line 32, insert: "If a lien has been
permanently extinguished pursuant to this subdivision
because the employee has not commenced an action to enforce
the lien within the applicable time period, the employee
may not record or file another lien under Section 3010
claiming the same unpaid wages, compensation, penalties
and/or costs claimed by the extinguished lien."
4) Study by the Division of Labor Standards Enforcement:
As was discussed above, this amendment would create the
requirement for a study on the impact of AB 2416 on wage
theft collection.
On page 18, between lines 27 and 28, insert: "3017. On or
before January 1, 2019, the Department of Industrial
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 16
Senate Committee on Labor and Industrial Relations
Relations shall issue a report to the Legislature on the
impact of the Wage Theft Recovery Act. The report shall,
at a minimum, report on how many wage liens were filed, how
many wage liens led to the foreclosure or seizure of
property, and the impact of this legislation on unpaid wage
collection.
7. Proponent Arguments :
Proponents, noting the 2010 wage theft study discussed
earlier, argue that wage theft is a significant problem in
California, with LA County's wage theft resulting in over $1
billion unlawfully failing to reach the workers who
desperately need it. Proponents also note that current wage
theft collection rates are less than 20%, meaning the vast
majority of scofflaw employers are successful in robbing their
workers of their lawful wages. Proponents believe that AB
2416 will help combat the high rate of wage theft in
California by creating a simple lien process for workers to
use against employers who rob them of their wages.
Proponents, noting Wisconsin's success, argue that wage liens
are simple, effective, and a time tested approach to halting
wage theft.
8. Opponent Arguments :
Opponents argue that AB 2416 would hurt California businesses
by allowing any employee, governmental agency, or employee
representative to record liens on an employer's real property
or any property for an alleged, yet unproven, wage claim.
Proponents also note that AB 2416 is not just limited to
minimum wage claims, but could include vacation pay, expense
reimbursements, and compensation for tools, uniforms, and
equipment. Opponents also argue that the ability of an
employee to file a wage lien against a third-party commercial
property owner who had no actual control over the employee
will create significant market disruptions. Finally,
opponents argue that this bill would place a significant
burden on California's courts, and that there are already
sufficient protections in place for the failure to pay wages.
9. Prior Legislation :
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 17
Senate Committee on Labor and Industrial Relations
AB 469 (Swanson), Chapter 655, Statutes of 2011, increases the
statute of limitations and bonding requirements for the
failure to pay the minimum wage and overtime wages, as well as
requires the provision of a notice at the time of hiring that
lists the relevant details of a worker's employment.
SUPPORT
Service Employees International Union California (Sponsor)
Asian Americans Advancing Justice-Asian Law Caucus
Asian Americans Advancing Justice-Los Angeles
California Employment Lawyers Association
California Labor Federation, AFL-CIO
California Professional Firefighters
California School Employees Association; AFL-CIO
Centro Legal de la Raza
Chinese Progressive Association
CLEAN Carwash Campaign
Coalition for Humane Immigrant Rights of Los Angeles
Community Action Board of Santa Cruz County
Consumer Attorneys of California
Employee Rights Center
Equal Rights Advocates
Filipino Advocates for Justice
Garment Workers Center
Golden Gate University School of Law
Koreatown Immigrant Workers Alliance
Labor & Employment Committee
Los Angeles Alliance for a New Economy
Maintenance Cooperation Trust Fund
National Day Laborer Organizing Network
National Employment Law Project
National Immigration Law Center; National Lawyers Guild
Sunrise Floor Systems LLC
Wage Justice Center
Women's Employment Rights Clinic
Workplace Justice Initiative
(List from Senate Judiciary analysis)
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 18
Senate Committee on Labor and Industrial Relations
OPPOSITION
Acclamation Insurance Management Services
Air Conditioning Trade Association
Allied Managed Care
Associated Builders and Contractors of California
Associated Builders and Contractors - San Diego Chapter
Associated General Contractors
Building Owners and Managers Association of California
California Apartment Association
California Association for Health Services at Home
California Association of Winegrape Growers
California Building Industry Association
California Business Properties Association
California Business Roundtable
California Chamber of Commerce
California Chapter of American Fence Association
California Employment Law Council
California Farm Bureau Federation
California Fence Contractors' Association
California Grocers Association
California Hospital Association
California Hotel and Lodging Association
California Land Title Association
California Landscape Contractors Association
California League of Food Processors
California Manufacturers and Technology Association
California Mortgage Bankers Association
California Newspaper Publishers Association
California Pool and Spa Association
California Professional Association of Specialty Contractor
California Restaurant Association
California Retailers Association
Civil Justice Association of California
Coalition of Small and Disabled Veterans Businesses
Construction Employers' Association
El Centro Chamber of Commerce
Flasher Barricade Association
Fullerton Chamber of Commerce
Greater Bakersfield Chamber of Commerce
Greater Riverside Chambers of Commerce
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 19
Senate Committee on Labor and Industrial Relations
Independent Insurance Agents & Brokers of California
International Council of Shopping Centers
Marin Builders Association
NAIOP of California
The Commercial Real Estate Development Association
National Federation of Independent Business
Orange County Business Council
Oxnard Chamber of Commerce
Palm Desert Area Chamber of Commerce
Plumbing-Heating-Cooling Contractors Association of California
Porterville Chamber of Commerce
San Jose Silicon Valley Chamber of Commerce
Santa Clara Chamber of Commerce and Convention-Visitors Bureau
Simi Valley Chamber of Commerce
Southwest California Legislative Council
Tahoe Chamber of Commerce
Visalia Chamber of Commerce
Western Electrical Contractors Association
Western Growers Association
1 individual
(List from Senate Judiciary analysis)
Hearing Date: June 25, 2014 AB 2416
Consultant: Gideon L. Baum Page 20
Senate Committee on Labor and Industrial Relations