Bill Text: CA AB2416 | 2013-2014 | Regular Session | Amended
Bill Title: Liens: laborers and employees.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Engrossed - Dead) 2014-08-30 - Re-referred to Com. on RLS. Senate Rule 29.3(b) suspended. (Ayes 22. Noes 8. Page 5002.) From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on RLS. Withdrawn from committee. Ordered to third reading. [AB2416 Detail]
Download: California-2013-AB2416-Amended.html
BILL NUMBER: AB 2416 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 30, 2014
AMENDED IN SENATE AUGUST 22, 2014
AMENDED IN SENATE AUGUST 20, 2014
AMENDED IN SENATE AUGUST 18, 2014
AMENDED IN SENATE JUNE 26, 2014
AMENDED IN ASSEMBLY MAY 23, 2014
AMENDED IN ASSEMBLY MAY 6, 2014
AMENDED IN ASSEMBLY MARCH 28, 2014
INTRODUCED BY Assembly Member Stone
(Principal coauthor: Assembly Member Lowenthal)
(Coauthors: Assembly Members Gonzalez, Roger Hernández, and Pan)
FEBRUARY 21, 2014
An act to add Chapter 3 (commencing with Section 3000) to Title 14
of Part 4 of Division 3 of the Civil Code, 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 mechanic's lien upon the property
so improved. 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.
This bill would enact the California Wage Theft Recovery Act to
authorize an employee, with certain exceptions, to record
and enforce specified employees to request
that the Labor Commissioner record, on his or her behalf, a
wage lien upon real and personal property of an employer, or a
property owner, as specified, for unpaid wages and other compensation
owed the employee, and certain other penalties, interest, and costs.
The bill would prescribe requirements relating to the recording and
enforcement of the wage lien and for its extinguishment and removal.
The bill would require a notice of lien on real property to be
executed under penalty of perjury.The bill would authorize the
employer or property owner to use a procedure to release the notice
of lien or reduce the amount of the lien if the employer makes
specified contentions, and would require a specific certification
under the procedure to be made under penalty of perjury. The bill
would also require the Department of Industrial Relations to issue a
report to the Legislature by January 1, 2019, on the effect of these
provisions, as specified.
By expanding the scope of the crime of perjury, this bill would
impose a state-mandated local program.
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.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known, and may be cited, as the
California Wage Theft Recovery Act.
SEC. 2. Chapter 3 (commencing with Section 3000) is added to Title
14 of Part 4 of Division 3 of the Civil Code, to read:
CHAPTER 3. WAGE LIENS
3000. (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 not apply to the employer's 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.
3001. (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).
(d) The lien described in Section 3000 shall not attach if the
employer receives a court order finding that the employee does not
have a reasonable likelihood of success on the claim for wages and
other compensation, penalties, and interest owed to the employee. The
employee shall release the lien within 30 days of being provided
with proof of the order.
3001.5. (a) At least 20 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 who 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 20 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 who 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 employer 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.
3002. (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. The lien described in Section 3000 shall 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 in accordance with Section 3003 or 3004.
(b) (1) The employee shall commence an action to enforce the lien
and prove the amount owed within 45 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.
(2) 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
shall not record or file another lien under Section 3000 claiming the
same unpaid wages, compensation, penalties, or costs claimed by the
extinguished lien.
(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).
3003. (a) With regard to a lien on real property under Section
3000, the employee shall record request that
the Labor Commissioner record, on behalf of the employee, a
notice of lien with the county recorder in the county where the real
property is located. The employee or the employee's agent, as
described in subdivision (e) of Section 3000, shall provide the Labor
Commissioner with an executed notice of lien and a copy of the
preliminary notice that the employee provided to the property owner
pursuant to Section 3001.5.
(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 employer.
(4) The employee's mailing address.
(5) A description of the address or site of the property
sufficient for identification.
(c) If the Labor Commissioner is satisfied that preliminary notice
has been given, that the notice of lien is in proper form, and that
the notice of lien is not fraudulent or being used for purposes of
harassment, the Labor Commissioner shall record the notice of lien on
behalf of the employee. A determination made by the Labor
Commissioner pursuant to this subdivision shall not be subject to
judicial review, and shall not be evidence in any proceeding of the
merit or lack of merit of the employee's demand or of the amount of
that demand.
(c)
(d) The employee Labor
Commissioner 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. The Labor
Commissioner shall also mail a copy of the recorded notice of lien to
the employee at the address that the employee has provided to the
Labor Commissioner.
(d)
(e) 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.
3004. (a) With regard to a lien on personal property under
Section 3000, the employee shall file request
that the Labor Commissioner file, on behalf of the employee, a
notice of lien with the Secretary of State on the standard form of
initial financing statement pursuant to Section 9521 of the
Commercial Code. The employee or the employee's agent, as
described in subdivision (e) of Section 3000, shall provide the Labor
Commissioner with an executed standard form completed as required by
this section and a copy of the preliminary notice that
the employee provided to the property owner pursuant to Section
3001.5. The standard form shall be completed in the following
manner:
(1) The employee shall be identified as the secured party.
(2) The employer shall be identified as the debtor.
(3) The description of the collateral shall include the following
statements:
(A) 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.
(B) A general statement of the kind of work furnished by the
employee and the dates of employment.
(C) A statement that reads: "By authorizing or directly submitting
this notice of lien to the Secretary of State, the employee affirms,
under penalty of perjury as defined in Section 118 of the Penal
Code, that the employee has read this description of collateral and
that all the statements in the description of collateral are true and
correct."
(b) For the purpose of the Secretary of State's index pursuant to
Sections 9515, 9516, and 9522 of the Commercial Code and for the
purpose of the issuance of a certificate pursuant to Section 9519 or
9528 of the Commercial Code, the Secretary of State shall treat a
notice of lien pursuant to this section as a financing statement.
(c) If the Labor Commissioner is satisfied that preliminary notice
has been given, that the notice of lien is in proper form, and that
the notice of lien is not fraudulent or being used for purposes of
harassment, the Labor Commissioner shall record the notice of lien on
behalf of the employee. A determination made by the Labor
Commissioner pursuant to this subdivision shall not be subject to
judicial review, and shall not be evidence in any proceeding of the
merit or lack of merit of the employee's demand or of the amount of
that demand.
(c)
(d) The employee Labor
Commissioner 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. The Labor
Commissioner shall also mail a copy of the filed notice of lien to
the employee at the address that the employee has provided to the
Labor Commissioner.
(d)
(e) 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.
(e)
(f) The notice of claim of lien to which the
termination statement relates ceases to be effective upon the filing
of a termination statement with the office of the Secretary of
State.A termination statement for a notice of lien may be filed in
the same manner as a termination statement for a financing statement
filed pursuant to Section 9513 of the Commercial Code.
(f)
(g) A notice of lien shall not be deemed invalid by
reason of any variance from the requirements of this section or the
requirements of the financing statement pursuant to Section 9521 of
the Commercial Code, if all of the following occur:
(1) The Secretary of State accepts the notice of lien for filing.
(2) The notice of lien provides substantially the same
information.
(3) The notice serves as an effective notice.
3005. (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.
3005.5. (a) An employer may use the procedure established
pursuant to this section to release the notice of lien or reduce the
amount of the lien if the employer contends any of the following:
(1) That a notice of lien established pursuant to Section 3000 is
not effective.
(2) That the lien has been extinguished because the circumstances
provided by Section 3000 are not present.
(3) All wages due the employee have been paid.
(4) The employer has obtained a surety bond pursuant to
subdivision (a) of Section 3001.
(5) The exception provided by subdivision (b) of Section 3001
applies.
(6) The employee has failed to provide the notice required by
Section 3001.5.
(7) The employee or Labor Commissioner has failed to commence an
action to enforce the lien within the specified time.
(8) The action has been resolved against the employee.
(9) That there is no basis for the employee's demand or for the
amount of that demand.
(b) The procedure to release the notice of lien or reduce the
amount of the lien shall be as follows:
(1) The employer shall provide notice to the employee that the
employer believes that the lien should be released or reduced and the
basis for that belief, and request that the employee record or file
a release of the notice of lien or reduction in the amount of the
lien. The notice shall be made by certified mail with return receipt
requested, evidenced by a certificate of mailing, postage prepaid,
addressed to the employee at the employee's residence or place of
business.
(2) If the employee fails to record or file a release of notice of
lien or reduction in the amount of the lien within 30 days of the
date of mailing of the notice provided by paragraph (1), the employer
may give notice to the Labor Commissioner that the employee did not
release or reduce the lien, and request that the Labor Commissioner
file or record a release of the notice of lien or reduction in the
amount of the lien. The notice shall include a copy of the notice of
lien, a copy of the notice sent to the employee pursuant to paragraph
(1), and a certification, made under penalty of perjury, that the
employer followed the procedures provided by this section and that
the employee did not release or reduce the lien.
(3) Upon receiving a request pursuant to paragraph (2), the Labor
Commissioner shall notify the employee that unless the employee
serves an objection on the Labor Commissioner within 30 days, the
Labor Commissioner shall release the notice of lien, or reduce the
amount of the lien, as requested by the employer. The notice shall be
made by certified mail with return receipt requested, evidenced by a
certificate of mailing, postage prepaid, addressed to the employee
at the employee's residence or place of business. If the employee
does not serve a timely objection, the Labor Commissioner shall
record or file a release of the notice of lien, or a reduction in the
amount of the lien, as requested by the employer.
(4) If the employee serves a timely objection pursuant to
paragraph (3), and the employer contends that the employee's
objection is frivolous, the employer may request that the Labor
Commissioner investigate the lien notice. The request shall be
accompanied by an explanation as to why the employer contends that
the objection is frivolous. Upon receipt of that request, the Labor
Commissioner shall promptly provide the employee with notice of the
employer's contention, including a copy of any material received from
the employer, and notify the employee that he or she has 30 days
from receipt of that notice to provide a response to the Labor
Commissioner. If the employee fails to establish to the satisfaction
of the Labor Commissioner that there is a nonfrivolous basis for the
employee's objection, the Labor Commissioner shall record or file a
release of the notice of lien or reduction in the amount of the lien.
A lien shall not be released nor lien amount reduced on a basis not
identified in the notice provided to the employee pursuant to this
paragraph. A determination made by the Labor Commissioner pursuant to
this paragraph shall not be subject to judicial review and shall not
be evidence in any proceeding of the merit or lack of merit of the
employee's demand or of the amount of that demand.
(5) If the employer or the Labor Commissioner is notified that the
employee is represented by an attorney, a copy of any notice under
this section shall also be served on the employee's attorney.
(c) The procedure established pursuant to this section to release
the notice of lien is an additional means of releasing a notice of
lien.
3010. (a) An employee of a contractor described
in Section 2810 of the Labor Code, which covers construction, farm
labor, garment, janitorial, security guard, and warehouse
contractors, 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 either 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
not apply to the property owner's principal 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
paragraph shall not apply if the services were provided to a
household or residence.
(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.
3011. (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).
(d) The lien described in Section 3010 shall not attach if the
employer or property owner receives a court order finding that the
employee does not have a reasonable likelihood of success on the
claim for wages and other compensation, penalties, and interest owed
to the employee. The employee shall release the lien within 30 days
of being provided with proof of the order.
3012. (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 who 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 who 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.
3013. (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.
The lien described in Section 3010 shall also be permanently
extinguished as to property that is transferred or sold by the
property owner, unless a notice of lien was recorded before the
transfer or sale in accordance with Section 3014.
(b) (1) The employee shall commence an action to enforce the lien
and prove the amount owed within 45 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.
(2) 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
shall not record or file another lien under Section 3010 claiming the
same unpaid wages, compensation, penalties, or costs claimed by the
extinguished lien.
(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).
3014. (a) The employee shall record
request that the Labor Commissioner record, on behalf of the
employee, a notice of lien with the county recorder in the
county where the real property is located. The employee shall
provide the Labor Commissioner with an executed notice of lien and a
copy of the preliminary notice that the employee provided to the
property owner pursuant to Section 3001.5.
(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 employer.
(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) If the Labor Commissioner is satisfied that preliminary notice
has been given, that the notice of lien is in proper form, and that
the notice of lien is not fraudulent or being used for purposes of
harassment, the Labor Commissioner shall record the notice of lien on
behalf of the employee. A determination made by the Labor
Commissioner pursuant to this subdivision shall not be subject to
judicial review, and shall not be evidence in any proceeding of the
merit or lack of merit of the employee's demand or of the amount of
that demand.
(c)
(d) The employee Labor
Commissioner 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. The Labor Commissioner shall also mail a copy
of the r ecorded notice of lien to the employee at the
address that the employee has provided to the Labor Commissioner.
(d)
(e) The lien attaches only to real property owned by
the property owner described in Section 3010 at the time of the
recording of the notice of lien. The lien attaches only to the
property that is specifically identified in the notice of lien.
3015. (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.
3015.5. (a) An employer or property owner may use the procedure
established pursuant to this section to release the notice of lien if
the employer or property owner contend any of the following:
(1) That a notice of lien established pursuant to Section 3010 is
not effective.
(2) The lien has been extinguished because the circumstances
provided by Section 3010 are not present.
(3) The amount claimed by the employee has been paid.
(4) The employer or property owner has obtained a surety bond
pursuant to subdivision (a) of Section 3011.
(5) The exception provided by subdivision (b) of Section 3011
applies.
(6) The employee has failed to provide the notice required by
Section 3012.
(7) The employee or Labor Commissioner has failed to commence an
action to enforce the lien within the specified time.
(8) The action has been resolved against the employee.
(b) The procedure to release the notice of lien shall be as
follows:
(1) The employer or property owner shall provide notice to the
employee that the employer or property owner 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
notice shall be made by certified mail with return receipt requested,
evidenced by a certificate of mailing, postage prepaid, addressed to
the employee at the employee's residence or place of business.
(2) If the employee fails to respond within 30 days of the date of
mailing of the notice provided by paragraph (1), the employer or
property owner may give notice to the Labor Commissioner that the
employee did not respond, and request that the Labor Commissioner
file or record a release of the notice of lien. The notice shall
include a copy of the notice of lien and a certification, made under
penalty of perjury, that the employer or property owner followed the
procedures provided by this section and that the employee did not
respond.
(3) Upon receiving a request pursuant to paragraph (2), the Labor
Commissioner shall notify the employee that unless the employee
serves an objection on the Labor Commissioner within 30 days, the
Labor Commissioner shall release the notice of lien. The notice shall
be made by certified mail with return receipt requested, evidenced
by a certificate of mailing, postage prepaid, addressed to the
employee at the employee's residence or place of business. If the
employee does not serve a timely objection, the Labor Commissioner
shall record or file a release of the notice of lien, or a reduction
in the amount of the lien, as requested by the employer or property
owner.
(4) If the employer or property owner serves a timely objection
pursuant to paragraph (3), and the employer or property owner
contends that the employee's objection is frivolous, the employer or
property owner may request that the Labor Commissioner investigate
the lien notice. The request shall be accompanied by an explanation
as to why the employer or property owner contends that the objection
is frivolous. Upon receipt of that request, the Labor Commissioner
shall promptly provide the employee with notice of the employer's or
property owner's contention, including a copy of any material
received from the employer or property owner, and notify the employee
that he or she has 30 days from receipt of that notice to provide a
response to the Labor Commissioner. If the employee fails to
establish to the satisfaction of the Labor Commissioner that there is
a nonfrivolous basis for the employee's objection, the Labor
Commissioner shall record or file a release of the notice of lien or
reduction in the amount of the lien. A lien shall not be released nor
lien amount reduced on a basis not identified in the notice provided
to the employee pursuant to this paragraph. A determination made by
the Labor Commissioner pursuant to this paragraph shall not be
subject to judicial review and shall not be evidence in any
proceeding on the merit or lack of merit of the employee's demand or
of the amount of that demand.
(5) If the employer, property owner, or the Labor Commissioner is
notified that the employee is represented by an attorney, a copy of
any notice under this section shall also be served on the employee's
attorney.
(c) The procedure established pursuant to this section to release
the notice of lien is an additional means of releasing a notice of
lien.
3016. 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.
3017. On or before January 1, 2019, the Department of Industrial
Relations shall issue a report to the Legislature, in compliance with
Section 9795 of the Government Code, on the impact of this chapter,
known as the California Wage Theft Recovery Act. The report at a
minimum, shall report on the number of wage liens filed, the number
of wage liens that led to foreclosure or seizure of property, and the
impact of this chapter on unpaid wage collection.
SEC. 3. 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.
