Bill Text: CA AB1897 | 2013-2014 | Regular Session | Chaptered
Bill Title: Labor contracting: client liability.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2014-09-28 - Chaptered by Secretary of State - Chapter 728, Statutes of 2014. [AB1897 Detail]
Download: California-2013-AB1897-Chaptered.html
BILL NUMBER: AB 1897 CHAPTERED
BILL TEXT
CHAPTER 728
FILED WITH SECRETARY OF STATE SEPTEMBER 28, 2014
APPROVED BY GOVERNOR SEPTEMBER 28, 2014
PASSED THE SENATE AUGUST 27, 2014
PASSED THE ASSEMBLY AUGUST 28, 2014
AMENDED IN SENATE AUGUST 22, 2014
AMENDED IN SENATE AUGUST 19, 2014
AMENDED IN SENATE JULY 1, 2014
AMENDED IN ASSEMBLY MAY 28, 2014
AMENDED IN ASSEMBLY MAY 23, 2014
AMENDED IN ASSEMBLY APRIL 10, 2014
AMENDED IN ASSEMBLY MARCH 28, 2014
INTRODUCED BY Assembly Member Roger Hernández
FEBRUARY 19, 2014
An act to add Section 2810.3 to the Labor Code, relating to
private employment.
LEGISLATIVE COUNSEL'S DIGEST
AB 1897, Roger Hernández. Labor contracting: client liability.
Existing law regulates the terms and conditions of employment and
establishes specified obligations of employers to employees. Existing
law prohibits a person or entity from entering into a contract for
labor or services with a construction, farm labor, garment,
janitorial, security guard, or warehouse contractor, if the person or
entity knows or should know that the contract or agreement does not
include sufficient funds for the contractor to comply with laws or
regulations governing the labor or services to be provided.
This bill would require a client employer to share with a labor
contractor all civil legal responsibility and civil liability for all
workers supplied by that labor contractor for the payment of wages
and the failure to obtain valid workers' compensation coverage. The
bill would prohibit a client employer from shifting to the labor
contractor legal duties or liabilities under workplace safety
provisions with respect to workers provided by the labor contractor.
The bill would define a client employer as a business entity that
obtains or is provided workers to perform labor within the usual
course of business from a labor contractor, except as specified. The
bill would define a labor contractor as an individual or entity that
supplies workers, either with or without a contract, to a client
employer to perform labor within the client employer's usual course
of business. The bill would except from the definition of labor
contractor specified nonprofit, labor, and motion picture payroll
services organizations and 3rd parties engaged in an employee leasing
arrangement, as specified. The bill would specify that it does not
prohibit client employers and labor contractors from mutually
contracting for otherwise lawful remedies for violations of its
provisions by the other party. The bill would require a client
employer or labor contractor to provide to a requesting enforcement
agency or department, and make available for copying, information
within its possession, custody, or control required to verify
compliance with applicable state laws. The bill would authorize the
Labor Commissioner, the Division of Occupational Safety and Health,
and the Employment Development Department to adopt necessary
regulations and rules to administer and enforce the bill's
provisions. The bill would provide that waiver of its provisions is
contrary to public policy, void, and unenforceable. The bill would
prohibit its provisions from being interpreted to impose liability in
specified circumstances.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2810.3 is added to the Labor Code, to read:
2810.3. (a) As used in this section:
(1) (A) "Client employer" means a business entity, regardless of
its form, that obtains or is provided workers to perform labor within
its usual course of business from a labor contractor.
(B) "Client employer" does not include any of the following:
(i) A business entity with a workforce of less than 25 workers,
including those hired directly by the client employer and those
obtained from, or provided by, any labor contractor.
(ii) A business entity with five or fewer workers supplied by a
labor contractor or labor contractors to the client employer at any
given time.
(iii) The state or any political subdivision of the state,
including any city, county, city and county, or special district.
(2) "Labor" has the same meaning provided by Section 200.
(3) "Labor contractor" means an individual or entity that
supplies, either with or without a contract, a client employer with
workers to perform labor within the client employer's usual course of
business. "Labor contractor" does not include any of the following:
(A) A bona fide nonprofit, community-based organization that
provides services to workers.
(B) A bona fide labor organization or apprenticeship program or
hiring hall operated pursuant to a collective bargaining agreement.
(C) A motion picture payroll services company as defined in
subparagraph (A) of paragraph (4) of subdivision (f) of Section 679
of the Unemployment Insurance Code.
(D) A third party who is a party to an employee leasing
arrangement, as defined by Rule 4 of Section V of the California
Workers' Compensation Experience Rating Plan-1995 (Section 2353.1 of
Title 10 of the California Code of Regulations), as it read on
January 1, 2014, except those arrangements described in subrule d of
Rule 4 of Section V, if the employee leasing arrangement
contractually obligates the client employer to assume all civil legal
responsibility and civil liability under this act.
(4) "Wages" has the same meaning provided by Section 200 and all
sums payable to an employee or the state based upon any failure to
pay wages, as provided by law.
(5) "Worker" does not include an employee who is exempt from the
payment of an overtime rate of compensation for executive,
administrative, and professional employees pursuant to wage orders by
the Industrial Welfare Commission described in Section 515.
(6) "Usual course of business" means the regular and customary
work of a business, performed within or upon the premises or worksite
of the client employer.
(b) A client employer shall share with a labor contractor all
civil legal responsibility and civil liability for all workers
supplied by that labor contractor for both of the following:
(1) The payment of wages.
(2) Failure to secure valid workers' compensation coverage as
required by Section 3700.
(c) A client employer shall not shift to the labor contractor any
legal duties or liabilities under the provisions of Division 5
(commencing with Section 6300) with respect to workers supplied by
the labor contractor.
(d) At least 30 days prior to filing a civil action against a
client employer for violations covered by this section, a worker or
his or her representative shall notify the client employer of
violations under subdivision (b).
(e) Neither the client employer nor the labor contractor may take
any adverse action against any worker for providing notification of
violations or filing a claim or civil action.
(f) The provisions of subdivisions (b) and (c) are in addition to,
and shall be supplemental of, any other theories of liability or
requirement established by statute or common law.
(g) This section does not prohibit a client employer from
establishing, exercising, or enforcing by contract any otherwise
lawful remedies against a labor contractor for liability created by
acts of a labor contractor.
(h) This section does not prohibit a labor contractor from
establishing, exercising, or enforcing by contract any otherwise
lawful remedies against a client employer for liability created by
acts of a client employer.
(i) Upon request by a state enforcement agency or department, a
client employer or a labor contractor shall provide to the agency or
department any information within its possession, custody, or control
required to verify compliance with applicable state laws. Upon
request, these records shall be made available promptly for
inspection, and the state agency or department shall be permitted to
copy them. This subdivision does not require the disclosure of
information that is not otherwise required to be disclosed by
employers upon request by a state enforcement agency or department.
(j) The Labor Commissioner may adopt regulations and rules of
practice and procedure necessary to administer and enforce the
provisions of subdivisions (b) and (i) that are under his or her
jurisdiction.
(k) The Division of Occupational Safety and Health may adopt
regulations and rules of practice and procedure necessary to
administer and enforce the provisions of subdivisions (c) and (i)
that are under its jurisdiction.
(l) The Employment Development Department may adopt regulations
and rules of practice and procedure necessary to administer and
enforce the provisions of subdivisions (b) and (i) that are under its
jurisdiction.
(m) A waiver of this section is contrary to public policy, and is
void and unenforceable.
(n) This section shall not be interpreted to impose individual
liability on a homeowner for labor or services received at the home
or the owner of a home-based business for labor or services received
at the home.
(o) This section shall not be interpreted to impose liability on a
client employer for the use of an independent contractor other than
a labor contractor or to change the definition of independent
contractor.
(p) This section shall not be interpreted to impose liability on
the following:
(1) A client employer that is not a motor carrier of property
based solely on the employer's use of a third-party motor carrier of
property with interstate or intrastate operating authority to ship or
receive freight.
(2) A client employer that is a motor carrier of property
subcontracting with, or otherwise engaging, another motor carrier of
property to provide transportation services using its own employees
and commercial motor vehicles, as defined in Section 34601 of the
Vehicle Code.
(3) A client employer that is a cable operator as defined by
Section 5830 of the Public Utilities Code, a direct-to-home satellite
service provider, or a telephone corporation as defined by Section
234 of the Public Utilities Code, based upon its contracting with a
company to build, install, maintain, or perform repair work utilizing
the employees and vehicles of the contractor if the name of the
contractor is visible on employee uniforms and vehicles.
(4) A motor club holding a certificate of authority issued
pursuant to Chapter 2 (commencing with Section 12160) of Part 5 of
Division 2 of the Insurance Code when it contracts with third parties
to provide motor club services utilizing the employees and vehicles
of the third-party contractor if the name of the contractor is
visible on the contractor's vehicles.
