Nicole Rice

Wage Lien Alternative Unveiled

By Nicole Rice, Policy Director, Government Relations

Capitol Update, May 1, 2015

In an effort to address the growing difficulty in collecting unpaid wage theft judgments, Assembly Member Mark Stone (D-Scotts Valley) introduced AB 2416 last year that would have allowed an employee to place a wage lien on the real and personal property of their employer absent proof that a violation had actually occurred. That effort was successfully defeated by CMTA, along with allies in the business community, but it was feared that a similar attempt would arise this year.

Senate President pro Tempore Kevin de León (D-Los Angeles) has resurrected the discussion for this legislative session, but has offered an alternative approach that more appropriately targets those bad actors who evade efforts to collect on judgments for wage violations.

SB 588 would allow the Labor Commissioner to file a lien on any property the employer owns in the State to recover wages and other compensation, penalties and interests owed to the employee, but unlike AB 2416, the action can only be taken after a wage violation judgment has been rendered and all appeal options have been exhausted. In addition to the lien provision, the Labor Commission can also levy upon an employer's bank accounts and accounts receivable; provide for third-party claims to property; authorize a stop order issue against the employer and prohibit the continuation of a business until the employer posts a bond. But again, all of these enforcement mechanisms cannot be utilized until after a third-party trier of fact has determined there is a violation and rendered a final judgment.

The bill has no opposition but concerns have been expressed related to a few technical provisions that if fixed would make the bill better. Given that the pre-judgment aspect of the enforcement has been eliminated, CMTA is neutral on the measure and supports the Labor Commissioner’s ability to collect on debts owed by unscrupulous businesses operating outside of the law.

The Senate Judiciary and Labor and Industrial Relations Committees approved SB 588  earlier this week. The bill will be heard next in the Senate Appropriations Committee.

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