Law Office of Rick Morin

(916) 333-2222

SB 588 Labor Commissioner Liens

Labor Commissioner liens are back, and unfortunately they are here to stay. That's the bad news now that Senate Bill 588 was signed into law by Governor Brown late last year.

If you recall, the California Legislature recently attempted to pass a law that would allow prevailing plaintiffs in Labor Commissioner wage cases to file liens on real property. AB 2416 ultimately failed to obtain passage from the Legislature. However, the policy wasn't totally dead.

Senate President Kevin de Leon introduced language similar to that contained in AB 2416 into his new SB 588. The bill obtained majority support from Assembly and Senate democrats and was sent to the Governor's Desk. Governor Brown signed the bill into law on October 11, 2015.

The new law contains several important provisions, but the focus of this article is on the California Labor Commissioner's newly vested power to place involuntary liens on real property.

Labor Code section 98.2(g) now authorizes the Labor Commissioner to file a lien on all property of the employer in California for the full amount of any wages and other compensation, penalties, and interest owed to the employee. Before the Labor Commissioner is allowed to file such a lien, the employee's claim must be liquidated to a judgement via the usual Labor Commissioner hearing process.

This policy is new. Previously, the Labor Commissioner could record a judgement lien. Now, they have the ability to go after specific pieces of property with liens. Liens don't just go away with time like money judgements. A recorded judgement lien must be resolved in order to clear the title to the subject property. This means paying off the former employee and obtaining a lien release.

California Employers now need to take the Labor Commissioner process more seriously than before. If an employer ignores a summons to appear at a Labor Commissioner hearing, they will lose their case automatically and be subject to fines, penalties, and interest. More worrisome, the Labor Commissioner will now have the authority to aggressively collect the judgement by placing liens on the employer's real property in the state.

If you find yourself subject to a Labor Commissioner real property lien, you will need to make arrangements to resolve the debt owed to the former employee. However, merely paying your former employee the amount of the judgement won't be enough. You will need to take steps to ensure to the proper lien release is recorded in order to clear the title to your property.

I help employers in the Sacramento area navigate the California Labor Commissioner process from start to finish. If you need help with a wage claim or other pending Labor Board matter, please call me at (916) 333-2222.