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AB-2416 Liens: laborers and employees.(2013-2014)

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AB2416:v91#DOCUMENT

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 06, 2014
Amended  IN  Assembly  March 28, 2014

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill No. 2416


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   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 recorded 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.