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AB-1701 Labor-related liabilities: original contractor.(2017-2018)

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Date Published: 03/24/2017 04:00 AM
AB1701:v98#DOCUMENT

Amended  IN  Assembly  March 23, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1701


Introduced by Committee on Labor and Employment (Assembly Members Thurmond (Chair), Gomez, Kalra, McCarty, and Reyes) Assembly Member Thurmond

February 28, 2017


An act to amend Section 212 of the Labor Code, relating to employment. An act to add Section 218.7 to the Labor Code, relating to employment.


LEGISLATIVE COUNSEL'S DIGEST


AB 1701, as amended, Committee on Labor and Employment Thurmond. Employment: payment of wages. Labor-related liabilities: original contractor.
Under existing law, an action may be brought for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions.
This bill would require a direct contractor, as defined, making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other work, to assume, and be liable for, specified debt owed to a wage claimant that is incurred by a subcontractor, at any tier, acting under, by, or for the direct contractor for the wage claimant’s performance of labor included in the subject of the original contract. The bill would authorize civil actions to enforce this liability, as provided. The bill would provide that this remedy is in addition to any other remedy provided by law.

Existing law prohibits a person or his or her agent or officer from issuing in payment of wages due (1) an acknowledgment of indebtedness unless it is negotiable and payable in cash at an established place of business in the state with a specified name and address and at the time of issuance and for at least 30 days thereafter or (2) a thing redeemable in merchandise or otherwise than in money.

This bill would make nonsubstantive changes to those provisions.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 218.7 is added to the Labor Code, to read:

218.7.
 (a) (1) A direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other work, shall assume, and is liable for, any debt owed to a wage claimant incurred by a subcontractor at any tier acting under, by, or the direct contractor for the wage claimant’s performance of labor included in the subject of the contract between the direct contractor and the owner.
(2) The direct contractor’s liability shall extend to any wage, fringe or other benefit payment or contribution, including interest thereon, and the state tax payment owed to a wage claimant or third party on the wage claimant’s behalf, but shall not extend to penalties or liquidated damages unless otherwise provided by law.
(3) A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section.
(b) A wage claimant may sue directly or through an assignee for the debt described in subdivision (a).
(c) The Labor Commissioner, the district attorney of a county, or prosecuting attorney of a city or city and county where the direct contractor resides or is found may institute a civil action against the direct contractor for the amount owed.
(d) Unless otherwise provided by law, property of the direct contractor may be attached for the payment of any judgment received pursuant to this section.
(e) An action brought pursuant to this section shall be filed within one year of the date of completion of the work for which the labor was performed.
(f) This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(g) For purposes of this section, “direct contractor” and “subcontractor” have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h) The remedy provided in this section shall be in addition to any remedy otherwise provided by law.

SECTION 1.Section 212 of the Labor Code is amended to read:
212.

(a)A person, or agent or officer thereof, shall not issue in payment of wages due, or to become due, or as an advance on wages to be earned:

(1)An order, check, draft, note, memorandum, or other acknowledgment of indebtedness, unless it is negotiable and payable in cash, on demand, without discount, at some established place of business in the state, the name and address of which shall appear on the instrument, and at the time of its issuance and for a reasonable time thereafter, which shall be at least 30 days, the maker or drawer has sufficient funds in, or credit, arrangement, or understanding with the drawee for its payment.

(2)A scrip, coupon, card, or other thing redeemable, in merchandise or purporting to be payable or redeemable otherwise than in money.

(b)Where an instrument mentioned in subdivision (a) is protested or dishonored, the notice or memorandum of protest or dishonor is admissible as proof of presentation, nonpayment, and protest and is presumptive evidence of knowledge of insufficiency of funds or credit with the drawee.

(c)Notwithstanding paragraph (1) of subdivision (a), if the drawee is a bank, the bank’s address need not appear on the instrument and, in that case, the instrument shall be negotiable and payable in cash, on demand, without discount, at a place of business of the drawee chosen by the person entitled to enforce the instrument.