New Law Strengthens Labor Commissioner’s Ability to Bind Employer Real Estate | Ervin Cohen & Jessup LLP

In 2013, the California Legislature passed Assembly Bill 1386, which amends Section 98.2 of the Labor Code, giving the Commissioner of Labor additional avenues to collect wages and penalties on behalf of workers. Section 98.2 of the Labor Code has been amended so that any amount owing under a final order of the labor commissioner allows the labor commissioner to register a certificate of lien on the employer’s real property.

Fast forward to September 2021 and the passage of Senate Bill 572. This bill adds section 90.8 to the Labor Code, which will come into effect on January 1, 2022. This law will allow the office of the Commissioner of to register a lien on real estate to secure the amount due to the labor commissioner on the basis of any “quotation, finding or decision that has become final”. The nuance between the two bills is easy to miss. Under SB 572, the labor commissioner no longer needs a final “order” before filing a lien, but may do so instead any type of final decision, conclusion or even quote. As with other liens on immovable property, the Commissioner of Labor would also have the right to renew the lien every ten years until the quoted amount, plus interest, is fully paid.

From a practical standpoint, SB 572 seems more remedial than punitive by closing a technical gap created by the wording of AB 1386. Regardless of whether the labor commissioner issues an order, citation, or other final decision , employers must comply with any such decision. avoid the increasingly aggressive collection efforts of the labor commissioner.