new law strengthens the ability of the labor commissioner to grant a lien on employers’ real estate | Ervin Cohen & Jessup LLP
In 2013, the California legislature passed Assembly Bill 1386, which amended section 98.2 of the Labor Code, giving the labor commissioner additional means to collect wages and penalties on behalf of workers. Section 98.2 of the Labor Code has been amended so that any amount due under a final order of the labor commissioner allows the labor commissioner to register a certificate of lien on the employer’s real estate.
Fast forward to September 2021 and adoption of the Senate bill 572. This bill adds article 90.8 to the Labor Code, which comes into force on January 1, 2022. This law will allow the Labor Commission to register a lien on real estate to guarantee the amount owed to the labor commissioner on the basis of any âcitation, finding or decision that has become finalâ. 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 can do so instead. any type of final decision, finding or even citation. As with other liens on real property, the labor commissioner would also have the right to renew the lien every ten years until the amount quoted, plus interest, is fully paid.
From a practical standpoint, SB 572 seems more remedial than punitive in filling a technical gap created by the wording of AB 1386. Whether the labor commissioner makes an order, citation or other final decision, employers must comply with such a decision to avoid increasingly aggressive collection efforts on the part of the labor commissioner.