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Bills expand responsibility for contractor pay

Published on NewsOK Modified: May 31, 2014 at 12:06 pm •  Published: May 31, 2014
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SACRAMENTO, Calif. (AP) — California businesses would be held responsible when contract workers they hire to clean their buildings, fill their warehouse shelves and deliver their goods are not paid or are denied overtime under a pair of bills advancing through the Legislature.

The legislative efforts are an attempt to address what economists say is a rise in lower-wage and temporary jobs in California, even as the official unemployment rate falls steadily.

Unions and Democratic lawmakers are responding to this shift in the economy with legislation to prevent businesses from avoiding their obligations under California's strong labor laws by replacing full-time staff with contracted employees.

AB2416 by Assemblyman Mark Stone, D-Scotts Valley, would allow workers to place liens for unpaid wages on their employer's property, as well as property where they performed work, such as office buildings protected by private security guards. AB1897 by Assemblyman Roger Hernandez, D-West Covina, would make sure that employers share liability with staffing agencies and contractors for workers' wages.

Both bills won approval as part of a flurry of legislative activity last week as lawmakers met a deadline to pass legislation from one house to the next. They now head to the Senate after passing the Assembly on party-line votes.

While supporters say the efforts would help the lowest-paid workers in California, such as farmworkers, business groups say they unfairly punish companies that did nothing wrong.

"They just immediately hold non-employers liable for the acts of another, regardless of whether or not the third party had an opportunity to prevent the acts from occurring," said Jennifer Barrera, a lobbyist for the California Chamber of Commerce.

The authors of the bills say they are not trying to penalize innocent companies, but say those businesses should be accountable for the workers who come through their doors.

"The more there are pressures on employers to do the right thing for their employees, we can minimize the claims and problems that are out there," said Stone, the author of the wage lien bill.

For example, a study last year by the UCLA Labor Center and the National Employment Law Project found 83 percent of workers with successful wage claims in California between 2008 and 2011 never recovered their paychecks. If his bill is signed into law, Stone expects businesses to draw up agreements to protect themselves from liens by making sure contractors have money available to pay wage claims.

The idea is not new. California homeowners, for example, are responsible for making sure subcontractors, including roofers and plumbers, are paid when they remodel their houses under the state's mechanics lien. In practice, the state encourages homeowners to pay subcontractors with joint checks to avoid liens. Stone's bill does not expand subcontracted employees' powers to place liens on homes where they worked, but it does allow for household workers such as maids to do so.

Barrera said the better solution to recovering unpaid wages is to give more power to the state's labor commissioner, rather than allowing employees to place liens without presenting evidence.

Hernandez said his worker liability bill responds to a "race to the bottom" of employers seeking low-cost staffing agencies and subcontractors that pay little and do not take steps to protect employees. He cited a 2012 report by the UC Berkeley Labor Center finding that temporary workers are twice as likely to be in poverty.

"This model is a big part of why California's middle class is shrinking," he said. "The employer-client (of a staffing agency) should not be able to continue hiding behind a middle man."

Hernandez said his bill encourages businesses to work with agencies that have a better track record of upholding worker rights by making them share responsibility for obtaining worker's compensation insurance and tracking hours worked. Business groups say the law already has enough protections.

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