We previously reported about two new laws affecting California employers this year: The Private Attorney General (aka Bounty Hunter) Act and, more recently, Labor Code section 2810 making employers liable for what they should have known when contracting for labor. Here, as promised, is an update regarding both sections:

Senate Bill 796 was signed by Gov. Davis on October 12, 2003 and became effective as Labor Code Section 2699 on January 1, 2004. Its major provisions include:

1. The creation of a civil penalty for Labor Code violations that do not currently carry a monetary penalty. The penalty will be $100 per employee per pay period for an initial violation and $200 per employee per pay period for subsequent violations.

2. The creation of a "private attorney general" right allowing aggrieved employees to bring suit against their employer in civil court for alleged Labor Code violations if a state agency does not cite the employer for the same violation. The aggrieved employee will be rewarded for bringing a civil lawsuit with 25% of the penalties recovered as a result of the suit and will also be entitled to reasonable attorney fees and costs.

At least three bills that would repeal or amend the law have been introduced by California Legislators.

• SB 1861 would require the aggrieved employee to first report an alleged labor code violation to the Labor and Workforce Development Agency (LWDA). The LWDA would then have 60 days to initiate an investigation of the matter. If no action is taken by the LWDA within 60 days, the employee would be allowed to proceed with a civil action against his or her employer.

• AB 2181 would completely repeal the law.

• AB 2650 proposes an exclusion for employers with fewer than 100 employees within a 75 mile radius.

All of these bills have been referred to the Labor and Employment Commissions of the Senate or Assembly and are set for hearing within the next month.

Labor Code section 2810: Labor Contracts

Senate Bill 179 was also signed by Gov. Davis and became effective the first of this year. This law makes employers contracting for labor liable if they "knew or should have known" that their labor agreement did not provide enough money for the labor contractor to comply with all laws related to services to be provided. The categories of information that employers must determine and include in every written contract for labor were outlined in our March 1st E-zine.

We have since learned that the intended target of the legislation was the janitorial industry. According to the bill’s author, application of the law to contracts between construction contractors and sub-contractors was never intended. However, as written, the law applies to all persons or entities entering into contracts for labor or services in the construction, farm labor, garment, janitorial or security guard industries. And, while the author is open to amending the law, no action has yet been taken. So, as of this writing, Labor Code section 2810 applies to all construction contractors’ agreements with sub-contractors with the exception of some collective bargaining agreements and household services.

We will be watching for changes and follow-up legislation as related to both of these sections and will update you as information becomes available.