California Updates Labor Code to Allow Liens Without a Court Order

Last fall, California’s governor signed Bill 572, resulting in an amendment to the Labor Code. This updates the Labor Commission’s ability to create liens against the property of business or business owners for the purpose of repaying wage-and-hour claims made by employees. Previously, the Labor Commission needed a court order to create a lien, but as of January 1, 2022, a court order is no longer required. Instead, the Labor Commission can decide to implement a lien based on citations, investigative findings, or administrative decisions that have become final and may be entered as a judgment.

This bill broadens the Labor Commission’s ability to enforce BOFE (Bureau of Field Enforcement) citations, effectively diminishing the court’s role in deciding whether or not a lien is appropriate. Prior to SB 572, liens could only be created with a court order and to the amount that the court specified to be paid out to employees. Now, the Labor Commission can create liens for any amount set forth in the final decision. Similar to before SB 527 was added, it may review and extend those liens every 10 years until the amount due to employees is paid.

What happens if I am investigated?

If you find yourself under investigation by the BOFE, don’t panic. Not all investigations are triggered by complaints. The BOFE frequently conducts investigations of businesses in industries that have a higher rate of wage-and-hour infringements, such as construction firms, restaurants, and retail.

The investigator will request certain information from your records, such as payroll or timekeeping records. You are obligated to provide these documents to them, and if needed, the BOFE may leverage subpoenas to gain access to information necessary for its investigation.

The investigator may also ask to interview your employees. You may not discourage employees from talking with the BOFE, but your employees may choose not to cooperate voluntarily. The investigator may also choose to inspect the workplace and collect evidence.

How to deal with an investigation

As a business owner, you have a right to legal counsel during an investigation by the BOFE. Your representation should be with you throughout every step of the process to ensure that the investigator’s requests are fair and that the correct procedures are followed. Should you find yourself facing such an investigation, call Integrated General Counsel to speak with an experienced employment attorney who can guide you through to the best possible outcome.