California Labor Code 238.3 – (a) The Labor Commissioner may create a lien on any personal …
(a) The Labor Commissioner may create a lien on any personal property in California of an employer that conducts business in violation of Section 238 for the full amount of any wages, interest, and penalties claimed to be owed to any employee. To the extent attorney’s fees are specifically allowed to be recovered by this code, such as by, but not limited to, subdivision (f) of Section 2673.1 and Section 2802, during a hearing pursuant to Section 98, the Labor Commissioner may include that amount in the lien.
(b) The Labor Commissioner may create the lien provided in this section by filing a notice of lien with the Secretary of State on the standard form of initial financing statement pursuant to § 9521 of the Commercial Code. The standard form shall be completed in the following manner:
Terms Used In California Labor Code 238.3
- Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
- Labor: includes labor, work, or service whether rendered or performed under contract, subcontract, partnership, station plan, or other agreement if the labor to be paid for is performed personally by the person demanding payment. See California Labor Code 200
- Labor Commissioner: means Chief of the Division of Labor Standards Enforcement. See California Labor Code 21
- Lien: A claim against real or personal property in satisfaction of a debt.
- Personal property: All property that is not real property.
- Secretary: means the Secretary of Labor and Workforce Development. See California Labor Code 19.5
- Violation: includes a failure to comply with any requirement of the code. See California Labor Code 22
- Wages: includes all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation. See California Labor Code 200
(1) The Labor Commissioner shall be identified as the secured party.
(2) The employer shall be identified as the debtor.
(3) The description of the collateral shall include the following statements:
(A) A statement of the Labor Commissioner’s demand for payment of the wages, penalties, interest, and attorney’s fees, if applicable. The statement shall specify the amount owed to the employee, and if the amount is estimated, shall provide an explanation for the basis of the estimate.
(B) A general statement of the kind of work furnished by the employee and the dates of employment.
(c) For the purpose of the Secretary of State’s index pursuant to Sections 9515, 9516, and 9522 of the Commercial Code and for the purpose of the issuance of a certificate pursuant to Section 9519 or 9528 of the Commercial Code, the Secretary of State shall treat a notice of lien pursuant to this section as a financing statement.
(d) The lien attaches to all personal property that is owned by the employer at the time of the filing of the notice of lien, or that is subsequently acquired by the employer, that can be made subject to a security interest under the Commercial Code.
(e) The Labor Commissioner shall file a termination statement, releasing the lien created under this section, upon final satisfaction of any judgment entered in favor of the employee, upon adjudication of the claim in favor of the employer, upon the filing of a surety bond in a form acceptable to the Labor Commissioner sufficient to secure the claim.
(f) The notice of claim of lien to which the termination statement relates ceases to be effective upon the filing of a termination statement with the office of the Secretary of State. A termination statement for a notice of lien may be filed in the same manner as a termination statement for a financing statement filed pursuant to § 9513 of the Commercial Code.
(g) Unless the lien is satisfied or released, a lien under this section shall continue until 10 years from the date of its creation.
(h) Prior to using this lien procedure in this section, the Labor Commissioner shall provide at least 20 days’ preliminary notice to the employer. The preliminary notice shall advise the employer of the nature and amount of the employee’s claim and of the Labor Commissioner’s authority to create a lien on the employer’s personal property to secure payment of the claim.
(i) The Labor Commissioner shall serve the preliminary notice on the employer by certified mail with return receipt requested, evidenced by a certificate of mailing, postage prepaid, addressed to the employer at the employer’s residence or place of business. The Labor Commissioner shall serve a copy of any notice of lien on the employer in the same manner.
(j) Upon entry of a final order, decision, or award issued in an appeal pursuant to Section 98.2 against the employer for unpaid wages, or entry of a final judgment against the employer for unpaid wages in an action filed in the superior court, the Labor Commissioner may bring an action to foreclose on any lien created pursuant to this section.
(k) A lien created pursuant to this section in addition to any other lien rights available to an employee or to the Labor Commissioner shall not be construed to limit those rights.
(Added by Stats. 2015, Ch. 803, Sec. 7. (SB 588) Effective January 1, 2016.)