(a) It shall be unlawful for any vendor to accept payment from the university pursuant to a contract for services if the vendor is performing services or supplying the university with employees to perform services who are paid less than the total compensation rate specified in the vendor’s contract with the university or required by university policy, whichever is higher.

(b) An aggrieved employee may bring a civil action, including on behalf of an employee or employees against whom a violation of this article was committed, against a vendor to recover compensation that has been earned but was not paid at the total compensation rate required by the vendor’s contract with the university or university policy, whichever is higher, or to enforce any other provision of this article.

(c) (1) Prior to bringing an action against a vendor, an aggrieved employee shall first provide a vendor with written notice of an alleged violation of this article. The notice shall include the names or other information sufficient to identify the employees against whom the alleged violations were committed, dates of employment, the period of alleged noncompliance, and contact information. The notice shall also provide the vendor with the opportunity to correct and cure the violation.

(2) If a vendor receives written notice pursuant to paragraph (1), the vendor shall provide a copy of the written notice to the president of the university within five business days of receipt.

(3) Upon providing written notice pursuant to paragraph (1), an aggrieved employee may file suit only if the vendor fails to provide documentation, within 60 days, demonstrating that each employee identified in the notice has been made whole, has been provided with the notices required by this article, and is receiving a total compensation rate no less than the rate specified in the vendor’s contract with the university or in university policy, whichever is higher.

(d) If a claimant prevails in an action brought under this section, the vendor shall notify the president of the university of the decision and the court shall order the following:

(1) Any vendor that supplies the university with any employee who is paid a total compensation rate less than the amount fixed by the vendor’s contract with the university or university policy to pay a penalty and restitution, as follows:

(A) For any initial violation of subdivision (a), one hundred dollars ($100) for each underpaid employee for each pay period for which the employee is underpaid, not exceeding an aggregate penalty of five hundred dollars ($500) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation.

(B) For each subsequent violation of subdivision (a), two hundred fifty dollars ($250) for each underpaid employee for each pay period for which the employee is underpaid, not exceeding an aggregate penalty of one thousand dollars ($1000) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation.

(C) For each knowing and intentional failure by a vendor to comply with Section 10510.52, fifty dollars ($50) per employee for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not exceeding an aggregate penalty of one thousand dollars ($1,000) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation.

(2) To the extent a vendor bills the university for services provided via an hourly bill rate, and to the extent a vendor fails to pay its employees the amount fixed by the vendor’s contract with the university or university policy, a court may, in its discretion, require that the vendor return to the university any amounts paid by the university to the vendor for services that exceed the amounts the vendor paid to its employees providing services for any payroll periods after January 1, 2024.

(3) Reasonable attorney’s fees and costs.

(e) Compensation and penalties recovered pursuant to this section shall be paid to the employee against whom a violation of this article was committed.

(f) The remedies provided for in this section are in addition to any other remedies provided by law. The penalties provided for in this section are in addition to any other penalties provided by law except that an employee shall not also receive penalties provided for in subdivision (f) of Section 226 or § 1197.1 of the Labor Code.

(g) This section shall not preclude or alter the university’s ability to contract for services as permitted under existing policies or collective bargaining agreements, nor shall it preclude the university from hiring in emergency circumstances or to meet other staffing needs.

(Added by Stats. 2023, Ch. 480, Sec. 1. (SB 27) Effective January 1, 2024.)