Californian Window Cleaners Liens

This bill would allow an employee to file a pre-judgment lien for the full amount of any wages.

California Bill Would Authorize Pre-Judgment Wage Liens On Real And Personal Property Of Employers And Third Parties: I often say that to be an employer in California is to be sued.  California is litigious and its labor (and other) laws are maddingly complex.  Last spring, Assembly Member Bonnie Lowenthal submitted a bill, AB 1164, that would add to the woes, not just of employers, but also of any person who has property upon which an employee has “bestowed labor”.  This bill would allow an employee to file a pre-judgment lien for the full amount of any wages, other compensation, and related penalties and damages owed to the employee.

It’s hard to imagine any property owner who at some time doesn’t have third party employees performing work on their property.  For example, a building owner may contract with a third party for window washing service.  If enacted, the bill would allow any employee of the contractor to lien the building owner’s real and personal property.  Of course, a building owner or other business is likely to have scores of contractors performing labor and thus could face a continuing barrage of employee liens.

Homeowners are allowed limited exemptions.  In the case of an employer, the lien would apply to the employer’s principal residence only to the extent that the employee provided labor to the benefit of that household or residence.  In the case of third party owners, the lien does not apply to a claim relating to property bought or services furnished primarily for personal, family, or household purposes, including those benefiting any real property that is the principal residence of the owner.

Importantly, the proposed employee lien would lack many of the limitations and procedural safeguards that apply to mechanics liens.  If enacted, I foresee an ocean of misery for California property owners, including interference with financings and costly litigation to remove liens.  For those inclined to worry about AB 1164 only if it should become law, that doesn’t appear to be unlikely.  It has already passed out of three committees in the Assembly (Judiciary, Labor & Employment, and Appropriations).

About the Author (Keith Paul Bishop - Partner) Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients on compliance.