BILL NUMBER: SB 940 CHAPTERED
BILL TEXT
CHAPTER 169
FILED WITH SECRETARY OF STATE JULY 22, 2008
APPROVED BY GOVERNOR JULY 22, 2008
PASSED THE SENATE JULY 2, 2008
PASSED THE ASSEMBLY JUNE 23, 2008
AMENDED IN ASSEMBLY MAY 21, 2008
AMENDED IN SENATE JANUARY 7, 2008
AMENDED IN SENATE APRIL 26, 2007
AMENDED IN SENATE APRIL 18, 2007
INTRODUCED BY Senator Yee
(Principal coauthors: Assembly Members Dymally and Swanson)
FEBRUARY 23, 2007
An act to amend Sections 203, 203.1, 204, 210, 215, 220, and
2699.5 of, and to add Section 201.3 to, the Labor Code, relating to
employment.
LEGISLATIVE COUNSEL'S DIGEST
SB 940, Yee. Temporary services employees: wages.
Existing law requires that all wages be paid twice during each
calendar month, that wages be paid immediately upon discharge, and
that wages be paid within 72 hours if an employee quits, with certain
exceptions.
This bill would provide that for employees of temporary services
employers, as defined, wages shall be paid weekly, or daily if an
employee is assigned to a client, as defined, on a day-to-day basis
or to a client engaged in a trade dispute. This bill would not apply
to employees who are assigned to a client for over 90 consecutive
calendar days unless the employer pays the employee weekly in
compliance with this bill.
Existing law imposes civil and criminal penalties on an employer
who violates certain wage payment requirements.
This bill would apply these civil and criminal penalties to the
wage payment requirements established by this bill. Because the bill
would create a new crime, it would impose a state-mandated local
program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 201.3 is added to the Labor Code, to read:
201.3. (a) For purposes of this section, the following
definitions apply:
(1) "Temporary services employer" means an employing unit that
contracts with clients or customers to supply workers to perform
services for the clients or customers and that performs all of the
following functions:
(A) Negotiates with clients and customers for matters such as the
time and place where the services are to be provided, the type of
work, the working conditions, and the quality and price of the
services.
(B) Determines assignments or reassignments of workers, even if
workers retain the right to refuse specific assignments.
(C) Retains the authority to assign or reassign a worker to
another client or customer when the worker is determined unacceptable
by a specific client or customer.
(D) Assigns or reassigns workers to perform services for clients
or customers.
(E) Sets the rate of pay of workers, whether or not through
negotiation.
(F) Pays workers from its own account or accounts.
(G) Retains the right to hire and terminate workers.
(2) "Temporary services employer" does not include any of the
following:
(A) A bona fide nonprofit organization that provides temporary
service employees to clients.
(B) A farm labor contractor, as defined in subdivision (b) of
Section 1682.
(C) A garment manufacturing employer, which, for purposes of this
section, has the same meaning as "contractor," as defined in
subdivision (d) of Section 2671.
(3) "Employing unit" has the same meaning as defined in Section
135 of the Unemployment Insurance Code.
(4) "Client" and "customer" means the person with whom a temporary
services employer has a contractual relationship to provide the
services of one or more individuals employed by the temporary
services employer.
(b) (1) Except as provided in paragraphs (2) to (5), inclusive, if
an employee of a temporary services employer is assigned to work for
a client, that employee's wages are due and payable no less
frequently than weekly, regardless of when the assignment ends, and
wages for work performed during any calendar week shall be due and
payable not later than the regular payday of the following calendar
week. A temporary services employer shall be deemed to have timely
paid wages upon completion of an assignment if wages are paid in
compliance with this subdivision.
(2) If an employee of a temporary services employer is assigned to
work for a client on a day-to-day basis, that employee's wages are
due and payable at the end of each day, regardless of when the
assignment ends, if each of the following occurs:
(A) The employee reports to or assembles at the office of the
temporary services employer or other location.
(B) The employee is dispatched to a client's worksite each day and
returns to or reports to the office of the temporary services
employer or other location upon completion of the assignment.
(C) The employee's work is not executive, administrative, or
professional, as defined in the wage orders of the Industrial Welfare
Commission, and is not clerical.
(3) If an employee of a temporary services employer is assigned to
work for a client engaged in a trade dispute, that employee's wages
are due and payable at the end of each day, regardless of when the
assignment ends.
(4) If an employee of a temporary services employer is assigned to
work for a client and is discharged by the temporary services
employer or leasing employer, wages are due and payable as provided
in Section 201.
(5) If an employee of a temporary services employer is assigned to
work for a client and quits his or her employment with the temporary
services employer, wages are due and payable as provided in Section
202.
(6) If an employee of a temporary services employer is assigned to
work for a client for over 90 consecutive calendar days, this
section shall not apply unless the temporary services employer pays
the employee weekly in compliance with paragraph (1) of subdivision
(b).
(c) A temporary services employer who violates this section shall
be subject to the civil penalties provided for in Section 203, and to
any other penalties available at law.
(d) Nothing in this section shall be interpreted to limit any
rights or remedies otherwise available under state or federal law.
SEC. 2. Section 203 of the Labor Code is amended to read:
203. (a) If an employer willfully fails to pay, without abatement
or reduction, in accordance with Sections 201, 201.3, 201.5, 202,
and 205.5, any wages of an employee who is discharged or who quits,
the wages of the employee shall continue as a penalty from the due
date thereof at the same rate until paid or until an action therefor
is commenced; but the wages shall not continue for more than 30 days.
An employee who secretes or absents himself or herself to avoid
payment to him or her, or who refuses to receive the payment when
fully tendered to him or her, including any penalty then accrued
under this section, is not entitled to any benefit under this section
for the time during which he or she so avoids payment.
(b) Suit may be filed for these penalties at any time before the
expiration of the statute of limitations on an action for the wages
from which the penalties arise.
SEC. 3. Section 203.1 of the Labor Code is amended to read:
203.1. If an employer pays an employee in the regular course of
employment or in accordance with Section 201, 201.3, 201.5, 201.7, or
202 any wages or fringe benefits, or both, by check, draft or
voucher, which check, draft or voucher is subsequently refused
payment because the employer or maker has no account with the bank,
institution, or person on which the instrument is drawn, or has
insufficient funds in the account upon which the instrument is drawn
at the time of its presentation, so long as the same is presented
within 30 days of receipt by the employee of the check, draft or
voucher, those wages or fringe benefits, or both, shall continue as a
penalty from the due date thereof at the same rate until paid or
until an action therefor is commenced. However, those wages and
fringe benefits shall not continue for more than 30 days and this
penalty shall not apply if the employer can establish to the
satisfaction of the Labor Commissioner or an appropriate court of law
that the violation of this section was unintentional. This penalty
also shall not apply in any case in which an employee recovers the
service charge authorized by Section 1719 of the Civil Code in an
action brought by the employee thereunder.
SEC. 4. Section 204 of the Labor Code is amended to read:
204. (a) All wages, other than those mentioned in Section 201,
201.3, 202, 204.1, or 204.2, earned by any person in any employment
are due and payable twice during each calendar month, on days
designated in advance by the employer as the regular paydays. Labor
performed between the 1st and 15th days, inclusive, of any calendar
month shall be paid for between the 16th and the 26th day of the
month during which the labor was performed, and labor performed
between the 16th and the last day, inclusive, of any calendar month,
shall be paid for between the 1st and 10th day of the following
month. However, salaries of executive, administrative, and
professional employees of employers covered by the Fair Labor
Standards Act, as set forth pursuant to Section 13(a)(1) of the Fair
Labor Standards Act, as amended through March 1, 1969, in Part 541 of
Title 29 of the Code of Federal Regulations, as that part now reads
or may be amended to read at any time hereafter, may be paid once a
month on or before the 26th day of the month during which the labor
was performed if the entire month's salaries, including the unearned
portion between the date of payment and the last day of the month,
are paid at that time.
(b) (1) Notwithstanding any other provision of this section, all
wages earned for labor in excess of the normal work period shall be
paid no later than the payday for the next regular payroll period.
(2) An employer is in compliance with the requirements of
subdivision (a) of Section 226 relating to total hours worked by the
employee, if hours worked in excess of the normal work period during
the current pay period are itemized as corrections on the paystub for
the next regular pay period. Any corrections set out in a
subsequently issued paystub shall state the inclusive dates of the
pay period for which the employer is correcting its initial report of
hours worked.
(c) However, when employees are covered by a collective bargaining
agreement that provides different pay arrangements, those
arrangements shall apply to the covered employees.
(d) The requirements of this section shall be deemed satisfied by
the payment of wages for weekly, biweekly, or semimonthly payroll if
the wages are paid not more than seven calendar days following the
close of the payroll period.
SEC. 5. Section 210 of the Labor Code is amended to read:
210. (a) In addition to, and entirely independent and apart from,
any other penalty provided in this article, every person who fails
to pay the wages of each employee as provided in Sections 201.3, 204,
204b, 204.1, 204.2, 205, 205.5, and 1197.5, shall be subject to a
civil penalty as follows:
(1) For any initial violation, one hundred dollars ($100) for each
failure to pay each employee.
(2) For each subsequent violation, or any willful or intentional
violation, two hundred dollars ($200) for each failure to pay each
employee, plus 25 percent of the amount unlawfully withheld.
(b) The penalty shall be recovered by the Labor Commissioner as
part of a hearing held to recover unpaid wages and penalties pursuant
to this chapter or in an independent civil action. The action shall
be brought in the name of the people of the State of California and
the Labor Commissioner and the attorneys thereof may proceed and act
for and on behalf of the people in bringing these actions. Twelve and
one-half percent of the penalty recovered shall be paid into a fund
within the Labor and Workforce Development Agency dedicated to
educating employers about state labor laws, and the remainder shall
be paid into the State Treasury to the credit of the General Fund.
SEC. 6. Section 215 of the Labor Code is amended to read:
215. Any person, or the agent, manager, superintendent or officer
thereof, who violates any provision of Section 201.3, 204, 204b,
205, 207, 208, 209, or 212 is guilty of a misdemeanor. Any failure to
keep posted any notice required by Section 207 is prima facie
evidence of a violation of these sections.
SEC. 7. Section 220 of the Labor Code is amended to read:
220. (a) Sections 201.3, 201.5, 201.7, 203.1, 203.5, 204, 204a,
204b, 204c, 204.1, 205, and 205.5 do not apply to the payment of
wages of employees directly employed by the State of California.
Except as provided in subdivision (b), all other employment is
subject to these provisions.
(b) Sections 200 to 211, inclusive, and Sections 215 to 219,
inclusive, do not apply to the payment of wages of employees directly
employed by any county, incorporated city, or town or other
municipal corporation. All other employments are subject to these
provisions.
SEC. 8. Section 2699.5 of the Labor Code is amended to read:
2699.5. The provisions of subdivision (a) of Section 2699.3 apply
to any alleged violation of the following provisions: subdivision
(k) of Section 96, Sections 98.6, 201, 201.3, 201.5, 201.7, 202, 203,
203.1, 203.5, 204, 204a, 204b, 204.1, 204.2, 205, 205.5, 206, 206.5,
208, 209, and 212, subdivision (d) of Section 213, Sections 221,
222, 222.5, 223, and 224, subdivision (a) of Section 226, Sections
226.7, 227, 227.3, 230, 230.1, 230.2, 230.3, 230.4, 230.7, 230.8, and
231, subdivision (c) of Section 232, subdivision (c) of Section
232.5, Sections 233, 234, 351, 353, and 403, subdivision (b) of
Section 404, Sections 432.2, 432.5, 432.7, 435, 450, 510, 511, 512,
513, 551, 552, 601, 602, 603, 604, 750, 751.8, 800, 850, 851, 851.5,
852, 921, 922, 923, 970, 973, 976, 1021, 1021.5, 1025, 1026, 1101,
1102, 1102.5, and 1153, subdivisions (c) and (d) of Section 1174,
Sections 1194, 1197, 1197.1, 1197.5, and 1198, subdivision (b) of
Section 1198.3, Sections 1199, 1199.5, 1290, 1292, 1293, 1293.1,
1294, 1294.1, 1294.5, 1296, 1297, 1298, 1301, 1308, 1308.1, 1308.7,
1309, 1309.5, 1391, 1391.1, 1391.2, 1392, 1683, and 1695, subdivision
(a) of Section 1695.5, Sections 1695.55, 1695.6, 1695.7, 1695.8,
1695.9, 1696, 1696.5, 1696.6, 1697.1, 1700.25, 1700.26, 1700.31,
1700.32, 1700.40, and 1700.47, paragraphs (1), (2), and (3) of
subdivision (a) of and subdivision (e) of Section 1701.4, subdivision
(a) of Section 1701.5, Sections 1701.8, 1701.10, 1701.12, 1735,
1771, 1774, 1776, 1777.5, 1811, 1815, 2651, and 2673, subdivision (a)
of Section 2673.1, Sections 2695.2, 2800, 2801, 2802, 2806, and
2810, subdivision (b) of Section 2929, and Sections 3095, 6310, 6311,
and 6399.7.
SEC. 9. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.