Fall 2018 New Employment Laws – Part 3
Now that the candy and costumes are gone, we have more updates and tweaks to California employment law to report. This week we focus on a joint liability. Yay! More ways employers can be liable for the mistakes of others. SB 1402 expands joint liability for truckers. The legislature clears up confusion from last year’s AB 1701.
Expansion of Joint Liability
SB 1402 has two major parts. The DLSE must create and maintain a list of trucking companies that have unpaid “judgment[s], tax assessment[s], or tax lien[s]” on the DLSE website. This includes judgments stemming from a myriad of employment-related violations such as
- Failure to pay wages
- Imposing unlawful expenses on employees
- Failing to remit payroll taxes
- Failing to provide workers’ compensation insurance
- Misclassification of employees as independent contractors
Trucking companies would only be added to this list after the period for all judicial appeals expires.
The second part of SB 1402 is much broader. It extends joint liability to any company using a trucking company on the list. Businesses using a company on the list share “all civil legal responsibility and civil liability” with the trucking company for “for the full amount of unpaid wages, unreimbursed expenses, damages and penalties, including applicable interest.”
This differs from previous law. Before SB 1402, joint liability only applied to contracted work within the scope of the “usual course of the client employer’s business.” Now, retailers and various other business can be liable even if the work does not fall in the scope of the business’s “usual course.”
Businesses should review the list and exercise caution when contracting with companies on this list. Oh, and consult with an attorney to ensure you are aware of liability you currently hold.
Legislative Fix of AB 1701
Last year, the Legislature made general contractors liable for their subcontractors who fail to pay wages or benefits. The bill seemed to imply that direct contractors had additional obligations beyond the Labor Code for failure to pay wages or provide benefits.
AB 1565 clarifies that direct contractors are simply subject to the existing obligations and remedies. It also specifies that direct contractors are only liable for wages and benefits. These provisions went into effect immediately after it was signed into law.
For contracts put in place on or after January 1, 2019, contractors must specify what documents subcontractors must provide before they withhold payments.
Provided by the Nuddleman Law Firm, P.C.
Written by J.T. Keane and edited by Robert E. Nuddleman
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The Nuddleman Law Firm, P.C. represents employers and employees in a wide range of employment law matters. Much of his practice focuses on wage and hour issues, such as unpaid overtime, meal and rest break violations, designing or enforcing commission plans, and other wage-related claims. He also advises employers on how to avoid harassment and wrongful termination claims and represents employees who have been victims of unlawful discrimination, retaliation or harassment. The Nuddleman Law Firm, P.C. helps employers develop good employment policies, and helps employers and employees with disability accommodation issues.
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