New Law 2014 – Liens Against Employer Property For Wage Judgments (AB 1386)

Employees may file claims for wages and other Labor Code violations either in court or before the California Labor Commissioner, Division of Labor Standards Enforcement (DLSE).  If an employee elects to sue before the Labor Commissioner/DLSE, an administrative hearing is held.  The hearing is known as a Berman Hearing and is heard by an administrative law judge appointed by the Labor Commissioner.  The Labor Commissioner issues an “Order, Decision or Award” (ODA) and if no party appeals, the ODA becomes a final judgment.

In recent years, the California legislature has stepped up efforts to enforce judgments arising from Berman Hearings.  Last year, the California legislature made it a crime for an employer to willfully fail to pay a final judgment or final order issued by the Labor Commissioner.  Such crime is punishable by fine up to $20,000 or one year in county jail or both.

As of 2014 as a result of AB 1386, once the ODA becomes final, the Labor Commissioner now may file a lien against the real property of the employer in the amount of the Labor Commissioner’s final order or judgment.