Senate Bill 588, referred to as the wage theft bill, significantly expands individual liability for wage and hour violations by authorizing the Labor Commissioner to hold a hearing to recover civil penalties for wage and hour violations against not only the employer, but also a person acting on behalf of an employer, which includes an owner, director, officer, or managing agent of the employer. These persons may now be held liable for violating or causing a violation of any provision regulating minimum wages or hours and days of work in any Wage Order or the Labor Code. SB 588 also makes it easier for the Labor Commissioner to collect unpaid wages on behalf of workers, by granting power to issue levies and liens against the employer’s property and to issue stop orders requiring businesses to cease operating until payment obligations are satisfied.

The new law also includes some unusual provisions which require that any individual or business entity that contracts for services in the property services or long-term care industries to be jointly and severally liable for any unpaid wages where the individual or business entity has been provided notice, by any party, of any proceeding or investigation by the Labor Commissioner in which the employer is found liable for unpaid wages. The requirements do not impose liability on individual residences or home-based businesses. “Property services” is defined as janitorial, security guard, valet parking, landscaping or gardening services. SB 588 becomes effective on January 1, 2016.

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