Did You Know That an Employer Can Share With a Labor Contractor Civil Liability For Wages?

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Did You Know That an Employer Can Share With a Labor Contractor Civil Liability For Wages?

 By: Rebecca Hause-Schultz

AB 1897, signed into law in September 2014 and codified in Section 2810.3 of the Labor Code, provides that a client employer is strictly and jointly responsible for a labor contractor’s (1) failure to pay wages, and, (2) failure to secure valid workers’ compensation coverage for workers supplied by the labor contractor.  There is no requirement under AB 1897 that the client employer be found to be a joint employer of the labor contractor’s workers.  The passage of AB 1897 significantly impacted client employers in the agricultural industry, who frequently rely on farm labor contractors (“FLCs”) or vineyard management companies (“VMCs”) to provide them with necessary workers.  

In late June of 2017, the Department of Industrial Relations (“DIR”) issued a news release stating that the California Labor Commissioner had issued citations of $249,879.00 against a general contractor and its subcontractor. The citations were issued to the general contractor for the subcontractor’s failure to pay wages. This is the first time that the Labor Commissioner has held a general contractor responsible for wage theft issuing citations under AB 1897 (Labor Code section 2810.3.) A link to the DIR’s news release is available here.


All client employers, whether operating in the agricultural industry, construction industry, or otherwise, should be careful when retaining a labor services provider.  And given that agricultural employers are frequently targeted, they should be especially vigilant about ensuring that FLCs and VMCs they utilize are following all state and federal wage and hour laws.  Additionally, we strongly encourage the use of written labor contracts to set clear expectations and provide for appropriate legal recourse if a party fails to abide by its legal and contractual responsibilities.   Otherwise, as this recent DIR citation shows, a client employer can be held jointly liable for the labor contractor’s failure to properly compensate employees. If you have any questions about AB 1897, or need help to make sure that you have appropriate safeguards in place with respect to your use of labor contractors, please contact the experts at The Saqui Law Group.


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