AB 520: Public Agencies can now be held Jointly Liable for Contractors’ Unpaid Wages

Currently, in California in the property services and long-term healthcare industries, an individual or business that contracts for services can be held jointly and severally liable for any unpaid wages (including interest) if a few requirements are met. First, that entity was provided notice of a proceeding or investigation by the Labor Commissioner. Second, the Labor Commissioner found the employer liable for unpaid wages. Third, some or all of those wages were for services performed under the service contract.

Assembly Bill 520, which was signed by the Governor on October 10, 2023, makes public entities also jointly and severally liable for unpaid wages and interest. “Public entity” is defined as a city, county, city and county, district, public authority, public agency, and any other political subdivision or public corporation in the state, including charter cities. As a result, public entities that have service contracts in the property services and long-term healthcare industries can now be held liable for unpaid wages.

For more information regarding this new law, please contact your labor attorney.