The Statute Labor Code 2810

www.labor2810.com (see sample contract addendum)

California

Bounty Hunter Statute

  A Threat Managers & Principals of Real Property; Defective “Service Contracts”

(How 10 easy points will protect you)

www.labor2810.com (see sample contract addendum)

Defective “Service Contracts”: New Labor Code Section 2810, creates deficiencies in most “Property Management” service contracts; which expose, "Property Managers" and the "Principals of Real Property" to civil liability for the wrongful employment acts of its vendors (janitors, security guards, construction contractors, etc). The new statute creates a defacto employment relationship between "Real Property" and the Vendors' "Employees/Sub-Contractors” servicing the Real Property.

The Bounty: The statute provides "attorney fees" and up to $1,000.00 or actual damages to “every aggrieved employee/sub-contractor” of the vendor utilized on Real Property (Paid by the managers and owners of the property) . Property owners and managers now have a legal duty to ensure that "service contracts" entered into with vendors comply with all applicable laws and regulations, (e.g. overtime, workers comp., withholding taxes, disability, etc). Failure to document, in writing, the (10) points spelled out in the statute "constitutes actual knowledge" of vendor noncompliance with the statute and civil liability. Vendors with chronic “overtime or workers comp.” violations will create thousands of dollars in liability for property owners and managers. Pursuant to statute language, “or should have known”, there is no bliss in ignorance.

Service Contract Addendum: Alternatively; if the manager or property owner collects, in writing, the (10) points of information required in the statute there is a "Rebuttable Presumption" of compliance with the statute.

Historically

Historically, many vendors have been in continuous violation with laws on overtime, workers comp., disability, payroll taxes etc. thus, compelling the legislature to police the “under ground economy”.

For example, there may be large "Property Service Companies" that portray an illusive facade of large fleets and numerous employees; however, appearances are not always what they seem. Specifically, vendors continuously invent new schemes to deceive both government agencies and property management companies as to their noncompliance with the law.

In the Real World

For instance, a large "Property Service Company" could be nothing more than a broker reassigning “service contracts” to subcontractors that, for one reason or another, the subcontractors can not procure on their own.

As a result the subs demonstrate a lack of independence; therefore, they are misclassified employees.

The Transfer of Liability and the Financial Reward

Moreover, the "Property Service Company" reaps the financial reward of the contract, and then deceptively transfers liability to the Property & Management Company. Consequently, this shifts the operating expense and management of servicing the property to unqualified and “masqueraded” sub-contractors (misclassified employees) who lack the skills to operate a business and independently procure their own service contracts. Incidentally, some managers are unaware that “Property Service Companies” can easily procure “workers comp. certificates even when they have no employees, thereby, misleading the manager as to the size of the “Property Service Company”. Unfortunately, there are countless variations of the above chicanery.

New "Labor Code 2810" is draconian and the rules have changed; accordingly, civil liability has been created for the Property & Manager who fail to use the code's “Rebuttable Presumption” provision.

The 10 Easy Point Solution:

In order to mitigate liability under 2810, the Property and Property Manager are required to collect from their vendors the following (10) points defined in the statute, thereby, entitling them to a “Rebuttable Presumption of Compliance” under law. To a legitimate vendor this should be no different and as easy as providing a certificate of insurance.

Sample (10) point Compliance Form Service Contract Addendum

1. Name, address, & telephone number of person or entity (Contractor) through whom the labor or services are to be provided.
2. Description of the labor service to be provided & a statement of when those services start and are to be completed.
3. Contractor's employer's identification number.
4. Contractor's Worker's Compensation insurance carrier information.
5. Vehicle identification number of any vehicle that is owned by the contractor and used for transportation in with the service to be provided. Include insurance information.
6. Address of real property (if applicable) where workers will be housed in connection with contract.
7. Total number of workers to be employed under contract, and total amount of all wages to be paid, and day or dates wages are to be paid.
8. Amount of commission or other payment made to the contractor for services under the contract.
9. Total number of persons who will be utilized under the contract as independent contractors along with a list of their contractor's license numbers (if applicable) and federal tax ID numbers.
10. Date and Signatures of parties to the contract.

This article was written to be informative and not with the intention of providing legal advice or legal conclusions.

Please seek the advice of Legal Counsel on Labor Code Section 2810 .