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Are contractor employees the "Laborers" allowed to put a Mechanic's Lien on real property?

I'm a consumer who had a licensed contractor install a new roof an solar on my house. Before signing and throughout the project I've told them verbally and in writing that I would require a lien release from the contractor, subcontractors, suppliers, AND everyone who worked on my house. From the California State Licensing Board website I've read that "Laborers" can put a mechanic's lien on my property if not paid, and that I should require a lien release from all Laborers. The problem is that now the prime or direct contractor is trying to say that employees are NOT "Laborers" and that the lien release signed by the direct contractor, subcontractors, and suppliers covers their "employees" who are NOT "laborers" and thus cannot file a mechanics lien. My question, under California's mechanic's lien law are contractor "employees" "Laborers" who can file a mechanics lien?

2 replies

Apr 16, 2019

Sorry to hear about your situation. It's a good sign that you've begun to do your research. The CA Civil Code §8400 establishes that lien rights are available to any “person that provides work authorized for a work of improvement, including, but not limited to the following persons, has a lien right under this chapter: (a) direct contractor, (b) subcontractor, (c) material supplier, (d) equipment lessor, (e) laborers, or (f) design professional.” To clarify this, the statute also defines what a laborer is for the purposes of mechanics lien rights. A laborer is any person who, “acting as an employee, performs labor upon, or bestows skill or other necessary services on, a work of improvement.” Therefore, it stands to reason that yes, laborers (or employees of contractors) that provide labor, skills or services to an improvement are granted lien rights. For additional information on lien rights, you can head over to the California Lien & Notice Overview page.

As far as the lien waivers are concerned, first a quick clarification. The industry tends to confuse waivers and releases because they are inconsistently used state-to-state. For the purposes of California a “lien waiver” is collected when payments are distributed, a “lien release” is the act of canceling or removing an already filed lien claim. Now, just because a GC has signed and submitted a lien waiver, doesn’t mean owners are off the hook for any outstanding amounts owed to the sub-tier parties such as subcontractors, suppliers, and laborers. Lien waivers should ideally be collected from all parties. It's important to keep in mind that CA has strict lien waiver requirements. The specific language and form requirements can be found in CA Civil Code §8132-8138. However, you can also find additional resources and free downloadable templates at California Lien Waiver Forms & Guide.

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Apr 17, 2019

I think the answer is YES. Employees of contractors are "laborers," and if unpaid, can file a mechanics lien on the job -- even if the employee's employer (i.e. the contractor) was paid. Good luck.

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