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Treatment of Bonds and Photographs under the Labor Code

Any property put up by any employee or applicant as a bond is prohibited from being used for any purpose

By Chris Micheli, January 26, 2024 4:20 pm

Article 2 of Chapter 3 of Part 1 of Division 2 of the California Labor concerns bonds and photographs. Section 400 defines “applicant” to mean an applicant for employment. Section 401 specifies that, if a bond or photograph of an employee or applicant is required by any employer, the cost must be paid by the employer.

Section 402 prohibits an employer from demanding or accepting any cash bond from any employee or applicant unless: the employee or applicant is entrusted with property of an equivalent value, or the employer advances regularly to the employee goods, wares, or merchandise to be delivered or sold by the employee, and for which the employer is reimbursed by the employee at regular periodic intervals, and the employer limits the cash bond to an amount sufficient to cover the value of the goods, wares, or merchandise.

Section 403 provides that, if cash is received as a bond, it must be deposited in a savings account in a bank authorized to do business in this State, and may be withdrawn only upon the joint signatures of the employer and the employee or applicant.

Section 404 states that any money put up as a bond is not subject to enforcement of a money judgment, except in an action between the employer and the employee or applicant, or their successors or assigns; and, that the money must be returned to the employee or applicant together with accrued interest thereon, immediately upon the return of the money or property entrusted to the employee or applicant and upon the fulfillment of the agreement.

Section 405 states that any property put up by any employee or applicant as a bond is prohibited from being used for any purpose other than liquidating accounts between the employer and employee or for return to the employee or applicant and must be held in trust for this purpose and not mingled with the property of the employer.

Section 406 specifies that any property put up by an employee, or applicant as a part of the contract of employment, directly or indirectly, must be deemed to be put up as a bond and is subject to the provisions of this article whether the property is put up on a note or as a loan or an investment and regardless of the wording of the agreement under which it is put up.

Section 407 states that investments and the sale of stock or an interest in a business in connection with the securing of a position are illegal as against the public policy of the State and cannot be advertised or held out in any way as a part of the consideration for any employment.

Section 408 provides that any person, agent, or officer who violates any provision of this article is generally guilty of a misdemeanor, punishable by a fine of not less than $5) and not exceeding $1,000, or imprisonment for not exceeding six months, or both.

Section 409 requires all fines imposed and collected under this article to be paid into the State Treasury and credited to the general fund. Section 410 requires the Labor Commissioner to enforce this article.

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