Vendor Obligations

This is not intended to be legal advice and is informational only. Please consult with an attorney on how SB27 may affect your business.

Under the new law, vendors have three key obligations: (1) to provide notice to employees of their total compensation rate and the disclosure requirements under the law; (2) to disclose basic payroll and audit information to a joint labor committee. Basic payroll information is also disclosed to aggrieved employees upon request; and (3) To provide notice to UC when a vendor receives notice of non-compliance from an aggrieved employee.

Notice to UC should be provided using the links on this page and referenced below. The notice process walks vendors through the information required under the law and by UC related to notification of non-compliance.

These three obligations are explained in detail below.

First Obligation: Notice to Employees of Total Compensation Rate and Disclosure of Basic Payroll Information Required Under the Law.

Vendors supplying services to the University must give their employees written notice of the total compensation rate specified in the vendor’s contract with the University or as required by University policy, whichever is higher. This notice should include the employee's hourly pay rate and the hourly value of employer-provided benefits. The vendor is obligated to provide these notices to employees at the time they are assigned to perform services for the university, as well as periodically each January and within seven days of any change to the employee's hourly rate.

Vendors are also required to provide their employees with notice that they are disclosing basic payroll, information in compliance with the law.

UC has created a template notification document that vendors can use to support this obligation. Vendors must consult with their legal counsel regarding whether the notice template supports their compliance obligations under the law.

Bill Language:

  • Notice of the Total Compensation Rate
    • "A vendor that supplies the university with employees to perform services, shall provide those employees with written notice of the total compensation rate specified in the vendor’s contract with the university or required by university policy, whichever is higher, and the employee’s hourly rate of pay and hourly value of employer-provided benefits
    • "The vendor shall provide employees with these notices at the time each employee is assigned to perform services for the university and thereafter, each January, and within seven days of a change to the employee’s hourly rate."
    • The vendor shall provide all employees who agree to perform services for the university or continue doing so with written notice of this requirement and the written notice shall also include the following text:

      "Basic payroll information pertaining to all employees who accept an assignment or continue performing services for the University of California will be shared with the University of California and the organizations that represent University of California employees. The information that will be shared includes your full name, university work location, mobile telephone number, email address, and home address. The purpose of sharing this information is to ensure that the University of California and the organizations that represent University of California employees can contact you if they discover you have been paid less than required by the vendor’s contract with the university or university policy and so that the University of California can provide you with a timely offer of employment as soon as you become eligible.” 

Second Obligation: Provide Basic Payroll and Audit Information to the Joint Labor Management Committee and to Aggrieved Employees upon Request.

Vendors are required to provide basic payroll information to the University of California and members of any joint labor-management committee in January and July of each year. Vendors must also inform all employees who agree to perform services for the university, or continue to do so, about this requirement. See bill language above. The notice to employees must include specific text explaining that their basic payroll information, such as full name, university work location, contact details, and home address, will be shared with the university and relevant organizations representing university employees. The purpose of sharing this information is to facilitate contact in case of potential underpayment issues and to enable the university to offer timely employment opportunities.

Government Code section 10510.52(b)(2) also states that basic payroll information for an individual employee working for the university must be made available for inspection by that employee or their authorized representative upon request, or it should be furnished to them. 

“Basic payroll information” means, for each vendor-supplied employee who performed services at any time during the preceding six-month period, the following information:

  1. The employee’s full name, job title, mobile telephone number, email address, and home address.
  2. Work location while performing services for the university.
  3. The employee’s hourly rate of pay while performing services for the university for each applicable pay period during the preceding six-month period.
  4. The hourly value of employer-provided benefits, if any, received by the employee while performing services for the university for each applicable pay period during the preceding six-month period.
  5. The employee’s hours of work while performing services for the university for each applicable pay period during the six-month period. (Gov't Code section 10510.51(b))

Bill Language:

  • Provide Basic Payroll Information (BPI) to Joint Labor Management Committee (JLMC)
    • "In January and July of each year, the vendor shall provide basic payroll information to the university and members of any joint labor-management committee."
    • "Basic payroll information for an individual employee who performs services for the university shall also, upon request, be made available for inspection by that individual employee or that individual employee’s authorized representative or be furnished to that individual employee or that individual employee’s authorized representative.”

If any party, such as an auditor, vendor, the university, or any other individual, conducts or receives an audit, verification, notice, report, or finding related to whether a vendor has paid employees at the total compensation rate mandated by the vendor's contract with the university or university policy, including instances where the vendor fails to meet any "wage and benefits parity" rate as required by university policy, that audit or finding must be shared with the university and members of any joint labor-management committee.

Bill Language:

  • Disclosure of Audits to UC and JLMC
    • "If an auditor, vendor, the university, or any other person conducts or receives an audit, verification, notice, report, or finding with regard to whether a vendor has compensated employees at the total compensation rate required by the vendor’s contract with the university or university policy, including the vendor’s failure to provide employees with any “wage and benefits parity” rate required by university policy, that audit, verification, notice, report, or finding shall be provided to the university and members of any joint labor-management committee." 

Third Obligation: Provide Notices to the UC of Aggrieved Employees and Civil Action

Before initiating legal action against a vendor, an aggrieved employee must provide the vendor with written notice of an alleged violation. This notice should include details such as the names or information sufficient to identify affected employees, dates of employment, the period of alleged noncompliance, and contact information. An aggrieved employee is defined as someone against whom violations were committed or a university employee coworker of an affected employee at the same location or department.

If a vendor receives this written notice, the vendor is required to provide a copy of the notice to the president of the university within five business days. Following the notice, an aggrieved employee can file a lawsuit only if the vendor fails to provide documentation within 60 days, demonstrating that each identified employee has been compensated appropriately, received necessary notices, and is being paid a total compensation rate at least as specified in the vendor's contract with the university or university policy.

Furthermore, aggrieved employees are empowered to bring civil actions against a vendor to recover unpaid compensation at the required total compensation rate or to enforce other provisions of the relevant article. If the claimant prevails in such an action, the vendor must notify the president of the university of the decision.

Please use the forms at the links below to notify the UC of an aggrieved employee, 60-day compliance, civil actions, and civil action decisions.

Bill Language:

Notice of Aggrieved Employee

  • "Prior to bringing an action against a vendor, an aggrieved employee shall first provide a vendor with written notice of an alleged violation of this part.  The written notice shall include the names or other information sufficient to identify the affected employees against whom the alleged violations were committed, dates of employment, the period of alleged noncompliance, and contact information."  
  • "If a vendor receives such a written notice pursuant to paragraph [(c)(1)], the vendor shall provide a copy of the written notice to the president of the university within five business days of receipt.

“Aggrieved Employee” means either of the following:

  1. An employee against whom one or more alleged violations of this article was committed.
  2. A university employee coworker of an employee against whom one or more alleged violations of this article was committed who performs services for the university at or for the same university location or department as the employee. 

Notice of 60-Day Compliance Obligation

  • "Upon providing written notice pursuant to paragraph (1), an aggrieved employee may file suit only if the vendor fails to provide documentation, within 60 days, demonstrating that each employee identified in the notice has been made whole, has been provided with the notices required by this article, and is receiving a total compensation rate no less than the rate specified in the vendor’s contract with the university or in university policy, whichever is higher." (Gov't Code section 10510.53(c)(3)).

Notice of Civil Action:

An aggrieved employee may bring a civil action, including on behalf of an employee or employees against whom a violation of this article was committed, against a vendor to recover compensation that has been earned but was not paid at the total compensation rate required by the vendor’s contract with the university or university policy, whichever is higher, or to enforce any other provision of this article."

Notice of Civil Action Decision

  • "If a claimant prevails in an action brought under this section, the vendor shall notify the president of the university of the decision ...." (Gov't Code section 10510.53(d))

Failing to comply with these obligations may result in the penalties below.

  • Penalty for Non-Compliance:
    • If a claimant prevails in an action, the court shall order: "Any vendor that supplies the university with any employee who is paid a total compensation rate less than the amount fixed by the vendor’s contract with the university or university policy to pay a civil penalty and restitution, as follows:
    • For any initial violation of subdivision (a) (failing to pay wage and benefit parity), one hundred dollars ($100) for each underpaid employee for each pay period for which the employee is underpaid, not exceeding an aggregate penalty of five hundred dollars ($500) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation." (Gov't Code section 10510.53(d)(1)(A)).
    • For each subsequent violation of subdivision (a) (failing to pay wage and benefit parity), two hundred fifty dollars ($250) for each underpaid employee for each pay period for which the employee is underpaid, not exceeding an aggregate penalty of one thousand dollars ($1000) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation." (Gov't Code section 10510.53(d)(1)(B))
    • "To the extent a vendor bills the university for services provided via an hourly bill rate, and to the extent a vendor fails to pay its employees the amount fixed by the vendor’s contract with the university or university policy, a court may, in its discretion, require that the vendor return to the university any amounts paid by the university to the vendor for services that exceed the amounts the vendor paid to its employees providing services for any payroll periods after January 1, 2024." (Gov't Code section 10510.53(d)(2))
    • "Reasonable attorney’s fees and costs." (Gov't Code section 10510.53(d)(3))
    • Any other remedies provided by law (but an employee shall not also receive civil penalties provided for in Section 226 or 1197.1).(Gov't Code section 10510.53(f))
  • Penalties for Failure to Provide Notice:
    • "For each knowing and intentional failure by a vendor to comply with Section 10510.52, fifty dollars ($50) per employee for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not exceeding an aggregate penalty of one thousand dollars ($1,000) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation." (Gov't Code section 10510.53(d)(2))

This is NOT intended to be legal advice and is informational only. Please consult with an attorney on how SB27 may affect your business.