The Lowest Bid is Not Always the Best Deal


Has your security company advised you of the requirements of California Labor Code §2810? If not, your business could be exposed to significant liability.

On October 12, 2003, Governor Gray Davis signed Senate Bill 179 into law. SB 179 was codified as California Labor Code §2810. This statute requires landowners, management companies, and others who use the services of private security contractors to carefully monitor that contractors' compliance with labor laws. Failure to do so could result in significant damages if it is shown that the landowner or property manager "knew or should have known" that the contract price was insufficient to enable their contractors to comply with such labor laws and regulations.

The statute makes it unlawful to enter into a contract with a private security firm "knowing" that the contract is insufficient to enable the security company to comply with the labor laws. Additionally, such knowledge will be imputed to any "entity" or "person" who "should have known" that the contract price was not sufficient. Those violating the statute are subject to claims for damages and possibly even demands that they rectify the labor law violations of their contractors and subcontractors.

The statute does provide a safe harbor by creating a rebuttable presumption that this law has been complied with if the contract for security services contains the following information:

Click to Download 2810 Compliance Form

If your current security contract does not contain these provisions, you may be in violation of this statute and you could be exposed to substantial liability. For a correct billing formula click here.