Assembly Bill No. 1701 Affects Contractors and Subs
Under existing law, an action may be brought for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions.
On or after January 1, 2018, AB 1701 makes general contractors liable for the unpaid wage obligations of subcontractors. Essentially, if subs don’t pay the wages of their workers, the general is liable, regardless of the fact that the general has no contract with the worker. The bill, for all contracts entered into on or after January 1, 2018, requires a direct contractor, as defined, to assume, and be liable for, “specified debt owed to a wage claimant that is incurred by a subcontractor.”
The bill would require a subcontractor, upon request from the direct contractor, to provide specified information regarding the subcontractor’s and third party’s work on the project and would provide that the direct contractor could withhold disputed sums upon the subcontractor’s failure to provide the requested information, as specified. The bill would provide that these obligations and remedies are in addition to any other remedy provided by law. The bill would provide that its provisions are severable.
It’s a fairly complicated protocol and we will provide further information.
Bottom Line: Contractors need to make sure subs pay their workers!
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