AUTHOR – Kim Slowey
PUBLISHED – Dec. 1, 2017
Dive Brief:
- California contractors acting as direct contractors on private construction projects will be financially responsible for any wages, fringe benefits and union contributions left unpaid by subcontractors and their sub-tiers, per a new law signed by Gov. Jerry Brown, JD Supra reported. The law encompasses all private contracts entered into starting Jan. 1.
- Direct contractors will not have to pay any penalties or liquidated damages that arise from a subcontractors neglecting to pay their employees, but the law will require direct contractors to monitor closely their subcontractors’ payrolls.
- The law allows for direct contractors to withhold payment from any subcontractor that does not provide the required payroll records. To protect against having to assume any subcontractors’ or their sub-tiers’ unpaid costs, direct contractors should add indemnity language to their subcontracts.