AB 1565: Labor-related liabilities: direct contractor.

Existing law requires, for all contracts entered into on or after January 1, 2018, a direct contractor, as defined, making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other work, to assume, and be liable for, specified debt owed to a wage claimant that is incurred by a subcontractor, at any tier, acting under, by, or for the direct contractor for the wage claimants performance of labor included in the subject of the original contract. Existing law authorizes the Labor Commissioner to bring an action under specified statutes or in a civil action to enforce this liability, and authorizes a 3rd party owed fringe or other benefits, or a joint labor-management cooperation committee, as defined, to bring a civil action to enforce the liability against a direct contractor under these provisions, as specified. Existing law provides that the obligations and remedies under these provisions are in addition to any obligations and remedies otherwise provided by law, except that the provisions are not to be construed to impose liability on a direct contractor for anything other than unpaid wages and fringe or other benefit payments or contributions, including interest owed.

This bill would repeal the provisions that state that the obligations and remedies are in addition to existing obligations and remedies provided by law, except that the provisions are not to be construed to impose liability on a direct contractor for anything other than unpaid wages and fringe or other benefit payments or contributions including interest owed. The bill, for contracts entered into on or after January 1, 2019, would require a direct contractor or a subcontractor to include a specified provision in its contract that lists the specific documents or information that the direct contractor or subcontractor will require a lower tiered subcontractor to produce before the direct contractor or subcontractor is allowed to withhold any disputed payments from the lower tiered subcontractor under these provisions.

This bill would declare that it is to take effect immediately as an urgency statute.