SB 727: Labor-related liabilities: direct contractor.
- Session Year: 2021-2022
- House: Senate
- Latest Version Date: 2021-09-27
Existing law requires, for 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 private work, to assume, and be liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 limits the direct contractors liability under those provisions to extend only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed and provides that liability does not extend to penalties or liquidated damages.
This bill would extend, for contracts entered into on or after January 1, 2022, the direct contractors liability to penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of the labor, except as provided.
Existing law authorizes the Labor Commissioner to enforce against a direct contractor the liability for unpaid wages pursuant to specified provisions, or through a civil action, and limits the direct contractors liability to unpaid wages, including any interest owed.
This bill would require the Labor Commissioner to notify, as specified, the direct contractor and subcontractor at any tier on a private works project at least 30 days prior to taking certain actions for the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers. The bill would remove, for contracts entered into on or after January 1, 2022, the limitation of liability.
Existing law requires, prior to commencement of an action against a direct contractor, a joint labor-management cooperation committee to provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice, as provided.
This bill would, for contracts entered into on or after January 1, 2022, require the notice to include the project name and name of the employer and provide that any liquidated damages awarded by the Labor Commissioner or the court shall be payable to the aggrieved employee. The bill would make conforming changes.
Existing law requires, for 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 private work, to assume, and be liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 limits the direct contractors liability under those provisions to extend only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed and provides that liability does not extend to penalties or liquidated damages.
This bill would extend, for contracts entered into on or after January 1, 2022, the direct contractors liability to penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of the labor, except as provided.
Existing law authorizes the Labor Commissioner to enforce against a direct contractor the liability for unpaid wages pursuant to specified provisions, or through a civil action, and limits the direct contractors liability to unpaid wages, including any interest owed.
This bill would require the Labor Commissioner to notify, as specified, the direct contractor and subcontractor at any tier on a private works project at least 30 days prior to taking certain actions for the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers. The bill would remove, for contracts entered into on or after January 1, 2022, the limitation of liability.
Existing law requires, prior to commencement of an action against a direct contractor, a joint labor-management cooperation committee to provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice, as provided.
This bill would, for contracts entered into on or after January 1, 2022, require the notice to include the project name and name of the employer and provide that any liquidated damages awarded by the Labor Commissioner or the court shall be payable to the aggrieved employee. The bill would make conforming changes.
Existing law requires, for 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 private work, to assume, and be liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 limits the direct contractors liability under those provisions to extend only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed and provides that liability does not extend to penalties or liquidated damages.
This bill would extend, for contracts entered into on or after January 1, 2022, the direct contractors liability to penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of the labor, except as provided.
Existing law authorizes the Labor Commissioner to enforce against a direct contractor the liability for unpaid wages pursuant to specified provisions, or through a civil action, and limits the direct contractors liability to unpaid wages, including any interest owed.
This bill would require the Labor Commissioner to notify, as specified, the direct contractor and subcontractor at any tier on a private works project at least 30 days prior to taking certain actions for the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers. The bill would remove, for contracts entered into on or after January 1, 2022, the limitation of liability.
Existing law requires, prior to commencement of an action against a direct contractor, a joint labor-management cooperation committee to provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice, as provided.
This bill would, for contracts entered into on or after January 1, 2022, require the notice to include the project name and name of the employer and provide that any liquidated damages awarded by the Labor Commissioner or the court shall be payable to the aggrieved employee. The bill would make conforming changes.
Existing law requires, for 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 private work, to assume, and be liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 limits the direct contractors liability under those provisions to extend only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed and provides that liability does not extend to penalties or liquidated damages.
This bill would extend extend, for contracts entered into on or after January 1, 2022, the direct contractors liability to penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of the labor. labor, except as provided.
Existing law authorizes the Labor Commissioner to enforce against a direct contractor the liability for unpaid wages pursuant to specified provisions, or through a civil action, and limits the direct contractors liability to unpaid wages, including any interest owed.
This bill would remove remove, for contracts entered into on or after January 1, 2022, the limitation of liability.
Existing law also authorizes a third party owed fringe or other benefit payments or contributions on a wage claimants behalf to bring an action against a direct contractor to enforce the above-described liabilities and also authorizes a joint labor-management cooperation committee to bring an action against a direct contractor or subcontractor at any tier for unpaid wages owed to a wage claimant by the direct contractor or subcontractor, as provided. Existing law requires, prior to commencement of an action against a direct contractor, a joint labor-management cooperation committee to provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice, as provided.
This bill would require, prior to commencing action, the Labor Commissioner and a third party to provide similar notices with specified information to the direct contractor and the subcontractor that employed the wage claimant. The bill would require these notices, including those sent by a joint labor-management cooperation committee, to be sent to the Contractors State License Board (Board) and would require, among other things, the Board to note the failure to pay wages or benefits on the original employers license. The bill would require a direct contractor and subcontractor who receive a notice to take reasonable steps to abate any alleged violations, and would limit, except as provided, the liability of a direct contractor, as specified, if the direct contractor can provide evidence of substantial compliance with any applicable payroll requirements and can demonstrate that the violations alleged in the notice have been fully abated.TheThis bill would, for contracts entered into on or after January 1, 2022, require the notice to include the project name and name of the employer and provide that any liquidated damages awarded by the Labor Commissioner or the court shall be payable to the aggrieved employee. The bill would make conforming changes.
Existing law requires, for 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 private work, to assume, and be liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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.
This bill would require, for contracts entered into on or after January 1, 2022, the direct contractor to also be liable for any contributions, deductions, and withholdings that the subcontractor was required to forward to the State of California on account of the performance of the labor and be liable for any relief the Labor Commissioner could seek against the subcontractor for the subcontractors failure to obtain and maintain valid workers compensation coverage as provided.Existing law limits the direct contractors liability under those provisions to extend only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed and provides that liability does not extend to penalties or liquidated damages.
This bill would extend the direct contractors liability to specified payments owed to the State of California, penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of the labor.
Existing law authorizes the Labor Commissioner to enforce against a direct contractor the liability for unpaid wages pursuant to specified provisions, or through a civil action, and limits the direct contractors liability to unpaid wages, including any interest owed.
This bill would remove the limitation of liability and would provide that the Labor Commissioner may seek any relief against a direct contractor for its subcontractors failure to obtain valid workers compensation coverage, as provided. The bill would authorize the Employment Development Department to enforce against a direct contractor, pursuant to specified provisions, or through a civil action, the liability created for the subcontractors failure to make payments to the State of California, as provided. liability.
Existing law requires, upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor to provide payroll records, as specified, of its employees who are providing labor on a private work and requires the payroll records to contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.This bill would require the subcontractor and any lower tier subcontractors to also provide records showing its reports and payments to the Employment Development Department.Existing law also authorizes a third party owed fringe or other benefit payments or contributions on a wage claimants behalf to bring an action against a direct contractor to enforce the above-described liabilities and also authorizes a joint labor-management cooperation committee to bring an action against a direct contractor or subcontractor at any tier for unpaid wages owed to a wage claimant by the direct contractor or subcontractor, as provided. Existing law requires, prior to commencement of an action against a direct contractor, a joint labor-management cooperation committee to provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice, as provided.
This bill would require, prior to commencing action, the Labor Commissioner and a third party to provide similar notices with specified information to the direct contractor and the subcontractor that employed the wage claimant. The bill would require these notices, including those sent by a joint labor-management cooperation committee, to be sent to the Contractors State License Board (Board) and would require, among other things, the Board to note the failure to pay wages or benefits on the original employers license. The bill would require a direct contractor and subcontractor who receive a notice to take reasonable steps to abate any alleged violations, and would limit, except as provided, the liability of a direct contractor, as specified, if the direct contractor can provide evidence of substantial compliance with any applicable payroll requirements and can demonstrate that the violations alleged in the notice have been fully abated.
The bill would make conforming changes.
Existing law requires, for 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 private work, to assume, and be liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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.
This bill would require, for contracts entered into on or after January 1, 2022, the direct contractor to also be liable for any contributions, deductions, and withholdings that the subcontractor was required to forward to the State of California on account of the performance of the labor and be liable for any relief the Labor Commissioner could seek against the subcontractor for the subcontractors failure to obtain and maintain valid workers compensation coverage as provided.
Existing law limits the direct contractors liability under those provisions to extend only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed and provides that liability does not extend to penalties or liquidated damages.
This bill would extend the direct contractors liability to specified payments owed to the State of California, penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of the labor.
Existing law authorizes the Labor Commissioner to enforce against a direct contractor the liability for unpaid wages pursuant to specified provisions, or through a civil action, and limits the direct contractors liability to unpaid wages, including any interest owed.
This bill would remove the limitation of liability and would provide that the Labor Commissioner may seek any relief against a direct contractor for its subcontractors failure to obtain valid workers compensation coverage, as provided. The bill would authorize the Employment Development Department to enforce against a direct contractor, pursuant to specified provisions, or through a civil action, the liability created for the subcontractors failure to make payments to the State of California, as provided.
Existing law requires, upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor to provide payroll records, as specified, of its employees who are providing labor on a private work and requires the payroll records to contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.
This bill would require the subcontractor and any lower tier subcontractors to also provide records showing its reports and payments to the Employment Development Department.
The bill would make conforming changes.
Existing law establishes the Health and Safety Code.This bill would make a technical, nonsubstantive change to a provision relating to that code.Existing law establishes the Health and Safety Code.
This bill would make a technical, nonsubstantive change to a provision relating to that code.
(a)(1)For contracts entered into between January 1, 2018, and December 31, 2021, inclusive, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner.
(2)The direct contractors liability under this section shall extend only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed but shall not extend to penalties or liquidated damages.
(3)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor.
(b)(1)The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action. The direct contractors liability shall be limited to unpaid wages, including any interest owed.
(2)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability created by subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(3)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier for unpaid wages owed to a wage claimant by the direct contractor or subcontractor for the performance of private work, including unpaid wages owed by the direct contractor, pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only describe the general nature of the claim and shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.
(4)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(c)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(d)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(e)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(f)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(g)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(i)For any contract entered into on or after January 1, 2019, in order to withhold payments as disputed pursuant to subdivision (h), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (f). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(j)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 2.Section 218.8 is added to the Labor Code, to read:218.8.(a)(1)For contracts entered into on or after January 1, 2022, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner.
(2)Subject to paragraph (3), the direct contractors liability under this section shall extend to any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor.
(3)The direct contractors liability under this section shall extend to penalties and liquidates damages only as follows:
If a worker employed by a subcontractor on a private construction project is not paid the wage, fringe or other benefit payment or contribution owed by the subcontractor on account of the workers performance of labor on that project, the direct contractor of the project is not liable for any associated penalties or liquidated damages under paragraph (2) unless the direct contractor had knowledge of the subcontractors failure to pay the specified wage, fringe or other benefit payment or contribution, or the direct contractor fails to comply with all of the following requirements:
(A)The contractor shall monitor the payment by the subcontractor of wage, fringe or other benefit payment or contribution to the employees or the labor trust fund, by periodic review of the subcontractors payroll records which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174.
(B)Upon becoming aware of the failure of the subcontractor to pay the wage, fringe or other benefit payment or contribution to the employees or the labor trust fund, the contractor shall diligently take corrective action to halt or rectify the failure, including, but not limited to, retaining sufficient funds due the subcontractor for work performed on the private construction project.
(C)Prior to making final payment to the subcontractor for work performed on the private construction project, the contractor shall obtain an affidavit signed under penalty of perjury from the subcontractor that the subcontractor has paid the wage, fringe or other benefit payment or contribution due to the employees or the labor trust fund for all work performed on the private construction project.
(4)The Division of Labor Standards Enforcement shall notify the contractor and subcontractor on a private works project within 15 days of the receipt by the Division of Labor Standards Enforcement of a complaint of the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers.
(5)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor, including liability for associated penalties and liquidated damages.
(b)(1)(A)The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages, liquidated damages, interest, and penalties created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action.
(B)The Labor Commissioner shall notify the direct contractor and subcontractor at any tier on a private works project at least 30 days prior to a hearing held on an administrative complaint pursuant to Section 98, prior to issuance of a citation pursuant to Section 1197.1, or prior to filing a civil action, for the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers. The notice need only describe the general nature of the claim, the project name or address, and the name of the employer. The notice shall not preclude subsequent amendments of an action to encompass additional contractors or wage claimants employed by the subcontractor.
(2)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(3)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier to enforce liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor on a private work pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only describe the general nature of the claim, the project name and the name of the employer, and shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.
(4)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(5)Any liquidated damages awarded by the Labor Commissioner or the court shall be payable to the aggrieved employee.
(c)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(d)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(e)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(f)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, the contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(g)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(i)For any contract entered into on or after January 1, 2022, in order to withhold payments as disputed pursuant to subdivision (h), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (f). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(j)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(a)(1)For contracts entered into between January 1, 2018, and December 31, 2021, inclusive, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner.
(2)The direct contractors liability under this section shall extend only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed but shall not extend to penalties or liquidated damages.
(3)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor.
(b)(1)The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action. The direct contractors liability shall be limited to unpaid wages, including any interest owed.
(2)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability created by subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(3)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier for unpaid wages owed to a wage claimant by the direct contractor or subcontractor for the performance of private work, including unpaid wages owed by the direct contractor, pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only describe the general nature of the claim and shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.
(4)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(c)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(d)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(e)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(f)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(g)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(i)For any contract entered into on or after January 1, 2019, in order to withhold payments as disputed pursuant to subdivision (h), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (f). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(j)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 2.Section 218.8 is added to the Labor Code, to read:218.8.(a)(1)For contracts entered into on or after January 1, 2022, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner.
(2)Subject to paragraph (3), the direct contractors liability under this section shall extend to any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor.
(3)The direct contractors liability under this section shall extend to penalties and liquidates damages only as follows:
If a worker employed by a subcontractor on a private construction project is not paid the wage, fringe or other benefit payment or contribution owed by the subcontractor on account of the workers performance of labor on that project, the direct contractor of the project is not liable for any associated penalties or liquidated damages under paragraph (2) unless the direct contractor had knowledge of the subcontractors failure to pay the specified wage, fringe or other benefit payment or contribution, or the direct contractor fails to comply with all of the following requirements:
(A)The contractor shall monitor the payment by the subcontractor of wage, fringe or other benefit payment or contribution to the employees or the labor trust fund, by periodic review of the subcontractors payroll records which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174.
(B)Upon becoming aware of the failure of the subcontractor to pay the wage, fringe or other benefit payment or contribution to the employees or the labor trust fund, the contractor shall diligently take corrective action to halt or rectify the failure, including, but not limited to, retaining sufficient funds due the subcontractor for work performed on the private construction project.
(C)Prior to making final payment to the subcontractor for work performed on the private construction project, the contractor shall obtain an affidavit signed under penalty of perjury from the subcontractor that the subcontractor has paid the wage, fringe or other benefit payment or contribution due to the employees or the labor trust fund for all work performed on the private construction project.
(4)The Division of Labor Standards Enforcement shall notify the contractor and subcontractor on a private works project within 15 days of the receipt by the Division of Labor Standards Enforcement of a complaint of the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers.
(5)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor, including liability for associated penalties and liquidated damages.
(b)(1)(A)The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages, liquidated damages, interest, and penalties created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action.
(B)The Labor Commissioner shall notify the direct contractor and subcontractor at any tier on a private works project at least 30 days prior to a hearing held on an administrative complaint pursuant to Section 98, prior to issuance of a citation pursuant to Section 1197.1, or prior to filing a civil action, for the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers. The notice need only describe the general nature of the claim, the project name or address, and the name of the employer. The notice shall not preclude subsequent amendments of an action to encompass additional contractors or wage claimants employed by the subcontractor.
(2)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(3)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier to enforce liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor on a private work pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only describe the general nature of the claim, the project name and the name of the employer, and shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.
(4)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(5)Any liquidated damages awarded by the Labor Commissioner or the court shall be payable to the aggrieved employee.
(c)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(d)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(e)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(f)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, the contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(g)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(i)For any contract entered into on or after January 1, 2022, in order to withhold payments as disputed pursuant to subdivision (h), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (f). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(j)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(a)(1)For contracts entered into between January 1, 2018, and December 31, 2021, inclusive, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner.
(2)The direct contractors liability under this section shall extend only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed but shall not extend to penalties or liquidated damages.
(3)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor.
(b)(1)The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action. The direct contractors liability shall be limited to unpaid wages, including any interest owed.
(2)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability created by subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(3)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier for unpaid wages owed to a wage claimant by the direct contractor or subcontractor for the performance of private work, including unpaid wages owed by the direct contractor, pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only describe the general nature of the claim and shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.
(4)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(c)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(d)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(e)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(f)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(g)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(i)For any contract entered into on or after January 1, 2019, in order to withhold payments as disputed pursuant to subdivision (h), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (f). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(j)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 2.Section 218.8 is added to the Labor Code, to read:218.8.(a)(1)For contracts entered into on or after January 1, 2022, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner.
(2)Subject to paragraph (3), the direct contractors liability under this section shall extend to any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor.
(3)The direct contractors liability under this section shall extend to penalties and liquidates damages only as follows:
If a worker employed by a subcontractor on a private construction project is not paid the wage, fringe or other benefit payment or contribution owed by the subcontractor on account of the workers performance of labor on that project, the direct contractor of the project is not liable for any associated penalties or liquidated damages under paragraph (2) unless the direct contractor had knowledge of the subcontractors failure to pay the specified wage, fringe or other benefit payment or contribution, or the direct contractor fails to comply with all of the following requirements:
(A)The contractor shall monitor the payment by the subcontractor of wage, fringe or other benefit payment or contribution to the employees or the labor trust fund, by periodic review of the subcontractors payroll records which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174.
(B)Upon becoming aware of the failure of the subcontractor to pay the wage, fringe or other benefit payment or contribution to the employees or the labor trust fund, the contractor shall diligently take corrective action to halt or rectify the failure, including, but not limited to, retaining sufficient funds due the subcontractor for work performed on the private construction project.
(C)Prior to making final payment to the subcontractor for work performed on the private construction project, the contractor shall obtain an affidavit signed under penalty of perjury from the subcontractor that the subcontractor has paid the wage, fringe or other benefit payment or contribution due to the employees or the labor trust fund for all work performed on the private construction project.
(D)(4)The Division of Labor Standards Enforcement shall notify the contractor and subcontractor on a private works project within 15 days of the receipt by the Division of Labor Standards Enforcement of a complaint of the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers.
(4)(5)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor, including liability for associated penalties and liquidated damages.
(b)(1)(A)The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages, liquidated damages, interest, and penalties created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action.
(B)The Labor Commissioner shall notify the direct contractor and subcontractor at any tier on a private works project at least 30 days prior to a hearing held on an administrative complaint pursuant to Section 98, prior to issuance of a citation pursuant to Section 1197.1, or prior to filing a civil action, for the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers. The notice need only describe the general nature of the claim, the project name or address, and the name of the employer. The notice shall not preclude subsequent amendments of an action to encompass additional contractors or wage claimants employed by the subcontractor.
(2)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(3)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier to enforce liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor on a private work pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only describe the general nature of the claim, the project name and the name of the employer, and shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.
(4)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(5)Any liquidated damages awarded by the Labor Commissioner or the court shall be payable to the aggrieved employee.
(c)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(d)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(e)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(f)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, the contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(g)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(i)For any contract entered into on or after January 1, 2022, in order to withhold payments as disputed pursuant to subdivision (h), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (f). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(j)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(a)(1)For contracts entered into on or after between January 1, 2018, and December 31, 2021, inclusive, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner.
(2)The direct contractors liability under this section shall extend only to any unpaid wage, fringe or other benefit payment or contribution, including penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of the labor. but shall not extend to penalties or liquidated damages.
(3)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor.
(b)(1)(A)The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action. The direct contractors liability shall extend to unpaid wage, fringe or other benefit payment or contribution, including penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of labor. be limited to unpaid wages, including any interest owed.
(B)(i)Prior to the commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the Labor Commissioner shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice shall describe the general nature of the claim, the project name, the name of the employer that failed to pay wages, and the dates of the alleged claim. The notice shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor. The Labor Commissioner shall forward the notice to the Contractors State License Board, and the board shall note the failure to pay wages or benefits on the original employers license.(ii)Within five business days of receiving the forwarded notice described in clause (i), the board shall notify a direct contractor and the subcontractor who is the subject of the wage claim that they have received notice of the Labor Commissioners intent to pursue an action against them.(C)The Labor Commissioner shall not bring an action against a direct contractor to enforce liability created by subdivision (a) until 30 days from the day that the Contractors State License Board receives the forwarded notice described in clause (i) of subparagraph (B).(D)A direct contractor and subcontractor who are the subject of a notice pursuant to this paragraph shall, within 30 days of receiving the notice, take reasonable steps to abate any alleged violations. Except as provided in paragraph (2) of subdivision (c), if a direct contractor can provide evidence of substantial compliance with any applicable payroll requirements and can demonstrate that the violations alleged in the notice have been fully abated, the direct contractors liability shall be limited to any remaining unpaid wage, fringe or other benefit payments or contributions owed to a wage claimant employed by one of their subcontractors, and that liability shall not extend to liquidated damages, penalties, or interest. This subparagraph shall not limit or reduce liquidated damages, penalties, or interest owed by a subcontractor.(2)(A)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability created by subdivision (a) in addition to penalties, liquidated damages, and interest as specified in subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(B)(i)Prior to the commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the third party shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice shall describe the general nature of the claim, the project name, the name of the employer that failed to pay wages, and the dates of the alleged claim. The notice shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor. The third party shall forward the notice to the Contractors State License Board, and the board shall note the failure to pay wages or benefits on the original employers license.(ii)Within five business days of receiving the forwarded notice described in clause (i), the board shall notify a direct contractor and the subcontractor who is the subject of the wage claim that they have received notice of the third partys intent to pursue an action against them. A copy of this notice shall also be sent to the Labor Commissioner.(C)A third party shall not bring an action against a direct contractor to enforce liability created by subdivision (a) until 30 days from the day that the Contractors State License Board receives the forwarded notice described in clause (i) of subparagraph (B).(D)A direct contractor and subcontractor who are the subject of a notice pursuant to this paragraph shall, within 30 days of receiving the notice, take reasonable steps to abate any alleged violations. Except as provided in paragraph (2) of subdivision (c), if a direct contractor can provide evidence of substantial compliance with any applicable payroll requirements and can demonstrate that the violations alleged in the notice have been fully abated, the direct contractors liability shall be limited to any remaining unpaid wage, fringe or other benefit payments or contributions owed to a wage claimant employed by one of their subcontractors, and that liability shall not extend to liquidated damages, penalties, or interest. This subparagraph shall not limit or reduce liquidated damages, penalties, or interest owed by a subcontractor.(3)(A)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier for unpaid wages owed to a wage claimant by the direct contractor or subcontractor for the performance of private work, including unpaid wages owed by the direct contractor, pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only describe the general nature of the claim and shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.
(B)(i)Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice shall describe the general nature of the claim, the project name, the name of the employer that failed to pay wages, and the dates of the alleged claim. The notice shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor. The joint labor-management cooperation committee shall forward the notice to the Contractors State License Board, and the board shall note the failure to pay wages or benefits on the original employers license.(ii)Within five business days of receiving the forwarded notice described in clause (i), the board shall notify a direct contractor and the subcontractor who is the subject of the wage claim that they have received notice of the committees intent to pursue an action against them. A copy of this notice shall also be sent to the Labor Commissioner.(C)The committee shall not bring an action against a direct contractor to enforce liability created by subdivision (a) until 30 days from the day that the Contractors State License Board receives the forwarded notice described in clause (i) of subparagraph (B).(D)A direct contractor and subcontractor who are the subject of a notice pursuant to this paragraph shall, within 30 days of receiving the notice, take reasonable steps to abate any alleged violations. Except as provided in paragraph (2) of subdivision (c), if a direct contractor can provide evidence of substantial compliance with any applicable payroll requirements and can demonstrate that the violations alleged in the notice have been fully abated, the direct contractors liability shall be limited to any remaining unpaid wage, fringe or other benefit payments or contributions owed to a wage claimant employed by one of their subcontractors, and that liability shall not extend to liquidated damages, penalties, or interest. This subparagraph shall not limit or reduce liquidated damages, penalties, or interest owed by a subcontractor.(4)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(c)(1)The Contractors State License Board shall keep a record of notices received and sent pursuant to subdivision (b) for no less than three years.(2)A direct contractor shall not have their liability limited pursuant to subparagraph (D) of paragraphs (1), (2), or (3) of subdivision (b) by abating alleged violations if the direct contractor meets any of the following conditions:(A)The direct contractor has previously received two notices pursuant to subdivision (b) within a three-year period.(B)The liability against the direct contractor arises from actions by a subcontractor that previously received two notices pursuant to subdivision (b) within a three-year period.(C)The liability against the direct contractor arises from actions by a subcontractor is a successor to a subcontractor that previously received two notices pursuant to subdivision (b) within a three-year period.(3)For purposes of paragraph (2), a successor to a subcontractor is established upon meeting any of the following criteria:(i)The successor uses substantially the same facilities or substantially the same workforce to offer substantially the same services as the previous direct contractor. This factor does not apply to employers who maintain the same workforce pursuant to Chapter 4.5 (commencing with Section 1060) of Part 3.(ii)The successor has substantially the same owners or managers that control the labor relations as previous direct contractors.(iii)The successor employs as a managing agent any person who directly controlled the wages, hours, or working conditions of the affected workforce of the previous direct contractor. The term managing agent has the same meaning as in subdivision (b) of Section 3294 of the Civil Code.(iv)The successor operates a business in the same industry and the business has an owner, partner, officer, or director who is an immediate family member of any owner, partner, officer, or director of the previous direct contractor.(d)(c)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(e)(d)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(f)(e)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(g)(f)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(h)(g)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(i)(h)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (g), (f), until that information is provided.
(j)(i)For any contract entered into on or after January 1, 2019, in order to withhold payments as disputed pursuant to subdivision (i), (h), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (g). (f). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (g), (f), until that information is provided.
(k)(j)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 2.Section 218.8 is added to the Labor Code, to read:218.8.(a)(1)For contracts entered into on or after January 1, 2022, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner.
(2)Subject to paragraph (3), the direct contractors liability under this section shall extend to any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor.
(3)The direct contractors liability under this section shall extend to penalties and liquidates damages only as follows:
If a worker employed by a subcontractor on a private construction project is not paid the wage, fringe or other benefit payment or contribution owed by the subcontractor on account of the workers performance of labor on that project, the direct contractor of the project is not liable for any associated penalties or liquidated damages under paragraph (2) unless the direct contractor had knowledge of the subcontractors failure to pay the specified wage, fringe or other benefit payment or contribution, or the direct contractor fails to comply with all of the following requirements:
(A)The contractor shall monitor the payment by the subcontractor of wage, fringe or other benefit payment or contribution to the employees or the labor trust fund, by periodic review of the subcontractors payroll records which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174.
(B)Upon becoming aware of the failure of the subcontractor to pay the wage, fringe or other benefit payment or contribution to the employees or the labor trust fund, the contractor shall diligently take corrective action to halt or rectify the failure, including, but not limited to, retaining sufficient funds due the subcontractor for work performed on the private construction project.
(C)Prior to making final payment to the subcontractor for work performed on the private construction project, the contractor shall obtain an affidavit signed under penalty of perjury from the subcontractor that the subcontractor has paid the wage, fringe or other benefit payment or contribution due to the employees or the labor trust fund for all work performed on the private construction project.
(D)The Division of Labor Standards Enforcement shall notify the contractor and subcontractor on a private works project within 15 days of the receipt by the Division of Labor Standards Enforcement of a complaint of the failure of a subcontractor on that private works project to pay the specified wage, fringe, or other benefit due to workers.
(4)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor, including liability for associated penalties and liquidated damages.
(b)(1)The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages, liquidated damages, interest, and penalties created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action.
(2)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(3)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier to enforce liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor on a private work pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only describe the general nature of the claim, the project name and the name of the employer, and shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.
(4)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(5)Any liquidated damages awarded by the Labor Commissioner or the court shall be payable to the aggrieved employee.
(c)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(d)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(e)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(f)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, the contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(g)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(i)For any contract entered into on or after January 1, 2022, in order to withhold payments as disputed pursuant to subdivision (h), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (f). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(j)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
REVISIONS: HeadingLine 2.(a)(1)For contracts entered into on or after January 1, 2018, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner. For contracts entered into on or after January 1, 2022, the direct contractor shall also be liable for any contributions, deductions, and withholdings that the subcontractor was required to forward to the State of California pursuant to the Unemployment Insurance Code on account of the performance of the labor and shall further be liable for any relief the Labor Commissioner could seek against the subcontractor for the subcontractors failure to obtain and maintain valid workers compensation coverage as required by law, which includes, but is not limited to, Section 3700.
(2)The direct contractors liability under this section shall extend to any unpaid wage, fringe or other benefit payment or contribution, payments owed to the State of California pursuant to the Unemployment Insurance Code, including penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of the labor.
(3)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor.
(b)(1)(A)The Labor Commissioner may enforce against a direct contractor the liability created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action, and seek any relief against a action. The direct contractor for its subcontractors failure to obtain valid workers compensation coverage as required by law, which includes, but is not limited to, Section 3700. contractors liability shall extend to unpaid wage, fringe or other benefit payment or contribution, including penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of labor.
(B)(i)Prior to the commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the Labor Commissioner shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice shall describe the general nature of the claim, the project name, the name of the employer that failed to pay wages, and the dates of the alleged claim. The notice shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor. The Labor Commissioner shall forward the notice to the Contractors State License Board, and the board shall note the failure to pay wages or benefits on the original employers license.
(ii)Within five business days of receiving the forwarded notice described in clause (i), the board shall notify a direct contractor and the subcontractor who is the subject of the wage claim that they have received notice of the Labor Commissioners intent to pursue an action against them.
(C)The Labor Commissioner shall not bring an action against a direct contractor to enforce liability created by subdivision (a) until 30 days from the day that the Contractors State License Board receives the forwarded notice described in clause (i) of subparagraph (B).
(D)A direct contractor and subcontractor who are the subject of a notice pursuant to this paragraph shall, within 30 days of receiving the notice, take reasonable steps to abate any alleged violations. Except as provided in paragraph (2) of subdivision (c), if a direct contractor can provide evidence of substantial compliance with any applicable payroll requirements and can demonstrate that the violations alleged in the notice have been fully abated, the direct contractors liability shall be limited to any remaining unpaid wage, fringe or other benefit payments or contributions owed to a wage claimant employed by one of their subcontractors, and that liability shall not extend to liquidated damages, penalties, or interest. This subparagraph shall not limit or reduce liquidated damages, penalties, or interest owed by a subcontractor.
(2)(A)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability created by subdivision (a) in addition to penalties, liquidated damages, and interest as specified in subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(B)(i)Prior to the commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the third party shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice shall describe the general nature of the claim, the project name, the name of the employer that failed to pay wages, and the dates of the alleged claim. The notice shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor. The third party shall forward the notice to the Contractors State License Board, and the board shall note the failure to pay wages or benefits on the original employers license.
(ii)Within five business days of receiving the forwarded notice described in clause (i), the board shall notify a direct contractor and the subcontractor who is the subject of the wage claim that they have received notice of the third partys intent to pursue an action against them. A copy of this notice shall also be sent to the Labor Commissioner.
(C)A third party shall not bring an action against a direct contractor to enforce liability created by subdivision (a) until 30 days from the day that the Contractors State License Board receives the forwarded notice described in clause (i) of subparagraph (B).
(D)A direct contractor and subcontractor who are the subject of a notice pursuant to this paragraph shall, within 30 days of receiving the notice, take reasonable steps to abate any alleged violations. Except as provided in paragraph (2) of subdivision (c), if a direct contractor can provide evidence of substantial compliance with any applicable payroll requirements and can demonstrate that the violations alleged in the notice have been fully abated, the direct contractors liability shall be limited to any remaining unpaid wage, fringe or other benefit payments or contributions owed to a wage claimant employed by one of their subcontractors, and that liability shall not extend to liquidated damages, penalties, or interest. This subparagraph shall not limit or reduce liquidated damages, penalties, or interest owed by a subcontractor.
(3)(A)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier for unpaid wages owed to a wage claimant by the direct contractor or subcontractor for the performance of private work, including unpaid wages owed by the direct contractor, pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior
(B)(i)Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only shall describe the general nature of the claim and claim, the project name, the name of the employer that failed to pay wages, and the dates of the alleged claim. The notice shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor. The joint labor-management cooperation committee shall forward the notice to the Contractors State License Board, and the board shall note the failure to pay wages or benefits on the original employers license.
(ii)Within five business days of receiving the forwarded notice described in clause (i), the board shall notify a direct contractor and the subcontractor who is the subject of the wage claim that they have received notice of the committees intent to pursue an action against them. A copy of this notice shall also be sent to the Labor Commissioner.
(C)The committee shall not bring an action against a direct contractor to enforce liability created by subdivision (a) until 30 days from the day that the Contractors State License Board receives the forwarded notice described in clause (i) of subparagraph (B).
(D)A direct contractor and subcontractor who are the subject of a notice pursuant to this paragraph shall, within 30 days of receiving the notice, take reasonable steps to abate any alleged violations. Except as provided in paragraph (2) of subdivision (c), if a direct contractor can provide evidence of substantial compliance with any applicable payroll requirements and can demonstrate that the violations alleged in the notice have been fully abated, the direct contractors liability shall be limited to any remaining unpaid wage, fringe or other benefit payments or contributions owed to a wage claimant employed by one of their subcontractors, and that liability shall not extend to liquidated damages, penalties, or interest. This subparagraph shall not limit or reduce liquidated damages, penalties, or interest owed by a subcontractor.
(4)The Employment Development Department may enforce against a direct contractor, pursuant to the procedures in the Unemployment Insurance Code or through a civil action, the liability created by subdivision (a) for the subcontractors failure to make payments to the State of California required by the Unemployment Insurance Code.(5)(4)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(c)(1)The Contractors State License Board shall keep a record of notices received and sent pursuant to subdivision (b) for no less than three years.
(2)A direct contractor shall not have their liability limited pursuant to subparagraph (D) of paragraphs (1), (2), or (3) of subdivision (b) by abating alleged violations if the direct contractor meets any of the following conditions:
(A)The direct contractor has previously received two notices pursuant to subdivision (b) within a three-year period.
(B)The liability against the direct contractor arises from actions by a subcontractor that previously received two notices pursuant to subdivision (b) within a three-year period.
(C)The liability against the direct contractor arises from actions by a subcontractor is a successor to a subcontractor that previously received two notices pursuant to subdivision (b) within a three-year period.
(3)For purposes of paragraph (2), a successor to a subcontractor is established upon meeting any of the following criteria:
(i)The successor uses substantially the same facilities or substantially the same workforce to offer substantially the same services as the previous direct contractor. This factor does not apply to employers who maintain the same workforce pursuant to Chapter 4.5 (commencing with Section 1060) of Part 3.
(ii)The successor has substantially the same owners or managers that control the labor relations as previous direct contractors.
(iii)The successor employs as a managing agent any person who directly controlled the wages, hours, or working conditions of the affected workforce of the previous direct contractor. The term managing agent has the same meaning as in subdivision (b) of Section 3294 of the Civil Code.
(iv)The successor operates a business in the same industry and the business has an owner, partner, officer, or director who is an immediate family member of any owner, partner, officer, or director of the previous direct contractor.
(c)(d)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(d)(e)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(e)(f)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(f)(g)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf. The subcontractor and any lower tier subcontractors shall also provide records showing its reports and payments to the Employment Development Department.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(g)(h)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h)(i)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (f), (g), until that information is provided.
(i)(j)For any contract entered into on or after January 1, 2019, in order to withhold payments as disputed pursuant to subdivision (h), (i), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (f). (g). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (f), (g), until that information is provided.
(j)(k)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(a)(1)For contracts entered into on or after January 1, 2018, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimants behalf, 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 contract between the direct contractor and the owner. For contracts entered into on or after January 1, 2022, the direct contractor shall also be liable for any contributions, deductions, and withholdings that the subcontractor was required to forward to the State of California pursuant to the Unemployment Insurance Code on account of the performance of the labor and shall further be liable for any relief the Labor Commissioner could seek against the subcontractor for the subcontractors failure to obtain and maintain valid workers compensation coverage as required by law, which includes, but is not limited to, Section 3700.
(2)The direct contractors liability under this section shall extend only to any unpaid wage, fringe or other benefit payment or contribution, including payments owed to the State of California pursuant to the Unemployment Insurance Code, penalties, liquidated damages, and interest owed but shall not extend to penalties or liquidated damages. by the subcontractor on account of the performance of the labor.
(3)A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section. This section does not prohibit a direct contractor or subcontractor at any tier from establishing by contract or enforcing any otherwise lawful remedies against a subcontractor it hires for liability created by the nonpayment of wages, fringe or other benefit payments, or contributions by that subcontractor or by a subcontractor at any tier working under that subcontractor.
(b)(1)The Labor Commissioner may enforce against a direct contractor the liability for unpaid wages created by subdivision (a) pursuant to Section 98 or 1197.1, or through a civil action. The action, and seek any relief against a direct contractors liability shall be contractor for its subcontractors failure to obtain valid workers compensation coverage as required by law, which includes, but is not limited to unpaid wages, including any interest owed. to, Section 3700.
(2)A third party owed fringe or other benefit payments or contributions on a wage claimants behalf may bring a civil action against a direct contractor to enforce the liability created by subdivision (a) in addition to penalties, liquidated damages, and interest as specified in subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees.
(3)A joint labor-management cooperation committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) may bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier for unpaid wages owed to a wage claimant by the direct contractor or subcontractor for the performance of private work, including unpaid wages owed by the direct contractor, pursuant to subdivision (a). The court shall award a prevailing plaintiff in such an action its reasonable attorneys fees and costs, including expert witness fees. Prior to commencement of an action against a direct contractor to enforce the liability created by subdivision (a), the committee shall provide the direct contractor and subcontractor that employed the wage claimant with at least 30 days notice by first-class mail. The notice need only describe the general nature of the claim and shall not limit the liability of the direct contractor or preclude subsequent amendments of an action to encompass additional wage claimants employed by the subcontractor.
(4)The Employment Development Department may enforce against a direct contractor, pursuant to the procedures in the Unemployment Insurance Code or through a civil action, the liability created by subdivision (a) for the subcontractors failure to make payments to the State of California required by the Unemployment Insurance Code.
(4)(5)No other party may bring an action against a direct contractor to enforce the liability created by subdivision (a).
(c)Unless otherwise provided by law, property of the direct contractor may be attached, after trial, for the payment of any judgment received pursuant to this section.
(d)An action brought pursuant to this section shall be filed within one year of the earliest of the following:
(1)Recordation of the notice of completion of the direct contract, pursuant to Section 8182 of the Civil Code.
(2)Recordation of a notice of cessation of the work covered by the direct contract, pursuant to Section 8188 of the Civil Code.
(3)Actual completion of the work covered by the direct contract.
(e)This section does not apply to work performed by an employee of the state, a special district, a city, a county, a city and county, or any political subdivision of the state.
(f)(1)Upon request by a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide payroll records, which, at a minimum, contain the information set forth in subdivision (a) of Section 226, and which are payroll records as contemplated by Section 1174, of its employees who are providing labor on a private work, which payroll records shall be marked or obliterated only to prevent disclosure of an individuals full social security number, but shall provide the last four digits of the social security number. The payroll records must contain information sufficient to apprise the requesting party of the subcontractors payment status in making fringe or other benefit payments or contributions to a third party on the employees behalf. The subcontractor and any lower tier subcontractors shall also provide records showing its reports and payments to the Employment Development Department.
(2)Upon request of a direct contractor to a subcontractor, the subcontractor and any lower tier subcontractors under contract to the subcontractor shall provide the direct contractor award information that includes the project name, name and address of the subcontractor, contractor with whom the subcontractor is under contract, anticipated start date, duration, and estimated journeymen and apprentice hours, and contact information for its subcontractors on the project.
(3)A subcontractors failure to comply with this subdivision shall not relieve a direct contractor from any of the obligations contained in this section.
(g)For purposes of this section, direct contractor and subcontractor have the same meanings as provided in Sections 8018 and 8046, respectively, of the Civil Code.
(h)Nothing in this section shall alter the owners obligation to timely pay a direct contractor as set forth in Sections 8800 and 8812 of the Civil Code, or a direct contractors obligation to timely pay a subcontractor as set forth in Section 7108.5 of the Business and Professions Code and Section 8814 of the Civil Code, or the penalties for failing to do so as set forth in Sections 8800 and 8818 of the Civil Code and Section 7108.5 of the Business and Professions Code, except that the direct contractor may withhold as disputed all sums owed if a subcontractor does not timely provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(i)For any contract entered into on or after January 1, 2019, in order to withhold payments as disputed pursuant to subdivision (h), the direct contractor must specify, in its contract with the subcontractor, the specific documents and information that the direct contractor will require that the subcontractor provide under paragraphs (1) and (2) of subdivision (f). Subcontractors may include the same requirements in their contracts with lower tiered subcontractors and may withhold as disputed all sums owed if a lower tiered subcontractor does not provide the information requested under paragraphs (1) and (2) of subdivision (f), until that information is provided.
(j)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SECTION 1.Section 1 of the Health and Safety Code is amended to read:1.This act shall be known, and may be cited, as the Health and Safety Code.This act shall be known known, and may be cited, as the Health and Safety Code.
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Date
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Status
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|---|---|
| Sep 27, 2021 | Chaptered by Secretary of State. Chapter 338, Statutes of 2021. |
| Sep 27, 2021 | Approved by the Governor. |
| Sep 17, 2021 | Enrolled and presented to the Governor at 1:30 p.m. |
| Sep 10, 2021 | Assembly amendments concurred in. (Ayes 27. Noes 9. Page 2604.) Ordered to engrossing and enrolling. |
| Sep 9, 2021 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 9, 2021 | Read third time. Passed. (Ayes 60. Noes 18. Page 2964.) Ordered to the Senate. |
| Sep 2, 2021 | Read third time and amended. |
| Aug 30, 2021 | Read second time. Ordered to third reading. |
| Aug 26, 2021 | Coauthors revised. |
| Aug 19, 2021 | August 19 set for first hearing. Placed on suspense file. |
| Jul 7, 2021 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 8. Noes 2.) (July 6). Re-referred to Com. on APPR. |
| Jun 23, 2021 | From committee: Do pass and re-refer to Com. on JUD. (Ayes 5. Noes 2.) (June 22). Re-referred to Com. on JUD. |
| Jun 10, 2021 | Referred to Coms. on L. & E. and JUD. |
| Jun 2, 2021 | In Assembly. Read first time. Held at Desk. |
| Jun 1, 2021 | Read third time. Passed. (Ayes 29. Noes 9. Page 1317.) Ordered to the Assembly. |
| May 20, 2021 | From committee: Do pass. (Ayes 5. Noes 2. Page 1202.) (May 20). |
| May 14, 2021 | Set for hearing May 20. |
| May 10, 2021 | May 10 hearing: Placed on APPR suspense file. |
| May 4, 2021 | Set for hearing May 10. |
| Apr 29, 2021 | Read second time and amended. Re-referred to Com. on APPR. |
| Apr 28, 2021 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 9. Noes 1. Page 937.) (April 27). |
| Apr 21, 2021 | Read second time and amended. Re-referred to Com. on JUD. |
| Apr 20, 2021 | From committee: Do pass as amended and re-refer to Com. on JUD. (Ayes 4. Noes 1. Page 844.) (April 19). |
| Apr 6, 2021 | Set for hearing April 19. |
| Mar 25, 2021 | April 5 set for first hearing canceled at the request of author. |
| Mar 23, 2021 | Set for hearing April 5. |
| Mar 18, 2021 | Re-referred to Coms. on L., P.E. & R. and JUD. |
| Mar 9, 2021 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Mar 3, 2021 | Referred to Com. on RLS. |
| Feb 22, 2021 | Joint Rule 55 suspended. (Ayes 32. Noes 4. Page 272.) |
| Feb 22, 2021 | From printer. May be acted upon on or after March 24. |
| Feb 19, 2021 | Introduced. To Com. on RLS. for assignment. To print. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| Sep 10, 2021 | Unfinished Business SB727 Leyva et al. Concurrence | Senate Floor |
Passed |
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| Sep 9, 2021 | SB 727 Leyva Senate Third Reading By Lorena Gonzalez | Assembly Floor |
Passed |
|
| Jun 1, 2021 | Senate 3rd Reading SB727 Leyva | Senate Floor |
Passed |
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Bill Author
Bill Co-Author(s):
