California Passes Bill Requiring GCs to Pay Wages of Sub Employees if Subs Fail to Pay

The California State Assembly recently passed a bill requiring general contractors, or direct contractors, to pay subcontractors' employees if the subcontractors do not pay them. The measure, if signed by Gov. Jerry Brown, would go into effect in January 2018. General contractors would not have to pay penalties related to subcontractors' nonpayment.

The Sacramento Bee reports that the contractors would be allowed to request subcontractors' payroll records to verify they are paying their employees correctly. Union representatives lobbied hard for the measure. They say the law is necessary to ensure employees are paid for the work they perform.

The construction industry, which opposes the measure, says it could increase the cost of building in a state with an acute housing shortage.

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