New Law Makes Original Contractor Liable for Wages
Gov. Brown recently signed into law a bill that added Labor Code section 218.7. According to the signing message, Gov. Brown intended the new Labor Code section to extend liability against a general contractor for wages owed to workers of a subcontractor and also creates new wage collection remedies for private non-public work projects.
SOME HIGHLIGHTS OF THE NEW LAW
Director Contractor Liability: The new law applies to contracts entered into on or after Jan. 1, 2018. The law applies only to private works, not public works projects.
The law makes a direct contractor liable for any debt owed to a wage claimant or third party on the claimant's behalf that has been incurred by a subcontractor.
No Liability for Penalties or Liquidated Damages: The director contractor's liability extends only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed. However, the direct contractor is not liable for penalties or liquidated damages.
Enforcement: The Labor Commissioner may enforce a claim against the direct contractor for unpaid wages.
This new law is good news for employees of subcontractors who are typically the ones that get the short end of the stick when their employer fails to pay them.
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