California Governor Jerry Brown will have the opportunity to sign a bill that would penalize contractors for the sins of their subs.
Assembly Bill 1701 by Tony Thurmond (D-Richmond) proposes a new recourse for workers who are stiffed by their subcontractor employers: They could go after the general contractor on the job. The Labor Commissioner would be given the authority to bring action.
“This is a tremendously dangerous bill for the building industry in general — and certainly pool contractors,” said John Norwood, executive director of the California Pool & Spa Association. “Building trade unions have had members flooding the Capitol, walking the halls and holding demonstrations in support of the bill. Unlike other bad labor bills, this bill does not exclude even small projects.”
The bill passed the state senate and assembly and, as of press time, awaits the governor’s signature. If it becomes law, AB 1701 will apply to contracts signed on Jan. 1, 2018 or after.
CPSA has joined with the California Building Industry Association and others to combat the legislation, stating that such a law would not accomplish its goal without changes to the language. Workers couldn’t take action at least until the project was complete, and may have to wait a year past that point.
The organizations object to the fact that, if passed, the law would allow workers to sue general contractors as a first move, rather than as a last resort after pursuing their immediate employers.
They also worry that, by passing this liability up the food chain to general contractors, it would create a de facto joint employer relationship, making GCs responsible for wages and benefits.
The language also currently only allows plaintiffs to sue for attorneys fees, CPSA said.
The contracting groups would like to see general contractors given the ability to obtain information about the status of workers compensation from their subcontractors before making progress payments to them.
CPSA said the ramifications of such a law would be severe.
“While there has been no evidence presented that the problem that AB 1701 seeks to remedy exists in the private residential construction industry, the bill would result in general contractors paying twice for labor,” the organization said.
Governor Brown has until Oct. 15 to sign the bill, or it will die. While he has given no indication how he will act, he tends to support labor, Norwood said.
