Contract With Care: New Law Increases Direct Risk for General Contractors (and Indirect Risk for Owners) Regarding Subcontractor Wages
Stuart Kane LLP partners Shane Criqui and Jeremiah Nelson published the article “Contract With Care: New Law Increases Direct Risk for General Contractors (and Indirect Risk for Owners) Regarding Subcontractor Wages” in the May 7, 2018 issue of the Orange County Business Journal.
“While not uncommon for owners and general contractors to haggle over payment of unforeseen cost increases on construction projects, imagine arguing over who pays for a subcontractor’s labor costs. For new construction contracts after January 1, 2018, a private direct contractor in California may be held liable for “any debt owed to a wage claimant or third party on the wage claimant’s behalf incurred by a subcontractor at any tier” acting under, by or for the direct contractor. Assembly Bill 1701, codified at Section 218.7 of the Labor Code, is squarely aimed at direct (general) contractors, however, owners and tenants hiring those contractors should pay careful attention to the terms of their construction contracts to avoid effectively paying twice for the same work.”