You Are Your Brother’s Keeper. Direct Contractors in California Now Responsible for Wage Obligations of Subcontractors

January 31, 2018
Garret Murai – California Construction Law Blog

If there’s one law from the 2017 Legislative Session that’s garnered a lot of attention in the construction press, it’s AB 1701. Under AB 1701, beginning January 1, 2018, for contracts entered into on or after January 1, 2018, direct contractors may be found liable for unpaid wages, fringe or other benefit payments or contributions, including interest, but excluding penalties or liquidated damages, owed by a subcontractor of any tier to their workers. Here’s what you need to know about AB 1701.

What code section did AB 1701 amend?

AB 1701 added a a new section 218.7 to the Labor Code.

To whom does AB 1701 apply?

AB 1701 applies to direct contractors only. A direct contractor is defined as a “contractor that has a direct contractual relationship with an owner.”

On what types of projects does AB 1701 apply?

AB 1701 applies to private works projects only.

When does AB 1701 take effect?

AB 1701 took effect on January 1, 2018 and applies to all contracts entered into on or after January 1, 2018.

Mr. Murai may be contacted at gmurai@wendel.com



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