Kevin Sullivan, Associate in the Employment, Labor & Workforce Management practice, in the firm’s Los Angeles office, was quoted in Law360, in “New Calif. Law Leaves Contractors with Questions,” by John Kennedy. (Read the full version – subscription required.)

Following is an excerpt:

Since the start of the year, California construction contractors have been bound by a new law that puts them on the hook for unpaid wages owed to their subcontractors’ employees, a change praised by worker advocates but eyed warily by builders.

Concerns over Assembly Bill 1701, signed by the governor in October, include uncertainty about what type of work the law actually covers and the lack of a safe harbor for well-intentioned companies. Contractors are also looking for ways to hold subcontractors responsible for missed wage payments, experts said.

The law, now set down in Section 218.7 of the California Labor Code, makes any direct contractor involved in the “erection, construction, alteration or repair of a building, structure or other private work” liable for any debt owed to employees of its subcontractors. That includes wages and benefits, plus interest, but not penalties or contractual liquidated damages. …

“Private Work” Ambiguity

Contractors and those who represent them say they aren’t sure about what the opening line of the new law means when it refers to “other private work.” …

Epstein Becker Green associate Kevin Sullivan says the firm’s homebuilding clients are often direct contractors, but various nonconstruction clients could also fall within the statute’s scope, depending on the definition of “other private work.” He said he considers it somewhat sloppy work by the state legislature to leave such an ambiguous term in the law.


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