CA AB 1701: Stopping Subcontractor Wage Theft

California Governor Brown signed AB 1701 on October 14, 2017, adding Labor Code § 218.7.  The new law puts a general contractor on the hook for wages owed to workers by its subcontractor at any tier.  The law extends to private jobs.

The language makes the primary contractor responsible for all wages, and each (sub)contractor responsible for any lower tier contractor with whom they contract.

Only an Labor Management Cooperation Committee (“LMCC”), benefit plan, or the Labor Commissioner, can pursue claims under this new law in court.  An employee can also bring a claim to the Labor Commissioner’s office.  The claimant, or those acting on her behalf, can recover wages, fringe benefits, and interest—but not liquidated damages or penalties.

A claim must be filed within a year of completion of the project.

This change in law applies to any contract entered into after January 1, 2018.  It does not apply to individuals directly employed by a public employer.​

By Caren Sencer | November 6, 2017

Legal Developments