Construction wage liability bill passes legislature despite business opposition

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Website opposing Bill 1701 set up by the California Building Industry Association (CBIA)

A contentious proposal that would put California builders on the hook for wage theft violations by their subcontractors has advanced to Gov. Jerry Brown after a last-minute agreement between the author and opponents, The Sacramento Bee reports.

The Assembly on Sept. 13 sent to the governor’s desk Assembly Bill 1701, which would allow construction workers who have not been paid for a job to seek their back wages and benefits, with interest, from the general contractor, even if they did not work directly for that company on the project, the newspaper reported.

Both the building industry and construction trade unions lobbied heavily on the measure, by Assemblyman Tony Thurmond (D-Richmond) in the final weeks of session, plastering websites with digital advertisements, passing out fliers on the sidewalk outside the Capitol and setting up an electronic billboard across the street.

CBIA Website opposing AB 1701

While unions argued that AB 1701 gives workers a legal remedy when subcontractors skip town or file for bankruptcy before paying employees, builders warned that it could drive up the cost of construction and worsen California’s housing crisis by potentially forcing them to pay twice for labor. The California Building Industry Association (CBIA) especially has opposed the legislation.

However, the measure received overwhelming support when it came up for a vote in the Assembly, passing 52-13. Thurmond said he submitted a letter to the legislature stating his intent to carry a follow-up bill. It will remove a section of AB 1701 that builders worried could be used to hold them liable for further monetary damages.

“We took an additional step to clarify something that I believe was already explicit in the bill: that contractors, general contractors, would not be held responsible for any penalties that resulted from a subcontractor not paying anyone,” he said. “It’s in everybody’s best interest to make that clear, that all we’re trying to do is protect those workers who don’t get paid.”

Tom Scott, executive director of the National Federation of Independent Business-California, said the group would lobby Brown to veto the bill he said “unfairly holds businesses liable for employment actions for which they are not responsible…NFIB believes that every employee should be paid what they have earned and are legally entitled to. At the same time, we are strongly opposed to holding one business accountable for the decisions of another.”

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