Assembly Bill 1701/Labor Code 218.7 – What you need to know?
The State of California has passed a number of new laws in recent years but none has been so widely discussed by the construction industry as Assembly Bill 1701 (Labor Code 218.7). This new law extends lability to a general contractor on a private construction project for unpaid wages, fringe, and other benefits owed to a subcontractor’s employees. This is regardless of the tier of the subcontractor or if the subcontractor has already been paid or not. Basically, this gives a subcontractor’s employees the right to make a claim against the general contractor for unpaid wages, fringe or other benefits.
Before discussing possible protections there are a few key component of the law
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How to Protect Your Company
When new and potentially unfavorable laws are enacted, there is usually an immediate scramble to avoid the negative impacts it may bring. However, as a general contractor, claims cannot be fully avoided. Thus, much like insurance, the best practice is to implement procedures that reduce the possibility of a claim.
Drafting a favorable contract is a good first line of defense. This includes but is not limited to:
• Including language that shifts the liability created by the new law back to the subcontractor. For example, the general contract should include language affirming that every subcontractor is accountable for full and timely payment of their workers and all sub-tier subcontractor’s workers;
• Requiring subcontractors (all tiers) to provide time cards and wage statements monthly with their pay applications. If the subcontractor fails to provide this information, they do not get
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The performance bond protects the general contractor (obligee on a subcontract bond) from losses in the event that the subcontractor fails to perform the contract. The payment bond guarantees that the subcontractor will pay their workers, subcontractors, and materials suppliers and that the project will be a lien free project. Requiring performance and payments bonds from your subcontractors transfers the risk of a subcontractor’s non-performance and non-payment to the surety
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Throughout United States history, Congress has passed legislation to address important social and economic issues. These laws have often had a significant impact on the United States and/or on American society. The United States Congress passed many laws to help reduce tension and to appease all people. The goal of many of the laws created was to create peace and order between different groups of people.
The Constitution Center, a museum accredited by the American Association of Museums, awards the Liberty Medal to men and women each year and is the only museum to commemorate the American Constitution. That is where we are now. We are at 525 Arch Street, Philadelphia, Pennsylvania - the National Constitution Center. Not to be confused with Independence Hall, the Constitution Center was not where the Constitution was actually written or signed. The Constitution Center does, though, hold one of the 12 surviving copies of the Constitution.
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The construction site was in a downtown area of a large southeastern city, criss-crossed with city streets, utilities, and immediately adjacent to mid-rise and high rise buildings. Nearly all of the work was required to be constructed within temporary piling structures to limit settlement of adjacent structures. The construction contract called for seven phase releases of work areas and nine completion milestones, each milestone has its own liquidated damages penalty. The construction contract was valued at $10 million, and the duration was 545 calendar days. Following the completion of the work, the contractor filed a claim for $5.5 million and 1.1 million in interest. The authority subsequently denied the claim and the contractor, in accordance with the contract, filed an arbitration demand with the American Arbitration Association. Following the contractor’s issuance of the demand letter, the parties agreed to resolve the dispute through negotiation” (Ray,
The company claims that they were not responsible for the garment worker’s pay because they were subcontracted does not mean that they have
HILLIARD, J. And O’SULLIVAN, J. (2012) The Law of Contract [Online] 5th Ed. Oxford: Oxford University Press. Available from - http://books.google.co.uk/ [Accessed: 2nd January 2014]
Even though his firm was only required to do civil engineering work, Giffels concluded that there was an unacceptable risk to the firefighters who would use the facility with the unresolved issues, so he began contacting other firms with experience handling similar contract projects, part of exercising due care to ensure they could enhance safety. The training facility met the minimum requirements of the law, but Giffels felt that it would be shirking the responsibility his firm has to the public by not callin...
Part 2 of Employer Duties and Rights- management rights, subcontracting, just-cause discipline and discharge, and safety standards.
Also, in instances where the issuer fails to pay the principal amount back to the bond holder,