By Katherine Sandberg, Fisher Phillips
A contentious new law in California is reshaping the potential liability of builders for unpaid wage claims, and contractors must be prepared. AB 1701 applies to private construction contracts that are entered into on or after January 1, 2018. The law makes general contractors liable for unpaid wages or fringe benefits that a subcontractor may owe to any worker. Under the new law, the California Labor Commissioner, unions and joint labor management cooperation committees may all bring private actions up to one year after the project’s date of completion against the general contractor to collect alleged unpaid wages and fringe benefits. Notably, the law allows prevailing plaintiffs to recover their attorneys’ fees and costs, which will incentivize plaintiff’s attorneys to troll for these types of claims. To add insult to injury, contractors who prevail against these claims may not recover their attorneys’ fees.
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