Under a new law, general contractors in California must take responsibility for any employee wages or benefits that their subcontractors fail to make under contracts entered into after Jan. 1, 2018. The same obligations apply to wage claims from lower-tier sub-subcontractors.
General contractors may inspect their subcontractors’ payroll records to determine if payments are being made in a timely manner; if not, the general contractor may withhold future payments. Additionally, under the law, general contractors are not liable for penalties or liquidated damages related to subcontractor claims.
