This year California ushered in a new law effective Jan. 1, 2018, for private works construction contracts, California’s Labor Code section 218.7. The law applies to all direct contractors who make or take the contract in California for the “… erection, construction, alteration or repair of a building, structure…” who must assume and be liable for debt owed to a wage claimant, or third party acting on behalf of the wage claimant, by the contractor’s subcontractor.
The law applies to wages incurred by the subcontractor for the wage claimant’s performance of labor included in the subject of the original contract between the contractor and the owner. It applies only to unpaid wages, fringe benefits or other benefits payments or contributions, including interest. It does not apply to penalties or liquidated damages.