An often-overlooked part of contract negotiations is the language included in the performance bond. While the owner or contractor (bond obligee) requires a performance bond and pays for it, negotiating efforts are typically spent on the main contract language itself rather than the bond. A common go-to performance bond form used in the construction industry
California and Maryland Have Enacted Legislation Essentially Making The General Contractor the Guarantor for All Wages on the Project – Should Sureties Be Concerned?
It’s been said that as California goes, so goes the nation. If so, general contractors throughout the country may soon be taking on more responsibility for the unpaid wages of the workers on their construction projects than they might have expected. As of January 1, 2018, Assembly Bill 1701 makes general contractors liable for the unpaid wages of any employee who furnishes labor to or through the general contractor in furtherance of the prime contract; no matter the tier.
A.B. 1701 amended Section 218.7 of the California Labor Code so that general contractors on private construction projects “assume, and [are] liable for any debt” of a subcontractor of any tier for unpaid wages, fringe benefits or other employee contributions. The driving force behind the legislation was the labor unions. The legislation does not provide for a private right of action to the unpaid employees but instead permits the Commissioner of Labor to file suit on behalf of an unpaid employee(s) and also allows labor unions to sue for unpaid wages or benefits. There is a one year statute of limitations for such claims.
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