CA AB1565

Direct contractors are liable for unpaid wages and fringe benefits owed by subcontractors at any tier for labor included in the original contract, limited to unpaid wages, fringe or other benefit payments or contributions, and interest—not penalties or liquidated damages.

The Labor Commissioner, third parties owed fringe or other benefits, and joint labor-management cooperation committees (but no other parties) may enforce this liability through civil action, with prevailing plaintiffs entitled to reasonable attorney's fees and costs including expert witness fees.

For contracts entered into on or after January 1, 2019, direct contractors and subcontractors must specify in their contracts the specific documents and information they will require lower-tiered subcontractors to produce before withholding disputed payments.

Direct contractors may withhold disputed payments from subcontractors who fail to timely provide requested payroll records and award information, and subcontractors may apply the same withholding rights against lower-tiered subcontractors.

Actions to enforce liability must be filed within one year of the earliest of: recordation of notice of completion, recordation of notice of cessation, or actual completion of the work.