Legislation  to combat rampant wage-theft in California’s construction industry passed the state legislature this month with strong majorities.  Assembly Bill 1701 would hold general contractors and their subcontractors jointly liable for unpaid wages, all the way down the chain.  If signed by Governor Jerry Brown, which seems likely, it will go into effect at the end of the year.

Cesar Diaz, Legislative and Political Director of the California State Building and Construction Trades Council, say wage theft by subcontractors is common in the industry nationwide:

[Cesar Diaz]: “We believe that the general contractor does have the authority of the entire worksite on a variety of different levels.  So, they are responsible for hiring subcontractors that fail to pay their workers, and this happens routinely on many private construction job sites.  They often turn a blind eye because, in the end they know they won’t be responsible for that subcontractor’s actions.  So, this bill changes that behavior.”

Diaz says AB 1701 will also help combat the common practice of misclassifying construction workers as independent contractors, denying them a wide array of benefits and worker protections.

The state’s construction industry spent five million dollars fighting the legislation:

[Cesar Diaz]: “They said that if you were to pay workers their properly-owed wages, that somehow that would increase construction costs, which, I think sent a signal to all of us and a lot of legislators in the capitol.  They’re basically admitting that they’re not paying workers what they’re properly owed, abusing workers.  And none of those savings translated into lower housing costs.  They just translated into more profits for the developers themselves.  The legislators were not buying those arguments.”