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SB 5278: Concerning the Protection of Construction Worker Wages and Benefits

February 1, 2021

2020 ‘Direct Contractor Liability’ recap

BIAW members will recall that in 2020, one of our biggest battles was on HB 1395/SB 5565 “Direct Contractor Liability”.

With the help of many BIAW members, other construction groups, and pro-housing legislators, we were able to defeat HB 1395 and its Senate companion SB 5565.

‘Direct Contractor Liability’ returns in 2021

Unfortunately, in this 2021 legislative session of “helping businesses get back on their feet”, Senator Derek Stanford (D- 1stLD) has introduced SB 5278, a nearly identical bill to HB 1395/SB 5565.

SB 5278 would make general contractors responsible for the wages and benefits of their subcontractor’s employees. If a subcontractor failed to pay or mistakenly underpaid any wages or benefits (health insurance, 401k, etc.), the general contractor would be responsible to pay these to the employee(s) of the subcontractor.

In order to accomplish this, the bill directs general contractors to obtain payroll records from each subcontractor and to review them to ensure that proper wages and benefits have been paid. It’s unclear how a general contractor is supposed to determine which employees of a subcontractor worked on a general’s project, for how long, what his or her wage rate was on that particular job (over time?) and what other jobs that the subcontractor’s employees worked on during the same pay period.

Finally, if a general contractor does obtain payroll records from a subcontractor and they are inaccurate or falsified, there is no “safe harbor” for the general contractor, and he/she is still responsible for the unpaid wages and benefits.

How you can help

This unfair and ill-conceived bill is scheduled to be heard on Wednesday, February 3rd at 10:30 in the Senate Labor, Commerce & Tribal Affairs Committee. 

Tell the Senate Labor, Commerce and Tribal Affairs Committee home builders can’t afford SB 5278. 
Testify in committee OPPOSED to SB 5278
Can’t testify? We still need you to register your opposition: Sign-in opposed here

Be sure to sign up no later than 9:30 a.m. on Wednesday, Feb. 3!

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