In mid-October, California passed a bill which will make general contractors liable for any unpaid wages and fringe benefits owed to employees of subcontractors. The ruling will go into effect on Jan. 1, and will apply to all private construction projects entered into after that date.
Needless to say, the bill was met with resistance on the side of contractors who argued that it would further inflate costs which would ultimately be borne by buyers. While the bill does provide ways for contractors to seek indemnity from subcontractors who do not pay their employees, it does not offer possibilities to avoid the liability altogether.