Call A Trusted, Experienced LAW FIRM
Tsao-Wu & Yee LLP International Lawyers

Is a contractor responsible for unpaid subcontractor wages?

It seems straightforward: You are hired as a contractor for a project in California, you enlist the services of a subcontractor to complete the project, the work is finished and you move on to the next job. However, what happens if the employees hired by your subcontractor bring up claims of not being paid all that was promised to them? If your subcontractors fail to properly compensate their employees for the work they have done, can you find yourself in hot water over unpaid wages or improperly disbursed benefits? It is quite possible.

According to the Legislative Assembly Bill No. 1701, which was approved on October 14th, 2017, the direct contractor is liable for debts stemming from wages owed not only to its own employees and the employees of subcontractors, but also for the workforce employed by any level of lower subcontractors that are used on the project. This includes contracts for the "erection, construction, alteration, or repair of a building, structure, or other private work." The direct contractor must ensure that these employees receive their wages in full, benefits and contributions promised to them and even interest that is owed.

Contractors can, however, lessen their risk by addressing the issue in the contracts they enter into before the work begins. For instance, a contractor can include a provision that states the subcontractor will indemnify and take on costs associated with wage and benefit disputes and can make a requirement that the subcontractor has payment bonds. Contracts can also include clear protocols for confirming payment to workers and outline deadlines for when the subcontractors must provide records regarding payroll. Keep in mind, though, that it is still the responsibility of the direct contractor to ensure proper protocols are being met.

This post is meant for informative purposes only and should not be used in place of professional legal counsel.



No Comments

Leave a comment
Comment Information
Email Us For A Response

Want To Learn More?

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy


San Francisco Office
4215 Geary Boulevard
San Francisco, CA 94118

Toll Free: 800-494-0390
Fax: 415-777-2298
Map & Directions

San Jose Office
99 North 1st Street
Suite 200
San Jose, CA 95113

Toll Free: 800-494-0390
Phone: 408-635-2334
Map & Directions

San Francisco Office
140 Geary St.
4th Floor
San Francisco, CA 14180

Map & Directions

Oakland Office
1110 Franklin Street
Suite 1
Oakland, CA 94607

Toll Free: 800-494-0390
Map & Directions

  • M & A 2017 Awards CorporateLiveWire
  • LCA | Proven Trail Lawyers
  • American Arbitration Association
  • Legal Leaders
  • Super Lawyers
  • The Bar Association Of San Francisco
  • Soba | Honoring The past| Inspiring The Future
  • Arag | Divine Into Life
  • Attorney Search Network | Find The Right Lawyer