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New California Construction Laws for 2022

By November 22, 2021No Comments
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In 2021, California Governor Gavin Newsom signed several laws impacting California contractors and employers. Below is a list of the key changes that can affect your business.

A.B. 1023 – Electronic Records for Contractors and Subcontractors (Effective Jan. 1, 2022) 

A.B. 1023 now revises the requirement for contractors or subcontractors to furnish records “monthly” as required under Labor Code Section 1771.4.  The law defines “monthly” which must be made at least once every 30 days while work is being performed on the project and within 30 days after the final day of work performed on the project.  It also now requires that contractors and subcontractors to furnish certain records electronically, in a manner specified by the Labor Commissioner’s website.  The law now makes a contractor or subcontractor who fails to submit records related to employees now liable for a penalty of $100 per day for a maximum total of $5,000 per project. 

Contractors and subcontractors are given a 14-day grace period after the date the record submission is due before any penalty will be levied. Penalties under this section only accrue to the actual contractor or subcontractor who failed to submit records.

This bill amends Labor Code Section 1771.4.

 

S.B. 727 – Direct Contractor Liability on Private Works (Effective Jan. 1, 2022)

Currently, Labor Code section 218.7 provides that for private construction contracts, direct contractors (as defined) are liable for unpaid wages and benefits of the employees of their subcontractors if the subcontractor fails to pay them.  The liability attaches to wages and benefits owed by any subcontractor in any tier of subcontractors for labor connected to the contract.  This version of the law did not extend liability of penalties or liquidated damages against the direct contractor.

S.B. 727– amends the law to now impose joint liability for a direct contractor for penalties and liquidated damages, as well as liability for the failure of a subcontractor to make payments to the California unemployment insurance fund or for failure to provide workers’ compensation benefit, and interest owed for contracts entered into on or after January 1, 2022. For contracts entered into on or after January 1, 2022, this bill also removes the limitation of liability.

At least 30 days prior to taking action, the Labor Commissioner must notify the direct contractor and subcontractor on a private works project of the failure of a subcontractor to pay wages and/or other applicable benefit owed to its workers. The notice must include the project name and name of the employer.

This bill amends Section 218.7 and adds Section 218.8 to the Labor Code.

 

S.B. 572 – Enforcement Liens on Real Property (Effective Jan. 1, 2022)

SB 572 adds Section 90.8 to the Labor Code which authorizes the Labor Commissioner to create a lien on real property to secure amounts due under any final citation, findings, or decisions related to employee complaints regarding the payment of wages and other employment-related issues, including but not limited to, the nonpayment of wages, overtime or vacation pay.

Unless the lien is satisfied or released, a lien would continue until 10 years from the date of creation, and could be renewed for additional periods of 10 years prior to its expiration.

This bill adds Section 90.8 to the Labor Code.

 

S.B. 807 – Retention Period of Employee Personnel Records (Effective Jan. 1, 2022) 

Currently, Government Code Section 12946 requires that employers retain personnel records for two years.  S.B. 807 amends the law to extend the current personnel records retention requirement from two years to four years.  If a complaint has been filed, employers must retain such records until the applicable statute of limitations has run, or until the conclusion of the litigation, whichever occurs later.  

This bill amends Government Code Section 12946.

 

A.B. 1003 – Employer Wage Theft (Effective Jan. 1, 2022)

A.B. 1003 adds section 487m of the California Penal Code which makes the intentional theft of wages, benefits or compensation in the amount greater than $950 for one employee or more than $2,350 for two or more employees in a consecutive 12-month period punishable as grand theft, which prosecutors may charge as a misdemeanor or felony.

 

Minimum Wage Increase (Effective Jan. 1., 2022)

As a reminder, effective January 1, 2022, the minimum wage in California is increasing to $15.00 per hour for employers with 26 or more employees based on previous legislation signed by Gov. Jerry Brown in 2015.   If you employ 25 or fewer employees, the minimum wage will increase to $14.00 per hour on January 1, 2022.  Keep in mind that various cities and local governments in California have enacted minimum wage ordinances which exceed the state’s minimum wage which you may be subject to.

 

For more information on this, please contact Senior Counsel Natasha K. Buchanan, nkbuchanan@lanak-hanna.com

 

The information contained in this post has been prepared by Lanak & Hanna, P.C. for educational and informational purposes only. It does not constitute legal advice, nor does it substitute for legal advice.

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