Public Comments for: SB1209 - Subcontractor's employees; liability of general contractor for wages.
The Baltimore Washington Laborers' District Council, the LiUNA affiliate representing more than 7,500 construction laborers across Northern Virginia, DC, and Maryland opposes SB1209 for the following reasons, and urges the committee to vote no on this bill: ● The existing law already is narrow in scope. The current law only applies if the general contractor knew or should have known that workers on their job sites were not being paid all wages due. The current law also only applies to large construction projects valued at more than $500,000, and entirely exempts single-family residential projects. ● SB1209 creates a loophole so that general contractors can avoid liability. Subcontractors have shown a strong willingness to commit wage theft and circumvent Virginia Criminal Code to maintain competitive advantage. With SB1209, a general contractor would be able to avoid liability if the subcontractor states in writing it is paying workers all their wages due, whether true or not. ● It is well-established that general contractors are liable for the actions of their subcontractors, and Virginia should not be backtracking. General contractors are liable for subcontractors’ violations of OSHA regulations and workers compensation laws. As a result, it is well-established that general contractors are responsible for all workers on their job sites for certain matters and should monitor their job sites for potential violations. ● General contractor liability does NOT increase the cost of bonding for subcontractors. The implementation of § 11-4.6 in July 2020 has NOT led to an increase in bonding rates for subcontractors because general contractors typically do not require subcontractors to purchase separate indemnity bonds. Instead, general contractors usually include contract language that indemnifies the general contractor for wages and damages unpaid by the subcontractor.
I am a senior staff attorney with Public Justice and have litigated dozens of cases involving forced arbitration provisions, many of those focusing on the issue of Federal Arbitration Act preemption. I have also spoken on the topic of whether particular proposed state legislation is preempted by the Federal Arbitration Act before the legislatures of New York, California and Maryland. Public Justice supports SB1384, which will empower localities throughout Virginia by allowing them to gather the same information about companies that use forced arbitration that is already in the public domain with respect to companies whose employment and civil rights disputes are litigated in open court. When localities enter into contracts, they should have full information about the business records of their potential contracting partners, and this legislation will provide that much-needed transparency. Because the localities will be operating as market participants, not as regulators imposing restrictions on arbitration, the bill does not raise concerns about preemption by the Federal Arbitration Act. A more extensive discussion of the market participant doctrine and how it interacts with FAA preemption can be found in our full testimony here: http://bit.ly/Gilbride_PublicJustice_SB1384