In Part 1 of this two-part series we’ll look at new rules for employers from the 2017 California legislative session. Unless otherwise noted, changes to the law are effective January 1, 2018. The following are the measures that may directly affect the construction industry. Part 2 will be in our December issue.

AB 1701 – Joint Liability of General Contractors and Subcontractors

AB 1701 holds general contractors jointly liable with subcontractors for unpaid wages, benefits, or contributions that a subcontractor owes for labor connected to the contract. The law also requires subcontractors to provide required payroll records upon a general contractor’s request. Notably, AB 1701 permits a wage claimant to proceed directly against the direct contractor for the subcontractor’s debts, without having to first obtain a judgment against the sub-contractor. AB 1701 applies to construction contracts entered into on or after January 1, 2018.

Employer Action: Governor Brown issued a signing memo regarding AB 1701, requesting AB 1701’s sponsors to clarify any confusion over the application of this new law regarding liability for penalties and liquidated damages. Contractors are advised to review AB 1701, and be on the lookout for potential revisions to this law in 2018.

SB 306 – Labor Commissioner Work-place Retaliation Investigations

SB 306 allows an employee or the Labor Commissioner to obtain a temporary restraining order to prohibit employers from terminating employees who allege retaliation before the Labor Commissioner completes its investigation. Under current law, the Labor Commissioner has the authority to seek injunctive relief only after it has investigated a claim of retaliation and made a determination that a violation exists.

Employer Action: Employers should be aware that they may be prevented from terminating an employee filing a retaliation complaint with the Labor Commissioner during the investigation, if the Labor Commissioner issues the employer a temporary restraining order.

AB 450 – Immigration Workforce Protection Actions

AB 450, known as the Immigrant Worker Protection Act, protects workers from immigration enforcement while on the job. Under AB 450, an employer is prohibited from voluntarily providing a federal immigration enforcement agent access to a business without a properly executed warrant. The employer is also forbidden from providing the agent access to the employee’s records without a subpoena. Additionally, employers are required to provide notice of an immigration agency’s inspection of I-9 forms or other records within 72 hours to employees, and provide a copy of the inspection notice and any results to affected employees and their authorized representatives.

Employer Action: Penalties for violations of the provisions of this law range from $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation. Before this law takes effect, security personnel, supervisors and Human Resources representatives should receive training on handling the law’s new regulations, including notification requirements.

AB 1008 – Ban-the-Box

Existing law prohibits state and local agencies from asking an applicant to disclose conviction information until the applicant is made a conditional offer of employment. AB 1008 extends this prohibition to all employers in California with five or more employees. Covered employers may no longer include on employment applications questions about an applicant’s conviction history. Once an offer has been made, criminal history information may be obtained by the employer. Before an employer may reject an applicant based on the criminal history, the employer must conduct an individual assessment and notify the employee of its preliminary decision. The assessment must justify denying the applicant the position by drawing a relevant connection between the conviction history against the specific job duties of the position. Applicants will have an opportunity to respond to the employer’s notice. If the employer intends to stick with the decision to not hire the applicant, the employer must provide a second notice informing the applicant of the decision.

Employer Action: Employers should review and update employment applications, recruitment and hiring guidelines, including background check procedures to ensure documents do not
impermissibly inquire into, or consider conviction histories. Personnel involved in the hiring process should also be trained on the types of inquiries and questions that are permissible and not permissible.

If you have any questions regarding implementation or application of any of these new laws, please contact one of the authors, or your usual employment law counsel. For a downloadable PDF
go to:,_Leave,_and_Hiring_Obligations_for_2018.pdf

By Maribel Hernandez, Allison M. Scott, Jonathan Judge