SB 597: Labor-related liabilities: direct contractor and subcontractor.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

Existing law requires, for contracts entered into on or after January 1, 2022, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, to assume, and be liable for, any debt owed to a wage claimant or third party on the wage claimant’s behalf, incurred by a subcontractor at any tier acting under, by, or for the direct contractor for the wage claimant’s performance of labor included in the subject of the contract between the direct contractor and the owner. Existing law defines “direct contractor” for this purpose to mean a contractor that has a direct contractual relationship with an owner.

This bill would apply the above-described provision to contracts entered into on or after January 1, 2022, and before January 1, 2026. The bill would instead require, for contracts entered into on or after January 1, 2026, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, to assume, and be liable for, any indebtedness for the performance of labor, as specified. The bill would prohibit a direct contractor from being held liable for the indebtedness with respect to fringe or other benefit contributions if they make contribution payments by joint check, as specified. The bill would define “direct contractor” for this purpose to mean a contractor that has a direct contractual relationship with an owner or any other person or entity engaging contractors or subcontractors, as specified, on behalf of the owner.

Existing law provides for a streamlined, ministerial approval process or use by right for certain housing developments that meet specified requirements. Existing law requires these developments to meet specified labor standards, including, among other things, making health care expenditures for each employee, as specified. Existing law grants a joint labor-management cooperation committee standing to sue a construction contractor pursuant to the above-described liability provision for failure to make those health care expenditures.

This bill would additionally grant a joint labor-management cooperation committee standing to sue pursuant to the liability provision added by this bill.

Sponsors

Sponsors by party (alphabetical): Democratic 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. October 13, 2025Chaptered by Secretary of State. Chapter 774, Statutes of 2025.
2. October 13, 2025Approved by the Governor.
3. September 17, 2025Enrolled and presented to the Governor at 2 p.m.
4. September 9, 2025Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2743.) Ordered to engrossing and enrolling.
5. September 8, 2025In Senate. Concurrence in Assembly amendments pending.
6. September 8, 2025Read third time. Passed. (Ayes 79. Noes 0. Page 3007.) Ordered to the Senate.
7. September 3, 2025Read second time. Ordered to third reading.
8. September 2, 2025Read second time and amended. Ordered to second reading.
9. August 29, 2025From committee: Do pass as amended. (Ayes 11. Noes 0.) (August 29).
10. August 20, 2025August 20 set for first hearing. Placed on APPR. suspense file.
11. July 16, 2025From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 12. Noes 0.) (July 15). Re-referred to Com. on APPR.
12. July 10, 2025From committee with author's amendments. Read second time and amended. Re-referred to Com. on JUD.