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Conferees continuing concerns: SB 838 – Wage Payment
Several bills have passed this year relating to Wage Theft.  The construction industry has not opposed these bills yet now has MAJOR concerns with SB 838 as reported from the Conferees:  
 
  • GC’s are liable if “they should have known” about lack of wage payment
  • Will just add to the cost of every building with additional insurance, bonding and will create un-necessary compliance costs.
  • Push out small businesses from subcontract work and create significant uncertainty for employees.
     
SB 838, as passed by the House is much more troubling.  It will now require a General Contractor (GC) to act as the employer of record for all workers on the project, regardless of who hired them (Specialty subcontractor (Subs) or subcontractors of specialty contractors).  It also makes GC’s liable if they “should have known” about non payment of wages by another firm working on the job.
 
  1. This Bill is contrary to the well-established federal FLSA law as to liability for subcontractor employees and would cause great confusion to firms and employees.
    A)  The joint-employer standards under a variety of federal statutes are used to determine when two or more entities are jointly responsible for the terms and conditions of employment over the same group of employees. These terms and conditions include, but are not limited to, having the ability to hire, fire, discipline, supervise, or direct employees.
-Will the GC now have the power to fire & discipline subcontractor’s employees as a result of this bill?
-Who will the employee go to file supervisory complaints? 
 
  • Joint employers are mutually liable for any violations of federal statutes when either entity commits violations with respect to those employees. Joint-employer status therefore results in significant changes to an employer’s liabilities and responsibilities under the law.
  • Generally speaking, we refer to the joint employer standard in the context of the National Labor Relations Act (NLRA). However, the Fair Labor Standards Act (FLSA) and Equal Employment Opportunity Act (EEOA) also have joint employer standards too.

    B)The joint-employer standard under the National Labor Relations Act (NLRA) include, but are not limited to, having the ability to hire, fire, discipline, supervise, or direct employees.
             a.  Joint employers are responsible for bargaining with any union representing the joint-employees and are mutually liable for any violations of the NLRA either entity commits with respect to those employees.
             b.  Requiring GCs to now join the negotiations and enter bargaining with unions of subcontractors will delay construction starts
     
We ask you to OPPOSE a confusing and complicated SB 838.
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