Another job-killing bill, if it is ever adopted, recently passed out of our legislature’s Senate Labor and Industrial Relations Committee, which will impose new liabilities on innocent businesses.
AB 1897 imposes liability on any contracting entity for the contractor’s wage-and-hour violations, lack of workers’ compensation coverage, and/or failure to remit employee contributions, despite the lack of any evidence that the contracting entity controlled the working conditions or wages of the contractor’s employees.
As a part of the Labor Code, any violation of AB 1897 will trigger a potential representative action under the Labor Code Private Attorney General Act (PAGA), Labor Code Section 2699, et seq., thereby expanding the threat of onerous litigation against any third party that utilizes contractors as a part of its usual course of business.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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