Legal update for contractors and contracting companies - 2019 saw additions to some key hiring issues.


Haul Nuts takes the risk out of a couple of the requirements below, helping you stay focused on key parts of your project.


The first thing to determine when hiring is whether a worker is a sub-contractor an employee. In doing this, you must prove the following factors:

A – Is the worker free from control and direction under the contract and in fact?

B – Does the worker perform work outside the usual course of the hiring entity?

C – Is the worker customarily engaged in an independently established trade or business? “The most significant change in the standard is that some existing 1099 workers will no longer qualify as independent contractors. So the practice of hiring an ‘extra pair of hands’ contractor to deliver services is not allowed if they do not pass the basics above. ,



New Driver’s Test on Unsafe Unsecured Loads. Current law requires the Department of Motor Vehicles to administer a written test of those persons seeking driver’s licenses or certificates of renewal. This bill requires the department to include at least one question in at least 20% of the tests of an applicant’s knowledge and understanding that driving with an unsecured load is a violation of law and may create a severe traffic safety hazard for other motorists.

AB 1565 (Contractor Liability):  This new law took effect immediately as urgency legislation. It clarifies a new law enacted last year making certain direct contractors performing work in the state liable for unpaid wages by subcontractors.  The amendments to the law provide requirements that must be met in order for a direct contractor to withhold payments to a subcontractor for “disputed sums.”  In order to withhold payment, the contractor must specify in its contract with a subcontractor all items of information that will be requested of the subcontractor, such as payroll records and other information related to hours worked, etc

    Existing law requires that contractors be registered through the Department of Industrial Relation’s (DIR) Public Works Program  for state and local public works contracts entered into on or after April 1, 2015 if work is more than $25,000 or maintenance work is more than $15,000. The bill removes the April 1, 2015 requirement, requiring that direct contractors and subcontractors be registered through the DIR’s Public Works Program when a public works contract was entered.

The bill increases the civil penalties for OSHA violations determined “not to be of a serious nature” to a maximum of $12,741 (formerly $7,000) for each violation. The bill increases the civil penalties for willful or repeated OSHA violations to a maximum of $124,709 (formerly $70,000) for each violation but in no event less than $8,908.

AB 1565 – Effective September 19, 2018 The bill clarifies that contractors are only liable for unpaid wages, fringe, or other benefit payments or contributions, including interest owed. To withhold payments under Labor Code section 218.7, the direct contractor must specify in its subcontract the specific documents and information that a direct contractor will require the subcontractor to provide.

Bill 2334 tightens state reporting laws. Cal/OSHA will now have five years, rather than six months to issue citations to employers who fail to record injuries or deaths.

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