SB-597
Labor & Employment

Labor-related liabilities: direct contractor and subcontractor.

Engrossed
CA
2025-2026 Regular Session
0
0
Track

Key Takeaways

  • Expands direct contractor liability for subcontractor wage debts on private construction projects through 2026.
  • Requires contractors on large housing projects to provide healthcare benefits equivalent to Platinum-level plans.
  • Mandates monthly compliance reports and payroll documentation to ensure proper wage and benefit payments.
  • Establishes penalties up to $10,000 for contractors who fail to submit required reports or violate labor standards.

Summary

Senator Cortese's labor standards legislation extends direct contractor liability for worker compensation while creating new mechanisms to ensure healthcare coverage and prevailing wages in California's construction industry. The bill modifies existing law by requiring contractors to assume responsibility for subcontractor wage obligations through 2026, after which broader liability provisions take effect.

For contracts initiated before 2026, direct contractors must monitor subcontractor wage payments and take corrective action if violations occur. The legislation mandates that contractors review payroll records, retain funds when necessary, and obtain signed affidavits confirming proper compensation before issuing final payments. Joint labor-management committees gain standing to pursue claims for unpaid wages and benefits.

Starting in 2026, the bill expands contractor obligations to include all labor-related indebtedness while establishing a new system for healthcare contributions. Contractors can limit liability for fringe benefits by implementing joint payment procedures with trust funds and benefit programs. The measure preserves existing wage claim enforcement through the Labor Commissioner while adding provisions for civil actions by workers and labor organizations.

The legislation also strengthens labor standards for housing developments, particularly those seeking streamlined approval. Projects with 50 or more units must participate in approved apprenticeship programs and provide healthcare expenditures equivalent to platinum-level coverage. Monthly compliance reporting requirements and specific penalties for violations aim to ensure consistent enforcement of these new standards.

Key Dates

Next Step
Referred to the Assembly Standing Committee on Labor and Employment
Next Step
Assembly Committee
Referred to the Assembly Standing Committee on Labor and Employment
Hearing has not been scheduled yet
Assembly Labor And Employment Hearing
Assembly Committee
Assembly Labor And Employment Hearing
Do pass and be re-referred to the Committee on [Judiciary] with recommendation: To Consent Calendar
Vote on Senate Floor
Senate Floor
Vote on Senate Floor
Special Consent SB597 Cortese
Senate Appropriations Hearing
Senate Committee
Senate Appropriations Hearing
Do pass
Senate Appropriations Hearing
Senate Committee
Senate Appropriations Hearing
Placed on suspense file
Senate Judiciary Hearing
Senate Committee
Senate Judiciary Hearing
Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar
Senate Labor, Public Employment and Retirement Hearing
Senate Committee
Senate Labor, Public Employment and Retirement Hearing
Do pass, but first be re-referred to the Committee on [Judiciary]
Introduced
Senate Floor
Introduced
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Contacts

Profile
Ash KalraD
Assemblymember
Committee Member
Not Contacted
Not Contacted
Profile
Phillip ChenR
Assemblymember
Committee Member
Not Contacted
Not Contacted
Profile
Heath FloraR
Assemblymember
Committee Member
Not Contacted
Not Contacted
Profile
Alex LeeD
Assemblymember
Committee Member
Not Contacted
Not Contacted
Profile
Chris WardD
Assemblymember
Committee Member
Not Contacted
Not Contacted
0 of 8 row(s) selected.
Page 1 of 2
Select All Legislators
Profile
Ash KalraD
Assemblymember
Committee Member
Profile
Phillip ChenR
Assemblymember
Committee Member
Profile
Heath FloraR
Assemblymember
Committee Member
Profile
Alex LeeD
Assemblymember
Committee Member
Profile
Chris WardD
Assemblymember
Committee Member
Profile
Dave CorteseD
Senator
Bill Author
Profile
Liz OrtegaD
Assemblymember
Committee Member
Profile
Sade ElhawaryD
Assemblymember
Committee Member

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Dave Cortese
Dave CorteseD
California State Senator
40% progression
Bill has passed all readings in its first house and is ready to move to the other house (5/29/2025)

Latest Voting History

July 9, 2025
PASS
Assembly Committee
Assembly Labor And Employment Hearing
AyesNoesNVRTotalResult
7007PASS

Key Takeaways

  • Expands direct contractor liability for subcontractor wage debts on private construction projects through 2026.
  • Requires contractors on large housing projects to provide healthcare benefits equivalent to Platinum-level plans.
  • Mandates monthly compliance reports and payroll documentation to ensure proper wage and benefit payments.
  • Establishes penalties up to $10,000 for contractors who fail to submit required reports or violate labor standards.

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Dave Cortese
Dave CorteseD
California State Senator

Summary

Senator Cortese's labor standards legislation extends direct contractor liability for worker compensation while creating new mechanisms to ensure healthcare coverage and prevailing wages in California's construction industry. The bill modifies existing law by requiring contractors to assume responsibility for subcontractor wage obligations through 2026, after which broader liability provisions take effect.

For contracts initiated before 2026, direct contractors must monitor subcontractor wage payments and take corrective action if violations occur. The legislation mandates that contractors review payroll records, retain funds when necessary, and obtain signed affidavits confirming proper compensation before issuing final payments. Joint labor-management committees gain standing to pursue claims for unpaid wages and benefits.

Starting in 2026, the bill expands contractor obligations to include all labor-related indebtedness while establishing a new system for healthcare contributions. Contractors can limit liability for fringe benefits by implementing joint payment procedures with trust funds and benefit programs. The measure preserves existing wage claim enforcement through the Labor Commissioner while adding provisions for civil actions by workers and labor organizations.

The legislation also strengthens labor standards for housing developments, particularly those seeking streamlined approval. Projects with 50 or more units must participate in approved apprenticeship programs and provide healthcare expenditures equivalent to platinum-level coverage. Monthly compliance reporting requirements and specific penalties for violations aim to ensure consistent enforcement of these new standards.

40% progression
Bill has passed all readings in its first house and is ready to move to the other house (5/29/2025)

Key Dates

Next Step
Referred to the Assembly Standing Committee on Labor and Employment
Next Step
Assembly Committee
Referred to the Assembly Standing Committee on Labor and Employment
Hearing has not been scheduled yet
Assembly Labor And Employment Hearing
Assembly Committee
Assembly Labor And Employment Hearing
Do pass and be re-referred to the Committee on [Judiciary] with recommendation: To Consent Calendar
Vote on Senate Floor
Senate Floor
Vote on Senate Floor
Special Consent SB597 Cortese
Senate Appropriations Hearing
Senate Committee
Senate Appropriations Hearing
Do pass
Senate Appropriations Hearing
Senate Committee
Senate Appropriations Hearing
Placed on suspense file
Senate Judiciary Hearing
Senate Committee
Senate Judiciary Hearing
Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar
Senate Labor, Public Employment and Retirement Hearing
Senate Committee
Senate Labor, Public Employment and Retirement Hearing
Do pass, but first be re-referred to the Committee on [Judiciary]
Introduced
Senate Floor
Introduced
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Latest Voting History

July 9, 2025
PASS
Assembly Committee
Assembly Labor And Employment Hearing
AyesNoesNVRTotalResult
7007PASS

Contacts

Profile
Ash KalraD
Assemblymember
Committee Member
Not Contacted
Not Contacted
Profile
Phillip ChenR
Assemblymember
Committee Member
Not Contacted
Not Contacted
Profile
Heath FloraR
Assemblymember
Committee Member
Not Contacted
Not Contacted
Profile
Alex LeeD
Assemblymember
Committee Member
Not Contacted
Not Contacted
Profile
Chris WardD
Assemblymember
Committee Member
Not Contacted
Not Contacted
0 of 8 row(s) selected.
Page 1 of 2
Select All Legislators
Profile
Ash KalraD
Assemblymember
Committee Member
Profile
Phillip ChenR
Assemblymember
Committee Member
Profile
Heath FloraR
Assemblymember
Committee Member
Profile
Alex LeeD
Assemblymember
Committee Member
Profile
Chris WardD
Assemblymember
Committee Member
Profile
Dave CorteseD
Senator
Bill Author
Profile
Liz OrtegaD
Assemblymember
Committee Member
Profile
Sade ElhawaryD
Assemblymember
Committee Member