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    SB-597
    Labor & Employment

    Labor-related liabilities: direct contractor and subcontractor.

    Engrossed
    CA
    ∙
    2025-2026 Regular Session
    0
    0
    Track
    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
    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

    View History
    May 29, 2025
    PASS
    Senate Floor
    Vote on Senate Floor
    AyesNoesNVRTotalResult
    380240PASS

    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
    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

    View History
    May 29, 2025
    PASS
    Senate Floor
    Vote on Senate Floor
    AyesNoesNVRTotalResult
    380240PASS

    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