Protecting workers from dishonest construction contractors while not worsening California’s housing crisis are not mutually exclusive goals. Unfortunately, Assemblyman Tony Thurmond and the sponsors of AB 1701 would have you incorrectly believe they are.

As written, AB 1701 makes innocent contractors liable for dishonest sub-contractors actions for which they have no oversight or control.   If a sub-contractor stiffs its workers, this bill would require homebuilders to pay twice for labor. Meanwhile, the bill does nothing to punish or hold the bad actor accountable for failing to pay their employees. Despite numerous requests to negotiate reasonable amendments, the sponsors and author refused to consider alternatives.

Instead the union sponsors claim builders are indifferent to workers being paid. This is simply false.

Our industry agrees that workers should be paid for the work they perform. We have tried to work with the sponsors and Assemblyman Thurmond to ensure a measure that protects workers, while not wreaking havoc on innocent companies and making California’s housing crisis even worse through increased costs. Make no mistake, AB 1701 – even with the amendments we had requested– will increase housing costs.

We had proposed three simple amendments to protect workers and housing affordability.

  1. Exhaustion of remedies: In public works, the Labor Commissioner already pursues enforcement actions after exhausting reasonable remedies against the subcontractor before going after the general contractor. The author and sponsor maintain that the commissioner will, on the natural, proceed in this manner. If that’s the truth: then why did they refuse to put it in the bill.
  2. Penalties: The sponsors have stated this bill is not intended to penalize good actors. Yet, language remains in the bill that leaves good-acting general contractors at risk to the possibility of being assessed penalties and liquidated damages for the actions of the subcontractor.
  3. Statute of Limitations: The bill allows claims to be filed possibly more than 20 years after the subcontractor has been paid and the project finished. Workers immediately know when they haven’t been paid, and it is in the best interest of the worker that immediate notice is made. Imposing a one-year deadline to file a claim would have been reasonable and acceptable.

This would have been a path forward to protect workers and protect housing affordability. And, sponsors cannot falsely claim that opponents of AB 1701 – which include affordable housing advocates, minority businesses, local elected officials and business organizations– support ripping off workers. This type of rhetoric is untrue and unhelpful to the serious debate on how to address California’s housing crisis while ensuring that workers get paid.

We strongly urge the Assembly to reject AB 1701 as written so that California does not needlessly drive up housing costs to the detriment of everyone else.