With the new year right around the corner, it is important contractors are aware of the new laws taking effect that will impact their industry. This post covers what contractors need to know beginning January 1, 2022. 

Minimum Wage Increase
As of January 1, 2022, the California minimum wage will be $15 per hour for employers with 26 or more employees and $14 per hour for those with 25 or fewer employees.

As of January 30, 2022, the federal contractor minimum wage will be $15 per hour. 

AB 1023 - Electronic Records for Contractors and Subcontractors

This piece of legislation pertains to Labor Code Section 1771.4, which stipulates that contractors must submit monthly payroll records at least once every 30 days of work being performed on a project, and within 30 days after the final day of work has concluded. It also requires that both contractors and subcontractors furnish certain records electronically, in a manner outlined on the Labor Commissioner’s website

Failure to submit payroll records can result in a fine of $100 per day, up to a total of $5,000 per project. Any funds received as a result of fines will be deposited to the State Public Works Enforcement Fund. Contractors and subcontractors will be allowed a 14 day grace period for late record submission before penalties will be applied.   

AB 1124 - Solar Energy Systems
Solar has been at the center of attention for contractors and the Contractors State License Board throughout 2021.
For pretext on AB 1124, visit: https://www.ccisbonds.com/content/127-cslb-battery-energy-storage-systems-report-released.htm

AB 1124 revises the definition of a solar energy system to mean one of the following: 

  • “Any solar collector or other solar energy device whose primary purpose is to provide for the collection, storage, and distribution of solar energy for space heating, space cooling, electric generation, or water heating, or a structural design feature of a building, including a design feature whose primary purpose is to provide for the collection, storage, and distribution of solar energy for electricity generation, space heating or cooling, or for water heating.” - https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB1124
  • A device with features designed to serve one or more utility retail customers on the same, adjacent, or contiguous property, that is not designed for procurement of electricity by an electric utility. 

AB 1561 - Classification of Independent Contractors
This bill extends the sunset date from January 1, 2022 to January 1, 2025 for how the State determines if an individual is an employee or subcontractor of a general contractor.

SB 727 - Direct Contractor Liability
Labor Code Section 218.7 will now specifically apply to contracts entered between January 1, 2018 and December 31, 2021, thanks to the passing of SB 727. All contacts entered into on or after January 1, 2022 will be subject to Labor Code Section 218.8.

Labor Code Section 218.8 states that a contractor on a private works project will continue to be liable for any debt owed to a subcontractor’s wage claim. The change being that a contractor’s liability will now also extend to liquidated damages and penalties IF the contractor was aware of a subcontractor’s failure to pay a specified wage or benefit owed by a subcontractor to a worker performing labor on said project.

Contractors should keep in mind that while there are not too many new laws that will impact the industry starting January 1, there are plenty in the pipeline that may get passed in 2022. This stresses the importance of staying up-to-date on industry news.

Check back monthly as we will post any updates on the legislation listed above.

For more CSLB related laws, visit: https://www.cslb.ca.gov/Resources/IndustryBulletins/2021/NewContractLaw.pdf.