What should a subcontractor know?
On October 8th, 2017 the California State legislature passed bill AB 1223 (Caballero D). This bill went into effect on January 1st, 2018 and imposes specific requirements for state agencies regarding payment of construction contracts. This new bill requires within 10 days of payment, any state agency that runs a website must post the date the payment was made, the name of the company or contractor, the amount of the payment, and/or the payment application number or other identifying number. Contracts under $25,000 would be exempt from this new provision. Learn more about this new law and others refer to Capitol Track .
Why does this matter?
If a general contractor fails to pay a subcontractor on time, California has prompt payment laws that provide remedies for subcontractors to collect due payment. If payment has not been made within the required timely manner, there may be a penalty which is payable to these subcontractors. This penalty may be in the amount of 2% of the total due per month for every month they are not paid. This new law is useful because it gives subcontractors the ability to enforce the prompt payment laws by providing accurate information regarding when the general contractor was paid. With this additional information it may create an opportunity to pursue past due payments in a space where the information needed to provide address that discrepancy may easily be found. For more information like this, follow our blog and keep up to date with contracting news important to YOU.