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Legislation holds GCs liable for specialty contractors’ unpaid wages and fringes

The Legislature is currently considering legislation that would make a general contractor liable for any unpaid wages and fringes of specialty contractors on all private construction projects.  The bills are SSB 1395 and SB 5565.

AGC is strongly opposed to this measure.  Recently, two AGC members traveled to Olympia to testify against it before the Senate Labor and Commerce Committee.

“We are an ESOP—Employee Stock Ownership Plan company—100% employee owned,” said Dawn Stephens, CFO of Charter Construction and AGC second vice president. “Every decision that effects our company effects our people. I see this bill literally taking money from my employee’s retirement funds to foot the bill for someone else.”

Troy Stedman, president and CEO of Abbott Construction and member of AGC’s Government Affairs Committee, described for the Committee a situation experienced by Abbott in California, where a version of this bill is in place.  “Within the past few years, our Southern California business unit was working with a highly respected concrete subcontractor who had been in business for over 75 years,” Stedman said.  “Midway through those projects, the subcontractor notified us that they were insolvent and closing their doors. Shortly thereafter, I was personally contacted by a union pension-fund representative who informed me that the subject contractor had not contributed to the pension fund for multiple months. The pension fund subsequently filed liens against the two hospital projects, and the liens had to be cured. The impact this caused was monumental.  Due to the similar law in California, Abbott had to pay over $750,000 to the union pension fund.  This was fully at Abbott’s expense and was essentially paying twice for the union pension benefit, that we previously paid to the subcontractor.”

SB 5565 has not been moved out of the Senate Labor and Commerce Committee.  SHB 1395, however, could receive a vote on the House floor at any time.  If they haven’t yet, AGC members are urged to contact their legislators about this bill; they can easily do so via AGC’s action alert system.

For questions or comments, contact AGC Chief Lobbyist Jerry VanderWood, 360-352-5000.

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