Business, Labor Groups Lobby Governor On Subcontractor Liability Bill

California Governor Jerry Brown doesn’t have many big legislative fights left to resolve, but one is a bill on his desk that would make large employers - those with 25 or more employees - liable when their subcontractors mistreat workers. It's a classic labor-business battle.

Caitlin Vega with the California Labor Federation argues that some companies are using subcontractors to shield themselves from responsibility for wage theft or workers compensation violations.

“When you, a company, are bringing workers onto your work site, you should have some obligation to make sure that those workers get paid and that they have a safe workplace – whether you’re hiring them directly or whether you’re using a third-party contractor,” Vega says. 

But Bill Dombrowski with the California Retailers Association says it’s “crazy” to make an employer liable for a contractor.

“I may know this guy really well, but what if he turns out to be a shady operator and he fooled me? I’m all of a sudden on the hook for millions of dollars. So what it does is put a tremendous stop sign up to an employer,” Dombrowski says.

The governor has until next Tuesday to sign or veto the bill. His Department of Finance announced its opposition to the bill earlier this year.