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 Bill Text - SB-597 Labor-related liabilities: direct contractor and subcontractor.

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 |Add To My Favorites |Track Bill | Version: 10/13/25 - Chaptered
 09/12/25 - Enrolled
 09/02/25 - Amended Assembly
 07/10/25 - Amended Assembly
 06/27/25 - Amended Assembly
 03/28/25 - Amended Senate
 02/20/25 - Introduced

 SB-597 Labor-related liabilities: direct contractor and subcontractor.(2025-2026)

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 Date Published: 10/14/2025 09:00 PM

SB597:v93#DOCUMENTBill Start

 Senate Bill

 No. 597

 CHAPTER 774

 An act to amend Sections 65912.131, 65913.4, and 65913.16 of the Government Code, and to amend Section 218.8 of, and to add Section 218.9 to, the Labor Code, relating to employment. 

 [
 Approved by

 Governor
 October 13, 2025.

 Filed with

 Secretary of State
 October 13, 2025.
 ]

LEGISLATIVE COUNSEL'S DIGEST

SB 597, Cortese.
 Labor-related liabilities: direct contractor and subcontractor.

Existing law requires, for contracts entered into on or after January 1, 2022, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, to assume, and be liable for, any debt owed to a wage claimant or third party on the wage claimant’s behalf, incurred by a subcontractor at any tier acting under, by, or for the direct contractor for the wage claimant’s performance of labor included in the subject of the contract between the direct contractor and the owner. Existing law defines “direct contractor” for this purpose to mean a contractor that has a direct contractual relationship with an owner.

This bill would apply the above-described provision to contracts entered into on or after January 1, 2022, and before January 1, 2026. The bill would
 instead require, for contracts entered into on or after January 1, 2026, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, to assume, and be liable for, any indebtedness for the performance of labor, as specified. The bill would prohibit a direct contractor from being held liable for the indebtedness with respect to fringe or other benefit contributions if they make contribution payments by joint check, as specified. The bill would define “direct contractor” for this purpose to mean a contractor that has a direct contractual relationship with an owner or any other person or entity engaging contractors or subcontractors, as specified, on behalf of the owner.

Existing law provides for a streamlined, ministerial approval process or use by right
 for certain housing developments that meet specified requirements. Existing law requires these developments to meet specified labor standards, including, among other things, making health care expenditures for each employee, as specified. Existing law grants a joint labor-management cooperation committee standing to sue a construction contractor pursuant to the above-described liability provision for failure to make those health care expenditures.

This bill would additionally grant a joint labor-management cooperation committee standing to sue pursuant to the liability provision added by this bill.

Digest Key

 Vote:
 MAJORITY 
 Appropriation:
 NO 
 Fiscal Committee:
 YES 
 Local Program:
 NO 

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 65912.131 of the Government Code is amended to read:

65912.131.

 In addition to the requirements of Section 65912.130, a development of 50 or more housing units approved by a local government pursuant to Article 2 (commencing with Section 65912.110) or Article 3 (commencing with Section 65912.120) shall meet all of the following labor standards:

(a) The development proponent shall require in contracts with construction contractors and shall certify to the local government that each contractor of any tier who will employ construction craft employees or will let subcontracts for at least 1,000 hours shall satisfy the requirements in subdivisions (b) and (c). A construction contractor is deemed in compliance with subdivisions (b) and (c) if it is signatory to a valid
 collective bargaining agreement that requires utilization of registered apprentices and expenditures on health care for employees and dependents.

(b) A contractor with construction craft employees shall either pa