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Contractors See New Laws in New Year

Tuesday, January 8, 2013

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Liability in California, payments in North Carolina, and employment requirements in Pennsylvania are just a few of the legalities that have shifted for U.S. contractors, under new state laws that took effect Jan. 1.

The American Subcontractors Association (ASA) recently provided information on several laws regarding subcontractors and contractors that kicked in with the start of 2013.

Flickr / billjacobus1

Contractors will be subject to new laws in several states, according to ASA.

California: Liability, Licensing

In California, Senate Bill No. 474 establishes a liability standard that holds each party responsible only for the damage it causes and its defense costs for that damage. The new law limits contractors' rights to require by contract that subcontractors and suppliers under them provide a defense for the contractor's active negligence. The ASA of California-supported law applies to public and commercial construction contracts entered into, on, or after Jan. 1, 2013.

Also in California, new law A.B. 2237 requires construction management consultants on residential projects to be licensed. The bill defines "consultant" to include a person who provides a bid, or who arranges for and sets up work schedules and maintains oversight of a construction project.

IA, MA, NC: Liens and Contracts

Meanwhile, in Iowa,  a new law (Chapter 1105) establishes a state construction registry for mechanic's liens and preliminary notices and notices for residential work. The law also requires subcontractors on residential construction to post preliminary notices to the database.

Massachusetts passed "An Act to Improve the Administration of State Government and Finance" (Chapter 165), which states: "No order for, or claim for payment for, extra work or materials, furnishings or equipment, in addition to an existing contract for the construction or repair of any structure or of public works of any nature whatsoever or for equipment or furnishings, shall be approved by any official, board, department or commission on behalf of the commonwealth until one week after notice of intention to act upon such order or claim shall have been filed by him or it with the comptroller..."

North Carolina's House Bill 1052 makes various amendments to mechanics lien and payment bond laws.

PA, TN, NC: E-Verify Expansion

Pennsylvania passed a Public Works Employment Verification Act (P.L. 1086, No. 127, Cl. 43) requiring all subcontractors and contractors on state and local public construction projects to use the federal E-Verify program to verify employment eligibility and to certify compliance with state immigration regulations. Penalties range from a warning letter to debarment from public projects to $1,000-per-violation penalties.

E-Verify banner

As of Jan. 1, three additional states require use of the federal E-Verify program.

Tennessee's House Bill 1378 requires employers with more than six employees to use the E-Verify program or maintain documentation of legal residency or valid U.S. work authorization for all employees hired. This requirement has been phased in since Jan. 1, 2012, when it applied to employers with over 500 employees.

North Carolina also passed House Bill 36, which requires employers with over 100 employees to use the federal government's E-Verify program to verify the work authorization of newly hired employees.

About ASA

ASA is dedicated to improving the business environment in the construction industry. It provides "Professional Standards of Practice for Construction Subcontractors" and believes in ethical and equitable business practices, quality construction, a safe and healthy work environment, integrity, and membership diversity.


Tagged categories: American Subcontractors Association (ASA); Contractors; Laws and litigation; Subcontractors

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