Menu
Home>Levelset Community>Legal Help>We were hired by a sub contractor to do a job for an state university. In order for the contractors and subcontractor that hired us, we had to provide certified payroll to the university. The subcontractor was paid. The subcontractor has not paid us and now he is asking for certified payroll. We don't believe that he is entitled to it, but we don't mind providing it , if he pays us . We want to use it a leverage to be paid. We just need to confirm if he is legally entitled to our certified payroll.

We were hired by a sub contractor to do a job for an state university. In order for the contractors and subcontractor that hired us, we had to provide certified payroll to the university. The subcontractor was paid. The subcontractor has not paid us and now he is asking for certified payroll. We don't believe that he is entitled to it, but we don't mind providing it , if he pays us . We want to use it a leverage to be paid. We just need to confirm if he is legally entitled to our certified payroll.

CaliforniaPayment Disputes

We were hired by a sub contractor to do a job for an state university. In order for the contractors and subcontractor that hired us, we had to provide certified payroll to the university. The subcontractor was paid. The subcontractor has not paid us and now he is asking for certified payroll. We don't believe that he is entitled to it, but we don't mind providing it , if he pays us . We want to use it a leverage to be paid. We just need to confirm if he is legally entitled to our certified payroll.

1 reply

Oct 2, 2018
Pursuant to a relatively recent California law, GCs are now liable for wages and other financial obligations of the subcontractors all the way down the project chain. One of the offshoots of this obligation is that the direct contractor can request certified payroll records from subcontractors, sub-subcontractors, and on down. While it is explicitly allowed for the direct contractor to skip levels and request payroll records from sub-subs, it is not specifically contemplated that a sub can make the request itself. Note, however, that subcontractors are obligated to maintain certified payroll records and make them available upon the request of certain parties, including 1) their employee, 2) the party awarding the contract, 3) the Division of Labor Standards Enforcement, and 4) the public (through 2 or 3, above).

The meat of the issue is really for what purpose your sub wants the records. If it is to gain information such they can be confident in avoiding potential claims on the project, there may be other ways to provide the desired safeguards and to prompt payment.

Additionally, California provides specific times by which payment must be made (absent other agreements to the contrary). The Cal. Bus. & Prof. Code Section § 7108.5, specifically, states that:

"(a) A prime contractor or subcontractor shall pay to any subcontractor, not later than seven days after receipt of each progress payment, unless otherwise agreed to in writing, the respective amounts allowed the contractor on account of the work performed by the subcontractors, to the extent of each subcontractor’ s interest therein."

So, if a subcontractor has been paid, they must make payment to their subcontractors for the related work within 7 days - unless there is a specific written agreement with the sub-sub at issue stating otherwise.

In any event, it is always good for construction participants to get in the practice of talking things out. Good and open communication can short-circuit many payment dispute or issues and get everybody on the same page and moving forward.
0 likes

Add your answer or comment

Not the answer you were looking for? Check out other Payment Disputes topics or ask your own question