Liability for Unpaid Wages
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Liability for Unpaid Wages

If associations hire unlicensed contractors, they could be liable for wage and hour claims filed by employees of the contractor.

In a 2009 case involving a general contractor and its subcontractors, associations who hire unlicensed contractors can be deemed a "general contractor" and the unlicensed contractors as "subcontractors." This means that any unpaid workers will be considered employees of the association and the association will be liable for paying those workers, even it the association already paid the contractor. (Sanders Construction v. Cerda (2009) 175 Cal.App.4th 430.)

Verify Status. Boards should verify each contractor's license with the Contractors State License Board. In addition it should get proof of insurance. Boards should also add a provision to their contracts requiring contractors to indemnify the association for any wage and hour claims by its employees.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC