Researcher: JM Page 1 5/4/24
OLR Bill Analysis
sSB 409 (File 296, as amended by Senate "A")*
AN ACT CONCERNING WAGE THEFT RESPONSIBILITY.
SUMMARY
Under the existing wage claim law, an employee can sue an employer
for failing to pay wages or fringe benefits (unpaid wages) and may be
awarded up to twice their unpaid wages as well as any related costs and
attorney’s fees (CGS § 31-72). For construction contracts executed on or
after October 1, 2024, this bill makes a construction contractor liable for
the unpaid wages owed by one of the contractor’s subcontractors in
these lawsuits. The bill applies to debt incurred by a subcontractor at
any tier acting under, by, or for the contractor or the contractor’s
subcontractors.
Under the bill, an employee who performed work under a
construction contract or a labor organization may bring a civil action
against the subcontractor, the contractor, or both if the subcontractor
fails to pay the employee.
Under the bill, a construction contract, with some exceptions, is any
(1) contract entered into for construction, renovation, or rehabilitation,
including improvements to real property that are associated with any of
this work, or (2) subcontract for construction, renovation, or
rehabilitation between an owner and a contractor, a contractor and a
subcontractor, or a subcontractor and another subcontractor.
*Senate Amendment “A” strikes § 2 of the underlying bill, which
required subcontractors to provide certain payroll information to either
a contractor or contractor’s subcontractor upon request.
EFFECTIVE DATE: October 1, 2024
§ 1 — CONTRACTOR LIABLE FO R SUBCONTRACTOR’S WA GE
DEBT 2024SB-00409-R01-BA.DOCX
Researcher: JM Page 2 5/4/24
For contracts executed on or after October 1, 2024, the bill makes a
construction contractor liable for the unpaid wages owed by one of their
subcontractors. It applies to any employee whose labor is included in a
construction contract of (1) any subcontractor in a direct contractual
relationship with the contractor, or (2) any subcontractor of a
subcontractor. The bill covers wages that are compensation for labor or
services rendered by an employee regardless of how they are
determined (e.g., a time, commission, or other basis).
The bill does not apply to (1) public works (i.e., prevailing wage)
contracts or any contract entered into with this state, any other state, or
the United States (CGS § 31-53) or (2) a home improvement contract for
the construction, renovation, or rehabilitation of (a) an owner-occupied
residence or (b) a one-family or two-family dwelling unit, except when
the contract is for the construction of more than 15 one-family or two-
family dwelling units at one site.
Definitions (§ 1(a))
The bill also includes the following definitions:
1. A “contractor” is any person, partnership, company, or other
entity, including a construction manager, general or prime
contractor, joint venture, or any combination of these, that enters
into a construction contract with an owner.
2. An “owner” is any person, partnership, company, or other
business entity that is the owner of record or lessee of real
property where the construction work under the construction
contract will be performed.
3. A “subcontractor” is any person, partnership, company, or other
entity that is a party to a contract with (1) a contractor or (2)
another party who has a separate contract with a contractor; or
that performs work, at any tier, for the contractor’s construction
contract with an owner, whether or not the subcontractor has a
direct contract with the contractor. 2024SB-00409-R01-BA.DOCX
Researcher: JM Page 3 5/4/24
Permitted Contractor Protections and Prohibited Provisions (§
1(c))
The bill (1) allows a contractor to include in each subcontract a
remedy for any liability created by a subcontractor’s nonpayment of
wages, provided it does not (1) interfere with an employee’s right to take
action to collect unpaid wages or (2) waive or release the contractor from
any liability assigned under the bill.
Also, the bill prohibits any provision that waives or releases the
contractor’s liability from being enforceable.
§ 2 — ENFORCEMENT
Under the bill, an employee who performed work under a
construction contract or a labor organization may bring a civil action for
any unpaid wages against the subcontractor, the contractor, or both.
At least 10 days before bringing a civil action, the employee must
provide notice to the contractor of an alleged violation by the
subcontractor. The notice must describe the general nature of the
violation.
This notice requirement does not apply if the employee has
previously given notice to a contractor of either the same violation or a
prior violation by the same subcontractor. The bill also states the notice
provided to a contractor does not limit their liability or prevent
amending an action to encompass additional employees of the
subcontractor.
COMMITTEE ACTION
Labor and Public Employees Committee
Joint Favorable Substitute
Yea 8 Nay 4 (03/19/2024)
Judiciary Committee
Joint Favorable
Yea 24 Nay 11 (04/22/2024)