Virginia 2022 Regular Session

Virginia House Bill HB881

Introduced
1/12/22  

Caption

Contracts; payment clauses to be included, right to payment of subcontractors.

Impact

A significant aspect of HB881 is its requirement for contractors to notify subcontractors in writing about any intention to withhold payments, stating the reasons for such withholding. This provision seeks to establish transparency and communication between contractors and subcontractors, potentially reducing disputes related to payments. Moreover, the bill outlines the obligation for contractors to pay subcontractors within seven days of receipt of payment from the state, with provisions for interest on unpaid amounts, thus incentivizing prompt payment practices.

Overall

As with many legislative efforts, HB881 has sparked discussions on the balance between protecting subcontractor rights and ensuring that the construction industry can operate efficiently. The requirement for joint and several liability for wage debts could be a double-edged sword—the aim is to protect workers' rights, but it may also lead to an increase in litigation or disputes over wage claims, especially in larger projects where multiple subcontractors are involved.

Summary

House Bill 881 focuses on enhancing the payment structure within construction contracts, mandating the inclusion of specific payment clauses aimed at protecting subcontractors. The bill stipulates that any contract awarded by a state agency or local government must contain a payment clause ensuring that contractors are individually liable for the total amount owed to their subcontractors. This move is intended to ensure timely payments to subcontractors, thereby promoting fair compensation for their work.

Contention

Despite the positive intent behind HB881, there could be concerns regarding its implementation and how it may impact the relationships between contractors and subcontractors. Some industry stakeholders may fear that the stringent payment requirements could lead to reluctance among contractors to engage subcontractors, especially smaller firms, due to the increased liability. Additionally, large contractors might argue that such regulations could create a cumbersome administrative burden, particularly in managing communications and compliance with the new rules across multiple projects.

Companion Bills

No companion bills found.

Previously Filed As

VA SB550

Contracts; payment clauses, right to payment of subcontractors.

VA HB2500

Construction contracts; payment clauses to be included in certain contracts.

VA SB1313

Construction contracts; payment clauses to be included in certain contracts.

VA SB0451

Construction: contracts; prompt payment law; establish for contractors to pay subcontractors and suppliers in a timely manner. Creates new act.

VA HB4837

Construction: contracts; prompt payment law; establish for contractors to pay subcontractors and suppliers in a timely manner. Creates new act.

VA HB3448

WAGE PAYMENT-CONTRACTORS

VA SB1136

Public works; contracts; payments

VA SB00097

An Act Creating A Civil Action To Allow Contractors To Recover Unpaid Employee Pension Obligations From Subcontractors.

VA HB05685

An Act Prohibiting Pay-if-paid Clauses In Construction Contracts And Ensuring Timely Payment Of Construction Subcontractors And Suppliers.

VA AB2696

Labor-related liabilities: direct contractor and subcontractor.

Similar Bills

VA HB2500

Construction contracts; payment clauses to be included in certain contracts.

VA SB550

Contracts; payment clauses, right to payment of subcontractors.

VA SB1313

Construction contracts; payment clauses to be included in certain contracts.

VA HB889

Nonpayment of wages; defense of contractor.

VA SB538

Nonpayment of wages; defense of contractor.