Tracking the Trend: State-by-State Updates on Contractor Wage Responsibility

‍

Over the past two years, several states have enacted legislation that expands the responsibility of general contractors (GCs) for ensuring subcontractors and lower-tier subcontractors properly pay workers. While each law differs in scope, the trend is clear: lawmakers are placing greater accountability on GCs on both public and private projects to monitor labor compliance throughout the contracting chain.

‍

Here are a few notable examples:

‍

Oregon – SB 426: Effective January 1, 2026

‍

Oregon's SB 426 significantly expands wage liability by making prime contractors jointly and severally liable for unpaid wages and fringe benefits owed by subcontractors and lower-tier subcontractors on both public and private construction projects. The law also establishes specific recordkeeping and information-sharing requirements intended to improve labor compliance throughout the project lifecycle.

‍

Maryland – HB 174 (Updated by HB 1035): Effective Originally March 1, 2024, with clarifying updates issued through HB 1035 and Maryland Department of Labor guidance in late 2025.

‍

Maryland expanded prevailing wage requirements to certain underground gas and electric utility construction projects for investor-owned utilities. While certified payroll submission is not required, contractors remain responsible for paying prevailing wages and maintaining sufficient payroll records to demonstrate compliance if challenged or audited.

‍

Virginia – HB 238: Effective July 1, 2026

‍

Virginia's HB 238 expands wage payment liability by making general contractors responsible for unpaid wages owed by subcontractors on private construction projects. Workers may pursue wage claims directly against the general contractor, substantially increasing the importance of monitoring subcontractor payroll practices and documentation.

‍

Connecticut – Public Acts 26-12 & 26-17: Effective October 1, 2026, and January 1, 2027

‍

Connecticut's recently enacted Public Acts 26-12 and 26-17 strengthen worker wage protections by expanding contractor accountability for wage payment violations committed by subcontractors and lower-tier subcontractors. The legislation increases the legal exposure of general contractors while reinforcing enforcement mechanisms designed to improve labor compliance across all contracting tiers.

‍

Staying Ahead of Labor Wage Compliance Risk

‍

As more states shift labor compliance responsibility upstream, relying solely on contract language is becoming increasingly risky. Proactively monitoring weekly payroll documentation, validating wage compliance as payroll is submitted, and identifying missing or inconsistent information in real time can help contractors address issues before they become costly disputes or enforcement actions.

‍

Labor wage compliance systems, like Kaster, help general contractors centralize subcontractor payroll collection, continuously monitor labor wage compliance, document reviews and corrections, and maintain a complete audit trail. Rather than discovering wage issues months or years after a project is complete, contractors can identify and resolve potential violations as they occur, helping reduce risk while demonstrating a consistent, documented compliance process.

‍