General contractors hiring subcontractors in DC would do well to heed one piece of advice: know thy subs.
“Know how they operate and how they treat their employees,” said Julie Reddig, an employment attorney at Lerch, Early & Brewer in Bethesda, Maryland. “Do they play by the rules or are they known to cut corners? Remember, you may be left holding the bag if they aren’t the type to comply with employment laws.”
Reddig was joined by Lerch Early employment attorneys Michael Neary and Rick Vernon on a panel at the AGC seminar “Presumed Guilty: What Employers Need to Know About the DC Wage Theft Prevention Act” on February 14 at the NRECA Conference Center in Arlington, Virginia. Michael Youngblut, VP in the national practice of M&T Insurance Agency, also presented at the event.
When it comes to litigation, DC wage theft cases are often toughest on the general contractor, Neary said.
“If you get sued as a general contractor for a wage theft violation, you are not going to have any records because the person suing is your subcontractor’s employee,” he said. “You are going to be strictly liable under the statute as the general contractor, and the subcontractor likely won’t have the money to indemnify you.”
Vernon calls the Act the “gargoyle law” because you “see it and want to scream [and] it’s not really clear why it’s there.”
Reddig added the law is confusing for multiple reasons:
- It was amended twice before going into effect in 2015, and has since been amended four additional times.
- It revises four existing DC employment laws: the Wage Payment and Collection Law, the Living Wage Act, the Minimum Wage Revision Act, and the Accrued Safe and Sick Leave Act.
- It adjusts penalties for law violations, creates new processes, and requires new notice and posting obligations.
However, in part because the law touches so many situations, general contractors cannot ignore it.
“General contractors and higher-tier subcontractors cannot stick their heads in the sand and think it will be OK,” Reddig said. “The key is to devise a strategy to minimize the risk of a claim.”
For more information on the issues surrounding the DC Wage Theft Prevention Act, including strategies for minimizing the risk of claims, you can reach Neary at [email protected], Reddig at [email protected], and Youngblut at [email protected].
This article originally appeared in the March 2017 edition of Washington Contractor Magazine.