By: Bryant H. Byrnes, Esq.
With the start of a new year, contractors and fellow travels must be mindful of the new and revised laws affecting the construction industry. Admittedly this is pretty dry stuff, but I would recommend everyone take a minute to review this information. And sorry to say, but absolutely nothing got easier for you.
Workers’ Compensation Enforcement Law – Tough Love!
Effective January 1, 2011, the Contractors State License Board will be allowed to issue “stop work” orders to any contractor who fails to provide workers’ compensation insurance coverage for his or her employees. (Oddly, this law includes unlicensed contractors as well.) Failure to comply with the stop work order is considered a misdemeanor, and punishable by up to 60 days in jail and/or fines up to $10,000. Employees affected by the work stoppage would also be entitled to up to 10 days’ pay for lost time.
Stop work orders take effect immediately, but may be contested by submitting a written hearing request within 20 days of issuance of the stop work order.
So heads up on your workers’ compensation coverage. It is a understatement to say that being shut down will be catastrophic – particularly when most lapses in coverage are bonehead failures to take care of routine paperwork.
Mechanics’ Lien Changes.
Civil Code Sections 3084 and 3146 – I addressed this in a previous article but it bears repeating. The changes stipulate the definitions of “claim of lien” and “mechanics’ lien” are the same. It also requires that a Notice of Mechanics’ Lien be served on the owner and/or person believed to be the owner of the property or on the construction lender or original contractor, and that a “proof of service affidavit” to the above individual(s) be completed and signed by the person serving the Notice of Mechanics’ Lien.
Failure to serve the mechanics’ lien and confirm a proof of service affidavit will cause the mechanics’ lien to be void and unenforceable.
Practice pointer: Mechanics’ liens just became much more complicated. While you don’t necessarily need to talk to your attorney (although we would be delighted to hear from you), read the new requirements before you record your lien.
Jobsite Safety – More Tough Love!
AB 2774 – Starting now, if an employer has an injury in its workplace or even allegations of a serious hazard, the Division of Occupational Safety and Health (DOSH) have clearer rules to make its case. The purported core principle of the new law is that a hazard posing a risk of serious physical harm that is unacceptable by modern standards should be treated as a serious violation and penalized accordingly. Major fines, such as $25,000, imposed on employers are more likely to stick, and without reductions.
In a nutshell, it has just become easier for them to ding you – and for more money! Be proactive, preemptive, and keep those jobsites safe.
License Fees to Increase.
Effective July 1, 2011, a new license fee structure will apply to those renewing their licenses as well as new applicants. For a listing of the rate increases please the Board’s website www.cslb.ca.gov.
I won’t bore you with the Board’s blurb – that it is entirely funded from application, licensing, and renewal fees combined with fines and penalties…and on and on. Simply get out your checkbooks.
Where Is This Stuff?
These changes in the law are further explained in the 2011 edition of Contractors State License Board’s California Contractor’s License Law and Reference Book and also can be found on the Board’s website.
Bryant H. Byrnes, Esq. practices construction law in the San Francisco Bay Area and is counsel to the NARI Board of Directors. Questions? Please feel free to contact him by email at email@example.com.