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H 7961Labor Relations

Labor and Labor Relations - Payment of Wages

Makes general contractors financially liable if their subcontractors fail to pay construction workers, effective January 2027.

Held for study
Population
Affected
15
Introduced Feb 27, 2026Committee House Labor

Plain-English Summary

This bill creates a law that holds general construction contractors responsible for unpaid wages owed to workers hired by their subcontractors. If a subcontractor fails to pay their employees for work done on a project, the general contractor can be held liable for those wages and benefits. To make a claim, the contractor must be notified within 45 days of the wage theft. The contractor's liability is limited to a 120-day period. This law applies to construction contracts starting on or after January 1, 2027.

For younger readers

Imagine you are hired to build a big Lego castle. The main boss hires a helper to manage the blocks, and that helper hires you. If the helper promises to give you candy for your work but then breaks that promise, this new rule says the main boss has to give you the candy instead. You have to tell the main boss quickly that you didn't get your candy. This rule helps make sure workers get paid for their hard work, even if the person directly in charge of them tries to be unfair.

Who & Where It Applies

Impacted groups
Construction ContractorsSubcontractorsConstruction WorkersLabor UnionsReal Estate Developers
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Protects vulnerable workers from wage theft by ensuring deep-pocketed general contractors are ultimately responsible for payment, preventing subcontractors from disappearing to avoid paying wages.
  • Strengthens the social safety net by empowering labor organizations and collective bargaining agents to file complaints on behalf of workers, ensuring better representation for the disadvantaged.
  • Incentivizes general contractors to hire ethical, law-abiding subcontractors, thereby raising labor standards and promoting systemic reform within the construction industry.
  • The strict 45-day notice requirement and 120-day liability cap may prevent many exploited workers from recovering stolen wages if they do not act immediately.
  • Allows the protections of this bill to be waived in collective bargaining agreements, potentially creating a loophole where workers' rights are traded away during negotiations.
  • Explicitly limits remedies to civil and administrative actions, removing the threat of criminal prosecution for wage theft which some progressives view as necessary for true justice.
For Conservatives
  • Includes specific time limits (45-day notice and 120-day liability cap) which provide businesses with predictability and protects them from open-ended lawsuits years after a project is finished.
  • Preserves the right of contractors to sue subcontractors for reimbursement, upholding the principle that the party actually at fault should ultimately pay.
  • Respects the freedom of contract by allowing these provisions to be waived through collective bargaining agreements between unions and employers.
  • Unjustly holds a business liable for the financial failures or misconduct of a completely separate legal entity (the subcontractor), undermining corporate independence.
  • Increases the regulatory burden and financial risk on construction companies, which will likely drive up the cost of construction and housing.
  • Expands government overreach by authorizing the Attorney General to intervene in private contract disputes and wage claims.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 87 additions

SECTION 1. Chapter 28-14 of the General Laws entitled "Payment of Wages" is hereby amended by adding thereto the following section: 28-14-32. Construction industry paycheck recovery.

(a) Definitions As used in this section:

(1) "Benefits" means any and all benefits, including paid vacations, holidays, sick leave, employer contributions and reimbursements to health insurance and/or any other retirement benefits, and any other similar benefits that are incidents of employment.

(2) "Construction" means the alteration, building, maintenance, reconstruction, moving or demolition of any building or structure, not including design services, or any appurtenances connected or attached to such buildings or structures.

(3) "Construction contract" means a written or oral agreement for construction.

(4) "Contractor" means any person, firm, partnership, corporation, association, company, organization or other entity, including a construction manager, general or prime contractor, joint venture, or any combination thereof, which enters into a construction contract for construction services with an owner.

(5) "Notice" means a written communication mailed, postage prepaid, or hand delivered to the contractor’s place of business, registered agent, officer, director, worksite manager or a supervisor, or any other individual identified by the contractor as its representative. Notice shall include, if known and available, the name of the employer, the amount of the claim or an explanation of any data needed to calculate the amount of the claim and the dates that the claimant worked.

(6) "Owner" means any person, firm, partnership, corporation, company, association or other organization or other entity, or a combination of any thereof, (with an ownership interest, whether the interest or estate is in fee, as vendee under a contract to purchase, as lessee or another interest or estate less than fee) that causes a building, structure or improvement, new or existing, to be constructed, altered, repaired, maintained, moved or demolished or that causes land to be excavated or otherwise developed or improved. "Owner" includes successors interest of the owner and agents of the owner acting within their authority or on the owner’s behalf. An owner shall not be subject to liability under subsection (b) of this section unless the owner is a contractor or subcontractor.

(7) "Person" means, and shall include, any natural person, corporation, municipality, partnership, unincorporated association, or other legal entity.

(8) "Subcontractor" means any person, firm, partnership, corporation, company, association, organization or other entity, or any combination thereof, which is a party to a contract with a contractor, and/or the contractor's subcontractors to perform any portion of work within the scope of the contractor's construction contract with the owner, including where the subcontractor has no direct privity of contract with the contractor.

(b) A contractor making or taking a construction contract for construction work to be performed under the International Building Code (IBC), as modified and adopted as the Rhode Island building code RISBC-1 (510-RICR-00-00-1), shall assume liability for any debt resulting from an action brought under §§ 28-14-19, 28-14-19.1, 28-14-19.2, 37-13-14.1, or 37-13-17 owed to a wage claimant or third party on the wage claimant's behalf, incurred by a subcontractor within a chain of construction contracts at any tier acting under, by, or for the construction contractor or its subcontractors for the wage claimant's performance of labor; provided that, written notice of the alleged violation to be raised in that action is provided to the contractor not more than forty-five

(45) days from the last occurrence of the alleged wage theft. A written offer and payment in full of all such wages allegedly owed during the forty-five (45) day period after a receipt of the notice by a contractor, shall extinguish a contractor’s liability for damages under this section.

(c) The construction contractor’s joint and several liability shall be limited to one hundred twenty (120) consecutive days of any alleged wage theft, counting back the one hundred twenty

(120) days from the day of the last violation prior to the notice. This one hundred twenty (120) day damages limitation period shall not impact other wage violation remedies available to a claimant.

(d) No agreement or release by an employee or subcontractor to waive liability assigned to a construction contractor under this section shall be valid. The provisions of this section shall not be deemed to impair the rights of a contractor to maintain an action against a subcontractor for owed wages that are paid by a contractor pursuant to this section.

(e) Notwithstanding any other provision of law, the remedies available for a claim pursuant to subsection (b) of this section, shall only be civil and administrative actions.

(f) In the case of a private civil action brought by an employee under §§ 28-14-19.2 and 37-13-17, such employee may authorize and designate any person, organization or collective bargaining agent to file a complaint with the director, to make a wage claim on their behalf.

(g) In the case of an action against a subcontractor, the construction contractor shall be considered jointly and severally liable for any unpaid wages, benefits, wage supplements, attorneys' fees and any other costs resulting from such action in addition to any other damages and penalties specified in §§ 28-14-17, 28-14-19, 28-14-19.1, 37-13-16, and 37-13-12.4 that are applicable.

(h) Nothing in this section shall preclude the attorney general from bringing a civil action to collect unpaid wages and penalties on behalf of employees pursuant to this section.

(i) A contractor or any other person shall not evade, or commit any act that negates, the requirements of this section; provided, however, that this section shall not be deemed to prohibit a contractor or subcontractor from establishing by contract or enforcing any other lawful remedies against a subcontractor it hires for liability created by violation of this section; provided, further, that such contract or arrangement does not diminish the right of employees to bring an action under the provisions of this section.

(j) Except as herein provided, nothing in this section shall be deemed to diminish the rights, privileges, or remedies of any employee under any collective bargaining agreement. The provisions of this section may be waived in a collective bargaining agreement between a contractor or subcontractor and a bona fide building and construction trade labor organization, which has established itself, and/or its affiliates, as the collective bargaining representative for persons performing work on a project; provided that, for such waiver to be valid, it shall explicitly reference this section; and provided further, however, that such waiver shall not diminish or impair the rights of an employee provided under any other section of this chapter.

(k) The provisions of this section shall apply to construction contracts entered into, renewed, modified or amended on or after January 1, 2027.

(l) Severability. If any provision of this section, or any application of any provision of this section, is held to be invalid, that shall not affect the validity or effectiveness of any other provision of this section, or of any other application of any provision of this section, which can be given effect without that provision or application; and to that end, the provisions and applications of this section are severable.

SECTION 2. This act shall take effect on January 1, 2027.