Skip to main content

Nixon Peabody LLP

  • People
  • Capabilities
  • Insights
  • About
Trending Topics
    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    Practices

    View All

    • Affordable Housing
    • Community Development Finance
    • Corporate & Finance
    • Cybersecurity & Privacy
    • Entertainment & Media
    • Environmental
    • Franchising & Distribution
    • Government Investigations & White Collar Defense
    • Healthcare
    • Intellectual Property
    • International Services
    • Labor, Employment, and Benefits
    • Litigation
    • Private Wealth & Advisory
    • Project Finance
    • Public Finance
    • Real Estate
    • Regulatory & Government Relations
    Industries

    View All

    • Aviation
    • Cannabis
    • Consumer
    • Energy
    • Financial Services
    • Healthcare
    • Higher Education
    • Infrastructure
    • Manufacturing
    • Nonprofit Organizations
    • Real Estate
    • Sports & Stadiums
    • Technology
    Value-Added Services

    View All

    • Alternative Fee Arrangements

      Developing innovative pricing structures and alternative fee agreement models that deliver additional value for our clients.

    • Continuing Education

      Advancing professional knowledge and offering credits for attorneys, staff and other professionals.

    • Crisis Advisory

      Helping clients respond correctly when a crisis occurs.

    • DEI Strategic Services

      Providing our clients with legal, strategic, and practical advice to make transformational changes in their organizations.

    • eDiscovery

      Leveraging law and technology to deliver sound solutions.

    • Environmental, Social, and Governance (ESG)

      We help clients create positive return on investments in people, products, and the planet.

    • Global Services

      Delivering seamless service through partnerships across the globe.

    • Innovation

      Leveraging leading-edge technology to guide change and create seamless, collaborative experiences for clients and attorneys.

    • IPED

      Industry-leading conferences focused on affordable housing, tax credits, and more.

    • Legal Project Management

      Providing actionable information to support strategic decision-making.

    • Legally Green

      Teaming with clients to advance sustainable projects, mitigate the effects of climate change, and protect our planet.

    • Nixon Peabody Trust Company

      Offering a range of investment management and fiduciary services.

    • NP Capital Connector

      Bringing together companies and investors for tomorrow’s new deals.

    • NP Second Opinion

      Offering fresh insights on cases that are delayed, over budget, or off-target from the desired resolution.

    • NP Trial

      Courtroom-ready lawyers who can resolve disputes early on clients’ terms or prevail at trial before a judge or jury.

    • Social Impact

      Creating positive impact in our communities through increasing equity, access, and opportunity.

    • Women in Dealmaking

      We provide strategic counsel on complex corporate transactions and unite dynamic women in the dealmaking arena.

    1. Home
    2. Insights
    3. Alerts
    4. New York contractors to be jointly liable for subcontractor non-payment of wages

      Alerts

    Alert / Real Estate

    New York contractors to be jointly liable for subcontractor non-payment of wages

    Oct 8, 2021

    LinkedInX (Twitter)EmailCopy URL

    By A. Darren Miller

    Contractors must be aware of changes to liability allocations regarding unpaid wages.

    What’s the Impact?

    • A new law allows unpaid employees to sue the general contractor, in addition to the relevant subcontractor, for unpaid wages
    • General contractors can and should take steps to protect themselves before the new law takes effect

    DOWNLOAD

    Changes to liability allocations regarding unpaid wages (PDF)

    In an effort to ensure that all workers are paid earned wages for work performed and to encourage the construction industry to “self-police” less scrupulous members, New York Governor Kathy Hochul recently signed into law Assembly Bill Number A3350-A/Senate Bill Number S2766-C. The new law, which comes into effect on January 4, 2022, adds provisions to the New York Labor Law and General Business Law, imposing liability on contractors for the failure of their subcontractors at any tier to pay their workers.

    Historically, unpaid construction workers have been able to bring a lawsuit against only their direct employers to collect unpaid wages. The most nefarious subcontractors have often dodged those suits by various means, including hiding assets and corporate restructuring—meaning that prevailing on such a claim could be difficult. Accordingly, the new law allows unpaid employees to sue the general contractor on a joint-and-several liability basis, in addition to the relevant subcontractor, for the unpaid wages.

    Unfortunately for general contractors, the new law invalidates any effort by an employee or subcontractor to waive the general contractor’s potential liability. However, general contractors can and should take steps contractually to protect themselves. First, general contractors should evaluate their subcontracting pool to weed out problematic subcontractors before the new law takes effect. Second, although new Section 756-f of the General Business Law statutorily requires subcontractors to provide certified payroll records upon request, general contractors should contractually implement a record gathering and review process to document and resolve payroll issues before they rise to the litigation level. Finally, as additional protection, general contractors should consider expanding typical indemnification clauses to require subcontractors to indemnify them from any claims, costs, and expenses incurred by the general contractor arising from the subcontractors’ failure to pay employees.

    The new law was signed by the Governor after securing the agreement of the Legislature to make some changes to the law, including implementing a ten (10) business day cure period before a lawsuit can be brought. We will continue to monitor any developments in the lead up to the law’s effective date.

    Locations

    AlbanyLong IslandNew York CityRochester

    Practices

    Affordable HousingConstruction & Real Estate Litigation

    Insights And Happenings

    • Alert

      Some private construction projects in NY now subject to prevailing wage requirements

      Jan 26, 2022
    • Alert

      New York Governor Hochul’s State of the State message delivers promising news for the affordable housing industry

      Jan 7, 2022
    The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

    Subscribe to stay informed of the latest legal news, alerts, and business trends.Subscribe

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    • Cookie Preferences
    • Privacy Policy
    • Terms of Use
    • Accessibility Statement
    • Statement of Client Rights
    • Purchase Order Terms & Conditions
    • Nixon Peabody International LLC
    • PAL
    © 2025 Nixon Peabody. All rights reserved