Wage theft is common in the construction industry, particularly by subcontractors.  General contractors sometimes use unscrupulous subcontractors, staffing companies, and labor brokers to underbid their competitors’ prices.  These fly-by-night subcontractors employ construction workers to meet their labor needs.   But when these subcontractors fail to pay their workers for all hours worked, misclassify the workers as independent contractors, fail to pay overtime, or make unlawful deductions, the workers are often unable to recover their earnings, because the subcontractor is difficult to locate, or insolvent, or the workers have trouble finding an attorney to bring their case.

Maryland’s “General Contractor Liability Law for Unpaid Wages,” which went into effect on October 1, 2018, helps address this problem.   Under this new law, which amends the Maryland Wage Payment and Collection Law (“MWPCL”), a general contractor on a project for construction services performed in Maryland is jointly and severally liable for violations of the MWPCL committed by a subcontractor, regardless of whether there is a direct contractual relationship between the general contractor and the subcontractor.  So, a general contractor can be found liable for the failure of a subcontractor, or even a second-tier or third-tier subcontractor, to pay an employee for all hours worked, or for failure to pay overtime, even though the general contractor is not the direct employer.

This new law is good for construction workers as general contractors have deeper pockets and are often in a better position to pay a judgment for unpaid wages.  The MWPCL provides a private cause of action that allows workers to pursue their claims in court.  And depending on the nature of the subcontractor’s violation, the worker may be entitled to recover from the general contractor up to three times the unpaid wages (i.e., treble damages) and reasonable attorney’s fees and costs.

For further information or consultation, contact Chris Ryon at 410-244-1010 or at ryon@kscadvocates.com