CaliforniaSB 5972025-2026 Regular SessionSenateWALLET

Labor-related liabilities: direct contractor and subcontractor.

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Bill Overview

Analyzed Economic Effects

16 provisions identified: 7 benefits, 0 costs, 9 mixed.

Faster housing approvals and clear timelines

If an application has strong evidence it meets objective rules, it is treated as consistent. Cities must explain conflicts in writing within 60 days (150 or fewer units) or 90 days (more than 150), or the project is deemed compliant. Design review must use objective standards and finish in 90 or 180 days. CEQA does not apply to subdivisions that meet all local objective subdivision rules. You can request changes; the city must decide in 60 or 90 days. New rules apply only if changes add at least 15% more space, or 5% to fix a specific health or safety issue. Unit counts include all projects on the site and adjacent parcels split off after January 1, 2023. In certain census tracts, a public meeting must be held within 45 days after a notice of intent and before applying; if the city does not hold it, you must.

Faster housing review and fewer add-ons

Planning directors must issue written consistency findings within 60 days for projects up to 150 homes, 90 days for larger ones, or 30 days for fixed resubmittals. If they miss the deadline, the project is treated as meeting the objective standards. Cities and counties cannot ask for studies unrelated to those objective standards or make you meet post‑entitlement rules before approval. They also cannot add fees or requirements just because you use the streamlined path, and they must issue later permits without unreasonable delay using the standards in place when you first applied, unless you agree to new ones.

Lower or no parking near transit

Qualifying streamlined developments generally cannot be required to provide more than one off‑street parking space per home. Cities cannot require any parking for parcels within one‑half mile of high‑quality transit or a major transit stop, or when a car‑share vehicle is within one block. They also may not impose parking rules in certain locations, including historic districts or where on‑street permits are required but not offered to residents. These rules can lower building costs and support transit‑friendly housing.

More affordable units in mega projects

For applications filed before January 1, 2019 with 500+ homes that dedicate 20% of units to households at or below 80% of area median income, at least 30% of those set‑aside units must use the affordable rent in Section 50053. The rest of the set‑aside units must use rents consistent with low‑income housing tax credit maximums. If 100% of units are for lower‑income households, affordable rent follows the public financing program’s rent limits. This rule ends January 1, 2036.

More homes with extra height and CEQA relief

Use‑by‑right projects can add one extra story or 11 feet above local limits. In nonresidential zones, the default is 40 homes per acre plus that height. These projects can still use density bonuses, subject to height limits. Approval does not expire if at least 50% of homes are affordable at or below 80% of area median income and there is public investment beyond tax credits. Other approvals last three years, with a one‑time one‑year extension for significant progress, and keep running while construction is underway. Some government actions that directly help streamlined affordable projects are exempt from CEQA. Starting January 1, 2025, coastal projects must get a coastal permit, which must be approved if the project meets objective local coastal standards; these coastal rules sunset January 1, 2036.

Contractors share wage debts, 2022–2026 rules

For direct contracts signed from January 1, 2022 through January 1, 2026, direct contractors are liable for unpaid wages, benefits, penalties, and interest a subcontractor owes for labor on the job. You avoid penalties or liquidated damages if you did not know of nonpayment and you followed three steps: monitor payroll records, act quickly and hold funds when you learn of a problem, and get a sworn affidavit before final payment. The labor standards agency must tell the contractor and subcontractor within 15 days after it gets a wage or benefit complaint.

New rules on contractor liability and suits

Local governments and their labor standards agencies can take action or sue construction contractors for labor violations. If they win, they must send recovered wages and penalties to the workers and may keep authorized fees. Any contract clause that tries to shift a developer’s obligations or penalties to the prime contractor is void. Starting January 1, 2026, only the Labor Commissioner, Civil Code 8024(c) entities, and eligible joint labor‑management committees can sue a direct contractor under this law.

Skilled crews, reports, and penalties on projects

Buildings over 85 feet must use a skilled and trained workforce with sworn commitments from primes and subs. Developers must notify local unions and contractor groups at least seven days before bids and, on request, disclose bidder names and license numbers within three business days. Developers file monthly skilled‑and‑trained reports. Missing a report costs 10% of that month’s construction value, up to $10,000. Contractors that use untrained workers pay $200 per day per worker; penalties can be assessed within 18 months. Small projects with 10 or fewer homes that are not public works are exempt from paying prevailing wages, using apprenticeship‑participating workers, and required health‑care spending.

Stronger labor and health rules on big housing jobs

For covered developments with 50 or more homes, contracts must require use of apprentices and health spending. Employers must spend per hour at least the cost of a Covered California Platinum plan for two 40‑year‑old adults and two children in that area. Workers on streamlined projects that are not all public work must be paid at least the prevailing wage. Developers file monthly public compliance reports, and contractors report changes within 10 business days. Contractors must keep verified payroll, send it monthly to the Labor Commissioner, be registered, and allow inspections. Wage rules can be enforced by the Labor Commissioner, workers, or a joint labor‑management committee, which can also sue to enforce health‑care spending.

Stronger wage collection from contractors starting 2026

For contracts dated on or after January 1, 2026, direct contractors are liable for a subcontractor’s unpaid labor debts under the job. The limit is the labor payments required by the subcontractor’s contract or union agreement. You must sue within one year of the earliest of: notice of completion, notice of cessation, or actual completion. People and groups listed in Civil Code 8024(c) and joint labor‑management committees can sue; winners get attorney and expert fees. Before hearings, citations, or suits, the Labor Commissioner must give at least 30 days’ notice. After trial, a contractor’s property may be attached to pay the judgment. Contractors can cure some fringe shortfalls by paying trusts with a joint check and by getting payroll and award details from subs. These rules do not cover work done by public employees.

Tribal consultation now required for fast track

Before applying for streamlined approval, a developer must send a notice of intent to the city or county. The local government must notify each affiliated California Native American tribe within 30 days; each tribe has 30 days to accept, and consultation must start within 30 days of acceptance. The consultation is confidential by law, and CEQA does not apply to the scoping talks. A city or county may accept a streamlined application only if no tribe accepts, a tribe fails to engage after repeated attempts, the parties find no potential tribal cultural resource, or they sign an enforceable agreement. After consultation, a project may use the streamlined path if there is no potential resource or there is an enforceable agreement. A project is not eligible if a listed resource is on site, there is no enforceable agreement on a potential resource, or the parties cannot agree on whether a resource will be affected.

Childcare and prior uses can stay

Use‑by‑right housing can include ground‑floor childcare and community‑group spaces. In single‑family zones, only childcare and community‑based organization spaces are allowed on the ground floor; in other zones, childcare, community spaces, and allowed shops can be included. Projects may also keep a religious use or any prior legal use, but total nonresidential square feet cannot exceed what was there before, and prior permit conditions still apply. These allowances are available through January 1, 2036.

Temporary carve-out for equine districts

From January 1, 2024 to June 30, 2025, this section does not apply to qualified sites in equine or equestrian districts. A qualified site has had that district label in the general plan for five or more years as of January 1, 2024, is not zoned for housing on that date but allows it by conditional use permit, and the city or county has a compliant housing element.

Public meeting and developer attestation rules

If a project is in a city over 250,000 people or in a large county’s unincorporated area, the planning commission must hold the required public meeting. This rule ends January 1, 2036. When a developer applies for streamlined approval, they must attest in writing that they attended that meeting and reviewed the public testimony and written comments.

State can replace city on state land

For developments on land the state owns or leases, the Department of General Services may act in place of the local government for this law. DGS decides whether to step in. This authority is in effect through January 1, 2036.

Streamlining ends 2036, faster state guidance

The Housing Department can issue, change, or repeal guidelines for this law without using the normal Administrative Procedure Act steps. This flexibility applies through January 1, 2036. The entire section also ends on January 1, 2036, so plan for its automatic repeal unless later law extends it.

Sponsors & Cosponsors

Sponsor

Dave Cortese
Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 218 • No: 0

Senate vote • 9/9/2025

Item 68 — Senate SFLOOR

Yes: 40 • No: 0

House vote • 9/8/2025

Item 242 — Assembly AFLOOR

Yes: 79 • No: 0

legislature vote • 8/29/2025

Vote in CX25

Yes: 11 • No: 0

legislature vote • 7/15/2025

Vote in CX13

Yes: 12 • No: 0

legislature vote • 7/9/2025

Vote in CX14

Yes: 7 • No: 0

Senate vote • 5/29/2025

Item 333 — Senate SFLOOR

Yes: 38 • No: 0

legislature vote • 5/23/2025

Vote in CS61

Yes: 6 • No: 0

legislature vote • 5/5/2025