Construction Law Blog

New legislation now prevents Virginia contractors from withholding payment on one project to address claims or backcharges on another.

The General Assembly, in its 2020 session, passed new legislation (codified at new Virginia Code §11.4-6 and in amended and reenacted Virginia Code § 40.1-29) that makes Virginia general contractors jointly and severally liable for its subcontractors’ employee wages if the general contractor knew or should have known that the subcontractor was not paying its employees. The new law goes into effect on July 1, 2020.

In an article published on Tuesday, February 25, 2020, for Contractor Magazine, Kelly Bundy and Liz Burneson discuss the enforceability of pay-if-paid provisions, alternatives to those provisions, and tips for subcontractors faced with these provisions during the contract negotiation stage and throughout the course of a project.

According to Kelly and Liz, the enforceability of pay-if-paid provisions varies by state. Subcontractors should pay attention to what law applies for each project and whether pay-if-paid provisions are enforceable in that jurisdiction. Kelly and ...