Bottom Line Up Front

  • Connecticut Public Act 26-12 (H.B. 5003) makes general contractors jointly and severally liable for unpaid wages owed to a subcontractor's employees, for construction contracts entered into on or after January 1, 2027
  • Workers can pursue the subcontractor, the general contractor, or both, after giving at least 30 days' notice
  • Public works and many small residential home improvement contracts are excluded
  • A contract clause that waives the general contractor's liability is unenforceable, but a clause that pays unpaid wages from retainage is allowed
  • Standard GL and employment practices policies generally do not pay wage claims, so sub vetting and contract language matter more than coverage

What Public Act 26-12 Changed

Public Act 26-12, formally "An Act Concerning Workforce Development and Working Conditions in the State," is a 75-section omnibus labor bill that Gov. Ned Lamont signed in May 2026 (Governor's announcement). It passed the Senate 28 to 7 on May 1, 2026 (CBIA). Most of the attention has gone to pay transparency, but one section matters directly to contractors who hire subs.

For construction contracts executed on or after January 1, 2027, general contractors are jointly and severally liable for wages that their subcontractors fail to pay their workers (Governor's announcement). Littler describes the rule as covering construction, renovation, or rehabilitation projects in Connecticut (Littler).

In plain English, "jointly and severally" means an unpaid worker does not have to choose. Employees may bring a civil action against the subcontractor, the contractor, or both (CBIA). If the subcontractor disappears or cannot pay, the general contractor is the party with the money.

The Rule at a Glance

QuestionWhat the analyses say
Effective dateContracts entered into on or after January 1, 2027 (Littler, Pullman & Comley)
Who is liableThe general contractor, jointly and severally with the subcontractor (CBIA)
Who can sueThe subcontractor's employees, against the subcontractor, the contractor, or both (CBIA)
Notice before suitAt least 30 days' notice to the contractor (Harris Beach Murtha). Littler says notice is not required if the employee previously raised the issue, or a different violation by the same subcontractor, with the general contractor (Littler).
Waiver clausesContract provisions that waive or release the contractor's liability are unenforceable (CBIA)
Retainage clausesContractors may include a provision that satisfies unpaid wages from retainage, but it does not limit an employee's right to sue the contractor (Littler)
ExclusionsPublic works and contracts by a state or the federal government, and certain home improvement contracts (see below) (Pullman & Comley)

Even If You Paid the Sub in Full

The part that surprises many general contractors is that liability does not depend on whether you paid your subcontractor. CBIA, which represents Connecticut employers, describes the rule as applying to general contractors even if they paid the subcontractor in full and had no knowledge that wage theft occurred (CBIA). That is a business group's characterization of the bill, so read the Act's text with your attorney, but it is the right way to think about the risk: you are exposed to a payroll you do not run.

This is why payroll hygiene among your subs, not just their insurance certificates, becomes part of risk management. If you have already tightened sub requirements for New Jersey's ABC test, see our workers' comp guide for NJ contractors for the same discipline on certificates, which carries over to Connecticut work.

What Is Excluded

According to Pullman & Comley, the provision does not cover public works or other contracts by the State, another state, or the federal government. It also does not cover home improvement contracts to build, renovate, or rehabilitate an owner-occupied residence or the property where it is located, or one- or two-family dwelling units or properties, unless there are more than 15 at one project site (Pullman & Comley).

That leaves private commercial work, multifamily, and larger residential developments as the main places general contractors should expect the rule to apply. Check the exact definitions in the Act, since the law firm summaries do not define terms like "contractor," "subcontractor," or "wages" in detail.

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Two Related Provisions Already in Effect

Do not confuse the January 2027 liability rule with two other parts of the same Act that took effect on October 1, 2026.

Does Insurance Cover Unpaid Wage Claims?

Usually not, and this is the point to understand before assuming a certificate of insurance protects you. A Reuters legal commentary explains that a commercial general liability policy is usually written for certain bodily injury, property damage, and personal or advertising injuries, and that wage-and-hour claims do not involve accidents that cause injury (Reuters). It adds that employment practices liability policies almost universally exclude wage-and-hour liabilities, although some can pay defense costs for certain suits up to an agreed cap, such as $100,000, which does not pay any money owed to the employees (Reuters).

Workers' compensation covers workplace injuries, not unpaid wages. So a sub's GL and WC certificates still matter for the risks they cover, but they do not answer the wage question. We cannot tell you what a specific policy covers without reading it, so ask your agent to review the wording of your GL, any employment practices coverage, and any wage-and-hour endorsement. That is a coverage question to settle before 2027, not after a claim.

What to Do Before January 1, 2027

  1. Inventory your Connecticut subs. List every sub you expect to use on CT work in 2027, and which of your upcoming contracts will be entered into on or after January 1.
  2. Decide when to sign. Because the rule turns on when the contract is entered into, ask your attorney how it applies to contracts signed in late 2026 and to change orders or renewals.
  3. Update the subcontract. Have a construction attorney review language on payroll compliance, proof of payment, a retainage remedy for unpaid wages, and indemnification. CBIA advises revisiting indemnification clauses to account for the new exposure (CBIA).
  4. Ask for proof, not promises. Consider requiring subs to show payroll records or proof of wage payment on a regular schedule, along with current GL and workers' comp certificates.
  5. Watch your retainage and payments. A retainage provision can give you a source to satisfy unpaid wages, but it does not remove an employee's right to sue you (Littler).
  6. Review your insurance program. Confirm your GL, workers' comp, and umbrella fit your CT work, and ask what, if anything, responds to wage claims. Try our 60-second estimator for a ballpark, then request a quote.

This page is general information, not legal advice. We reviewed the Governor's announcement and analyses by Littler, Pullman & Comley, Harris Beach Murtha, Foley and CBIA. We could not open the Act's full text on the General Assembly's website, so confirm specific wording at cga.ct.gov with your attorney before relying on any detail here.

Frequently Asked Questions

When does Connecticut's subcontractor wage liability rule start?

It applies to construction contracts entered into on or after January 1, 2027, according to the Governor's office and law-firm analyses of Public Act 26-12. Contracts signed before that date are not covered by this provision.

What does joint and several liability mean for a general contractor?

It means an unpaid worker of a subcontractor may pursue the subcontractor, the general contractor, or both for the unpaid wages. CBIA, the state business group, says this applies even if the general contractor paid the subcontractor in full.

Do workers have to give notice before suing a general contractor?

Yes. Analyses of the Act say an employee must give the contractor at least 30 days' notice before filing suit naming the contractor as a defendant. Littler says the notice is not required if the employee previously raised the issue, or a different violation by the same subcontractor, with the general contractor.

Are any projects excluded?

Pullman & Comley says the provision does not cover public works or contracts by a state or the federal government, or home improvement contracts for an owner-occupied residence or one- and two-family dwellings, unless there are more than 15 at one project site.

Does general liability or workers' comp insurance pay these wage claims?

Generally not. A Reuters legal commentary says general liability policies are usually written for bodily injury, property damage and personal or advertising injury, and that employment practices policies almost universally exclude wage-and-hour liabilities, though some offer limited defense-cost coverage. Ask your agent to review the actual policy language.

Can I protect myself with my subcontract?

Analyses say contractors may include provisions addressing a remedy for a subcontractor's nonpayment, including paying unpaid wages from retainage. They also say a clause that waives or releases the contractor's liability is unenforceable. Have a construction attorney draft or review your subcontract. This is general information, not legal advice.

Sources

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