A new Minnesota law, effective now, requires a contractor entering into a construction contract to assume and be liable for any unpaid wages, fringe benefits, penalties, and resulting liquidated damages owed to a claimant or third party acting on the claimant’s behalf by a subcontractor at any tier acting under, by, or for the contractor or its subcontractors for the claimant’s performance of labor. Additionally, the law invalidates any agreement by an employee or subcontractor to indemnify a contractor, or otherwise release or transfer liability assigned to a contractor. Once a contractor satisfies an employee’s claim for unpaid wages, however, they may pursue damages from a subcontractor who caused the contractor to incur those damages.
The new law is codified as Minnesota Statute § 181.165.
