Big Win for Small Business Minority Contractors and Subcontractors As Governor Signs Into Law Senator Cortese's Bill To Fast Track Payments For Work on Privately Financed Projects | Senator Dave Cortese
Hi Everyone... I'm surprised by the lack of news coverage and industry guidance on this change. Reducing retention from 10% to 5% is big news for us and really helps with cash flow. The bills wording looks pretty straightforward, but it leaves questions about roll out with our clients and subs.
Has anyone in California started preparing for this change? How have you communicated with clients and subs? It's a clear law, but how are your clients reacting to the change?
Things may get tricky around year-end. We'll have to make sure the retention from our clients aligns with the subs, especially if contract dates cross-over the year end. It sounds like the change isn't retroactive.
We'll also have to deal with carryover projects that have 10% retention, vs. 2026 projects with 5% retention. There will be 2 sets of forms and billing standards until all pre-2026 jobs are done.
Any other thoughts and considerations?
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Bryan Pavalko
President
RBA Builders
Fountain Valley CA
(714) 895-9000
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