Government Bill presented: Contractor liability in the construction industry

The Government has decided to present the Government Bill "Contractor liability for wage claims in the construction industry" to the Riksdag. The aim is to strengthen protection for employees and counter corner-cutting and criminal activities, while safeguarding the opportunities for the social partners to regulate contractor liability in collective agreements.

The construction industry in Sweden is experiencing a boom. At the same time, it is an industry struggling with major challenges regarding corner-cutting and criminal activities. To strengthen protection for employees and promote healthy competition, the Government proposes introducing a completely new act on contractor liability for wage claims in the construction industry.

– We can never accept that serious and responsible contractors in the construction industry risk being forced out by those who cheat on taxes, neglect safety or do not pay their workers the wages to which they are entitled, says Minister for Employment and Integration Ylva Johansson.

The legislative proposal means that a worker who does not receive their wages can demand their pay from the company that hired their employer. Failing that, the main contractor will be liable. If contractor liability becomes applicable, the contractor that paid the employee's salary can retroactively demand compensation from the employer. The proposal is expected to make it more difficult for rogue actors to operate since it should result in closer controls of the subcontractors admitted to Swedish construction sites.

One important premise of the Swedish model is that it must be possible for the social partners to reach an agreement on a regulation that is adapted to the conditions that apply in the industry or activity to which the agreement applies. Under the legislative proposal, the partners will therefore be able to regulate the issue of contractor liability in collective agreements that are to be applied instead of the act in certain circumstances.

– As I see it, current solutions achieved through collective agreements in the construction sector provide protection that corresponds to that which is intended by the act. However, the issue of whether a certain collective agreement meets the requirements of the act is ultimately determined through application of the law, says Ms Johansson.

It is proposed that contractor liability apply to both domestic and posted workers. Furthermore, the legislative proposal means that employers' and employees' organisations are to be entitled to information about the actors in the chain of contractors. It is proposed that infringements of the obligation to provide information may lead to damages.

The Government has previously introduced staff registers at construction sites to combat undeclared work. From 1 July 2018, an obligation will be introduced for some employers to provide information at individual level in the employer's tax return. This obligation will be expanded to cover all employers from 1 January 2019. The Government has instructed eight government agencies to develop their methods to counter corner-cutting and criminal activities in working life, and has overturned Lex Laval so that it will always be possible for trade unions to require a Swedish collective agreement.

The Government proposes that the new provisions on contractor liability enter into force on 1 August 2018.

Contact

Natali Sial
Press Secretary to Minister for Employment and Integration Ylva Johansson
Phone (switchboard) +46 8 405 10 00
Mobile +46 (0)72 520 54 49
email to Natali Sial