Labor Code section 2810 states that "[a] person or entity may not enter into a contract or agreement for labor or services with a construction, farm labor, garment, janitorial, or security guard contractor, where the person or entity knows or should know that the contract or agreement does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided." In other words, it specifically precludes a prime contractor from entering into a contract with a subcontractor if the prime knows—or should know—that the contract or agreement does not include sufficient funds to comply with local, state, and federal laws or regulations governing labor and services. AB 1855 simply adds warehouse contractors to the list of specified contractors to which the prohibitions listed in section 2810 apply.
