Senator Rosilicie Ochoa Bogh (R-Yucaipa) announced that Senate Bill 440, the “Private Works Change Order Fair Payment Act,” has passed the legislature with bipartisan support and is now on its way to the Governor’s desk. SB 440 establishes a process for contractors and subcontractors to recover private works construction payments due to change orders.
“In construction, changes to the original plan happen all the time,” said Senator Ochoa Bogh. “This bill makes sure contractors and subcontractors get paid fairly and on time for work arising from change orders instead of waiting months or years. These delays can become existential threats to their businesses.”
A change order is a common directive to work outside the scope of a previously agreed-upon construction contract. Common types of change orders include changing the construction project’s scope, design, schedule, and cost.
While the parties agree to change orders, state law does not provide a specific procedure for ensuring contractors and subcontractors are paid fairly and in a timely fashion for the work they performed as directed by the change order. Some contractors and subcontractors are forced to wait many months, sometimes years, because of the lack of law ensuring timely and fair payment. This often places contractors and subcontractors in a difficult financial position and creates a dynamic where contractors can be leveraged to reduce the amount owed to them.
“SB 440 will create a new layer of protection for construction contractors and subcontractors to ensure they are paid in a timely fashion,” stated Joe Connor, President of Safe Scaffolding and a member of the Southern California Association of Scaffolding Contractors (SCASC), the sponsor of the bill. “The costs alone associated with fighting change order disputes can bankrupt a business. SB 440, by establishing requirements that guarantee fair and timely treatment, will empower our businesses to prosper, driving vital construction projects that are essential for California’s growth and success.”
Incorporating the spirit and principle of California’s Prompt Payment Act, SB 440 will help avoid costly delays and protect smaller businesses, especially family-owned companies, disadvantaged business enterprises, and disabled veteran business enterprises, by ensuring an equitable process for payment.
The bill, if approved by Governor Newsom, will take effect on January 1, 2026.