Senator Rosilicie Ochoa Bogh (R–Yucaipa) announced today that Governor Newsom has signed Senate Bill 440 into law. Known as the “Private Works Change Order Fair Payment Act,” the measure establishes a clear process to ensure contractors and subcontractors are paid fairly and in a timely manner for work performed under change orders.
“In construction, changes to the original plan happen all the time,” said Senator Ochoa Bogh. “But too often, contractors and subcontractors are forced to wait months or even years for payment on work they have already completed. By signing SB 440, we are ensuring fairness in California’s construction economy. I’m grateful to the Southern California Association of Scaffold Contractors and all the industry leaders who worked with me to make this reform a reality for the businesses that build our communities.”
Change orders are a routine part of construction projects, often altering scope, design, schedule, or cost. While parties agree to the work, state law previously lacked a clear process guaranteeing timely and fair payment. As a result, contractors were often left vulnerable to financial strain, with some small businesses forced into costly disputes or leveraged into accepting less than what they were owed.
“The passage and enactment of the Private Works Change Order Fair Payment Act will help provide stability in the construction industry,” shared Joe Connor, owner of Safe Scaffolding and member of the Southern California Scaffold Contractors Association. “Without it, contractors, and especially subcontractors, face financial instability, increased credit dependency and, in some cases, business failure due, potentially, to change orders. Senator Ochoa Bogh, the legislature and Governor Newsom should all be commended for their vision and interest in ensuring a stable and thriving private construction industry.”
SB 440 builds on the principles of California’s Prompt Payment Act to prevent delays, reduce disputes, and protect smaller businesses, particularly family-owned companies, disadvantaged business enterprises, and disabled veteran business enterprises. By establishing a fair and equitable payment process, the law will strengthen contractors’ ability to deliver the projects that drive California’s growth and success.
The new law will take effect on January 1, 2026.