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HB 5505

AN ACT RELATING TO PUBLIC PROPERTY AND WORKS -- LABOR AND PAYMENT OF DEBTS BY CONTRACTORS

2025 Regular Session Introduced by Karen Alzate and 4 co-sponsors

Rhode Island public contracts require workers to receive actual healthcare and retirement benefits (not cash), with proof of coverage and penalties for noncompliance.

06/17/2025 Signed by Governor
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Bill Summary · HB 5505

Summary — HB 5505

Title: AN ACT RELATING TO PUBLIC PROPERTY AND WORKS -- LABOR AND PAYMENT OF DEBTS BY CONTRACTORS
Status: Signed by Governor (06/17/2025)
Introduced: Feb 13, 2025 (filed Mar 14, 2025)
Sponsors: Reps. Corvese, Azzinaro, Serpa, DeSimone, Alzate

Purpose / Intent

HB 5505 amends Rhode Island’s prevailing-wage and contractor payment statute (R.I. Gen. Laws §37-13-7) to tighten requirements that contractors and subcontractors on public contracts actually provide fringe benefits (healthcare and retirement/pension) rather than paying employees a cash equivalent. It clarifies benefit definitions, requires proof of purchase of benefits, and establishes enforcement mechanisms and penalties.

Key provisions

  • Scope: Applies to every public contract (state, political subdivision, public or quasi‑public agency) over $1,000 that involves employees, including construction/repair/painting and school pupil transportation contracts referenced in statute.
  • Prevailing wage and payment frequency: Reaffirms existing requirements that contracts state prevailing wages, require posting of wage scales at job sites, and require payment of employees at least weekly.
  • Expanded definition of “wages” / “prevailing wages”: Includes basic hourly rate plus fringe contributions or the reasonable cost of providing bona fide fringe benefits (healthcare, pensions, unemployment, life/disability/accident insurance, vacation/holiday pay, apprenticeship costs, etc.), where not already legally required.
  • Prohibition on cash-outs for healthcare: Effective July 1, 2024, contractors/subcontractors may not pay the cash equivalent of required healthcare benefits directly to employees in lieu of actually purchasing healthcare coverage for the covered period. Exceptions:
    • Employees already receiving coverage as a dependent (spouse/child/domestic partner), via active military service, or through Veterans Affairs.
    • “Short‑term” employees employed 90 days or less.
  • Proof of purchase: Contractors must provide employees (and bargaining agents, if any) documentation showing the insurer/provider, individual covered, type/amount of coverage, and coverage period (similar to insurance declaration pages).
  • Prohibition on cash-outs for retirement/pension: Effective July 1, 2025, contractors/subcontractors may not pay the cash equivalent of required retirement/pension benefits instead of providing the benefit (90‑day short‑term exception applies). The Department of Labor and Training may require proof of provision.
  • Enforcement and remedies:
    • Civil penalties of $1,000–$3,000 per violation, recoverable by the Director of Labor and Training.
    • Director authorized to seek injunctive relief.
    • The bill text provides for a private right of action for aggrieved employees or bargaining agents (section text truncated in provided copy).

Who is affected

  • Contractors and subcontractors on covered public contracts in Rhode Island.
  • Employees on those projects, who will be entitled to actual healthcare and pension/retirement benefits rather than cash equivalents (with limited exceptions).
  • Public agencies that procure covered contracts must ensure solicitations and contracts reflect prevailing-wage requirements.

Procedural timeline

  • Introduced Feb 13, 2025; filed Mar 14, 2025.
  • Passed House (05/15/2025); Senate passed in concurrence (06/12/2025).
  • Transmitted to Governor (06/13/2025); Signed into law (06/17/2025).

Potential impacts

  • Increases compliance and documentation requirements for contractors and subcontractors.
  • May raise labor costs for public contractors who must purchase benefits rather than pay cash equivalents.
  • Strengthens protections for workers on public projects by ensuring receipt of specified fringe benefits.

Compiled from official sources — confirm details with the bill’s official record.

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