Prime contractor’s right to reimbursement
368 Prime contractor’s right to reimbursement
This section applies if—
a prime contractor has paid a claim for wages payable to an employee of the employer, in satisfaction of the prime contractor’s obligations under this division; and
either of the following happens—
for an employer who is a corporation—winding-up proceedings are commenced;
for an employer who is an individual—the employer’s assets are distributed in insolvency of the employer or in a composition with the employer’s creditors.
The prime contractor is taken to have a claim for wages against the employer’s assets, which is a preferential claim, as if the prime contractor were an employee of the employer to whom wages were payable by the employer.
This section applies only to the extent a State law may validly apply to the distribution of assets.
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