United States: New Public Works Requirements In California For Public Agencies And Contractors

SB 854, enacted in June 2014 by the California Legislature, made several significant changes to the laws pertaining to the administration and enforcement of prevailing wage requirements on public works projects by the California Department of Industrial Relations ("DIR"). This new public works monitoring scheme created a mandatory registration program for all contractors and imposes new reporting obligations on public agencies.

A. Public Agency Requirements

Public agencies are subject to the following new requirements, which are applicable to all public works projects:

  1. PWC-100 form. Public agencies must file a PWC-100 form with the DIR within five days of the award of a public works contract. The PWC-100 form serves to notify the DIR that a public works contract has been awarded and provides general information about the project, such as awarding agency, date of award, type of work performed, amount of contract, funding sources, and contract information. The PWC-100 form may be filed online at https://www.dir.ca.gov/pwc100ext/.
  2. Notice. Public agencies must include the following notice in its call for bids and in the contract documents: (1) no contractor or subcontractor may be listed on a bid proposal for a public works project unless registered with the DIR; (2) no contractor or subcontractor may be awarded a contract for public work on a public works project unless registered with the DIR; and (3) work performed on the project is subject to compliance monitoring and enforcement by the DIR.
  3. Rejection of bids submitted by unregistered contractors. Public agencies may not accept a bid or enter into a contract for public work with an unregistered contractor.
  4. Job site notice. Public agencies must post the following job site notice, or require the prime contractor to do so:

    "This public works project is subject to monitoring and investigative activities by the Compliance Monitoring Unit (CMU) of the Division of Labor Standards Enforcement, Department of Industrial Relations, State of California. This Notice is intended to provide information to all workers employed in the execution of the contract for public work and to all contractors and other persons having access to the job site to enable the CMU to ensure compliance with and enforcement of prevailing wage laws on public works projects.

    The prevailing wage laws require that all workers be paid at least the minimum hourly wage as determined by the Director of Industrial Relations for the specific classification (or type of work) performed by workers on the project. These rates are listed on a separate job site posting of minimum prevailing rates required to be maintained by the public entity which awarded the public works contract. Complaints concerning nonpayment of the required minimum wage rates to workers on this project may be filed with the CMU at any office of the Division of Labor Standards Enforcement (DLSE).

    Local Office Telephone Number:                           

    Complaints should be filed in writing immediately upon discovery of any violations of the prevailing wage laws due to the short period of time following the completion of the project that the CMU may take legal action against those responsible.

    Complaints should contain details about the violations alleged (for example, wrong rate paid, not all hours paid, overtime rate not paid for hours worked in excess of 8 per day or 40 per week, etc.) as well as the name of the employer, the public entity which awarded the public works contract, and the location and name of the project.

    For general information concerning the prevailing wage laws and how to file a complaint concerning any violation of these prevailing wage laws, you may contact any DLSE office. Complaint forms are also available at the Department of Industrial Relations website found at www.dir.ca.gov/dlse/PublicWorks.html."

B. Contractor and Subcontractor Requirements

Contractors and subcontractors working on a public works project are subject to the following requirements:

  1. Annual registration. All contractors and subcontractors must register with the DIR annually and pay a fee of $300 to be eligible to work on any public works project in California. To be eligible for registration, contractors and subcontractors must provide evidence of: (1) workers' compensation coverage; (2) license from the Contractors State License Board, if applicable to the trade; (3) no delinquency of unpaid wage or penalty assessments owed to any employee or enforcement agency; (4) no federal or state debarment; and (5) no prior violation of registration requirements in the 12 months preceding the application or since the effective date of the new registration requirements, whichever is earlier. Note, that the registration requirement does not apply to bids prior to March 1, 2015 or work on projects for which the public works contract was awarded prior to April 1, 2015.
  2. Electronic submission of certified payroll records. All contractors and subcontractors must electronically submit all certified payroll records from public works projects directly to the DIR. This requirement applies to all new contracts awarded after April 1, 2015 and for work performed on any public works project after January 1, 2016 regardless of the date of award.

The intent of SB 854 is to ensure compliance with California's prevailing wage requirements. As such, we anticipate that the DIR will actively monitor and enforce compliance with the registration and notice requirements. Public agencies and contractors working on public works projects should thus immediately familiarize themselves with the new requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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