Labor Compliance Program Manual - San Francisco Public Schools
Labor Compliance Program Manual - San Francisco Public Schools
Labor Compliance Program Manual - San Francisco Public Schools
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SFUSD<br />
AWARDING BODY LCP<br />
PROCEDURES MANUAL<br />
STATE OF CALIFORNIA REQUIREMENTS<br />
AS OF JANUARY 21, 2009<br />
90615
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
_________________________________________________________________________________________________<br />
Appendix A – Terms & Definitions<br />
Appendix B – Relevant Websites<br />
Appendix C – DIR Determinations<br />
Appendix D – LCP Forms & Handouts<br />
Appendix E – Notice of Proposed Rulemaking - Approved January 21, 2009<br />
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CONTACT INFORMATION<br />
<strong>San</strong> <strong>Francisco</strong> Unified School District (SFUSD) received approval for their <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
(LCP) on March 28, 2003. It is currently recognized as an Awarding Body LCP with extended<br />
authority per Title 8, California Code of Regulations Section 16427 that monitors <strong>Public</strong> Works<br />
projects over $15,000 in value. The LCP for SFUSD is listed on the website for the Department of<br />
Industrial Relations (DIR): http://www.dir.ca.gov/lcp/lcplist.asp?lcptype=general.<br />
LCP ID: 2003.00103<br />
<strong>San</strong> <strong>Francisco</strong> Unified School District<br />
135 Van Ness Avenue<br />
<strong>San</strong> <strong>Francisco</strong>, CA 94102<br />
Approved: 3/28/2003<br />
The contact information for relevant parties at the District is as follows:<br />
Executive Team<br />
Joseph C. Grazioli David L. Goldin<br />
Chief Financial Officer Chief of Facilities<br />
SFUSD Finance Department SFUSD Facilities Department<br />
1550 Bryant Street, 6 th Floor 1550 Bryant Street, Suite #555<br />
<strong>San</strong> <strong>Francisco</strong>, CA 94103 <strong>San</strong> <strong>Francisco</strong>, CA 94103<br />
The Chief Financial Officer, in collaboration with the Chief of Facilities, directs relevant staff and<br />
consultants charged with the implementation of compliance procedures, per the Education Code<br />
Section 17424 and California <strong>Labor</strong> Code Sections 1720 through 1861.<br />
Joseph C. Grazioli<br />
Chief Financial Officer<br />
Mr. Grazioli, as Chief Financial Officer, is responsible for the daily activities in the areas of financial,<br />
managerial, and regulatory services, including the Office of Contract <strong>Compliance</strong> which initiated the<br />
Awarding Body <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> in March 28, 2003. Mr. Grazioli has been responsible for<br />
the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> since his arrival at <strong>San</strong> <strong>Francisco</strong> Unified School District (SFUSD) in<br />
December 2004. Mr. Grazioli communicates frequently with the Chief of Facilities as well as the<br />
General Counsel in charge of the District’s Legal Department to ensure contractors are in compliance<br />
with all regulatory requirements that are stipulated in SFUSD public work contracts. He directs the<br />
activities of staff and consultants he assigned to implement labor compliance procedures at the District.<br />
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Mr. Grazioli worked as a consultant for the <strong>San</strong> <strong>Francisco</strong> Performing Arts Library & Museum, and the<br />
Business Integration Group, after he retired from the real estate firm Cushman & Wakefield as<br />
Managing Director in Operations, Finance, Administration, and Building Accounting from 1973<br />
through 2003. Mr. Grazioli holds both a Bachelors and Masters degrees in Business Administration<br />
from Golden Gate University.<br />
David L. Goldin<br />
Chief Facilities Officer<br />
Mr. Goldin, as Chief Facilities Officer, oversees ten operating departments and a staff of over 850<br />
persons, including contract administrators, compliance professionals, and project managers involved in<br />
the capital facilities improvement programs, custodial, maintenance, transportation, environmental<br />
health, emergency planning and real estate departments. Currently and under his direction, SFUSD is<br />
midway through an $850+ million dollar school modernization program at over 90 <strong>San</strong> <strong>Francisco</strong><br />
school sites. Mr. Goldin is a prevailing wage advocate and communicates frequently with the <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> about oversight and enforcement activities being implemented in his department.<br />
Mr. Goldin is twice a graduate of the University of California at Berkeley, a registered Architect and a<br />
licensed General Contractor. Prior to moving to the public sector Mr. Goldin practiced architecture in<br />
Berkeley with his firm, which specialized in public and private educational facilities.<br />
Legal Department<br />
Maribel Medina<br />
General Counsel<br />
Maribel Medina assumed the position of General Counsel to the District in July, 2008. Ms. Medina has<br />
an undergraduate degree and a Juris Doctor from the University of California, Berkeley, and a Master<br />
of <strong>Public</strong> Administration from Harvard University. Prior to joining the District, she served as Special<br />
Counsel to the Los Angeles School District’s Board of Education from June 2005 through July 2008,<br />
serving as lead legal advisor to the LAUSD Board on issues ranging from education, real estate,<br />
environmental, construction, labor and budgeting. Ms. Medina is currently the President of the<br />
Mexican-American Bar Association, President of the Statewide La Raza Lawyers Association and<br />
serves as General Counsel to the Hispanic National Bar Association.<br />
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Staff and Consultants<br />
Fe Bongolan<br />
Contracts Administrator – Facilities Bond <strong>Program</strong><br />
Ms. Bongolan has been Contracts Administrator for the <strong>San</strong> <strong>Francisco</strong> Unified School District<br />
(SFUSD) since 2005, working specifically on capital design and construction contracts for the<br />
District’s Proposition A 2003 and 2006 Bond <strong>Program</strong>s, as well as administrative oversight for the<br />
review, approval, award and issuance of the District’s Facilities and Design department contracts. She<br />
is in charge of the bid documentation and ensures that required prevailing wage language is included in<br />
specific contract compliance requirements for the District. Ms. Bongolan also responds to public<br />
records requests by providing relevant documents for processing to the District’s Office of Equity<br />
Assurance.<br />
Previous professional experience includes two years as Manager of the Contracts Division at the SF<br />
<strong>Public</strong> Utilities Commission, two years as Administrative Manager for SF Department of <strong>Public</strong> Works<br />
Project Management Division working specifically on the ten-year Clean Water capital program for the<br />
City of <strong>San</strong> <strong>Francisco</strong>, and for the Earthquake Safety <strong>Program</strong> Phase 2, as contract administrator and<br />
expediter for the seismic retrofit and renovation of three major Civic Center buildings: City Hall, Civic<br />
Auditorium and War Memorial Opera House. Prior to assuming her duties with SFUSD, she has<br />
worked as a consultant to minority and women-owned engineering consulting firms on contracting and<br />
payment expedition.<br />
Susan Ortega-Resurreccion<br />
Administrative Analyst – Facilities Bond <strong>Program</strong><br />
Ms. Ortega-Resurreccion has been Administrative Analyst and Office Manager for the Prop A<br />
2003/2006 Bond <strong>Program</strong> at <strong>San</strong> <strong>Francisco</strong> Unified School District (SFUSD) since 2005. She is<br />
principally responsible for all payment processes for the Bond <strong>Program</strong> from individual vendors to<br />
construction contractors, including progress payments, retention releases and final closeout payments.<br />
Prior to this experience, she was Administrative Assistant for three years at the SFUSD State and<br />
Federal <strong>Program</strong>, which was in charge of Title I N&D and Title V federal programs.<br />
Al Bautista<br />
Management Assistant – Facilities Design & Construction<br />
Al Bautista has been working for Facilities Design & Construction at <strong>San</strong> <strong>Francisco</strong> Unified School<br />
District since 1986. He currently has experience in Human Resources, development of departmental<br />
procedures in project management, contracts, bidding, accounts payables, budget and office<br />
management in addition to serving as an assistant to the Chief of Facilities. He is currently involved in<br />
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contract administration and policy making in terms of project initiation and closeout.<br />
Lin Robertson<br />
LCP Management Consultant – <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
Lin Robertson began her professional career in the area of prevailing wage compliance at the City of<br />
<strong>San</strong> Jose where she worked as a Contract <strong>Compliance</strong> Officer from 2001 to 2004. After completing a<br />
Masters in <strong>Public</strong> Administration in 2005, Ms. Robertson continued working as a labor compliance<br />
consultant, providing training and assistance to public administrators charged with oversight and/or<br />
enforcement duties.<br />
Ms. Robertson was hired by the Chief Financial Officer September 30, 2006. She reports all labor<br />
compliance deficiencies observed during project site visits, or that evident in certified payroll records<br />
and other labor compliance documentation that are provided by contractors to the Chief Financial<br />
Officer and the Chief of Facilities. She works closely with District staff in charge of public works<br />
projects and contract compliance. All legal documentation (e.g., Notice to Withhold Contract<br />
Payment) required to fulfill required labor compliance procedures is referred to the District’s Legal<br />
Department. Ms. Robertson also responds to public records requests by providing relevant documents<br />
for processing to the District’s Office of Equity Assurance.<br />
Nigel A.L. Brooks<br />
LCP Consultant – <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
Nigel A.L. Brooks is a management consultant with experience in accounting, auditing, human<br />
resource management, information technology management, and project management in the<br />
construction and manufacturing industries, and in government. Mr. Brooks has developed accounting<br />
policies, processes, and procedures to manage labor, materials, and overhead for construction activities.<br />
These processes have included accounting, human resource management, and payroll systems that<br />
track fully loaded labor costs by job and process, and ensure compliance with both Federal and state<br />
labor laws.<br />
Mr. Brooks has worked on Federal and state-funded projects in addition to private sector projects.<br />
These projects have included developing accounting processes for funding and management systems<br />
for development projects. His extensive background is currently being used not only to assist <strong>San</strong><br />
<strong>Francisco</strong> Unified School District complete ongoing labor compliance audits and investigations, but<br />
also to ensure that we fulfill the procedures outlined in the recent “Update of <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong> Under 2009 Regulatory Amendments (8 CCR §16425(f) or §16426(f)),” effective January 21,<br />
2009.<br />
Mr. Brooks graduated with a Bachelors degree from the University of Exeter, Devon, England in 1973.<br />
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CONFLICT OF INTEREST CERTIFICATION STATEMENT<br />
UNDER PENALTY & PERJURY<br />
I hereby certify that neither myself, nor any personnel, management, independent consultants, or other parties<br />
associated with our <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has any affiliation with any (1) construction contractor or<br />
subcontractor within the preceding five years that has been awarded a public works contract within the<br />
geographical area in which our program operates or intends to operate, or with any public agency with which the<br />
program has contracted or intends to contract to provide labor compliance enforcement; (2) any person or entity<br />
who has been the surety of such a contract; (3) any joint labor-management committee established pursuant to<br />
the Federal <strong>Labor</strong> Management Cooperation Act of 1978 (section 175a of Title 29 of the United States Code); or<br />
(4) any person or entity who has represented workers employed in the same or similar classifications as those<br />
employed for such a contract and who has been engaged in (i) an organizational campaign under the National<br />
<strong>Labor</strong> Relations Act with contractors, professional organizations, or other parties competing for such contracts or<br />
(ii) a jurisdictional dispute with another collective bargaining representative of workers utilized for such<br />
contracts, that can be construed as a conflict of interest.<br />
The above statement is hereby certified as true and accurate, under penalty and perjury and is in compliance with<br />
(updated) requirements noted in the Title 8, California Code of Regulations §16430 which also describes how<br />
the filing of Statements of Economic Interest (FPPC Form 700) by Designated Employees and Consultants of<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> should be completed as described below:<br />
A. An Awarding Body that operates either its own labor compliance program or that contracts with a third<br />
party to operate all or part of its labor compliance program shall determine and designate those<br />
employees and consultants of the program who participate in making governmental decisions for the<br />
Awarding Body within the meaning of Title 2, California Code of Regulations, sections 18700 –<br />
18702.4. Those designated employees and consultants shall be required to file Statements of Economic<br />
Interest (FPPC Form 700) and to comply with other applicable requirements of the Political Reform Act<br />
(commencing with Section 87100 of the Government Code) in connection with work performed on<br />
behalf of the Awarding Body.<br />
(b) Designated employees and consultants who operate or are employed by a third party labor compliance<br />
program shall file their Statements of Economic Interest (FPPC Form 700) with the filing officer of each<br />
Awarding Body with which the third party program contracts, unless the Department of Industrial<br />
Relations or the Fair Political Practices Commission specifies a different or alternative filing location.<br />
Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 87100, et seq., Government Code;<br />
Section 1771.5, <strong>Labor</strong> Code.<br />
___________________________________ ________________________<br />
Joseph C. Grazioli Date<br />
Chief Financial Officer<br />
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AMENDED REGULATIONS WITHIN<br />
SUBCHAPTER 3, ARTICLE 6, AND SUBCHAPTER 4 OF<br />
CHAPTER 8, TITLE 8, CALIFORNIA CODE OF<br />
REGULATIONS, SECTIONS 16404 THROUGH 16439.<br />
(See Appendix E for complete summary of approved final amendments effective January 21, 2009, per the<br />
Department of Industrial Relations.)<br />
Statutory Changes:<br />
The Director has made the following substantive changes to the regulations originally proposed in the<br />
Notice of Proposed Rulemaking:<br />
Section 16404. Use of Electronic Reporting Forms.<br />
In subpart (e), the words “submit or” have been inserted before the word “receive” to indicate<br />
that the limitations expressed in that subpart apply both to the sending and receiving of electronic<br />
payroll records.<br />
Section 16422. Applicable Dates for Enforcement of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
In subpart (g)(1), the language was revised to delete the reference to Appendix B and replace it<br />
with a reference to statutes that require a labor compliance program “that contains or meets the<br />
requirements of <strong>Labor</strong> Code Section 1771.5.” The new language incorporates the customary<br />
statutory designation for mandated labor compliance programs that are subject to these<br />
regulations.<br />
Section 16423. Approved <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> Required by Statute.<br />
The new proposed Appendix B that followed this section was deleted and replaced by a new<br />
subpart (f), which specifies that a list of the statutes requiring awarding bodies to have a labor<br />
compliance program will be maintained on the Department of Industrial Relations’ website. This<br />
subpart effectively replaces some of the original language of subpart (a), which listed four sets of<br />
bond statutes that are subject to a labor compliance program requirement but failed to list several<br />
other statutes that also contain such a requirement.<br />
Section 16425. Approval of Awarding Body’s <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
Subpart (c) was further revised to clarify that the Director may impose conditions on a program’s<br />
approval based on the same factors used to evaluate a program’s application. Also, a new subpart<br />
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(f) was added to enable labor compliance programs with initial approval status under the existing<br />
regulations to convert to approval status without an expiration date and subject to revocation only<br />
for cause by meeting specified requirements. Specifically, the program’s annual reports would<br />
have to be up-to-date and accurate; the program would have to show that it continues to employ<br />
experienced and trained personnel and has competent legal support; the program would have to<br />
update its manuals and procedures to comply with changes in the law since the program was first<br />
approved, including changes resulting from these regulatory amendments; and the program<br />
would have to be in compliance with any specific conditions placed on its approval by the<br />
Director.<br />
Section 16426. Approval of Third Party <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
Subpart (c) was further revised to clarify that the Director may impose conditions on a program’s<br />
approval based on the same factors used to evaluate its application. Also, a new subpart (f) was<br />
added to enable labor compliance programs with initial approval status under the existing<br />
regulations to convert to unrestricted approval status without an expiration date and subject to<br />
revocation only for cause by meeting specified requirements. Specifically, the program’s annual<br />
reports would have to be up-to-date and accurate; the program would have to show that it<br />
continues to employ experienced and trained personnel and has competent legal support; the<br />
program would have to update its manuals and procedures to comply with changes in the law<br />
since the program was first approved, including changes resulting from these regulatory<br />
amendments; and the program would have to be in compliance with any specific conditions<br />
placed on its approval by the Director.<br />
Section 16428. Revocation of Approval.<br />
Subpart (f) was further revised to clarify that the Director may impose restriction or conditions on<br />
a program’s approval status.<br />
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Section 16431. Annual Report.<br />
The Director selected the Option B proposal for amending this section, which will require a<br />
prescribed reporting format for all labor compliance programs, with the exception of programs<br />
with extended authority with whom the Director has agreed to accept reports in a different<br />
format.<br />
Section 16432. Investigation Methods for <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s – Definitions and<br />
Minimum Requirements, Including Review, Confirmation and Audits of<br />
Payroll Records; On-Site Visits; and Early Resolution of Audits.<br />
The Director selected the Option B proposal for amending this section, which will do the<br />
following: (1) require all certified payroll records to be reviewed within 30 days of receipts; (2)<br />
require random confirmation of payroll records at least monthly; (3) require weekly site visits of<br />
public works projects; (4) require preparation of an audit according to prescribed standards<br />
whenever a programs determines that there has been a violation resulting in the underpayment of<br />
prevailing wages; (5) require the labor compliance program to give contractors an opportunity to<br />
submit exculpatory information before requesting the <strong>Labor</strong> Commissioner to approve the<br />
program’s determination; and (6) authorize the program to resolve certain violations without<br />
seeking the <strong>Labor</strong> Commissioner’s approval, subject to a further requirement to document the<br />
violation and resolution. The process of “confirmation” described in subpart (c) was further<br />
revised to clarify that it requires random rather than blanket confirmation of payroll records.<br />
Subpart (f) also was further revised by changing the word “may” to “shall” so that the duty to<br />
notify contractors of their right to submit exculpatory information will be mandatory rather than<br />
permissive, and the language was clarified to indicate that the contractors are entitled to a<br />
minimum of ten days within which to submit exculpatory information for consideration by the<br />
labor compliance program.<br />
Section 16434. Duties of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
The Director selected the Option B proposal for amending this section, which will do the<br />
following: (1) require labor compliance programs to follow prescribed standards for processing<br />
complaints; (2) set forth the duties of labor compliance programs with respect to apprentices; (3)<br />
require programs to maintain records demonstrating reasonable and sufficient enforcement efforts<br />
for each project monitored by the program, and requiring compliance records to be retained for<br />
prescribed periods of time; and (4) authorizing the <strong>Labor</strong> Commissioner to provide, sponsor, or<br />
endorse training of prevailing wage enforcement, covering but not limited to certain prescribed<br />
subjects. Subpart (a) was further revised to include a statement on the <strong>Labor</strong> Commissioner’s<br />
practice of using attorneys in enforcement cases. The language of subpart (c)(2)(D) also was<br />
revised further to clarify enforcement policies with respect to workers who are not duly<br />
registered as apprentices and to contractors who exceed the maximum ratios for use of<br />
apprentices.<br />
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Section 16437. Determination of Amount of Forfeiture by the <strong>Labor</strong> Commissioner.<br />
The Director selected the Option B language for subpart (a)(4) to conform to the revisions in<br />
section 16432 and also added a new optional Request for Approval of Forfeiture form.<br />
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INTRODUCTION<br />
California <strong>Labor</strong> Code Section 1771.7 requires that all LCPs, including the <strong>San</strong> <strong>Francisco</strong> Unified<br />
School District Awarding Body LCP, facilitate the following requirements on public works construction<br />
projects:<br />
All bid invitations and public works contracts issued by the district shall contain appropriate<br />
language about the requirements of the public works chapter of the California <strong>Labor</strong> Code,<br />
comprised of labor code sections 1720-1861.<br />
A pre-job conference shall be conducted with the contractor or subcontractors to discuss labor<br />
law requirements applicable to the contract.<br />
Project contractors and subcontractors shall maintain and furnish to the LCP a certified copy of<br />
each weekly payroll with a statement of compliance signed under penalty of perjury.<br />
The LCP shall review and, if appropriate, audit payroll records to verify compliance with the<br />
public works chapter of the labor code.<br />
The LCP shall attain an approval of forfeiture the Division of <strong>Labor</strong> Standards Enforcement to<br />
assess <strong>Labor</strong> Code 1776(g) penalties when payroll records are delinquent or inadequate.<br />
The LCP shall require the district to withhold contract payments equal to the amount of<br />
underpayment and applicable penalties when the LCP establishes that underpayment occurred<br />
through an investigation.<br />
Legal counsel for the LCP or awarding agency shall prepare a response to a Request for Review<br />
should a contractor or subcontractor opt not to pay amounts indicated in a Notice to Withhold<br />
Contract Payment and no settlement agreement was subsequently obtained.<br />
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CHAPTER 1 – Benefits of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
All public works contracts as set forth in <strong>Labor</strong> Code § 1720, 1720.2, 1720.3, 1720.4 and 1771 are<br />
subject to prevailing wage rates. There are a number of benefits in establishing procedures and<br />
systems to monitor compliance with prevailing wage laws. The benefits include:<br />
Competitive bidding process integrity<br />
The establishment of an effective labor compliance program ensures the following:<br />
1. Awarding bodies receive a higher number of qualified bidders;<br />
2. Contractors and their subcontractors are discouraged from underbidding;<br />
3. Contractors and their subcontractors pay the required prevailing wages;<br />
thereby<br />
4. Creating a level playing field for all contractors who bid on <strong>Public</strong> Works.<br />
Regeneration of funds to the community<br />
When the Firm actively enforces the prevailing wage laws, the process:<br />
1. Ensures the integrity and transparency of the LCP procedures;<br />
2. There is incentive by community contractors to bid on local <strong>Public</strong> Works projects;<br />
3. Construction workers who are employed on the project regenerate project funds back to the<br />
local community<br />
Quality construction work<br />
Paying the prevailing wage can attract the most skilled workers and ensure the highest quality work<br />
on <strong>Public</strong> Works projects.<br />
Better labor relations<br />
Responsible working conditions promote cooperation and communication among all constituencies<br />
and offer the best long-term prospects for a sustained, positive labor management relationship.<br />
Successful contracts<br />
Enhanced scrutiny of contractors and subcontractors allows the terms of the contract to coincide<br />
with project specifications.<br />
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Ability to withhold contract payment<br />
Pursuant to the requirements of the Department of Industrial Relations’ Division of <strong>Labor</strong><br />
Standards Enforcement, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> can initiate procedures to withhold needed<br />
portions of contract payments to cover wage restitution as well as penalty amounts as recommended<br />
in the <strong>Labor</strong> Code for compliance violations that result in the underpayment of prevailing wages.<br />
Enforce the payment of prevailing wages<br />
Construction employees, including employees, independent contractors, partners, and owneroperators,<br />
should receive the proper prevailing wages as described in the public works sections of<br />
the California <strong>Labor</strong> Code (sections 1720, 1720.2, 1720.3, 1720.4, and 1771), and pursuant to<br />
public works determinations issued by the Department of Industrial Relations. Limited exemptions<br />
include:<br />
1. Work carried out by a public agency “with its own forces” (California <strong>Labor</strong> Code Section<br />
1771)<br />
2. Certain janitorial services/guards (8 CCR 16000)<br />
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CHAPTER 2 – Prior to Construction Procedures<br />
Listed below are procedures traditionally implemented on public works projects prior to<br />
construction:<br />
Bid documentation<br />
Contract provisions for the payment of the prevailing wages should be documented prior to bid<br />
advertisement to facilitate compliance by the eventual Apparent Low Bidder that is awarded the<br />
contract by the awarding body.<br />
Advertisement for bid/construction contract<br />
The call for bids and the contract or purchase order must contain language appropriate to the<br />
requirements of prevailing wage law as contained in <strong>Labor</strong> Code sections 1771, 1775, 1777.5, 1813<br />
and 1815. The first advertisement date of the project determines the applicable prevailing wages.<br />
Pre-Bid Conference<br />
Contractors will receive information regarding the applicable prevailing wage determination and<br />
predetermined increases prior to bid. The prevailing wage rates are available on the web site of the<br />
Department of Industrial Relations’ Division of <strong>Labor</strong> Statistics and Research (DLSR). If needed,<br />
contractors should also be provided with a hard copy of relevant prevailing wages for each craft<br />
that would be included in the Scope of Work to ensure that bids are cognizant of the required rates<br />
of pay during the life of the project.<br />
Contractor Pre-Qualification<br />
Contractors are to certify qualifications as a responsible bidder, including in the area of prevailing wage<br />
compliance.<br />
Pre-Construction Conference<br />
This meeting is to be held before commencement of the work by contractors and subcontractors with<br />
accepted bids. The LCP representative should be prepared to discuss and answer questions about<br />
requirements and procedures, including record keeping, wage determinations, apprenticeship<br />
requirements and all labor compliance documentation that must be filed to verify compliance with the<br />
prevailing wage requirements of the <strong>Public</strong> Works project. <strong>Labor</strong> code sections 1777.5 and 1777.6<br />
contain the instructions for hiring Apprentices and the ratios to journeymen. A sign-in sheet for<br />
participants who attended and a checklist showing which labor compliance requirements were<br />
discussed shall be completed and kept on file for each conference.<br />
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CHAPTER 3 – Prevailing Wage Language for Bid Documentation<br />
The following prevailing wage language for bid documentation is recommended:<br />
“Attention is called to the fact that State of California prevailing wage requirements apply to this<br />
project. In accordance with provisions of Section 1773 of the <strong>Labor</strong> Code, the Director of the<br />
Department of Industrial Relations has ascertained the general prevailing rate of wages and employer<br />
payments for health and welfare, pension, vacation, and similar purposes applicable to the particular<br />
craft, classification, or type of workers employed on the work.<br />
“The General Prevailing Wage Determination is available via the Internet at:<br />
http://www.dir.ca.gov/DLSR/PWD<br />
“All questions regarding prevailing wage requirements can also be directed to the LCP representatives<br />
assigned to the <strong>Public</strong> Works project.”<br />
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CHAPTER 4– Standards of Responsibility: Prevailing Wages<br />
The awarding body should require in its procurement procedures that all persons who submit bids,<br />
proposals or offers to enter into a contract with the awarding body do so truthfully and in good<br />
faith, and shall not attempt to mislead the awarding body with respect to the following including,<br />
but not limited to, records regarding the nature or quality of the work performed under the contract,<br />
payroll records, classification of employees on payroll records, and payment of prevailing wages<br />
where called for by the contract.<br />
If directed by the awarding body, contractor shall file, and cause any subcontractor to file,<br />
compliance reports with the LCP administrator. <strong>Compliance</strong> reports shall be filed as required in<br />
<strong>Labor</strong> Code section 1776 on a weekly basis. <strong>Compliance</strong> reports shall contain such information<br />
and be supported by such data or records as may be requested by the LCP administrator to<br />
determine whether general contractor or its subcontractor is in compliance with the prevailing wage<br />
requirements.<br />
General contractors shall include the awarding bodies’ prevailing wage requirements in each<br />
subcontract entered into in furtherance of its <strong>Public</strong> Works agreement with the awarding bodies, so<br />
that such provisions are binding upon each of its subcontractors.<br />
A. Remedies for Contractor's Breach of Prevailing Wage Requirements<br />
1. The general contractor shall acknowledge that it shall pay workers the proper prevailing or<br />
wage (“Wage Provision”) and submit all required labor compliance documentation to the<br />
awarding body establishing its compliance with such requirement (“Document Provision”).<br />
The contractor shall acknowledge that the Wage Provision promotes each of the following<br />
(collectively “Goals”):<br />
a. It protects job opportunities and stimulates the economy by reducing the incentive to<br />
recruit and pay a substandard wage to labor.<br />
b. It benefits the public through the superior efficiency of well-paid employees, whereas<br />
the payment of inadequate wages tends to negatively affect the quality of services to the<br />
awarding body by fostering high turnover and instability in the workplace.<br />
c. Paying workers a wage that enables them not to live in poverty is beneficial to the health<br />
and welfare of all citizens of the community in which the project is located. It increases the<br />
ability of such workers to attain sustenance, decreases the amount of poverty, and reduces<br />
the amount of taxpayer funded social services in the community in which the project is<br />
located.<br />
d. It increases competition by promoting a more level playing field among contractors.<br />
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2. The general contractor agrees that the Documentation Provision is critical to the awarding<br />
body’s ability to monitor contractor’s compliance with the Wage Provision and to ultimately<br />
achieve the Goals. The contractor further agrees its breach of the Documentation Provision<br />
results in the need for additional enforcement action to achieve compliance with the prevailing<br />
wage provisions.<br />
In light of the critical importance of the Documentation Provision, the awarding body and<br />
contractor agree that the contractor’s compliance with this Provision, as well as the Wage<br />
Provision, is an express condition of the awarding body’s obligation to make each payment due the<br />
contractor pursuant to the <strong>Public</strong> Works contract. The awarding body shall not be obligated to<br />
make payment due the contractor until contractor has performed all of its obligations under these<br />
provisions.<br />
Any payment by the awarding body, despite the contractor’s failure to fully perform its obligations<br />
under these provisions, shall not be deemed to be a waiver of any other term or condition contained<br />
in the <strong>Public</strong> Works contract or a waiver of the right to withhold payment for any subsequent breach<br />
of the Wage Provision or the Documentation Provision.<br />
B. Penalties for Breach of Prevailing Wage Requirements:<br />
The contractor agrees that its breach of the Prevailing Wage requirements would cause the awarding<br />
body damage by undermining the Goals, and the awarding body’s damage would not be remedied by<br />
contractor’s payment of restitution to the workers who were paid a substandard wage. The contractor<br />
further agrees that such damage could increase the greater number of employees not paid the applicable<br />
prevailing wage and the longer the amount of time over which such wages were not paid.<br />
The awarding body and contractor mutually agree that making a precise determination of the<br />
amount of awarding body’s damages as a result of the contractor’s breach of the Prevailing Wage<br />
requirements would be impracticable and/or extremely difficult. Therefore, the parties agree that,<br />
in the event of such a breach, the contractor shall pay to the awarding body appropriate penalties,<br />
per Section 1775, 1776 and 1813 of the <strong>Labor</strong> Code.<br />
As such, the contractor shall forfeit as a penalty to the awarding body, up to $50 for each day for each<br />
worker paid less than the stipulated prevailing rates for any public work done under contract by the<br />
contractor or by any subcontractor in violation of the provisions of the <strong>Labor</strong> Code, particularly<br />
Sections 1770 through 1780, inclusive.<br />
Liquidated Damages: <strong>Labor</strong> Code Section 1742.1 requires the following:<br />
(a) After 60 days following the service of a civil wage and penalty assessment under Section<br />
1741 or a notice of withholding under subdivision (a) of Section 1771.6, the affected<br />
contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of<br />
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wages covered by the assessment or notice shall be liable for liquidated damages in an<br />
amount equal to the wages, or portion thereof, that still remain unpaid. If the assessment or<br />
notice subsequently is overturned or modified after administrative or judicial review,<br />
liquidated damages shall be payable only on the wages found to be due and unpaid.<br />
Additionally, if the contractor or subcontractor demonstrates to the satisfaction of the director<br />
that he or she had substantial grounds for appealing the assessment or notice with respect to a<br />
portion of the unpaid wages covered by the assessment or notice, the<br />
director may exercise his or her discretion to waive payment of the liquidated damages with<br />
respect to that portion of the unpaid wages. Any liquidated damages shall be distributed to the<br />
employee along with the unpaid wages. Section 203.5 shall not apply to claims for prevailing<br />
wages under this chapter.<br />
(b) Notwithstanding subdivision (a), there shall be no liability for liquidated damages if the full<br />
amount of the assessment or notice, including penalties, has been deposited with the<br />
Department of Industrial Relations, within 60 days following service of the assessment or<br />
notice, for the department to hold in escrow pending administrative and judicial review. The<br />
department shall release such funds, plus any interest earned, at the conclusion of all<br />
administrative and judicial review to the persons and entities who are found to be entitled to<br />
such funds.<br />
(c) The <strong>Labor</strong> Commissioner shall, upon receipt of a request from the affected contractor or<br />
subcontractor within 30 days following the service of a civil wage and penalty assessment under<br />
Section 1741, afford the contractor or subcontractor the opportunity to meet with<br />
the <strong>Labor</strong> Commissioner or his or her designee to attempt to settle a dispute regarding the<br />
assessment without the need for formal proceedings. The awarding body shall, upon receipt of a<br />
request from the affected contractor or subcontractor within 30 days following the service of a<br />
notice of withholding under subdivision (a) of Section 1771.6, afford the contractor or<br />
subcontractor the opportunity to meet with the designee of the awarding body to attempt to<br />
settle a dispute regarding the notice without the need for formal proceedings. The settlement<br />
meeting may be held in person or by telephone and shall take place before the expiration of the<br />
60-day period for seeking administrative review. No evidence of anything said or any admission<br />
made for the purpose of, in the course of, or pursuant to, the settlement meeting is admissible or<br />
subject to discovery in any administrative or civil proceeding. No writing prepared for the<br />
purpose of, in the course of, or pursuant to, the settlement meeting, other than a final settlement<br />
agreement, is admissible or subject to discovery in any administrative or civil proceeding. The<br />
assessment or notice shall advise the contractor or subcontractor of the opportunity to request a<br />
settlement meeting.<br />
(d) This section shall become operative on January 1, 2007.<br />
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C. Audit Rights:<br />
A copy of all payrolls shall be submitted weekly to the awarding body. Certified payroll records<br />
shall contain the full name, address, and social security number of each employee, his or her correct<br />
classification, rate of pay, daily and weekly number of hours worked, itemized deductions made,<br />
and actual wages paid. They shall also indicate apprentices and ratio of apprentices to journeymen.<br />
The employee’s address and social security number need only appear on the first payroll on which<br />
his or her name appears. The payroll shall be accompanied by a “Statement of <strong>Compliance</strong>” signed<br />
by the employer or agent indicating that the payrolls are correct and complete and that the wage<br />
rates contained therein are not less than those required by the Department of Industrial Relations.<br />
The “Statement of <strong>Compliance</strong>” shall be on forms furnished by the awarding body or on any form<br />
with identical wording. <strong>Compliance</strong> will also need to be documented on a Fringe Benefit Statement,<br />
as well as any <strong>Public</strong> Works documentation required by the Division of Apprenticeship Standards.<br />
Per CCR Section 16434 (d):<br />
“For each public work project subject to a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>’s enforcement of prevailing<br />
wage requirements, a separate, written summary of labor compliance activities and relevant facts<br />
pertaining to that particular project shall be maintained. That summary shall demonstrate that<br />
reasonable and sufficient efforts have been made to enforce prevailing wage requirements consistent<br />
with the practice of the <strong>Labor</strong> Commissioner. Appendix C following this section provides a suggested<br />
format for tracking and monitoring enforcement activities. <strong>Compliance</strong> records for a project shall be<br />
retained until the later of (1) at least one year after the acceptance of the public work or five years after<br />
the cessation of all labor on a public work that has not been accepted, or (2) one year after a final<br />
decision or judgment in any litigation under <strong>Labor</strong> Code Section 1742. For purposes of this section, a<br />
written summary or report includes information maintained electronically, provided that the summary<br />
or report can be printed out in hard copy form or is in an electronic format that (1) can be transmitted<br />
by e-mail or compact disk and (2) would be acceptable for the filing of documents in a federal or state<br />
court of record within this state.”<br />
If, by the 15th of the month, the contractor has not submitted satisfactory payroll records for all<br />
work performed during the monthly period ending on or before the first of that month, the awarding<br />
body can retain an amount equal to 10 percent of the estimated value of the work performed<br />
(exclusive of mobilization) during the month from the next monthly estimate, except that such<br />
retention shall not exceed $10,000 nor be less than $1,000. Retentions for failure to submit<br />
satisfactory payroll records shall be additional to all other retentions provided for in the <strong>Public</strong><br />
Works contract. The retention for failure to submit satisfactory payrolls for any monthly period will<br />
be released for payment when the monthly estimate for partial payments next following the date<br />
that all such payrolls for which the retention was made are submitted.<br />
Appendix E documents changes that the Director to the Title 8, California Code of Regulations section<br />
listed below. The Notice of Proposed Rulemaking with the changes are effective January 21, 2009:<br />
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§ 16404. Use of Electronic Reporting Forms.<br />
The certified payroll records required by <strong>Labor</strong> Code Section 1776 may be maintained and submitted<br />
electronically subject to all of the following conditions:<br />
(a) The reports must contain all of the information required by <strong>Labor</strong> Code Section 1776, with the<br />
information organized in a manner that is similar or identical to how the information is reported on the<br />
Department of Industrial Relations’ suggested “<strong>Public</strong> Works Payroll Reporting Form” (Form A-1-<br />
131);<br />
(b) The reports shall be in a format and use software that is readily accessible and available to<br />
contractors, awarding bodies, <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s, and the Department of Industrial Relations;<br />
(c) Reports submitted to an awarding body, a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>, the Division of <strong>Labor</strong><br />
Standards Enforcement, or other entity within the Department of Industrial Relations must be either (1)<br />
in the form of a non-modifiable image or record that bears an electronic signature or includes a copy of<br />
any original certification made on paper, or alternatively (2) printed out and submitted on paper with an<br />
original signature;<br />
(d) The requirements for redacting certain information shall be followed when certified payroll records<br />
are disclosed to the public pursuant to <strong>Labor</strong> Code Section 1776(e), whether the records are provided<br />
electronically or as hard copies; and<br />
(e) No contractor or subcontractor shall be mandated to submit or receive electronic reports when it<br />
otherwise lacks the resources or capacity to do so, nor shall any contractor or subcontractor be required<br />
to purchase or use proprietary software that is not generally available to the public.<br />
NOTE: Authority cited: Sections 54, 55, 1773.5, and 1776, <strong>Labor</strong> Code. Reference: Section 1776, <strong>Labor</strong> Code.<br />
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CHAPTER 5 – Detail of Prevailing Wage Coverage<br />
A. <strong>Public</strong> Works and Prevailing Wages Defined<br />
The Prevailing Wage is defined as not less than the general prevailing rate of pay for work of a<br />
similar character in the County in which the project is located and as determined by the Director of<br />
the Department of Industrial Relations pursuant to the provisions of Division 2, Part 7, Chapter 1 of<br />
the California <strong>Labor</strong> Code. Prevailing wages shall be paid to all workers employed for<br />
construction, alteration, demolition, installation or repair work performed in the execution of a<br />
<strong>Public</strong> Works contract.<br />
The work of installing, assembling, repairing or reconditioning, or other work of any nature on<br />
machinery, equipment, or tools used in or upon the work, shall be considered a part of the work to<br />
be performed under a <strong>Public</strong> Works contract and any laborers, workers, or mechanics working on<br />
such machinery, equipment, or tools, shall be subject to all of the requirements relating to labor set<br />
forth in the <strong>Public</strong> Works contract.<br />
The construction, erection, and operation of material production, proportioning, or mixing plants<br />
from which material is used wholly on the contract or on contracts under the supervision of the<br />
awarding body, shall be considered a part of the work to be performed under the contract and any<br />
laborers, workers, or mechanics working on such plants shall be subject to all of the requirements<br />
relating to labor set forth in the contract.<br />
Eight hours’ labor constitutes a legal day’s work. The Contractor shall forfeit as a penalty to the<br />
awarding body, $25 for each worker employed in the execution of the contract by the contractor or<br />
by any subcontractor for each day during which such worker is required or permitted to labor more<br />
than 8 hours in violation of <strong>Labor</strong> Code Sections 1810 to 1815, inclusive, except as provided for<br />
under <strong>Labor</strong> Code Section 1815.<br />
B. Apprentices<br />
The contractor’s attention is directed to the provisions in Sections 1777.5, 1777.6 and 1777.7 of the<br />
<strong>Labor</strong> Code concerning the employment of apprentices by the Contractor or any subcontractor.<br />
Section 1777.5 requires the contractor or subcontractor employing persons, as defined, in any<br />
apprenticeable occupation to apply to the joint apprenticeship committee which is nearest the site of<br />
the <strong>Public</strong> Works project and which administers the apprenticeship program in that trade for a<br />
certificate of approval. The certificate will also fix the ratio of apprentices to journeymen that will<br />
be used in the performance of a <strong>Public</strong> Works contract. The ratio of work performed by apprentices<br />
to journeymen in such cases shall not be less than 1 hour to 5 hours, except when the State has<br />
documented other ratio requirements.<br />
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CHAPTER 6– Contractor Requirements<br />
The contractor shall certify that they are aware of the provisions of section 1773 of the <strong>Labor</strong> Code,<br />
which requires the payment of prevailing wage on <strong>Public</strong> Works projects. Also, the contractor and<br />
any subcontractors under the contractor shall comply with Section 1776, regarding wage records,<br />
and with Section 1777.5, regarding the employment and training of apprentices of the <strong>Labor</strong> Code.<br />
It is the contractor’s responsibility to ensure compliance by any and all subcontractors performing<br />
work under a <strong>Public</strong> Works contract.<br />
The contractor shall maintain certified payroll records and basic records (time cards, cancelled<br />
checks, cash receipts, trust fund forms, accounting ledgers, tax forms, etc) during the course of the<br />
work. These records shall be made available to the awarding body for a period of three (3 years)<br />
thereafter to be maintained at their project or office location.<br />
1) Maintain and furnish records (labor code section 1776)<br />
a) Keep and maintain certified payroll records along with a Statement of <strong>Compliance</strong><br />
(<strong>Public</strong> Works Payroll Reporting Form A-1-131 in Appendix D). Each contractor and<br />
subcontractor is required by labor code section 1776 to keep and maintain certified<br />
payroll reports.<br />
b) All certified payroll reports are to be submitted for review during the course of the<br />
contract and furnished at times designated in the contract or within 10 days of the<br />
request by the awarding body or their LCP administrator. A certified payroll reporting<br />
form can be obtained from any office of the Department of Industrial Relations’<br />
Division of <strong>Labor</strong> Standards Enforcement (DLSE). If the contractor uses his/her own<br />
form, it must contain the following information:<br />
Employee full name, address and social security number<br />
Work classification<br />
Amount paid per hour. If payments are made to any third party trust, funds or<br />
plans for health and welfare, pension or vacation trusts, as part of the employer’s<br />
prevailing wage obligation, then those payments should be indicated on the<br />
payroll report. The basic wage rate paid per hour plus the amounts contributed<br />
per hour for benefits, including training fund contributions, must at least equal<br />
the total prevailing rate required for that classification.<br />
Daily regular, overtime and holiday hours and weekly totals.<br />
Gross/net wages paid for this project/all projects.<br />
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Contractor’s full name and address.<br />
Project name and location.<br />
Dates of the payroll.<br />
Certification statement or Statement of <strong>Compliance</strong> signed by a person with the<br />
authority to represent the company. This statement must declare under penalty<br />
of perjury that 1) the information contained in the payroll record is true and<br />
correct and 2) the employer has complied with the requirements of labor code<br />
sections 1771, 1811 and 1815 for any work performed by his or her employees<br />
on the public works project.<br />
It is important that each contractor and subcontractor write “FINAL” on the last submitted<br />
certified payroll record for the project.<br />
The contractor must complete a Non-Performance Report for each week in which no work<br />
is performed. All days worked on a project must be accounted for, including Saturdays,<br />
Sundays and holidays.<br />
Time cards (completed by workers), front and back copies of cancelled payroll checks,<br />
check stubs, daily logs, employee sign-in sheets, cancelled fringe benefit checks, fringe<br />
benefit statements, and/or any other record may be used by the LCP administrator or<br />
awarding body at any time to verify the accuracy of the certified payroll record and shall be<br />
provided by the contractor within 10 days following the receipt of a request for those<br />
records.<br />
2) Electronic submittals of certified payroll records<br />
The Director of the Department of Industrial Relations has added a new section 16404 that<br />
expressly authorizes contractors and subcontractors to maintain and submit electronic<br />
payroll records, subject to the following conditions:<br />
a) The reports must contain all of the information required in <strong>Labor</strong> Code Section 1776<br />
with the information organized in a manner that is similar or identical to how the<br />
information is reported on the Department of Industrial Relations’ suggested public<br />
works payroll form (Form A-1-131).<br />
b) The reports shall be in a format and use software that is readily accessible and available<br />
to contractors, awarding bodies, designated LCP administrators, and the Department of<br />
Industrial Relations.<br />
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c) Reports submitted electronically must be either (1) in the form of a non-modifiable<br />
image or record that bears an electronic signature or includes a copy of any original<br />
certification made on paper, or alternatively (2) printed out and submitted on paper with<br />
an original signature.<br />
d) The requirements for redacting certain information shall be followed when certified<br />
payroll records are disclosed to the public pursuant to <strong>Labor</strong> Code Section 1776(e)<br />
whether the records are provided electronically or as hard copies; and<br />
e) No contractor or subcontractor shall be mandated to submit or receive electronic reports<br />
when it otherwise lacks the resources or capacity to do so, nor shall any contractor or<br />
subcontractor be required to purchase or use proprietary software that cannot be generally<br />
available to the public.<br />
Note: the Director has made the following substantive changes to the regulations originally<br />
proposed in the Notice of Proposed Rulemaking, effective January 21, 2009:<br />
Section 16404 (e). Use of Electronic Reporting Forms.<br />
The words “submit or” have been inserted before the word “receive” to indicate that the<br />
limitations expressed in that subpart apply both to the sending and receiving of electronic<br />
payroll records. See Appendix E.<br />
3) Upon request, records can include supporting documents as described in the California<br />
Code of Regulations that can verify the payment of prevailing wages, including “all time<br />
cards, canceled checks, cash receipts, trust fund forms, books, documents, schedules, forms,<br />
reports, receipts or other evidences which reflect job assignments, work schedules by days<br />
and hours, and the disbursement by way of cash, check, or in whatever form or manner, of<br />
funds to a person(s) by job classification and/or skill pursuant to a public works project.”<br />
4) Provide a Fringe Benefit Statement<br />
The form, also known as a Statement of Employer Payments (PW 26), must be completed<br />
by each contractor and subcontractor indicating whether they pay the employees in cash or<br />
whether payments are made to a third party trust, plan or fund for health and welfare<br />
benefits, vacation funds, or makes pension contributions. It must contain the fund or trust<br />
name, address, administrator, and amount per hour contributed and frequency of<br />
contributions for each classification of worker. Training fund contributions must be reported<br />
on this form. A copy of the form can be downloaded from:<br />
http://www.dir.ca.gov/dlse/DLSEForm-PW26.pdf<br />
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5) Provide a copy of notices to the Division of Apprenticeship Standards<br />
(DAS Form 140)<br />
Contractors who are not already participating in an approved program, and who did not<br />
receive sufficient number of apprentices from their initial request, must request dispatch of<br />
apprentices from at least one other apprenticeship committee, if more than one exists in the<br />
area of the public works project.<br />
Using DAS Form 140, contractors must submit the contract award information in writing to<br />
each of the apprenticeship program sponsors in the area within 10 days of the prime<br />
execution of the contract or subcontract.<br />
6) Provide a copy of request(s) for apprentices (DAS Form 142)<br />
A contractor on a public works project must employ at least one (1) hour of apprentice work<br />
for every five (5) hours performed by a journeyman.<br />
7) Provide verification of Training Fund contributions (CAC-2 Form)<br />
Contractors who are awarded public works jobs must make training fund contributions in<br />
the amount established in the prevailing wage rate publication for journeymen and<br />
apprentices. Contractors who contribute to an apprenticeship program are entitled to a full<br />
credit in the amount of those contributions. Contractors who do not contribute to an<br />
apprenticeship program must submit their contributions to the California Apprenticeship<br />
Council, P. O. Box 420603, <strong>San</strong> <strong>Francisco</strong>, CA 94142-0603.<br />
Training fund contributions to the Council are due and payable on the 15 th day of the month<br />
for work performed during the preceding month. The contributions should be paid by check<br />
and be submitted with a training fund contribution form (CAC - 2) or a letter containing the<br />
following information:<br />
● Name, address and phone number of contractor<br />
● Contractor license number<br />
● Name and address of SFUSD as awarding agency<br />
● Jobsite location, including <strong>San</strong> <strong>Francisco</strong> County information<br />
● Contract or project number<br />
● Time period covered by contributions being paid<br />
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● Contribution rate and total hours worked by apprenticeable craft<br />
● Name of the program(s) providing apprentices, if applicable<br />
● Number if apprentice hours worked, by apprenticeable craft and by program<br />
8) Responsibility of Subcontractors<br />
The prime contractor shall be responsible for ensuring that the labor standards provisions<br />
are followed by all subcontractors. Moreover, the prime contractor may be jointly liable for<br />
the <strong>Labor</strong> Code violations of all subcontractors.<br />
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CHAPTER 7 – Overview of <strong>Labor</strong> Code Sections 1771, 1774, and 1813<br />
In accordance with provisions of Section 1773 of the <strong>Labor</strong> Code, the Director of the Department<br />
of Industrial Relations has ascertained the general prevailing rate of wages and employer payments<br />
for health and welfare, pension, vacation, and similar purposes available to the particular craft,<br />
classification, or type of workers employed on the work.<br />
The General Prevailing Wage Determination is available on the web site of the Division of <strong>Labor</strong><br />
Statistics and Research (DLSR):<br />
http://www.dir.ca.gov/DLSR/PWD<br />
All questions regarding prevailing wage requirements should also be provided by the SFUSD<br />
awarding body staff.<br />
Employees must be paid unconditionally, and not less than once each week, the full amounts which<br />
are due and payable for the period covered by the particular payday. The employer must establish a<br />
fixed workweek (Sunday through Saturday, for example) and an established payday (such as every<br />
Monday or the preceding day should such payday fall on a holiday). On each and every payday,<br />
each worker must be paid all sums due as of the end of the preceding workweek and must be<br />
provided with an itemized wage statement pursuant to <strong>Labor</strong> Code Section 226.<br />
If an individual who works on the project is called a subcontractor, when in fact he/she is a journey<br />
level mechanic supplying only labor, such an individual would not be deemed a bona fide<br />
subcontractor and must be reported on the payroll of the prime contractor as a tradeworker. Any<br />
person who does not hold a valid contractor’s license cannot be a subcontractor, and anyone hired<br />
by that person is the worker of the general contractor for purposes of prevailing wage requirements,<br />
certified payroll reporting and workers’ compensation laws.<br />
A. Prevailing wage rate determinations<br />
1) Requirements<br />
a) The law requires that workers on a publicly-funded project must be paid the prevailing<br />
wage of the area in which the project is located. Prevailing wage rates are published<br />
twice each year as prevailing wage determinations. Some trades are issued regionally<br />
(northern or southern California) and other subtrades are issued by county in which the<br />
project is located.<br />
b) Each wage determination for each classification of worker will indicate the basic wage<br />
rate and fringe benefit amounts which equal the total required wage for each<br />
classification of worker for straight time and overtime work.<br />
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c) When assistance is needed with a special or unknown classification, a written request<br />
should be submitted to the DLSR for them to make a determination.<br />
d) The contractor is obligated to pay the full prevailing rate of per diem wages. He/she,<br />
however, may take credit for amounts up to the total of fringe benefit amounts listed as<br />
prevailing in the determination. The credit may be taken only for amounts which are<br />
actual payments as defined under the Employer Payments Section CCR 16000(1)-(3). If<br />
the total of employer payments for the fringe benefits listed is less than the aggregate<br />
amount in the wage determination, the contractor must pay the difference directly to the<br />
employee. No amount of credit for payments over the aggregate amount of employer<br />
payments shall be taken as a credit towards the hourly wage required to be paid.<br />
e) The determinations indicate the amount required for straight-time work, overtime,<br />
holiday, and Saturday and Sunday work. There may be special requirements for the<br />
payment of overtime and Saturday/Sunday work, and these requirements will be<br />
indicated by footnotes. These footnotes should be examined carefully.<br />
f) There are separate determinations issued for apprentices on public works. These<br />
footnotes should also be examined carefully.<br />
g) Each wage determination will indicate when the determination will expire and whether<br />
the rate will increase during the project. A single asterisk after the expiration date<br />
indicates the rate is good for the life of the project.<br />
2) Overtime<br />
A double asterisk after the expiration date indicates the rate for work performed after the<br />
expiration date has been determined. If work extends past that date, the new rate must<br />
be paid and should be incorporated in contracts entered into at the time of bid. Wage<br />
determinations published by the DLSR also show any predetermined increases that may<br />
apply during the life of the project.<br />
Work performed by employees on public works in excess of eight hours per day and 40<br />
hours per week must be paid for at not less than one-and-one-half times the basic rate of<br />
pay. Each wage determination will specify the wage rate required for overtime pay and<br />
possible exceptions (e.g. Asbestos Removal Workers). Failure to pay the required prevailing<br />
wage rates would be subject to required <strong>Labor</strong> Code Section 1813 penalties and as<br />
stipulated by the Department of Industrial Relations.<br />
3) Holidays<br />
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Work performed on certain holidays may require the payment of overtime or double time.<br />
A list of designated holidays for each craft or classification of labor can be found on the<br />
Division of <strong>Labor</strong> Statistics and Research (DLSR) Web site at:<br />
http://www.dir.ca.gov/DLSR/statistics_research.html<br />
Each wage determination will specify the appropriate wage rate for holiday work.<br />
4) Saturday/Sunday work<br />
Most classifications of workers require the payment of overtime or double time for work<br />
performed on Saturdays and Sundays. Each wage determination will specify the required<br />
wage rate for this work. Pay attention to any footnotes that may contain exceptions or<br />
special requirements.<br />
5) Travel/subsistence payments<br />
Because the law requires that workers receive the general prevailing rate of per diem as part<br />
of the contractor’s prevailing wage obligation, there may be a requirement to pay<br />
travel/subsistence. Many classifications require the payment of mileage or subsistence for<br />
traveling certain distances. These requirements are contained in the collective bargaining<br />
agreement on file with DLSR for each craft/classification of worker. You can download<br />
those requirements from the DLSR Web site at:<br />
6) Owner, operator, partners<br />
http://www.dir.ca.gov/DLSR/statistics_research.html<br />
The law prescribes that workers on a <strong>Public</strong> Works project receive prevailing wages. Owners,<br />
owner-operators, partners, or officers of corporations performing labor on a prevailing wage<br />
project must be paid prevailing wage rates. Owner-operators are individuals that own and<br />
operate their own machines or equipment. Owner-operators are not to be confused with<br />
Operating Engineer employees, who operate equipment owned by a company and are<br />
employees of that company.<br />
If owner operators are incorporated they must submit Certified Payroll Records. For example,<br />
J. Doe Compacting, Inc., is a corporation and its owner, Mr. John Doe is an employee of the<br />
corporation who operates a compactor; J. Doe Compacting, Inc. must report Mr. Doe as an<br />
Operating Engineer and the company must submit CPRs for employee John Doe.<br />
However, if Mr. Doe, is a sole-proprietor Owner-Operator, is not incorporated, he must be<br />
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included in the CPRs of the company that contracted him as an Owner-Operator.<br />
B. Selecting the Correct Prevailing Wage Determination<br />
The Prevailing Wage Determination published bi-annually (February 22 and August 22) and are<br />
divided into Statewide, Northern and County Sections.<br />
The Statewide Prevailing Wage Determination Website is:<br />
http://www.dir.ca.gov/dlsr/PWD/Statewide.html<br />
The link for the Statewide Wage Determinations provides the prevailing wage rates for<br />
classifications such as Boiler Maker, Iron Worker, etc. These classifications are applicable to<br />
workers who work throughout the State.<br />
The Northern California Prevailing Wage Determination Website is:<br />
http://www.dir.ca.gov/dlsr/PWD/Northern.html<br />
The link for the Northern Wage Determinations provides the prevailing wage rates for<br />
classifications such as Carpenter, <strong>Labor</strong>er, Operating Engineer, etc. These classifications are<br />
applicable to workers who work throughout the Northern California.<br />
The <strong>San</strong> <strong>Francisco</strong> County (example) Prevailing Wage Determination Website is:<br />
http://www.dir.ca.gov/dlsr/PWD/sfr.html<br />
Selecting the above link will show the <strong>San</strong> <strong>Francisco</strong> County Wage Determinations where<br />
classifications such as Electrician, Plumber, Painter, etc can be found. These classifications are<br />
applicable to workers who work in <strong>San</strong> <strong>Francisco</strong> County, <strong>San</strong> <strong>Francisco</strong>, California.<br />
Prevailing wage rates for Apprentices has been moved to the website for the Division of<br />
Apprenticeship Standards (DAS):<br />
http://www.dir.ca.gov/DAS/PWAppWage/PWAppWageStart.asp<br />
Selecting the above links will show the rates for apprentices that are applicable for Statewide,<br />
Northern and <strong>San</strong> <strong>Francisco</strong> County.<br />
Apprentices shall be permitted to work and be employed at the apprentice rate only when they are<br />
registered under a bona fide apprenticeship program with a State apprenticeship agency which is<br />
recognized the State Division of Apprenticeship Standards (DAS). (<strong>Labor</strong> Code Section 1777.5<br />
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(c)). (See Chapter 9 for further information on Apprentice Requirements.)<br />
The appropriate Prevailing Wage Determination for use in the course of an audit is determined by<br />
the first of the two bid advertisement dates for the contract/project. Bid advertisement date from<br />
February 22 to August 21 call for the determination that is listed as “yyyy-01” (yyyy stands for<br />
year, for example 2008-01). Dates from August 22 to February 1 call for the “yyyy-02” (2008-02).<br />
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CHAPTER 8 – Overview of <strong>Labor</strong> Code Sections 1777.5 and 1777.7(a)(1)<br />
Apprentices shall be permitted to work in this capacity only when they are registered with a bona fide<br />
apprenticeship program registered with a State apprenticeship agency which is recognized by the State<br />
Division of Apprenticeship Standards (DAS). The definitions of <strong>Public</strong> Works pursuant to <strong>Labor</strong> Code<br />
Sections 1777.5 and 1777.7(a)(1) are documented below:<br />
A. <strong>Labor</strong> Code § 1777.5<br />
1) California <strong>Labor</strong> Code Section 1777.5 requires all <strong>Public</strong> Works contractors and<br />
subcontractors to comply with the following:<br />
a) Contractors must submit the contract award information in writing to each of the<br />
apprenticeship program sponsors in the area of your <strong>Public</strong> Works project within 10<br />
days of the prime execution of the contract or subcontract, but in no event later than<br />
the first day in which the contractor has workers employed on the public work.<br />
Contractors may use form DAS 140. This is simply a notification of award, it is not<br />
automatically a request for dispatch of a registered apprentice.<br />
b) Apprentice to Journeyman ratios requirements are at least one (1) hour of apprentice<br />
work for every five (5) hours performed by a journeyman. Ratio requirements are<br />
subject to the approved bargaining agreements that are recognized by the<br />
Department of Industrial Relations and published in the Scope of Work section of<br />
the wage determination. All contractors must request for dispatch of an apprentice<br />
from an apprenticeship program (for each apprenticeable craft or trade) by giving the<br />
program actual notice of at least 48 hours (business days only) before the date on<br />
which apprentices are required. Contractors who are not already participating in an<br />
approved program and who did not receive sufficient number of apprentices from<br />
their initial request must dispatch of apprentices from at least one other<br />
apprenticeship committee, if more than one exists in the area of the <strong>Public</strong> Works<br />
project.<br />
c) The prime contractor shall furnish to the awarding body written evidence of the<br />
registration of its and all subcontractors’ training programs and apprentices, with the<br />
State of California, as well as the ratios allowed (as defined in the <strong>Labor</strong> Code and<br />
by DAS) and the wage required to be paid thereunder for the area of construction.<br />
d) Pre-apprentice trainees, trainees in nonapprenticeable crafts and others who are not<br />
duly registered as apprentices will not be permitted on <strong>Public</strong> Works projects unless<br />
they are paid full prevailing wage rates as journeypersons.<br />
e) Contractors who are awarded <strong>Public</strong> Works jobs must make training fund<br />
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contributions in the amount established in the prevailing wage rate publication for<br />
journeymen and apprentices.<br />
f) Apprentices employed on <strong>Public</strong> Works projects must at all times work with or<br />
under the direct supervision of journeyperson(s).<br />
B. <strong>Labor</strong> Code § 1777.7(a)(1)<br />
A contractor or subcontractor that is determined by the Chief of the Division of<br />
Apprenticeship Standards to have knowingly violated Section 1777.5 shall forfeit as a civil<br />
penalty an amount not exceeding one hundred dollars ($100) for each full calendar day of<br />
noncompliance. The amount of this penalty may be reduced by the Chief if the amount of<br />
the penalty would be disproportionate to the severity of the violation. A contractor or<br />
subcontractor that knowingly commits a second or subsequent violation of Section 1777.5<br />
within a three-year period, where the noncompliance results in apprenticeship training not<br />
being provided as required by this chapter, shall forfeit as a civil penalty the sum of not<br />
more than three hundred dollars ($300) for each full calendar day of noncompliance.<br />
Notwithstanding Section 1727, upon receipt of a determination that a civil penalty has been<br />
imposed by the Chief, the awarding body shall withhold the amount of the civil penalty<br />
from contract progress payments then due or to become due.<br />
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CHAPTER 9 – Duties of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
As per CCR §16434 requirements:<br />
(a) A <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall have a duty to the Director to enforce the requirements of<br />
Chapter 1 of Part 7 of Division 2 of the <strong>Labor</strong> Code and these regulations in a manner consistent with<br />
the practice of the <strong>Labor</strong> Commissioner. It is the practice of the <strong>Labor</strong> Commissioner to refer to the<br />
Director’s ongoing advisory service of web-posted public works coverage determinations as a source of<br />
information and guidance in making enforcement decisions. It is also the practice of the <strong>Labor</strong><br />
Commissioner to be represented by an attorney in prevailing wage hearings conducted pursuant to<br />
<strong>Labor</strong> Code Section 1742(b) and sections 17201 – 17270 of Title 8 of the California Code of<br />
Regulations.<br />
(b) Upon receipt of a written complaint alleging that a contractor or subcontractor has failed to pay<br />
prevailing wages as required by the <strong>Labor</strong> Code, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall do all of the<br />
following:<br />
(1) Within 15 days after receipt of the complaint, send a written acknowledgment to the<br />
complaining party that the complaint has been received and identifying the name, address, and<br />
telephone number of the investigator assigned to the complaint;<br />
(2) Within 15 days after receipt of the complaint, provide the affected contractor with the notice<br />
required under <strong>Labor</strong> Code section 1775(c) if the complaint is against a subcontractor;<br />
(3) Notify the complaining party in writing of the resolution of the complaint within ten days<br />
after the complaint has been resolved by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>;<br />
(4) Notify the complaining party in writing at least once every 30 days of the status of a<br />
complaint that has not been resolved by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>; and<br />
(5) Notify the complaining party in writing at least once every 90 days of the status of a<br />
complaint that has been resolved by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> but remains under review<br />
or in litigation before another entity.<br />
(c) The duties of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> with respect to apprenticeship standards are as follows:<br />
(1) Either the Awarding Body or the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> acting on its behalf shall (A) inform<br />
contractors and subcontractors bidding public works about apprenticeship requirements, (B) send<br />
copies of awards and notices of discrepancies to the Division of Apprenticeship Standards as required<br />
under Section 1773.3 of the <strong>Labor</strong> Code, and (C) refer complaints and promptly report suspected<br />
violations of apprenticeship requirements to the Division of Apprenticeship Standards.<br />
(2) The <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall be responsible for enforcing prevailing wage pay<br />
requirements for apprentices consistent with the practice of the <strong>Labor</strong> Commissioner, including (A) that<br />
any contributions required pursuant to <strong>Labor</strong> Code Section 1777.5(m) are paid to the appropriate entity,<br />
(B) that apprentices are paid no less than the prevailing apprentice rate, (C) that workers listed and paid<br />
as apprentices on the certified payroll records are duly registered as apprentices with the Division of<br />
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Apprenticeship Standards, and (D) requiring that the regular prevailing wage rate be paid (i) to any<br />
worker who is not a duly registered apprentice and (ii) for all hours in excess of the maximum ratio<br />
permitted under <strong>Labor</strong> Code Section 1777.5(g), as determined at the conclusion of the employing<br />
contractor or subcontractor’s work on the public works contract.<br />
(d) For each public work project subject to a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>’s enforcement of prevailing<br />
wage requirements, a separate, written summary of labor compliance activities and relevant facts<br />
pertaining to that particular project shall be maintained. That summary shall demonstrate that<br />
reasonable and sufficient efforts have been made to enforce prevailing wage requirements consistent<br />
with the practice of the <strong>Labor</strong> Commissioner. Appendix C following this section provides a suggested<br />
format for tracking and monitoring enforcement activities. <strong>Compliance</strong> records for a project shall be<br />
retained until the later of (1) at least one year after the acceptance of the public work or five years after<br />
the cessation of all labor on a public work that has not been accepted, or (2) one year after a final<br />
decision or judgment in any litigation under <strong>Labor</strong> Code Section 1742. For purposes of this section, a<br />
written summary or report includes information maintained electronically, provided that the summary<br />
or report can be printed out in hard copy form or is in an electronic format that (1) can be transmitted<br />
by e-mail or compact disk and (2) would be acceptable for the filing of documents in a federal or state<br />
court of record within this state.<br />
(e) The <strong>Labor</strong> Commissioner may provide, sponsor, or endorse training on how to enforce prevailing<br />
wage requirements, including but not necessarily limited to the subjects of (1) ascertaining prevailing<br />
wage requirements and rates from the Division of <strong>Labor</strong> Statistics and Research, (2) monitoring and<br />
investigation under section 16432 above, (3) enforcement responsibilities under this Section and<br />
Sections 16435 – 16439 below, and (4) procedural requirements and responsibilities as an enforcing<br />
agency under <strong>Labor</strong> Code Sections 1741 – 1743 and 1771.6 and sections 17201 – 17270 of Title 8 of<br />
the California Code of Regulations.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1741 – 1743, 1771.5, 1771.6, 1773.3,<br />
and 1777.5 through 1777.7, <strong>Labor</strong> Code.<br />
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CHAPTER 10 – Case Review and Document Collection<br />
Below is an outline of critical steps for document collection, which should be routinely applied in every<br />
prevailing wage violation case and particularly for those cases that lead to the filing of a Notice of<br />
Withholding of Contract Payments:<br />
1) Copy of worker complaint<br />
Notes from worker interview.<br />
Calendar of dates and hours worked.<br />
Copies of check stubs or other form of proof of underpayment.<br />
Document all attempts to authenticate the complaint.<br />
Other supporting documentation where necessary.<br />
2) Copy of all correspondence to contractor<br />
Job-start meeting checklist.<br />
Initial notification of complaint.<br />
Invitation to review the preliminary findings.<br />
Request for additional documentation such as canceled checks, check stubs, time cards,<br />
cash receipts, ledgers, etc.<br />
Log of all calls to contractor with notes about the content of discussion.<br />
3) Certified payroll records<br />
Job-start meeting checklist.<br />
Initial notification of complaint.<br />
Invitation to review the preliminary findings.<br />
Request for additional documentation such as canceled checks, check stubs, time cards,<br />
cash receipts, ledgers, etc.<br />
Log of all calls to contractor with notes about the content of discussion.<br />
4) Inspector’s daily log<br />
Or another detailed record of work performed by date and the numbers of workers<br />
on project.<br />
For the period of time covered in the complaint.<br />
5) Correct prevailing wage determination and applicable increases<br />
For each classification appearing in the audit.<br />
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6) Scope of work for trade classifications used<br />
From Division <strong>Labor</strong> Statistics and Research (DLSR).<br />
7) Tabulation of bids<br />
● Advertisement date(s).<br />
● List of subcontractors.<br />
● Contract award amounts.<br />
● Description of project.<br />
8) Notice to proceed<br />
Official project start and completion dates.<br />
Duration of project.<br />
9) Notice of completion (if applicable)<br />
● With date stamp showing when it was recorded.<br />
● Any withholding or action must take place within 180 days from the date of recording.<br />
● Another 180 days is granted beyond this date if funds are still available in contract.<br />
10) Surety company information<br />
The surety is entitled to receive a copy of any action taken or Notice of Withholding of<br />
Contract Payments filed.<br />
11) Contractor’s previous record of violations (if applicable)<br />
Provide documentation regarding prior formal actions and withholdings.<br />
12) The Notice of Withholding of Contract Payments (if applicable)<br />
Always attach a copy of the audit spreadsheet.<br />
13) Release of Notice of Withholding of Contract Payments<br />
Returns withheld funds.<br />
Filed when a case is settled in whole or part.<br />
Filed when it is determined the violation did not occur.<br />
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14) Memo to file<br />
● Explains circumstances and reasons for case closure without action.<br />
● Provides explanation and reasons for settlement and spells any agreements reached with<br />
contractor or other parties.<br />
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CHAPTER 11 – Audit<br />
In order to achieve compliance on <strong>Public</strong> Works projects, audits shall be conducted routinely by the<br />
LCP administrator and shall be conducted if requested by the:<br />
<strong>Labor</strong> Commissioner<br />
Complainants<br />
Unions<br />
Contractor(s)<br />
Workers and<br />
Member of the general public<br />
When the LCP administrator receives a complaint, a labor standards investigation file shall be<br />
opened. If after reviewing all documents and interviewing workers and other witnesses, it is<br />
revealed that a willful violation of the <strong>Labor</strong> Code has occurred, an audit shall be conducted. The<br />
audit should consist of:<br />
1) A comparison of payroll records to the best available information as to the actual hours<br />
worked;<br />
2) The classification of workers employed on the construction contract;<br />
3) A review of fringe benefit payments.<br />
Examples of willful violations include some of the following:<br />
1. Failure to Comply with Prevailing Wage Rate Requirements<br />
Failure to comply with prevailing wage rate requirements (as set forth in <strong>Labor</strong> Code and<br />
awarding body contracts) is determined a willful violation whenever less that the stipulated<br />
basic hourly rate is paid to tradeworkers, or if overtime, Holiday, rate, fringe benefits and/or<br />
employer payments are paid at a rate less than stipulated.<br />
2. Falsification of Payroll Records, misclassification of work, and/or failure to:<br />
Falsification of Payroll Records, misclassification of work, and/or failure to accurately report<br />
hours of work is characterized by deliberate underreporting of hours of work, underreporting<br />
the head count, stating that the proper prevailing wage rate was paid when it in fact was not,<br />
misclassifying the work performed by the worker, and any other deliberate and/or willful act<br />
which results in the falsification or inaccurate reporting of payroll records.<br />
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3. Failure to Submit Certified Payroll Records:<br />
Prime contractor shall be responsible for the submission of certified payroll records for<br />
itself and all subcontractors, of any tier, within ten (10) days of the week ending date of<br />
each week.<br />
The prime contractor and subcontractors have 10 days upon notification by the awarding<br />
body or their representative in which to submit basic records and/or to correct inaccuracies<br />
or omissions that have been detected by the review of records.<br />
4. Failure to Pay Fringe Benefits:<br />
Fringe benefits are defined as the amounts stipulated for employer payments or trust fund<br />
contributions and are determined to be part of the required prevailing wage rate. Failure to<br />
pay or provide fringe benefits and/or make trust fund contributions on a timely basis is<br />
equivalent payment of less than the stipulated wage rate. Should back wages be due and<br />
there is no agreement on payment after meeting with the contractors, the LCP administrator<br />
shall report the matter to the <strong>Labor</strong> Commissioner as a willful violation, upon completion of<br />
an investigation and audit.<br />
5. Failure to pay the Correct Apprentice Rate and/or misclassifications of workers as<br />
Apprentices:<br />
Failure to pay the correct apprentice rate as a result of:<br />
Classifying a worker as an apprentice when not properly registered<br />
Employing apprentices outside of the prescribed ratios is equivalent<br />
6. Taking of Kickbacks:<br />
Accepting or extracting kickbacks from employee wages under <strong>Labor</strong> Code Section 1778<br />
constitutes a felony and may be prosecuted by the appropriate enforcement agency.<br />
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CHAPTER 12 – Penalties<br />
Failure to pay prevailing wages to every worker on a California State regulated project may result<br />
in the contractor being prohibited from bidding on public works projects for three years by the<br />
Division of <strong>Labor</strong> Standards Enforcement. In addition, wages not paid become forfeitures and can<br />
be collected from the contractor. Fines of up to $50 per day can also be assessed. The penalties are<br />
severe and range from misdemeanors to felonies (<strong>Labor</strong> Code sections 1777.5-1777). Although the<br />
fundamental obligation to pay prevailing wage rates rests with the contractor, ensuring payment<br />
also is important to SFUSD as awarding body .<br />
Failure to pay required overtime wages will result in the assessment of $25 per worker per<br />
violation, per <strong>Labor</strong> Code Section 1813.<br />
It is against the law for an employer or other person to accept any compensation from workers on a<br />
prevailing wage project. Anyone found guilty of accepting fees, bribes or any other form of<br />
compensation or kickbacks from a worker on a prevailing wage project is guilty of a felony. Any<br />
person or company that attempts to charge a fee for registration or information about public works<br />
employment is guilty of a misdemeanor. See <strong>Labor</strong> Code Section 1778.<br />
Every person, who individually or as a representative of an awarding or public body or officer, or as<br />
a contractor or subcontractor doing public work, or agent or officer thereof, who takes, receives, or<br />
conspires with another to take or receive, for his own use or the use of any other person any portion<br />
of the wages of any workman or working subcontractor, in connection with services rendered upon<br />
any <strong>Public</strong> Work is guilty of a felony.<br />
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A. Duties of the LCP administrator<br />
CHAPTER 13 – Enforcement Action<br />
The LCP administrator has a duty to enforce:<br />
The <strong>Labor</strong> Code public works requirements, and;<br />
The procedural regulations of the Department of Industrial Relations<br />
The above shall be enforced in a manner consistent with the practice of Title 8, California<br />
Code of Regulations, Section 16000, et seq. and in accordance with the Precedential<br />
Prevailing Wage Decisions issued by the Director, and of the Department of Industrial<br />
Relations in a manner consistent with the practiced of the <strong>Labor</strong> Commissioner.<br />
B. Withholding Contract Payments When Payroll Records are delinquent or Inadequate<br />
As per CCR §16435, please note the following:<br />
(a) "Withhold" means to cease payments by the Awarding Body, or others who pay on its behalf, or<br />
agents, to the general contractor. Where the violation is by a subcontractor, the general contractor shall<br />
be notified of the nature of the violation and reference made to its rights under <strong>Labor</strong> Code Section<br />
1729.<br />
(b) "Contracts." Except as otherwise provided by agreement, only contracts under a single master<br />
contract, including a Design-Build contract, or contracts entered into as stages of a single project, may<br />
be the subject of withholding.<br />
(c) "Delinquent payroll records" means those not submitted on the date set in the contract.<br />
(d) "Inadequate payroll records" are any one of the following:<br />
(1) A record lacking any of the information required by <strong>Labor</strong> Code Section 1776;<br />
(2) A record which contains all of the required information but is not certified, or is certified by<br />
someone who is not an agent of the contractor or subcontractor;<br />
(3) A record remaining uncorrected for one payroll period, after the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has<br />
given the contractor or subcontractor notice of inaccuracies detected by audit or record review.<br />
However, prompt correction will stop any duty to withhold if such inaccuracies do not amount to one<br />
(1) percent of the entire Certified Weekly Payroll in dollar value and do not affect more than half the<br />
persons listed as workers employed on that Certified Weekly Payroll, as defined in <strong>Labor</strong> Code Section<br />
1776 and section 16401 of Title 8 of the California Code of Regulations.<br />
(e) The withholding of contract payments when payroll records are delinquent or inadequate is required<br />
by <strong>Labor</strong> Code Section 1771.5(b)(5), and it does not require the prior approval of the <strong>Labor</strong><br />
Commissioner. The Awarding Body shall only withhold those payments due or estimated to be due to<br />
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the contractor or subcontractor whose payroll records are delinquent or inadequate, plus any additional<br />
amount that the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has reasonable cause to believe may be needed to cover a<br />
back wage and penalty assessment against the contractor or subcontractor whose payroll records are<br />
delinquent or inadequate; provided that a contractor shall be required in turn to cease all payments to a<br />
subcontractor whose payroll records are delinquent or inadequate until the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
provides notice that the subcontractor has cured the delinquency or deficiency.<br />
(f) When contract payments are withheld under this section, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall<br />
provide the contractor and subcontractor, if applicable, with immediate written notice that includes all<br />
of the following: (1) a statement that payments are being withheld due to delinquent or inadequate<br />
payroll records, and that identifies what records are missing or states why records that have been<br />
submitted are deemed inadequate; (2) specifies the amount being withheld; and (3) informs the<br />
contractor or subcontractor of the right to request an expedited hearing to review the withholding of<br />
contract payments under <strong>Labor</strong> Code Section 1742, limited to the issue of whether the records are<br />
delinquent or inadequate or the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has exceeded its authority under this<br />
section.<br />
(g) No contract payments shall be withheld solely on the basis of delinquent or inadequate payroll<br />
records after the required records have been produced.<br />
(h) In addition to withholding contract payments based on delinquent or inadequate payroll records,<br />
penalties shall be assessed under <strong>Labor</strong> Code Section 1776(g) for failure to timely comply with a<br />
written request for certified payroll records. The assessment of penalties under <strong>Labor</strong> Code Section<br />
1776(g) does require the prior approval of the <strong>Labor</strong> Commissioner under section 16436 of these<br />
regulations.<br />
NOTE: Authority cited: section 1773.5, <strong>Labor</strong> Code. Reference: sections 1729, 1771.5, and 1776, <strong>Labor</strong> Code.<br />
C. Withholding for Violation of the Requirement to Pay Prevailing Wages<br />
CCR §16435.5 requires the withholding of contract payments when, after investigation, it is established<br />
that an underpayment or other violation has occurred. Please note the following:<br />
(a) "Withhold" and “contracts” have the same meaning set forth in Sections 16435(a) and 16435(b) of<br />
these regulations.<br />
(b) Where the violation is by a subcontractor, the general contractor shall be notified of the nature of<br />
the violation and reference made to its rights under <strong>Labor</strong> Code Section 1729.<br />
(c) "Amount equal to the underpayment" is the total of the following determined by payroll review,<br />
audit, or admission of contractor or subcontractor:<br />
(1) The difference between amounts paid workers and the correct General Prevailing Rate of Per Diem<br />
Wages, as defined in <strong>Labor</strong> Code Section 1773, and determined to be the prevailing rate due workers in<br />
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such craft, classification or trade in which they were employed and the amounts paid;<br />
(2) The difference between amounts paid on behalf of workers and the correct amounts of Employer<br />
Payments, as defined in <strong>Labor</strong> Code Section 1773.1 and determined to be part of the prevailing rate<br />
costs of contractors due for employment of workers in such craft, classification or trade in which they<br />
were employed and the amounts paid;<br />
(3) Estimated amounts of "illegal taking of wages";<br />
(4) Amounts of apprenticeship training contributions paid to neither the program sponsor's training<br />
trust nor the California Apprenticeship Council;<br />
(5) Estimated penalties under <strong>Labor</strong> Code Sections 1775, 1776, and 1813.<br />
(d) The withholding of contract payments when, after investigation, it is established that underpayment<br />
or other violations have occurred requires the prior approval of the <strong>Labor</strong> Commissioner under Sections<br />
16436 and 16437 of these regulations.<br />
NOTE: Authority cited: section 1773.5, <strong>Labor</strong> Code. Reference: sections 1729, 1771.5, 1773, 1773.1, 1775,<br />
1776, 1777.5, 1778, 1813 and 1815, <strong>Labor</strong> Code.<br />
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CHAPTER 14 – Withholding Procedures<br />
The <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> (LCP) has a duty to the Director of the Department of Industrial<br />
Relations to enforce <strong>Labor</strong> Code Sections 1720 through 1861 in a manner consistent with the<br />
practice of the Division of <strong>Labor</strong> Standards Enforcement and reflective of the new rules in the<br />
amended regulations as of January 21, 2009 within Subchapter 3, Article 6, and Subchapter 4 of<br />
Chapter 8, Title 8, California Code of Regulations, Sections 16435 through 16438:<br />
§16435. Withholding Contract Payments When Payroll Records are Delinquent or<br />
Inadequate.<br />
(a) "Withhold" means to cease payments by the Awarding Body, or others who pay on its behalf, or<br />
agents, to the general contractor. Where the violation is by a subcontractor, the general<br />
contractor shall be notified of the nature of the violation and reference made to its rights under<br />
<strong>Labor</strong> Code Section 1729.<br />
(b) "Contracts." Except as otherwise provided by agreement, only contracts under a single master<br />
contract, including a Design-Build contract, or contracts entered into as stages of a single<br />
project, may be the subject of withholding.<br />
(c) "Delinquent payroll records" means those not submitted on the date set in the contract.<br />
(d) "Inadequate payroll records" are any one of the following:<br />
(1) A record lacking any of the information required by <strong>Labor</strong> Code Section 1776;<br />
(2) A record which contains all of the required information but is not certified, or is certified<br />
by someone who is not an agent of the contractor or subcontractor;<br />
(3) A record remaining uncorrected for one payroll period, after the <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong> has given the contractor or subcontractor notice of inaccuracies detected by<br />
audit or record review. However prompt correction will stop any duty to withhold if<br />
such inaccuracies do not amount to 1 percent of the entire Certified Weekly Payroll in<br />
dollar value and do not affect more than half the persons listed as workers employed on<br />
that Certified Weekly Payroll, as defined in <strong>Labor</strong> Code Section 1776 and section 16401<br />
of Title 8 of the California Code of Regulations.<br />
(e) The withholding of contract payments when payroll records are delinquent or inadequate is<br />
required by <strong>Labor</strong> Code Section 1771.5(b)(5), and it does not require the prior approval of the<br />
<strong>Labor</strong> Commissioner. The Awarding Body shall only withhold those payments due or estimated<br />
to be due to the contractor or subcontractor whose payroll records are delinquent or inadequate,<br />
plus any additional amount that the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has reasonable cause to believe<br />
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may be needed to cover a back wage and penalty assessment against the contractor or<br />
subcontractor whose payroll records are delinquent or inadequate; provided that a contractor<br />
shall be required in turn to cease all payments to a subcontractor whose payroll records are<br />
delinquent or inadequate until the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> provides notice that the<br />
subcontractor has cured the delinquency or deficiency.<br />
(f) When contract payments are withheld under this section, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall<br />
provide the contractor and subcontractor, if applicable, with immediate written notice that<br />
includes all of the following: (1) a statement that payments are being withheld due to delinquent<br />
or inadequate payroll records, and that identifies what records are missing or states why records<br />
that have been submitted are deemed inadequate; (2) specifies the amount being withheld; and<br />
(3) informs the contractor or subcontractor of the right to request an expedited hearing to review<br />
the withholding of contract payments under <strong>Labor</strong> Code Section 1742, limited to the issue of<br />
whether the records are delinquent or inadequate or the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has<br />
exceeded its authority under this section.<br />
(g) No contract payments shall be withheld solely on the basis of delinquent or inadequate payroll<br />
records after the required records have been produced.<br />
(h) In addition to withholding contract payments based on delinquent or inadequate payroll records,<br />
penalties shall be assessed under <strong>Labor</strong> Code Section 1776(g) for failure to timely comply with<br />
a written request for certified payroll records. The assessment of penalties under <strong>Labor</strong> Code<br />
Section 1776(g) does require the prior approval of the <strong>Labor</strong> Commissioner under section<br />
16436 of these regulations.<br />
§16435.5 Withholding Contract Payments When, After Investigation, It Is Established That<br />
Underpayment or Other Violation Has Occurred.<br />
(a) "Withhold" and “contracts” have the same meaning set forth in Sections 16435(a) and 16435(b) of<br />
these regulations.<br />
(b) Where the violation is by a subcontractor, the general contractor shall be notified of the nature of<br />
the violation and reference made to its rights under <strong>Labor</strong> Code Section 1729.<br />
(c) "Amount equal to the underpayment" is the total of the following determined by payroll review,<br />
audit, or admission of contractor or subcontractor:<br />
(1) The difference between amounts paid workers and the correct General Prevailing Rate of Per Diem<br />
Wages, as defined in <strong>Labor</strong> Code Section 1773, and determined to be the prevailing rate due workers in<br />
such craft, classification or trade in which they were employed and the amounts paid;<br />
(2) The difference between amounts paid on behalf of workers and the correct amounts of Employer<br />
Payments, as defined in <strong>Labor</strong> Code Section 1773.1 and determined to be part of the prevailing rate<br />
costs of contractors due for employment of workers in such craft, classification or trade in which they<br />
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were employed and the amounts paid;<br />
(3) Estimated amounts of "illegal taking of wages";<br />
(4) Amounts of apprenticeship training contributions paid to neither the program sponsor's training<br />
trust nor the California Apprenticeship Council;<br />
(5) Estimated penalties under <strong>Labor</strong> Code Sections 1775, 1776, and 1813.<br />
(d) The withholding of contract payments when, after investigation, it is established that underpayment<br />
or other violations have occurred requires the prior approval of the <strong>Labor</strong> Commissioner under Sections<br />
16436 and 16437 of these regulations.<br />
NOTE: Authority cited: section 1773.5, <strong>Labor</strong> Code. Reference: sections 1729, 1771.5, 1773, 1773.1, 1775,<br />
1776, 1777.5, 1778, 1813 and 1815, <strong>Labor</strong> Code.<br />
§16436. Forfeitures Requiring Approval by the <strong>Labor</strong> Commissioner.<br />
(a) For purposes of this section and section 16437 below, "forfeitures" means the amount of wages,<br />
penalties, and forfeitures assessed by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> and proposed to be<br />
withheld pursuant to <strong>Labor</strong> Code section 1771.6(a), and includes the following: (1) the<br />
difference between the prevailing wage rates and the amount paid to each worker for each<br />
calendar day or portion thereof for which each worker was paid less than the prevailing wage<br />
rate by the contractor or subcontractor; and (2) penalties assessed under <strong>Labor</strong> Code Sections<br />
1775, 1776 and 1813.<br />
(b) If the aggregate amount of forfeitures assessed as to a contractor or subcontractor is less than<br />
$1000.00, the forfeitures shall be deemed approved by the <strong>Labor</strong> Commissioner upon service<br />
and the <strong>Labor</strong> Commissioner's receipt of copies of the following: (1) the Notice of Withholding<br />
of Contract Payments authorized by <strong>Labor</strong> Code Section 1771.6(a); (2) an Audit as defined in<br />
section 16432(e) of these regulations, and (3) a brief narrative identifying the Bid<br />
Advertisement Date of the contract for public work and summarizing the nature of the violation,<br />
the basis of the underpayment, and the factors considered in determining the assessment of<br />
penalties, if any, under <strong>Labor</strong> Code Section 1775.<br />
(c) For all other forfeitures, approval by the <strong>Labor</strong> Commissioner shall be requested and obtained in<br />
accordance with section 16437 below.<br />
§16437. Determination of Amount of Forfeiture by the <strong>Labor</strong> Commissioner.<br />
(a) Where the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> requests a determination of the amount of forfeiture, the<br />
request shall include a file or report to the <strong>Labor</strong> Commissioner which contains at least the information<br />
specified in subparts (1) through (9) below. Appendix D is a suggested format for a Request for<br />
Approval of Forfeiture under this section.<br />
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(1) Whether the public work has been accepted by the awarding body and whether a valid<br />
notice of completion has been filed, the dates if any when those events occurred, and the<br />
amount of funds being held in retention by the Awarding Body;<br />
(2) Any other deadline which if missed would impede collection;<br />
(3) Evidence of violation, in narrative form;<br />
(4) Evidence of violation obtained under section 16432 of these regulations and a copy of<br />
the Audit prepared in accordance with section 16432(e) setting forth the amounts of<br />
unpaid wages and applicable penalties;<br />
(5) Evidence that before the forfeiture was sent to the <strong>Labor</strong> Commissioner (A) the<br />
contractor and subcontractor were given the opportunity to explain why there was no<br />
violation, or that any violation was caused by good faith mistake and promptly corrected<br />
when brought to the contractor or subcontractor's attention, and (B) the contractor and<br />
subcontractor either did not do so or failed to convince the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
of its position;<br />
(6) Where the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> seeks not only wages but also a penalty as part of<br />
the forfeiture, and the contractor or subcontractor has unsuccessfully contended that the<br />
cause of violation was a good faith mistake that was promptly corrected when brought to<br />
the contractor or subcontractor's attention, a short statement should accompany the<br />
proposal for a forfeiture, with a recommended penalty amount pursuant to <strong>Labor</strong> Code<br />
Section 1775(a);<br />
(7) Where the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> seeks only wages or a penalty less than $50 per<br />
day as part of the forfeiture because the contractor or subcontractor has successfully<br />
contended that the cause of the violation was a good faith mistake that was promptly<br />
corrected when brought to the contractor or subcontractor's attention, the file should<br />
include the evidence as to the contractor or subcontractor's knowledge of his or her<br />
obligation, including the program's communication to the contractor or subcontractor of<br />
the obligation in the bid invitations, at the pre-job conference agenda and records, and<br />
any other notice given as part of the contracting process. With the file should be a<br />
statement, similar to that described in (6), and recommended penalty amounts, pursuant<br />
to <strong>Labor</strong> Code Section 1775(a);<br />
(8) The previous record of the contractor and subcontractor in meeting their prevailing wage<br />
obligations; and<br />
(9) Whether the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has been granted approval on only an interim<br />
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or temporary basis under sections 16425 or 16426 above or whether it has been granted<br />
extended approval under section 16427 above.<br />
(b) The file or report shall be served on the <strong>Labor</strong> Commissioner as soon as practicable after the<br />
violation has been discovered, and not less than 30 days before the final payment, but in no event not<br />
less than 30 days before the expiration of the limitations period set forth in <strong>Labor</strong> Code Section 1741.<br />
(c) A copy of the recommended forfeiture and the file or report shall be served on the contractor and<br />
subcontractor at the same time as it is sent to the <strong>Labor</strong> Commissioner. The <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
may exclude from the documents served on the contractor and subcontractor copies of documents<br />
secured from the contractor or subcontractor during an audit, investigation, or meeting if those are<br />
clearly referenced in the file or report.<br />
(d) The <strong>Labor</strong> Commissioner shall affirm, reject, or modify the forfeiture in whole or in part as to the<br />
wages and penalties due.<br />
(e) The <strong>Labor</strong> Commissioner's determination of the forfeiture is effective on one of the two following<br />
dates:<br />
(1) For all programs other than those having extended authority under section 16427 of<br />
these regulations, on the date the <strong>Labor</strong> Commissioner serves by first class mail, on<br />
the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>, on the Awarding Body if different, on the contractor<br />
and on the subcontractor, if any, an endorsed copy of the proposed forfeiture, or a<br />
newly drafted forfeiture statement which sets out the amount of forfeiture approved.<br />
Service on the contractor or subcontractor is effective if made on the last address<br />
supplied by the contractor or subcontractor in the record. The <strong>Labor</strong> Commissioner's<br />
approval, modification or disapproval of the proposed forfeiture shall be served<br />
within 30 days of receipt of the proposed forfeiture.<br />
(2) For programs with extended authority under section 16427 above, approval is<br />
effective 20 days after the requested forfeitures are served upon the <strong>Labor</strong><br />
Commissioner, unless the <strong>Labor</strong> Commissioner serves a notice upon the parties,<br />
within that time period, that this forfeiture request is subject to further review. For<br />
such programs, a notice that approval will follow such a procedure will be included<br />
in the transmittal of the forfeiture request to the contractor. If the <strong>Labor</strong><br />
Commissioner notifies the parties of a decision to undertake further review, the<br />
<strong>Labor</strong> Commissioner's final approval, modification or disapproval of the proposed<br />
forfeiture shall be served within 30 days of the date of notice of further review.<br />
§16438. Deposits of Penalties and Forfeitures Withheld.<br />
(a) Where the involvement of the <strong>Labor</strong> Commissioner has been limited to a determination of the<br />
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actual amount of penalty, forfeiture or underpayment of wages, and the matter has been resolved<br />
without litigation by or against the <strong>Labor</strong> Commissioner, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall<br />
deposit penalties and forfeitures with the Awarding Body.<br />
(b) Where collection of fines, penalties or forfeitures results from administrative proceedings or<br />
court action to which the <strong>Labor</strong> Commissioner and Awarding Body or its <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong> are both parties, the fines, penalties or forfeitures shall be divided between the general<br />
funds of the state and the Awarding Body, as the Hearing Officer or court may decide.<br />
(c) All penalties recovered in administrative proceedings or court action brought by or against the<br />
<strong>Labor</strong> Commissioner and to which the Awarding Body or its <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> is not a<br />
party, shall be deposited in the general fund of the state.<br />
(d) All wages and benefits which belong to an employee and are withheld or collected from a<br />
contractor or subcontractor, either by withholding or as a result of administrative proceedings or<br />
any court action, and which have not been paid to the employee or irrevocably committed on the<br />
employee's behalf to a benefit fund, shall be deposited with the <strong>Labor</strong> Commissioner, who shall<br />
handle such wages and benefits in accordance with <strong>Labor</strong> Code Section 96.7.<br />
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CHAPTER 15 – Frequently asked Questions (FAQs)<br />
Q. Who must receive prevailing ages on public works projects?<br />
A. The prevailing wage must be paid to all workers on public works projects, including<br />
partners who are performing the work.<br />
Q. What is the penalty for not paying the prevailing wage?<br />
A. This is defined in <strong>Labor</strong> Code Section 1775.<br />
Q. How often are Certified Payroll Records due and who should receive them?<br />
A. Certified Payroll Records should be sent each week to the awarding body or their their 3 rd<br />
party LCP.<br />
Q. As a contractor or subcontractor when should I hire and train apprentices?<br />
A. When employing workers in an apprenticeable craft or trade, the contractor or subcontractor<br />
must apply to the appropriate joint apprenticeship committee for certification to employ and<br />
train apprentices in the affected industry. Contractors not signatory to a trust agreement<br />
shall contribute a training fee to the California Apprenticeship Council for each hour<br />
worked on the project. Awards of less than thirty thousand dollars or 20 working days are<br />
exempt from this provision.<br />
Q. How do I know what is the correct prevailing wage rate?<br />
A. The current prevailing wage rates are available on the internet at:<br />
http://www.dir.ca.gov/DLSR/PWD<br />
A copy is available from the contracting department.<br />
Copies of all wage determinations are also available from:<br />
Department of Industrial Relations<br />
Division of <strong>Labor</strong> Statistics and Research<br />
Prevailing Wage Unit<br />
P. O. Box 420603<br />
<strong>San</strong> <strong>Francisco</strong>, CA 94142<br />
Q. How do I know what is the correct craft or classification for the work my employees<br />
are doing?<br />
A. The Scope of Work for each craft is listed on the DIR website and on some of the wage<br />
determinations. If you have questions about the type of work that many be performed by<br />
each craft please call: Lin Robertson at (408) 516-7238.<br />
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SFUSD - 40 - Chapter 15
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Q. If owners or partners work on a project do they have to be paid prevailing wages?<br />
A. Yes, anyone who works on a project must be paid the prevailing wage rate for all hours<br />
worked. This does not include office staff and supervisor who are not hands on employees.<br />
Q. What should I do if an employee performs more than one type of work each day?<br />
A. You must keep accurate records of how many hours the employee works in each<br />
classification. The employee must be paid the prevailing wage rate for each craft,<br />
classification, and type of work performed. If accurate records are not kept, the highest<br />
wage rate may be required.<br />
Q. What if an employee is just learning a trade or is just a helper on the project. Can I<br />
pay him/her a lesser wage?<br />
A. No. All employees must be paid the prevailing wage rate for the type of work they perform.<br />
Only apprentices who are enrolled in a state-approved program are allowed to be paid less<br />
than journeyman rates (which are higher). Applicable wage rates for apprentices apply.<br />
Q. What happens if I don’t understand the prevailing wage rates?<br />
A. If you are unsure of the rates you should pay, you should contact the LCP administrator for<br />
clarification or you can call the Department of Industrial Relations, Division of <strong>Labor</strong><br />
Statistics & Research at (415) 703-4774.<br />
Q. What is the methodology for determining the prevailing wage rates?<br />
A. The prevailing wage rate is the basic hourly rate paid on public works projects to a majority<br />
of workers engaged in a particular craft, classification or type of work within the locality<br />
and the nearest labor market area (if a majority of such workers are paid at a single rate). If<br />
there is no single rate paid to a majority, then the single or modal rate being paid to the<br />
greater number of workers is prevailing.<br />
Q. How does the prevailing wage affect me?<br />
A. California’s prevailing wage laws ensure that the ability to get a public workers contract is<br />
not based on paying lower wage rates that a competitor. All bidders are required to use the<br />
same wage rates when bidding on a public works project. California law requires that not<br />
less than the general prevailing rate of per diem wages be paid to all workers employed on a<br />
public works project.<br />
Q. What is a general prevailing wage determination?<br />
A. When the Director of the California Department of Industrial Relations determine that the<br />
general prevailing rate of per diem wages for a particular craft, classification or type of<br />
worker is uniform throughout an area, the Director issues a determination enumerated<br />
county by county, but covering the entire area. General determinations are issued twice a<br />
year on February 22 and August 22.<br />
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SFUSD - 41 - Chapter 15
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Q. What is a special prevailing wage determination?<br />
A. When a particular craft, classification or type of worker is not covered by a general<br />
determination, the awarding body may request a special prevailing wage determination.<br />
Requests must be made at least 45 days prior the bid advertisement date.<br />
Q. What is an issue date?<br />
A. The date upon which copies of the determinations of the Director are deposited in the mail.<br />
Determinations are issued twice a year on February 22 and August 22.<br />
Q. Why is there an expiration date for each prevailing wage determination?<br />
A. The expiration date indicates when the determination of the Director of the California<br />
Department of Industrial Relations is subject to change.<br />
Q. What does it mean when there is a single asterisk ( * ) or double asterisk ( **) after the<br />
expiration date of a prevailing wage determination?<br />
A. Prevailing wage determinations with a single asterisk (*) after the expiration date which are<br />
in effect on the date of advertisement for bids remain in effect for the life of the project.<br />
Prevailing wage determinations with double asterisks (**) after the expiration date indicate<br />
that the basic hourly wage rate, overtime and holiday pay rates, and employer payments to<br />
be paid for work performed after this date have been predetermined. If work is to extend<br />
past this date, the new rate must be paid and should be incorporated in contracts entered into<br />
now. The contractor should contact the Prevailing Wage Unit, DLSR (415) 703-4774, or the<br />
awarding body to obtain predetermined wage<br />
Q. What is a predetermined change?<br />
A. Definitely changes to the basic hourly wage rate, overtime, holiday pay rates and employer<br />
payments which are know and specified in the applicable collective bargaining agreement at<br />
the time of the bid advertisement date and which are referenced in the general prevailing<br />
rate of per diem wages.<br />
Q. What is the effective date of a prevailing wage determination?<br />
A. The date upon which the determinations of the Director of the California Department of<br />
Industrial Relations go into effect. This date is 10 days after the issue date of the<br />
determination.<br />
Q. What is a coverage determination?<br />
A. A process in which the awarding body or any other interested party (such as a contractor,<br />
employee, union or labor-management compliance organization) may request a written<br />
determination by the Director of the Department of Industrial Relations about a specific<br />
construction project or type of work performed.<br />
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SFUSD - 42 - Chapter 15
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Q. When does overtime pay apply?<br />
A. Compensation for all hours worked in excess of eight hours per day and 40 hours during any<br />
one week should not be less than one-and-one half times the basic rate of pay. For specific<br />
overtime requirements, refer to the prevailing wage determinations.<br />
Q. What are the threshold requirements for a public works project?<br />
A. Prevailing wages must be paid to all workers employed on a public works project when the<br />
public works project is over $1,000. If an awarding body elects to initiate and enforce a<br />
labor compliance program, that has been approved by the Director of the Department of<br />
Industrial Relations, for every public works project under the authority of the awarding<br />
body, prevailing wages are not required to be paid for any public works project of $25,000<br />
or less when the project is for construction work, or for any public works project of $15,000<br />
or less when the project is for alteration, demolition, repair, or maintenance work.<br />
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SFUSD - 43 - Chapter 15
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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CHAPTER 16 – Common Violations<br />
The California <strong>Labor</strong> Code requires that workers employed by contractors or subcontractors in the<br />
execution of a public works contract must be paid the State-determined prevailing wage rate. All<br />
contractors and subcontractors are responsible for ascertaining and complying with all current<br />
general prevailing wage rates for crafts and any rate changes that occur during the life of the<br />
contract. Failure to pay the correct prevailing wage rates can have numerous causes. The<br />
following are common mistakes contractors tend to make:<br />
Using the incorrect wage determination<br />
Not understanding the double asterisk (**) rule<br />
Not applying Predetermined Increases<br />
Ignoring the footnotes in the wage determination<br />
Not utilizing the Important Notices issued by the Department of Industrial Relations (DIR)<br />
and Advice Letters<br />
Failure to submit Certified Payroll Reports<br />
Misclassification of workers<br />
Not following Apprenticeship Requirements<br />
To avoid these mistakes work closely with the LCP administrator and awarding body to review<br />
what requirements must be met to comply with each of the areas listed above.<br />
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SFUSD - 44 - Chapter 16
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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APPENDIX A – Terms and Definitions<br />
Awarding body Owner of project, body awarding contract<br />
CAC California Apprenticeship Council<br />
CCR California Code of Regulations<br />
CFR Code of Federal Regulations<br />
CPR Certified payroll record<br />
DAS Division of Apprenticeship Standards<br />
DIR Department of Industrial Relations<br />
DLSE Division of <strong>Labor</strong> Standards Enforcement<br />
DLSR Division of <strong>Labor</strong> Statistics & Research<br />
DSA Department of State Architect<br />
FBS Fringe benefit statement<br />
IOR Inspector of Record, DSA assigned building inspector<br />
JATC Joint apprenticeship training committee<br />
LCP <strong>Labor</strong> compliance program<br />
LEA Local education agency<br />
PW <strong>Public</strong> works or prevailing wage, depending on context<br />
PWD Prevailing wage division<br />
T&M Time & material<br />
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SFUSD - 45 - Appendix A
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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APPENDIX B – Relevant Websites<br />
The current prevailing wage rates are available on the Internet. For specific information about<br />
prevailing wage requirements you can visit the websites listed below:<br />
Prevailing Wage Rates http://www.dir.ca.gov/DLSR/PWD<br />
Apprentice Schedules http://www.dir.ca.gov/das/das.html<br />
Apprenticeship<br />
<strong>Program</strong>s, Requirements<br />
& Forms<br />
Contractors State License<br />
Status<br />
http://www.dir.ca.gov/apprenticeship.html<br />
<strong>Public</strong> Works<br />
Interactive Databases<br />
Forms<br />
http://www2.cslb.ca.gov/CSLB_LIBRARY/license+request.asp<br />
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SFUSD - 46 - Appendix B
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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APPENDIX C – DIR Determinations<br />
The appropriate Prevailing Wage Determinations for use in the course of an audit are determined by the<br />
first of the two bid advertisement dates for the contract/project. Bid advertisement dates from<br />
February 22 to August 21 call for the determination that is listed as “yyyy-01” (yyyy stands for the year<br />
for example 2008-01). Dates from August 22 to February 21 call for the “yyyy-02” determination.<br />
DIR Website to verify Prevailing Wage Rates for Journeymen:<br />
http://www.dir.ca.gov/dlsr/PWD/<br />
DIR Website to verify Prevailing Wage Rates for Apprentices:<br />
http://www.dir.ca.gov/das/das.html<br />
DIR Website to verify Apprentices are properly registered with DAS:<br />
http://www.dir.ca.gov/DAS/appcertpw/AppCertSearch.asp<br />
DIR Website to verify Electricians are certified by DAS:<br />
Links to download reference material:<br />
Statewide:<br />
http://www.dir.ca.gov/das/ElectricalTrade.htm<br />
http://www.dir.ca.gov/dlsr/PWD/Determinations%5CStatewide%5CStatewide.pdf<br />
Northern California:<br />
<strong>San</strong> <strong>Francisco</strong> (example):<br />
http://www.dir.ca.gov/dlsr/PWD/Determinations/Northern/Northern.pdf<br />
http://www.dir.ca.gov/dlsr/PWD/sfr.xls<br />
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SFUSD - 47 - Appendix C
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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APPENDIX D – LCP Forms & Handouts<br />
The following pages will show the forms listed below:<br />
Pre-Construction Checklist of <strong>Labor</strong> Law Requirements<br />
<strong>Public</strong> Works Contract Award - DAS Form 140<br />
Request for Dispatch of an Apprentice - DAS Form 142<br />
Training Funds Contribution Form – CAC-2<br />
Apprentice Agreement (front and back side)<br />
Fringe Benefit Statement (Statement of Employer Payments)<br />
Statement of <strong>Compliance</strong><br />
Certified Payroll Record (DIR Form A1-131)<br />
Notice to Construction Employees (posted on project site)<br />
Request for Approval of Forfeiture Amount<br />
Notice of Withholding of Contract Payments (language for when needed)<br />
⚊ Notice of Right to Obtain Review Formal Hearing (language for when needed)<br />
⚊ Opportunity for Settlement Meeting (language for when needed)<br />
Notice of Opportunity to Review Evidence Pursuant to <strong>Labor</strong> Code Section 1742(b)<br />
Request to Review Evidence (language for when needed)<br />
Notice of Transmittal (language for when needed)<br />
<strong>Public</strong> Works Complaint Form<br />
Prevailing Wage Compliant Supplementary Form<br />
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SFUSD - 48 - Appendix D<br />
49<br />
51<br />
52<br />
53<br />
54<br />
56<br />
57<br />
58<br />
59<br />
60<br />
63<br />
64<br />
65<br />
67<br />
69<br />
70<br />
71<br />
73
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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SFUSD<br />
Pre-Construction Checklist of <strong>Labor</strong> Law Requirements<br />
The federal and state labor law requirements applicable to the contract are composed of but not<br />
limited to the following items:<br />
The contractor's duty to pay prevailing wages under <strong>Labor</strong> Code Section 1770 et seq., should<br />
the project exceed the exemption amounts;<br />
The contractor's duty to employ registered apprentices on the public works project under <strong>Labor</strong><br />
Code Section 1777.5;<br />
The penalties for failure to pay prevailing wages (for non-exempt projects) and employ<br />
apprentices including forfeitures and debarment under <strong>Labor</strong> Code Sections 1775 and 1777.7;<br />
The requirement to keep and submit copies upon request of certified payroll records under<br />
<strong>Labor</strong> Code Section 1776, and penalties for failure to do so under <strong>Labor</strong> Code Section 1776(g);<br />
The prohibition against employment discrimination under <strong>Labor</strong> Code Section 1777.6; the<br />
Government Code, and Title VII of the Civil Rights Act of 1964;<br />
The prohibition against accepting or extracting kickback from employee wages under <strong>Labor</strong><br />
Code Section 1778;<br />
The prohibition against accepting fees for registering any person for public work under <strong>Labor</strong><br />
Code Section 1779; or for filling work orders on public works under <strong>Labor</strong> Code Section 1780;<br />
The requirement to list all subcontractors under <strong>Public</strong> Contracts Code Section 4104;<br />
The requirement to be properly licensed and to require all subcontractors to be properly licensed<br />
and the penalty for employing workers while unlicensed under <strong>Labor</strong> Code Section 1021 and<br />
under the California Contractors License Law, found at Business and Professions Code Section<br />
7000 et seq;<br />
The prohibition against unfair competition under Business and Professions Code Section<br />
17200-17208;<br />
The requirement that the contractor be properly insured for Workers Compensation under <strong>Labor</strong><br />
Code Section 1861;<br />
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SFUSD - 49 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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The requirement that the contractor abide by the Occupational, Safety and Health laws and<br />
regulations that apply to the particular construction project;<br />
The federal prohibition against hiring undocumented workers, and the requirement to secure<br />
proof of eligibility/citizenship from all workers.<br />
The requirement to provide itemized wage statements to employees under <strong>Labor</strong> Code Section<br />
226.<br />
Certification:<br />
I acknowledge that I have been informed and am aware of the foregoing requirements and<br />
that I am authorized to make this certification on behalf of [name of subcontractor].<br />
Date Name of person signing and company signing and company<br />
______________________________________________________________________________________________<br />
SFUSD - 50 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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SFUSD - 51 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
_________________________________________________________________________________________________<br />
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SFUSD - 52 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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SFUSD - 53 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Front<br />
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SFUSD - 54 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Back<br />
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SFUSD - 55 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Fringe Benefit Statement<br />
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SFUSD - 56 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Statement of <strong>Compliance</strong><br />
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SFUSD - 57 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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http://www.dir.ca.gov/dlse/publicWorksPayrollInstructions.htm<br />
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SFUSD - 58 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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LABOR COMPLIANCE PROGRAM<br />
REQUEST FOR APPROVAL OF FORFEITURE AMOUNT<br />
Awarding body or 3 rd Party Administrator:<br />
Name:<br />
Date Requested: Name of Affected <strong>Public</strong> Agency:<br />
Project Information<br />
Project Name<br />
Contract Number<br />
Project Location (County)<br />
Bid Advertisement<br />
Estimated Completion<br />
Date<br />
Project Accepted/Completion Date<br />
Date<br />
Notice of Recordation by County Recorder Funds in Retention<br />
Contractor Information<br />
Name & address of General<br />
Contractor<br />
General description of scope of work of<br />
the entire project<br />
Name & address of Subcontractor or<br />
Affected Contractor<br />
General description of scope of work for<br />
the Subcontractor or affected contractor<br />
LCP Investigation and Findings<br />
Has Final Approval been granted? Yes ( ) No ( )<br />
Date of Notice of Withholding Contract Payments ___________________<br />
Wages assessed $______________ Training $______________________<br />
1775 Penalties assessed $________ 1813 Penalties $_________________<br />
1776 Penalties assessed $________<br />
TOTAL NOTICE OF WITHHOLDING CONTRACT PAYMENTS $____________<br />
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SFUSD - 60 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Brief Statement of Issues<br />
Report of Audit including supporting documents showing the wage underpayment issues that<br />
have been identified at this point in your investigation. Include an Audit Spreadsheet showing the<br />
calculations of the wages found due, dates that you have discussed the issues with the employer, the<br />
employer’s response, and an analysis of all the factually based evidence that support your<br />
conclusion. 1<br />
Report of Investigation stating each penalty related issues that have been identified at this point in<br />
your investigation. Include an audit spreadsheet showing that calculates the 1775 and 1813<br />
penalties assessed, description of the opportunities you have given to the contractor to address the<br />
criteria listed below, the employer’s response to each issue, and an analysis of all the factually<br />
based evidence that the employer has submitted to refute your conclusion. 2<br />
Please explain the reason of <strong>Labor</strong> Code 1775 penalty recommendations:<br />
State whether the <strong>Labor</strong> Code Section 1775 penalties are based upon either:<br />
Whether the failure of the contractor or subcontractor to pay the correct rate of per diem wages was a good faith mistake.<br />
Explain.<br />
If so, the error was promptly and voluntarily corrected upon being brought to the attention of the contractor or<br />
subcontractor. Explain.<br />
Whether the contractor or subcontractor has a prior record of failing to meet its prevailing wage obligations.<br />
1<br />
2<br />
If the issue is misclassification be sure to include a detailed description of the work performed by each victim/witness and the basis for your<br />
determination that the work was misclassified.<br />
Including all evidence of the awarding body’s contact with the prime contractor and/or the subcontractor relative to the obligation to pay the<br />
prevailing wage, and/or the prime contractor’s contacts with the subcontractor’s relative to the obligation to pay the prevailing wage, and/or the<br />
complaining witness’s contacts with the affected contractor relative to the obligation to pay the prevailing wage, and/or the DLSE’s contacts with the<br />
affected contractor relative to the obligation to pay the prevailing wage.<br />
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SFUSD - 61 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Disposition of the Case by the <strong>Labor</strong> Commissioner<br />
Approved:<br />
Wages $_______________<br />
1775 Penalties $____________<br />
1776 Penalties $____________<br />
TOTAL $_________________<br />
Training $__________________<br />
1813 Penalties_____________<br />
Approved as alternative (modified) penalty amount:<br />
Wages $_______________ Training $__________________<br />
1775 Penalties $____________1813 Penalties $_____________<br />
1776 Penalties $____________<br />
TOTAL $_________________<br />
Rejected:<br />
____________________________________ __________________<br />
State <strong>Labor</strong> Commissioner Date<br />
______________________________________________________________________________________________<br />
SFUSD - 62 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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LCP Administrator<br />
Contact Information<br />
Date:<br />
Awarding Body Seal<br />
In Reply Refer to Case No.:<br />
Notice of Withholding of Contract Payments<br />
Awarding Body Work Performed in County of:<br />
Project Name Project No.<br />
Prime Contractor<br />
Subcontractor<br />
After an investigation concerning the payment of wages to workers employed in the execution of the<br />
contract for the above-named public works project, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> for<br />
________________________ (awarding body name) has determined that violations of the California<br />
<strong>Labor</strong> Code have been committed by the contractor and/or subcontractor identified above. In<br />
accordance with <strong>Labor</strong> Code sections 1771.5 and 1771.6, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> hereby issues<br />
this Notice of Withholding of Contract Payments.<br />
The nature of the violations of the <strong>Labor</strong> Code and the basis for the assessment are as follows:<br />
________________________________________________________________________________<br />
The <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has determined that the total amount of wages due was: (Verification<br />
of restitution pending).<br />
The <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has determined that the total amount of outstanding penalties due<br />
under <strong>Labor</strong> Code sections 1775 and 1813 is:<br />
The <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has determined that the amount of penalties assessed under <strong>Labor</strong><br />
Code section 1776 is:<br />
By:_________________________________<br />
______________________________________________________________________________________________<br />
SFUSD - 63 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Notice of Right to Obtain Review - Formal Hearing<br />
In accordance with <strong>Labor</strong> Code sections 1742 and 1771.6, an affected contractor or subcontractor may<br />
obtain review of this Notice of Withholding of Contract Payments by transmitting a written request to<br />
the office of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> that appears below within 60 days after service of the<br />
notice. To obtain a hearing, a written Request for Review must be transmitted to the following:<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
Contact Information<br />
A Request for Review either shall clearly identify the Notice of Withholding of Contract Payments<br />
from which review is sought, including the date of the notice, or it shall include a copy of the notice as<br />
an attachment, and shall also set forth the basis upon which the notice is being contested. In<br />
accordance with <strong>Labor</strong> Code section 1742, the contractor or subcontractor shall be provided an<br />
opportunity to review evidence to be utilized by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> at the hearing within<br />
20 days of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>'s receipt of the written Request for Review.<br />
Failure by a contractor or subcontractor to submit a timely Request<br />
for Review will result in a final order which shall be binding on the<br />
contractor and subcontractor, and which shall also be binding, with<br />
respect to the amount due, on a bonding company issuing a bond<br />
that secures the payment of wages and a surety on a bond. <strong>Labor</strong><br />
Code section 1743.<br />
In accordance with <strong>Labor</strong> Code section 1742(d), a certified copy of a final order may be filed by the<br />
<strong>Labor</strong> Commissioner in the office of the clerk of the superior court in any county in which the affected<br />
contractor or subcontractor has property or has or had a place of business. The clerk, immediately<br />
upon the filing, shall enter judgment for the State against the person assessed in the amount shown on<br />
the certified order.<br />
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SFUSD - 64 - Appendix D
Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Opportunity for Settlement Meeting<br />
In accordance with <strong>Labor</strong> Code Section 1742.1 (b), the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall, upon receipt<br />
of a request from the affected contractor or subcontractor within 30 days following the service of this<br />
Notice of Withholding of Contract Payments, afford the contractor or subcontractor the opportunity to<br />
meet with the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>'s designee to attempt to settle a dispute regarding the<br />
notice. The settlement meeting may be held in person or by telephone and shall take place before the<br />
expiration of the 60-day period for seeking a hearing as set forth above under the heading Notice of<br />
Right to Obtain Review. No evidence of anything said or any admission made for the purpose of, in<br />
the course of, or pursuant to, the settlement meeting is admissible or subject to discovery in any<br />
administrative or civil proceeding. No writing prepared for the purpose of, in the course of, or pursuant<br />
to, the settlement meeting, other than a final settlement agreement, is admissible or subject to discovery<br />
in any administrative or civil proceeding. This opportunity to timely request an informal settlement<br />
meeting is in addition to the right to obtain a formal hearing, and a settlement meeting may be<br />
requested even if a written Request for Review has already been made. Requesting a settlement<br />
meeting, however, does not extend the 60-day period during which a formal hearing may be requested.<br />
A written request to meet with the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>'s designee to attempt to settle a dispute<br />
regarding this notice must be transmitted to:<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
Contact Information<br />
<strong>Labor</strong> Code Section 1742.1 requires the following:<br />
Liquidated Damages<br />
(a) After 60 days following the service of a civil wage and penalty assessment under Section 1741<br />
or a notice of withholding under subdivision (a) of Section 1771.6, the affected contractor,<br />
subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by<br />
the assessment or notice shall be liable for liquidated damages in an amount equal to the wages,<br />
or portion thereof, that still remain unpaid. If the assessment or notice subsequently is<br />
overturned or modified after administrative or judicial review, liquidated damages shall be<br />
payable only on the wages found to be due and unpaid.<br />
Additionally, if the contractor or subcontractor demonstrates to the satisfaction of the director<br />
that he or she had substantial grounds for appealing the assessment or notice with respect to a<br />
portion of the unpaid wages covered by the assessment or notice, the<br />
director may exercise his or her discretion to waive payment of the liquidated damages with<br />
respect to that portion of the unpaid wages. Any liquidated damages shall be distributed to the<br />
employee along with the unpaid wages. Section 203.5 shall not apply to claims for prevailing<br />
wages under this chapter.<br />
______________________________________________________________________________________________<br />
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(b) Notwithstanding subdivision (a), there shall be no liability for liquidated damages if the full<br />
amount of the assessment or notice, including penalties, has been deposited with the<br />
Department of Industrial Relations, within 60 days following service of the assessment or<br />
notice, for the department to hold in escrow pending administrative and judicial review. The<br />
department shall release such funds, plus any interest earned, at the conclusion of all<br />
administrative and judicial review to the persons and entities who are found to be entitled to<br />
such funds.<br />
(c) The <strong>Labor</strong> Commissioner shall, upon receipt of a request from the affected contractor or<br />
subcontractor within 30 days following the service of a civil wage and penalty assessment under<br />
Section 1741, afford the contractor or subcontractor the opportunity to meet with<br />
the <strong>Labor</strong> Commissioner or his or her designee to attempt to settle a dispute regarding the<br />
assessment without the need for formal proceedings. The awarding body shall, upon receipt of a<br />
request from the affected contractor or subcontractor within 30 days following the service of a<br />
notice of withholding under subdivision (a) of Section 1771.6, afford the contractor or<br />
subcontractor the opportunity to meet with the designee of the awarding body to attempt to<br />
settle a dispute regarding the notice without the need for formal proceedings. The settlement<br />
meeting may be held in person or by telephone and shall take place before the expiration of the<br />
60-day period for seeking administrative review. No evidence of anything said or any admission<br />
made for the purpose of, in the course of, or pursuant to, the settlement meeting is admissible or<br />
subject to discovery in any administrative or civil proceeding. No writing prepared for the<br />
purpose of, in the course of, or pursuant to, the settlement meeting, other than a final settlement<br />
agreement, is admissible or subject to discovery in any administrative or civil proceeding. The<br />
assessment or notice shall advise the contractor or subcontractor of the opportunity to request a<br />
settlement meeting.<br />
(d) This section shall become operative on January 1, 2007.<br />
The Amount of Liquidated Damages Available Under this Notice is<br />
Distribution:<br />
General Contractor and their bonding company<br />
Affected Contractor and their bonding company<br />
______________________________________________________________________________________________<br />
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Procedures <strong>Manual</strong><br />
_________________________________________________________________________________________________<br />
Notice of Opportunity to Review Evidence Pursuant to <strong>Labor</strong> Code Section 1742(b)<br />
To: Prime Contractor<br />
__________________________<br />
__________________________<br />
__________________________<br />
Subcontractor<br />
__________________________<br />
__________________________<br />
__________________________<br />
Please be advised that this office has received your Request for Review, dated<br />
_____________, and pertaining to the Notice of Withholding of Contract Payments<br />
issued by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> in Case No. _____________. In<br />
accordance with <strong>Labor</strong> Code section 1742(b), this notice provides you with an opportunity<br />
to review evidence to be utilized by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> at<br />
the hearing on the Request for Review, and the procedures for reviewing such<br />
evidence. Rule 17224 of the Prevailing Wage Hearing Regulations provides as<br />
follows:<br />
(a) Within ten (10) days following its receipt of a Request for Review, the Enforcing<br />
Agency shall also notify the affected contractor or subcontractor of its opportunity<br />
and the procedures for reviewing evidence to be utilized by the Enforcing<br />
Agency at the hearing of the Request for Review.<br />
(b) An Enforcing Agency shall be deemed to have provided the opportunity to review<br />
evidence required by this Rule if it (1) gives the affected contractor or subcontractor<br />
the option at said party's own expense to either (i) obtain copies of all<br />
such evidence through a commercial copying service or (ii)<br />
inspect and copy such evidence at the office of the Enforcing Agency during normal<br />
business hours; or if (2) The Enforcing Agency at its own expense forwards<br />
copies of all such evidence to the affected contractor or subcontractor.<br />
(c) The evidence required to be provided under this Rule shall include the identity<br />
of witnesses whose testimony the Enforcing Agency intends to present, either in<br />
person at the hearing or by declaration or affidavit. This provision shall not be<br />
construed as requiring the Enforcing Agency to prepare or provide any separate<br />
listing of witnesses whose identities are disclosed within the written materials<br />
made available under subpart (a).<br />
(d) The Enforcing Agency shall make evidence available for review as specified<br />
in subparts (a) through (c) within 20 days of its receipt of the Request for Review;<br />
______________________________________________________________________________________________<br />
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provided that, this deadline may be extended by written request or agreement of<br />
the affected contractor or subcontractor. The Enforcing Agency's failure to make<br />
evidence available for review as required by <strong>Labor</strong> Code Section 1742(b) and this<br />
Rule, shall preclude the enforcing agency from introducing such evidence in proceedings<br />
before the Hearing<br />
officer or the Director.<br />
(e) This Rule shall not preclude the Enforcing Agency from relying upon or<br />
presenting any evidence first obtained after the initial disclosure of evidence under<br />
subparts (a) through (d), provided that , such evidence is promptly disclosed<br />
to the affected contractor or subcontractor. This Rule also shall not preclude the<br />
Enforcing Agency from presenting previously undisclosed evidence to rebut new<br />
or collateral claims raised by another party in the proceeding.<br />
In accordance with the above Rule, please be advised that the <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong>'s procedure for you to exercise your opportunity to review evidence is as follows:<br />
Within five calendar days of the date of this notice, please transmit<br />
the attached Request to Review Evidence to the following address:<br />
________________________________<br />
________________________________<br />
________________________________<br />
________________________________<br />
________________________________<br />
Attention:________________________<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
To: ______________________________<br />
______________________________<br />
______________________________<br />
______________________________<br />
From:______________________________<br />
______________________________<br />
______________________________<br />
______________________________<br />
Request to review evidence<br />
Regarding Notice of Withholding of Contract Payments Dated ____________<br />
Our Case No.: _________________<br />
The undersigned hereby requests an opportunity to review evidence to be utilized by the <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> at the hearing on the Request for Review.<br />
________________________________<br />
Phone No.:_______________________<br />
Fax No.:_________________________<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
LCP Contact Information Awarding body seal if applicable<br />
Date: Re: Request for Review dated<br />
To: Department of Industrial Relations<br />
Office of the Director-Legal Unit<br />
Attention: Lead Hearing Officer<br />
P. O. Box 420603<br />
<strong>San</strong> <strong>Francisco</strong>, CA 94142-0603<br />
Notice of Transmittal<br />
Enclosed herewith please find a Request for Review, dated ________________, and received by the<br />
_________________, (LCP Administrator with LCP ID number) for the _________________________ School<br />
District, on (date). Also enclosed please find the following:<br />
____ Copy of Notice of Withholding of Contract Payments<br />
____ Copy of Audit Summary<br />
By: _____________________________<br />
LCP Administrator Rep<br />
cc: Prime Contractor:<br />
Affected Contractor:<br />
Surety(s) on Bond:<br />
Please be advised that the attached Request for Review identified above has been received and<br />
transmitted to the address indicated. Please be further advised that the governing procedures<br />
applicable to these hearings are set forth at Title 8, California Code of Regulations sections<br />
17201-17270. These hearings are not governed by Chapter 5 of the Government Code,<br />
commencing with section 11500.<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
SFUSD For office use only: case #:_______<br />
PUBLIC WORKS COMPLAINT FORM<br />
(Page 1 of 2)<br />
Name:____________________________________________________________ ☐ Male ☐ Female<br />
First Middle Last<br />
Check the race/ethnic category which best describes your background:<br />
_______________________<br />
Social Security Number<br />
☐ Black ☐ Hispanic ☐ Asian ☐ Pacific Islander ☐ Filipino ☐ American Indian<br />
☐ White ☐ Other___________________<br />
Address:___________________________________________________________________________<br />
Street City State Zip<br />
Home telephone___________________ Work telephone___________________<br />
Work classification___________________________________________________________________<br />
Name of school______________________________________________________________________<br />
Project location:_____________________________________________________________________<br />
Street City State Zip<br />
Prime contractor's name_______________________________________________________________<br />
Address:___________________________________________________________________________<br />
Street City State Zip<br />
Subcontractor's name_________________________________________________________________<br />
Address:___________________________________________________________________________<br />
Street City State Zip<br />
Supervisor's name____________________________________________________________________<br />
Return form to: <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>, SFUSD, 135 Van Ness Avenue, <strong>San</strong> <strong>Francisco</strong>, CA 94102<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
(Page 2 of 2)<br />
(3) Present the facts of the alleged prevailing wage or apprenticeship violation. Describe<br />
completely the reason for your complaint. You must include the dates of the violation, rate of<br />
pay, pay stubs, if possible, etc. Give all names of all persons involved.<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(4) Have you filed any claim related to this matter? ☐ Yes ☐ No<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(5) I have attached supporting evidence. ☐ Yes ☐ No<br />
I hereby certify that this is a true statement to the best of my knowledge and belief.<br />
___________________________________ ________________<br />
Complainant's Signature Date<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
SFUSD<br />
Prevailing Wage Complaint Supplementary Form<br />
(Page 1 of 3)<br />
Name:____________________________________________________________ ☐ Male ☐ Female<br />
First Middle Last<br />
Project/school name_________________________________________________________________<br />
PLEASE ANSWER THE FOLLOWING QUESTIONS:<br />
(1) How did you get the job and who is your employer?<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(2) Who hired you?<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(3) What was your hourly rate of pay on the project?<br />
___________________________________________________________________________<br />
(4) Who informed you of how much you would get paid on this project?<br />
___________________________________________________________________________<br />
(5) How were you paid? By check or by cash?<br />
___________________________________________________________________________<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
(Page 2 of 3)<br />
(6) Were you ever paid in cash? If so, explain when, where, the amount, how, and by whom?<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(7) When were you paid and where?<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(8) What were your duties on this project?<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(9) What type of tools did you use for this project?<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(10) Who was the person that gave you your pay?<br />
___________________________________________________________________________<br />
(11) Did you know about the prevailing wage rate?<br />
___________________________________________________________________________<br />
(12) How did you find out about the prevailing wage rate?<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
(Page 3 of 3)<br />
(13) Did your employer ever mention prevailing wages? Explain if there was any time that your<br />
employer discussed wages or prevailing wage rates. What did your employer say?<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(14) Did you know this project's inspector, plant manager or any other school personnel? If so,<br />
please list them.<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(15) Were you ever threatened by your employer? Explain when and why.<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
(16) Please explain why your check stubs show the correct prevailing wages. Explain how your<br />
employer did not pay you the prevailing wages (if applicable)<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
___________________________________________________________________________<br />
I hereby certify that this is a true statement to the best of my knowledge and belief.<br />
___________________________________ ________________<br />
Complainant's Signature Date<br />
______________________________________________________________________________________________<br />
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Procedures <strong>Manual</strong><br />
_________________________________________________________________________________________________<br />
Appendix E – Notice of Proposed Rulemaking – Approved January 21, 2009<br />
Source:<br />
http://www.dir.ca.gov/<strong>Labor</strong><strong>Compliance</strong>Regulations/<strong>Labor</strong><strong>Compliance</strong>_regulations.htm<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
Text:<br />
REGULATIONS GOVERNING<br />
CERTIFIED PAYROLL RECORDS and<br />
LABOR COMPLIANCE PROGRAMS<br />
CALIFORNIA CODE OF REGULATIONS<br />
TITLE 8, CHAPTER 8, SUBCHAPTER 3, Article 6,<br />
and SUBCHAPTER 4<br />
(as amended effective January 21, 2009)<br />
______________________________________________________________________________________________<br />
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Procedures <strong>Manual</strong><br />
_________________________________________________________________________________________________<br />
Contents<br />
Subchapter 3. Payment of Prevailing Wages upon <strong>Public</strong> Works<br />
Article 6. Certified Payroll Records: Requests, Content, and Cost<br />
§16400. Request for Payroll Records<br />
§16401. Reporting of Payroll Requests<br />
§16402. Cost.<br />
§16403. Privacy Considerations.<br />
§16404. Use of Electronic Reporting Forms.<br />
______________________________________________________________________________________________<br />
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Procedures <strong>Manual</strong><br />
_________________________________________________________________________________________________<br />
Subchapter 4. Awarding Body <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s<br />
Article 1. Operation of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> and Contracts Subject to <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> Jurisdiction<br />
§16421. Composition and Components of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
§16422. Applicable Dates for Enforcement of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s.<br />
§16423. Approved <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> Required by Statute.<br />
Article 2. Approval and Revocation of Approval of <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong>s by Director<br />
§16424. Application for Approval.<br />
§16425. Approval of Awarding Body’s <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
§16426. Approval of Third Party <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
§16427. Extended Authority.<br />
§16428. Revocation of Approval.<br />
§16429. Notice of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> Approval.<br />
Article 3. Reports and Audits<br />
§16430. Filing of Statements of Economic Interest (FPPC Form 700) by Designated Employees<br />
and Consultants of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
§16431. Annual Report.<br />
§16432. Investigation Methods for <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> – Definitions and Minimum<br />
Requirements, Including Review, Confirmation and Audits of Payroll Records; On-Site<br />
Visits; and Early Resolution of Audits.<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
Article 4. Limited Exemption from the Requirement to Pay Prevailing Wages<br />
§16433. Limited Exemption.<br />
Article 5. Enforcement<br />
§16434. Duties of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
§16435. Withholding Contract Payments When Payroll Records are Delinquent or Inadequate.<br />
§16435.5. Withholding Contract Payments When, After Investigation, It Is Established That<br />
Underpayment or Other Violation Has Occurred.<br />
§16436. Forfeitures Requiring Approval by the <strong>Labor</strong> Commissioner.<br />
§16437. Determination of Amount of Forfeiture by the <strong>Labor</strong> Commissioner.<br />
§16438. Deposits of Penalties and Forfeitures Withheld.<br />
§16439. Request for Review of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> Enforcement Action; Settlement<br />
Authority.<br />
______________________________________________________________________________________________<br />
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Procedures <strong>Manual</strong><br />
_________________________________________________________________________________________________<br />
Subchapter 3. Payment of Prevailing Wages upon <strong>Public</strong> Works<br />
Article 6. Certified Payroll Records: Requests, Content, and Cost<br />
§ 16400. Request for Payroll Records.<br />
(a) Requests may be made by any person for certified copies of payroll records. Requests shall be made<br />
to any of the following:<br />
(1) the body awarding the contract, or<br />
(2) any office of the Division of <strong>Labor</strong> Standards Enforcement, or the Division of Apprenticeship<br />
Standards.<br />
(b) Requests for certified copies of payroll records pursuant to Section 1776 of the <strong>Labor</strong> Code may be<br />
made by any person. However, any such request shall be in writing and contain at least the following<br />
information:<br />
(1) The body awarding the contract;<br />
(2) The contract number and/or description;<br />
(3) The particular job location if more than one;<br />
(4) The name of the contractor;<br />
(5) The regular business address, if known.<br />
NOTE: Requests for records of more than one contractor of subcontractor must list the information<br />
regarding that contractor individually, even if all requests pertain to the same particular public works<br />
project. Blanket requests covering an entire public works project will not be accepted; unless<br />
contractor and subcontractor responsibilities regarding the project are not clearly defined.<br />
(c) Acknowledgment of Request. The public entity receiving a request for payroll records shall<br />
acknowledge receipt of such, and indicate the cost of providing the payroll records based on an<br />
estimate by the contractor, subcontractor or public entity. The acknowledgment of the receipt of said<br />
request for payroll records may be accomplished by the public entity's furnishing a copy of its written<br />
correspondence requesting certified copies of the payroll records sent to the specific contractor<br />
pursuant to Section 16400(d) below, to the person who requested said records.<br />
(d) Request to Contractor. The request for copies of payroll records by the requesting public entity shall<br />
be in any form and/or method which will assure and evidence receipt thereof. The request shall include<br />
the following:<br />
(1) Specify the records to be provided and the form upon which the information is to be provided;<br />
(2) Conspicuous notice of the following:<br />
______________________________________________________________________________________________<br />
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_________________________________________________________________________________________________<br />
(A) that the person certifying the copies of the payroll records is, if not the contractor, considered as an<br />
agent acting on behalf of the contractor; and<br />
(B) that failure to provide certified copies of the records to the requesting public entity within 10<br />
working days of the receipt of the request will subject the contractor to a penalty of twenty-five<br />
($25.00) dollars per calendar day or portion thereof for each worker until strict compliance is<br />
effectuated;<br />
(3) Cost of preparation as provided in Section 16402; and<br />
(4) Provide for inspection.<br />
(e) Inspection of Payroll Records. Inspection of the original payroll records at the office of the<br />
contractor(s) pursuant to subdivision (b) of Section 1776 of the <strong>Labor</strong> Code shall be limited to the<br />
public entities upon reasonable written or oral notice.<br />
NOTE: Authority cited: Sections 54, 1773.5 and 1776, <strong>Labor</strong> Code. Reference: Sections 1773.5 and 1776, <strong>Labor</strong><br />
Code.<br />
§16401. Reporting of Payroll Requests.<br />
(a) Reporting Format. The format for reporting of payroll records requested pursuant to <strong>Labor</strong> Code<br />
Section 1776 shall be on a form provided by the public entity. Copies of the forms may be procured at<br />
any office of the Division of <strong>Labor</strong> Standards Enforcement (DLSE) throughout the state and/or:<br />
Division of <strong>Labor</strong> Statistics & Research<br />
P.O. Box 420603<br />
<strong>San</strong> <strong>Francisco</strong>, CA 94101<br />
ATTENTION: Prevailing Wage Unit<br />
Acceptance of any other format shall be conditioned upon the requirement that the alternate format<br />
contain all of the information required pursuant to <strong>Labor</strong> Code Section 1776. If, however, the<br />
contractor does not comply with the provisions of <strong>Labor</strong> Code Section 1776, the <strong>Labor</strong> Commissioner<br />
may require the use of DIR's suggested format, "<strong>Public</strong> Works Payroll Reporting Form" (Form A-1-<br />
131).<br />
(b) Words of Certification. The form of certification shall be as follows: I, ________________ (Nameprint)<br />
the undersigned, am ________________ (position in business) with the authority to act for and<br />
on behalf of ________________, (name of business and/or contractor) certify under penalty of perjury<br />
that the records or copies thereof submitted and consisting of ________________ (description, no. of<br />
pages) are the originals or true, full and correct copies of the originals which depict the payroll<br />
record(s) of the actual disbursements by way of cash, check, or whatever form to the individual or<br />
individuals named. Date:____________ Signature:_______________________<br />
A public entity may require a more strict and/or more extensive form of certification.<br />
______________________________________________________________________________________________<br />
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Procedures <strong>Manual</strong><br />
_________________________________________________________________________________________________<br />
NOTE: Authority cited: Sections 54 and 1773.5, <strong>Labor</strong> Code. Reference: Section 1776, <strong>Labor</strong> Code.<br />
§16402. Cost.<br />
The cost of preparation to each contractor, subcontractor, or public entity when the request was made<br />
shall be provided in advance by the person seeking the payroll record. Such cost shall be $1 for the<br />
first page of the payroll record and 25 cents for each page thereafter, plus $10 to the contractor or<br />
subcontractor for handling costs. Payment in the form of cash, check or certified money order shall be<br />
made prior to release of the documents to cover the actual costs of preparation.<br />
NOTE: Authority cited: Section 1776, <strong>Labor</strong> Code. Reference: Section 1776(h), <strong>Labor</strong> Code.<br />
§16403. Privacy Considerations.<br />
(a) Records received from the employing contractor shall be kept on file in the office or entity that<br />
processed the request for at least 6 months following completion and acceptance of the project.<br />
Thereafter, they may be destroyed unless administrative, judicial or other pending litigation, including<br />
arbitration, mediation or other methods of dispute resolution, are in process. Copies on file shall not<br />
be obliterated in the manner prescribed in subdivision (b) below;<br />
(b) copies provided to the public upon written request shall be marked, obliterated or provided in such<br />
a manner that the name, address and Social Security number, and other private information pertaining<br />
to each employee cannot be identified. All other information including identification of the contractor<br />
shall not be obliterated;<br />
(c) the public entity may affirm or deny that a person(s) was or is employed on a public works contract<br />
(by a specific contractor) when asked, so long as the entity requires such information of an identifying<br />
nature which will reasonably preclude release of private or confidential information.<br />
NOTE: Authority cited: Sections 54, 1773.5 and 1776, <strong>Labor</strong> Code. Reference: Section 1776, <strong>Labor</strong> Code.<br />
§ 16404. Use of Electronic Reporting Forms.<br />
The certified payroll records required by <strong>Labor</strong> Code Section 1776 may be maintained and submitted<br />
electronically subject to all of the following conditions:<br />
(a) The reports must contain all of the information required by <strong>Labor</strong> Code Section 1776, with the<br />
information organized in a manner that is similar or identical to how the information is reported on the<br />
Department of Industrial Relations’ suggested “<strong>Public</strong> Works Payroll Reporting Form” (Form A-1-<br />
131);<br />
(b) The reports shall be in a format and use software that is readily accessible and available to<br />
contractors, awarding bodies, <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s, and the Department of Industrial<br />
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Relations;<br />
(c) Reports submitted to an awarding body, a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>, the Division of <strong>Labor</strong><br />
Standards Enforcement, or other entity within the Department of Industrial Relations must be either (1)<br />
in the form of a non-modifiable image or record that bears an electronic signature or includes a copy<br />
of any original certification made on paper, or alternatively (2) printed out and submitted on paper<br />
with an original signature;<br />
(d) The requirements for redacting certain information shall be followed when certified payroll records<br />
are disclosed to the public pursuant to <strong>Labor</strong> Code Section 1776(e), whether the records are provided<br />
electronically or as hard copies; and<br />
(e) No contractor or subcontractor shall be mandated to submit or receive electronic reports when it<br />
otherwise lacks the resources or capacity to do so, nor shall any contractor or subcontractor be<br />
required to purchase or use proprietary software that is not generally available to the public.<br />
NOTE: Authority cited: Sections 54, 55, 1773.5, and 1776, <strong>Labor</strong> Code. Reference: Section 1776, <strong>Labor</strong> Code.<br />
Subchapter 4. Awarding Body <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s<br />
Article 1. Operation of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> and Contracts Subject to <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> Jurisdiction<br />
§16421. Composition and Components of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
(a) In accordance with <strong>Labor</strong> Code Section 1771.5(b), a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall include,<br />
but not be limited to, the following requirements:<br />
(1) The Call for Bids, Design-Build Request, and the contract or purchase order shall contain<br />
appropriate language concerning the requirements of Chapter 1 of Part 7 of Division 2 of the <strong>Labor</strong><br />
Code.<br />
(2) A prejob conference shall be conducted before commencement of the work with contractors and<br />
subcontractors listed in the bid or who are required to be identified or prequalified in a Design-Build<br />
Contract. At the prejob conference applicable federal and state labor law requirements shall be<br />
discussed, and copies of suggested reporting forms furnished. A checklist, showing which federal and<br />
state labor law requirements were discussed, shall be kept for each conference. A checklist in the<br />
format of Appendix A presumptively meets this requirement.<br />
(3) A requirement that certified payroll records be kept by the contractor in accordance with <strong>Labor</strong><br />
Code Section 1776 and furnished to the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> at times designated in the<br />
contract, which shall be at least monthly, or within 10 days of any request by the Awarding Body. Use<br />
of the current version of DIR's "<strong>Public</strong> Works Payroll Reporting Form" (A-1-131) and Statement of<br />
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Employer Payments (PW26) constitutes presumptive compliance with the requirement for certified<br />
payroll records kept in accordance with <strong>Labor</strong> Code Section 1776, provided the forms are filled out<br />
accurately and completely. These suggested forms are available from the Department of Industrial<br />
Relations.<br />
(4) A program for orderly review of payroll records and, if necessary, for audits to verify compliance<br />
with the requirements of Chapter 1 of Part 7 of Division 2 of the <strong>Labor</strong> Code.<br />
(5) A prescribed routine for withholding penalties, forfeitures, and underpayment of wages for<br />
violations of the requirements of Chapter 1 of Part 7 of Division 2 of the <strong>Labor</strong> Code.<br />
(6) All contracts to which prevailing wage requirements apply shall include a provision that contract<br />
payments shall not be made when payroll records are delinquent or inadequate.<br />
(b) To the extent otherwise authorized by law, an Awarding Body or a Joint Powers Authority<br />
consisting of two or more Awarding Bodies may contract with a third party to initiate and enforce all<br />
or part of its <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>, provided that the third party has been approved by the<br />
Director to operate a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> in accordance with these regulations. However, this<br />
subpart (b) shall not be construed as limiting an Awarding Body’s or Joint Powers Authority’s<br />
authority to contract for services for the operation of its own approved <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>,<br />
including services by persons licensed or certified by the State of California to practice one of the<br />
following recognized professions: law, architecture, engineering, or accounting.<br />
(c) A private entity that is approved by the Director to operate a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> and that<br />
operates a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> pursuant to a contract with an Awarding Body or a Joint<br />
Powers Authority shall have the same rights and responsibilities as the Awarding Body or Joint Powers<br />
Authority in administering the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>, including but not limited to (1) complying<br />
with the conflict of interest provisions of the Political Reform Act (commencing with Section 87100 of<br />
the Government Code) including disclosure requirements for <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> employees<br />
and consultants who participate in making governmental decisions, as defined under Title 2 California<br />
Code of Regulations Section 18701, and (2) maintaining, disclosing, or keeping confidential personnel<br />
information, payroll records, and other information and records in accordance with <strong>Labor</strong> Code<br />
Section 1776, the California <strong>Public</strong> Records Act, (Chapter 3.5 (commencing with Section 6250),<br />
Division 7, Title 1, Government Code) and the Information Practices Act of 1977, (Title 1.8<br />
(commencing with Section 1798), Part 4, Division 3, Civil Code).<br />
(d) Nothing in this section or these regulations shall be construed as limiting the responsibility and<br />
authority of an Awarding Body to take cognizance of prevailing wage violations under Section 1726 of<br />
the <strong>Labor</strong> Code and take any appropriate action pursuant to and in accordance with that responsibility<br />
and authority.<br />
(e) It is the responsibility of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> to enforce prevailing wage requirements,<br />
consistent with the policy of the state as expressed in <strong>Labor</strong> Code Section 90.5(a). A <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> shall take reasonable, vigorous, and prompt action to (1) determine whether<br />
violations exist, and (2) enforce compliance, including through imposition of appropriate penalties and<br />
formal enforcement action, when violations are found. A <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall neither<br />
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avoid use of its enforcement authority based on cost considerations nor shall it use that authority in an<br />
unreasonable manner to gain leverage over a contractor or subcontractor. Unreasonable use of<br />
enforcement authority includes, but is not necessarily limited to, prolonged or excessive withholdings<br />
of contract payments without making a determination that a violation has occurred.<br />
(f) The failure of an Awarding Body or <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> to comply with any requirement<br />
imposed by this subchapter shall not of itself constitute a defense to the failure to pay prevailing wages<br />
or to comply with any other obligation imposed by Chapter 1 (commencing with Section 1720), Part 7,<br />
Division 2 of the <strong>Labor</strong> Code.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1798 – 1798.78, Civil Code; Sections<br />
6250 – 6276.48, 6500 - 6533 and 87100 - 87500, Government Code; Sections 90.5, 1726, 1771.5(b), 1771.7,<br />
1771.8, 1771.9, and 1776, <strong>Labor</strong> Code.<br />
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Appendix A<br />
Suggested Checklist of <strong>Labor</strong> Law Requirements to Review at Prejob Conference, Section 16421,<br />
with suggested Certification by subcontractor.<br />
The federal and state labor law requirements applicable to the contract are composed of but not<br />
limited to the following items:<br />
(1) The contractor's duty to pay prevailing wages under <strong>Labor</strong> Code Section 1770 et seq., should the<br />
project exceed the exemption amounts;<br />
(2) The contractor's duty to employ registered apprentices on the public works project under <strong>Labor</strong><br />
Code Section 1777.5;<br />
(3) The penalties for failure to pay prevailing wages (for non-exempt projects) and employ<br />
apprentices including forfeitures and debarment under <strong>Labor</strong> Code Sections 1775 and 1777.7;<br />
(4) The requirement to keep and submit copies upon request of certified payroll records under <strong>Labor</strong><br />
Code Section 1776, and penalties for failure to do so under <strong>Labor</strong> Code Section 1776(g);<br />
(5) The prohibition against employment discrimination under <strong>Labor</strong> Code Section 1777.6; the<br />
Government Code, and Title VII of the Civil Rights Act of 1964;<br />
(6) The prohibition against accepting or extracting kickback from employee wages under <strong>Labor</strong> Code<br />
Section 1778;<br />
(7) The prohibition against accepting fees for registering any person for public work under <strong>Labor</strong><br />
Code Section 1779; or for filling work orders on public works under <strong>Labor</strong> Code Section 1780;<br />
(8) The requirement to list all subcontractors under <strong>Public</strong> Contracts Code Section 4104;<br />
(9) The requirement to be properly licensed and to require all subcontractors to be properly licensed<br />
and the penalty for employing workers while unlicensed under <strong>Labor</strong> Code Section 1021 and under<br />
the California Contractors License Law, found at Business and Professions Code Section 7000 et<br />
seq;<br />
(10) The prohibition against unfair competition under Business and Professions Code Sections<br />
17200-17208;<br />
(11) The requirement that the contractor be properly insured for Workers Compensation under <strong>Labor</strong><br />
Code Section 1861;<br />
(12) The requirement that the contractor abide by the Occupational, Safety and Health laws and<br />
regulations that apply to the particular construction project;<br />
(13) The federal prohibition against hiring undocumented workers, and the requirement to secure<br />
proof of eligibility/citizenship from all workers.<br />
(14) The requirement to provide itemized wage statements to employees under <strong>Labor</strong> Code Section<br />
226.<br />
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Certification:<br />
I acknowledge that I have been informed and am aware of the foregoing requirements and that I<br />
am authorized to make this certification on behalf of [name of subcontractor].<br />
Date Name of person signing and company<br />
§16422. Applicable Dates for Enforcement of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s.<br />
(a) No contracts shall be subject to <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> jurisdiction nor shall the limited<br />
exemption from payment of prevailing wages pursuant to <strong>Labor</strong> Code Section 1771.5(a) apply to any<br />
contract of an Awarding Body unless and until the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has been approved by<br />
the Director pursuant to this subchapter.<br />
(b) Contracts for which the Date of Notice or the Call for Bids is subsequent to the date of approval of<br />
a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> are subject to <strong>Labor</strong> Code Section 1771.5. In the case of a contract for<br />
which there is no Call for Bids, the applicable date shall be the date of the award of the contract.<br />
(c) Revocation of approval of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> by the Director shall not affect the limited<br />
exemption from payment of prevailing wages provided by <strong>Labor</strong> Code Section 1771.5(a) if the date of<br />
such revocation is subsequent to the Date of Notice or Call for Bids or, in the case of a contract for<br />
which there is no Call for Bids, subsequent to the date of the award of the contract.<br />
(d) If the Director revokes approval of an awarding body’s <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> that was<br />
approved pursuant to section 16425 below, the Director shall give notice to the Awarding Body<br />
specifying enforcement responsibilities, including with respect to cases pending hearing, as of the date<br />
of revocation.<br />
(e) An Awarding Body may voluntarily terminate its <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>. With respect to each<br />
contract pending on the date of termination, the Awarding Body shall:<br />
(1) Notify the Director of its intention and the effective date of the termination;<br />
(2) Notify the contractor(s) and the <strong>Labor</strong> Commissioner of the identity of the agent who will carry out<br />
the compliance enforcement obligations of <strong>Labor</strong> Code Section 1771.5 on the remaining contracts; and<br />
(3) Specify the fund into which penalties or forfeitures withheld from any contract payments shall be<br />
deposited.<br />
(f) The <strong>Labor</strong> Commissioner may, in writing, agree to assume enforcement obligations on pending<br />
contracts of an Awarding Body which has voluntarily terminated its <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>. In<br />
such case, penalties and forfeitures shall be deposited in the general fund of the state.<br />
(g) Upon receipt of a notice of revocation, a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> that was approved pursuant<br />
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to section 16426 below shall (1) enter into no new contracts to provide labor compliance program<br />
services for the purpose of meeting an awarding body’s statutory obligation to have a labor<br />
compliance program that contains or meets the requirements of <strong>Labor</strong> Code Section 1771.5; (2)<br />
provide immediate written notice to all awarding bodies for which the <strong>Program</strong> has an existing<br />
contract to provide labor compliance program services that the <strong>Program</strong> has received a revocation<br />
notice; and (3) provide all reasonable assistance to those awarding bodies in transferring labor<br />
compliance program responsibilities to another approved <strong>Program</strong> in order to avoid any forfeiture of<br />
funds by those awarding bodies and any forfeiture of rights by workers on the projects for which the<br />
<strong>Program</strong> had monitoring and enforcement responsibilities.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1771.5 and 1771.6, <strong>Labor</strong> Code.<br />
§16423. Approved <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> Required by Statute.<br />
(a) Whenever an Awarding Body is required by statute to enforce or contract to enforce a <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> that contains or meets the requirements of <strong>Labor</strong> Code section 1771.5, the<br />
Awarding Body must have its own program that has been approved by the Director pursuant to section<br />
16425 below, unless it fully contracts out its responsibilities and decision-making authority to a third<br />
party program that has been approved by the Director pursuant to section 16426 below.<br />
(b) The governing board of any Awarding Body that is required to enforce a <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong> under subpart (a) above shall make a written finding that the Awarding Body has<br />
(1) established its own <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> in accordance with the requirements of<br />
<strong>Labor</strong> Code Section 1771.5(b) and this subchapter; or<br />
(2) has contracted with a third party that has been approved by the Director to operate a <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> in accordance with the requirements of <strong>Labor</strong> Code Section 1771.5(b)<br />
and this subchapter.<br />
Copies of the finding required by this subpart (b) together with (A) notice of whether or not the<br />
Awarding Body intends to initiate and enforce its <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> for all public works<br />
projects in which the Awarding Body participates, and (B) notice of any contract or agreement with a<br />
third party to operate a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall be provided promptly to the Director and<br />
prior to certifying to any other entity that the Awarding Body has complied with the statutory<br />
requirement to have a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
(c) For purposes of these regulations, an approved program refers to the entity that has applied for<br />
and received approval by the Director based on a consideration of the factors in sections 16425,<br />
16426, or 16427 below, and not to that entity’s manual or methodology for conducting labor<br />
compliance enforcement.<br />
(d) Unless otherwise required by statute, an Awarding Body is not required to have separate <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong>s, and a third party <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> is not required to have separate<br />
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approvals from the Director for different types of projects or funding sources, provided that (1) the<br />
Awarding Body has provided all notices required by subpart (b) above, (2) the <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong> has timely filed all reports required by this subchapter, and (3) the Director has not otherwise<br />
limited the approved scope of operation for the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
(e) The limited exemption from payment of prevailing wages provided by <strong>Labor</strong> Code Section<br />
1771.5(a) shall not apply unless the Awarding Body elects to initiate and enforces a <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong> for every public works project under the authority of the Awarding Body.<br />
(f) A list of statutes that require Awarding Bodies to have a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> as a condition<br />
of project authorization, project funding, or use of specified contracting authority shall be maintained<br />
on the Department of Industrial Relations’ website.<br />
Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Section 1771.5, <strong>Labor</strong> Code.<br />
Article 2. Approval and Revocation of Approval of <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong>s by Director<br />
§16424. Application for Approval.<br />
An application for Approval of an Awarding Body’s <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> or for Approval of a<br />
Third Party <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall include the information specified either in section<br />
16425(a) or in Ssection 16426(a) respectively, and shall be sent to the following address:<br />
Office of the Director<br />
Department of Industrial Relations<br />
455 Golden Gate Avenue, 10 th Floor<br />
<strong>San</strong> <strong>Francisco</strong>, CA 94102<br />
Attention: Executive Assistant to the Director<br />
Suggested application forms are available on the Department of Industrial Relations’ website.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Section 1771.5, <strong>Labor</strong> Code.<br />
§16425. Approval of Awarding Body’s <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
(a) An Awarding Body seeking approval of its own <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall submit evidence<br />
of its capacity and ability to operate an effective <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> consistent with<br />
applicable legal requirements, based on the following factors:<br />
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(1) Experience and training of the Awarding Body's personnel on public works labor compliance<br />
issues, including private sector experience on behalf of unions or contractors or on a joint labormanagement<br />
committee established pursuant to the federal <strong>Labor</strong> Management Cooperation Act of<br />
1978 (section 175a of Title 29 of the United States Code) and participation in any public works<br />
enforcement training provided by the Division of <strong>Labor</strong> Standards Enforcement;<br />
(2) The average number of public works contracts the Awarding Body annually administers;<br />
(3) Whether the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> is a joint or cooperative venture among Awarding Bodies,<br />
and how the resources and expanded responsibilities of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> compare to the<br />
Awarding Bodies involved;<br />
(4) The Awarding Body's record of taking cognizance of <strong>Labor</strong> Code violations and of withholding in<br />
the preceding five years;<br />
(5) The availability of competent legal support for the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>;<br />
(6) The availability and quality of a manual outlining the responsibilities and procedures of the <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> to the Awarding Body; and<br />
(7) The method by which the Awarding Body will transmit notice to the <strong>Labor</strong> Commissioner of<br />
violations which may lead to debarment under <strong>Labor</strong> Code Section 1777.1.<br />
(b) The Director shall notify the Awarding Body within 60 days of receipt of the request for approval<br />
that approval is granted and the effective date of approval, or that the request is incomplete and of the<br />
materials necessary to complete the request or that the request is disapproved for other reasons.<br />
(c) The Director may grant approval on an interim or temporary basis and may impose specific<br />
restrictions on a <strong>Program</strong>’s approval based on factors limiting its capacity and ability to operate an<br />
effective <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> or conflict of interest concerns, subject to reasonable conditions<br />
for removing an interim or temporary designation or other specified restrictions.<br />
(d) The Director will maintain a list of all approved <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s, including programs<br />
approved on an interim, temporary or restricted basis, for distribution to interested parties upon<br />
request.<br />
(e) An Awarding Body that intends to operate a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> on behalf of other<br />
Awarding Bodies or Joint Powers Authorities must obtain approval pursuant to section 16426 below.<br />
(f) A <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> with an initial approval or extended initial approval that is set to<br />
expire on or after January 30, 2009, shall be entitled to convert to approved status without a<br />
prescribed expiration date and subject to revocation only in accordance with section 16428 below,<br />
upon providing satisfactory evidence to the Director of all of the following:<br />
(1) the program has submitted timely, accurate, and complete annual reports in accordance with<br />
section 16431 below;<br />
(2) the program continues to employ personnel with experience and training on public works labor<br />
compliance issues;<br />
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(3) competent legal support remains available to the program;<br />
(4) the program’s manual of policies and procedures has been updated to accurately reflect any<br />
amendments to the public works laws and regulations (including the laws and regulations governing<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s) between the time of the program’s approval and the effective date of this<br />
subpart (f); and<br />
(5) the program is in compliance with any specific conditions placed by the Director on its approval,<br />
and there is no written decision, order, or directive that requires the program either to cease or limit its<br />
operations as of a specified date.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1771.5 and 1777.1, <strong>Labor</strong> Code;<br />
Section 175a, Title 29 United States Code.<br />
§16426. Approval of Third Party <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
(a) Any entity seeking approval to operate a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> pursuant to a contract with<br />
one or more Awarding Bodies or Joint Powers Authorities shall submit evidence of its capacity and<br />
ability to operate an effective <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> consistent with applicable legal<br />
requirements, based on the following factors:<br />
(1) Experience and training of the entity’s personnel on public works labor compliance issues,<br />
including private sector experience on behalf of unions or contractors or on a joint labor-management<br />
committee established pursuant to the federal <strong>Labor</strong> Management Cooperation Act of 1978 (section<br />
175a of Title 29 of the United States Code) and participation in any public works enforcement training<br />
provided by the Division of <strong>Labor</strong> Standards Enforcement;<br />
(2) The geographical area in which the entity intends to operate its <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> and<br />
the identity of the Awarding Bodies and Joint Powers Authorities, if any, with whom the entity intends<br />
to contract for operation of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>;<br />
(3) Whether the entity shares personnel, management, ownership or other close affiliation with (A) any<br />
contractor or subcontractor that within the preceding five years has been awarded a public works<br />
contract within the geographical area with any Awarding Body or Joint Powers Authority identified in<br />
subpart (2) above, (B) any person or entity who has been the surety on such a contract, (C) any joint<br />
labor-management committee established pursuant to the Federal <strong>Labor</strong> Management Cooperation<br />
Act of 1978 (section 175a of Title 29 of the United States Code), or (D) any person or entity who has<br />
represented workers employed in the same or similar classifications as those employed for such a<br />
contract and who has been engaged in (i) an organizational campaign under the National <strong>Labor</strong><br />
Relations Act with contractors competing for such contracts or (ii) a jurisdictional dispute with<br />
another collective bargaining representative of workers utilized for such contracts;<br />
(4) The record of any contractor, subcontractor, surety, or worker representative referred to in subpart<br />
(3) above with respect to compliance and enforcement or aiding in the compliance and enforcement of<br />
prevailing wage requirements under the <strong>Labor</strong> Code in the preceding five years;<br />
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(5) The availability of competent legal support for the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> and whether the<br />
persons or firms providing that support also represent any contractor, subcontractor, surety, or worker<br />
representative referred to in subpart (3) above;<br />
(6) The availability and quality of a manual outlining the responsibilities and procedures of the <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> to any Awarding Body or Joint Powers Authority with which it contracts;<br />
(7) The method by which the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> will transmit notice to the <strong>Labor</strong><br />
Commissioner of violations which may lead to debarment under <strong>Labor</strong> Code Section 1777.1;<br />
(8) Awareness of the rights and responsibilities imposed on the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> as an<br />
agent of a governmental agency under section 16421(c) above and the existence of procedures<br />
designed to inform personnel of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> of these rights and responsibilities<br />
and to insure the compliance of employees and consultants who participate in making governmental<br />
decisions with conflict of interest reporting requirements, such as through participation in internetbased<br />
or live training programs provided by the Fair Political Practices Commission; and<br />
(9) The identity by job title and number of program employees who will participate in making<br />
governmental decisions within the meaning of Title 2 California Code of Regulations sections 18700<br />
through 18702.4 or any successor regulations, and whether required statements of economic interest<br />
(FPPC Form 700) will be filed with local awarding bodies with which the program contracts, with the<br />
Director, or with some other specified entity.<br />
(b) The Director shall notify the applicant within 60 days of receipt of the request for approval that<br />
approval is granted and the effective date of approval, or that the request is incomplete and of the<br />
materials necessary to complete the request or that the request is disapproved for other reasons.<br />
(c) The Director may grant approval on an interim or temporary basis and may impose specific<br />
restrictions on a <strong>Program</strong>’s approval based on factors limiting its capacity and ability to operate an<br />
effective <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> or conflict of interest concerns, subject to reasonable conditions<br />
for removing an interim or temporary designation or other specified restrictions.<br />
(d) The Director will maintain a list of all approved third party <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s,<br />
including programs approved on an interim, temporary or restricted basis, for distribution to interested<br />
parties upon request.<br />
(e) When the Director has approved a third party entity to operate a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
pursuant to Article 2 of this subchapter, that approval shall extend to any Awarding Body or Joint<br />
Powers Authority that has contracted with the approved entity for operation of its <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong>, subject to the following:<br />
(1) No such approval shall apply unless the Awarding Body or Joint Powers Authority has first<br />
provided written notice to the Director of its contractual relationship with the approved entity together<br />
with such further information as the Director may reasonably require to document that relationship, as<br />
well as notice of whether or not the Awarding Body intends to initiate and enforce its <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> for all public works projects in which the Awarding Body participates;<br />
(2) The parties shall provide immediate written notice to the Director and the <strong>Labor</strong> Commissioner<br />
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upon the termination or proposed termination of such contractual relationship; and<br />
(3) For good cause, the Director may disallow or withdraw approval for the operation of a <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> as to any particular Awarding Body or Joint Powers Authority, whether or not<br />
the third party entity remains approved to operate a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> on behalf of one or<br />
more other Awarding Bodies or Joint Powers Authorities.<br />
(f) A third party <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> with an initial approval or extended initial approval that<br />
is set to expire on or after January 30, 2009, shall be entitled to convert to approved status without a<br />
prescribed expiration date and subject to revocation only in accordance with section 16428 below,<br />
upon providing satisfactory evidence to the Director of all of the following:<br />
(1) the program has submitted timely, accurate, and complete annual reports in accordance with<br />
section 16431 below;<br />
(2) the program continues to employ personnel with experience and training on public works labor<br />
compliance issues;<br />
(3) competent legal support remains available to the program;<br />
(4) the program’s manual of policies and procedures has been updated to accurately reflect any<br />
amendments to the public works laws and regulations (including the laws and regulations governing<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s) between the time of the program’s approval and the effective date of this<br />
subpart (f); and<br />
(5) the program is in compliance with any specific conditions placed by the Director on its approval,<br />
and there is no written decision, order, or directive that requires the program to cease or limit its<br />
operations as of a specified date.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1771.5 and 1777.1, <strong>Labor</strong> Code;<br />
Section 175a, Title 29 United States Code.<br />
§16427. Extended Authority.<br />
(a) An Awarding Body or third party entity which has operated a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> with<br />
active enforcement responsibilities for at least three consecutive years after initial approval may apply<br />
to the Director for extended authority. The applicant bears the burden of producing evidence that it<br />
meets the criteria in subpart (b) below.<br />
(b) The Director may grant extended authority to an applicant that has satisfactorily demonstrated its<br />
understanding of and ability to monitor compliance with the requirements of the <strong>Labor</strong> Code and these<br />
regulations, and that has filed timely, complete, and accurate reports as required by these regulations.<br />
(c) The Director shall notify the applicant within 90 days of the receipt of a request for extended<br />
authority that the request is granted and the effective date of and extent of any extended authority that<br />
is granted, or that the request is denied and the reason for the denial.<br />
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(d) A <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> with extended authority may enter into an agreement with the <strong>Labor</strong><br />
Commissioner providing for different procedures for securing approval of forfeitures than those set<br />
forth in Ssection 16437 below.<br />
(e) Any <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> with final approval on the effective date of the amendments<br />
changing “final approval” to “extended authority” shall automatically be converted to the status of<br />
having “extended authority.” The Director will maintain a list of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s with<br />
extended authority, for distribution to interested parties upon request. The Director may agree to<br />
alternative reporting formats under Ssection 16431 of these regulations for such programs, and shall<br />
maintain a list of interested parties who wish notification of alternative reporting formats before<br />
adoption.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1771.5, <strong>Labor</strong> Code.<br />
§16428. Revocation of Approval.<br />
(a) The Director may revoke approval of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> after giving due notice,<br />
conducting a hearing if appropriate, and finding cause for revocation. Cause for revocation of<br />
approval includes, but is not limited to:<br />
(1) Failure of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> to monitor compliance with the requirements of the<br />
<strong>Labor</strong> Code and these regulations or to take appropriate enforcement action for violations of which it<br />
becomes or should have become cognizant;<br />
(2) Failure of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> to file timely, complete, and accurate reports to the<br />
Director as required by section 16431 or elsewhere in these regulations.;<br />
(3) A pattern of failures in hearings conducted pursuant to <strong>Labor</strong> Code Section 1742(b) either (A) to<br />
establish violations under <strong>Labor</strong> Code Sections 1775(a) and 1776(g) for which contract payments have<br />
been withheld or (B) to comply with the requirements imposed on enforcing agencies or their<br />
representatives in the prevailing wage hearing regulations at Ssections 17201 – 17270 of Title 8 of the<br />
California Code of Regulations;<br />
(4) Failure to comply with applicable laws and reporting requirements pertaining to conflicts of<br />
interest and the handling of personnel and payroll records and information;<br />
(5) Failure to comply with requirements imposed on <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s by statute or these<br />
regulations or with any terms, conditions, or restrictions imposed by the Director on the <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong>’s approval.<br />
(b) Interested parties may request the Director to revoke approval of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>. A<br />
request for revocation shall include evidence of failure of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> to monitor<br />
compliance with the requirements of the <strong>Labor</strong> Code and these regulations or to take enforcement<br />
action after becoming cognizant of a violation of the <strong>Labor</strong> Code or these regulations. A request for<br />
revocation shall also include any other relevant evidence.<br />
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(1) Approval of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> may be revoked by the Director based on a request by<br />
an interested party after a proceeding conducted as provided in subpart (a) above. A copy of the<br />
request for revocation shall be provided to the Awarding Body as part of the notice required under<br />
subpart (a) above.<br />
(2) As part of a proceeding for revocation of approval based on a request by an interested party, the<br />
Director may require the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> to furnish a supplemental report for the period<br />
between the ending date of the last annual report filed by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> pursuant to<br />
section 16431 and the date of notice by the Director, and containing the information listed in subpart<br />
(a) of said section 16431.<br />
(3) Revocation of approval of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> based on a request by an interested party<br />
is solely within the discretion of the Director. The duty to operate a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> in<br />
accordance with the requirements of this subchapter runs solely to the Director and not to any worker,<br />
contractor, or interested party. The sole remedy for failure to comply with this duty is revocation of<br />
approval by the Director.<br />
(c) Upon determining that the request for revocation will be denied without hearing, the Director shall<br />
give notice of the decision and of the reasons therefore by mail to the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>, any<br />
Awarding Body or Joint Powers Authority that has contracted with the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
pursuant to section 16421(b) above, and any interested party that requested revocation.<br />
(d) Upon determining that a hearing is necessary, the parties will be notified and a hearing on cause<br />
for revocation of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> approval will be held in accordance with the procedures<br />
for notice and hearing proceedings set forth in section 16304 of Title 8 of the California Code of<br />
Regulations.<br />
(e) The <strong>Labor</strong> Commissioner is authorized to conduct investigations into whether a <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong> has operated in accordance with the requirements of this subchapter and to participate in the<br />
role of prosecutor in any revocation proceedings. The Director shall make all final determinations.<br />
(f) Nothing in this section shall be construed as (1) requiring the Director to extend any approval<br />
granted on a temporary or interim basis pursuant to sections 16425 or 16426 above or (2) restricting<br />
the Director’s authority to impose conditions or restrictions on a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>’s<br />
approval in lieu of revocation.<br />
NOTE: Authority cited: Sections 55, 1773.5, <strong>Labor</strong> Code. Reference: Sections 55, 1742(b), 1771.5, 1775(a),<br />
and 1776(g), <strong>Labor</strong> Code.<br />
§16429. Notice of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> Approval.<br />
(a) Notice of approval of an Awarding Body's <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall be given in the Call<br />
for Bids and in the contract or purchase order and shall also be posted at the job site. If more than one<br />
job site exists or where such posting would endanger public safety, the notice may be posted in the<br />
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manner prescribed by section 16100(b) of Title 8 of the California Code of Regulations.<br />
(b) Notice of an approved <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall contain, at the minimum, the effective date<br />
of the Director's approval, a statement whether the limited exemption from prevailing wages pursuant<br />
to <strong>Labor</strong> Code Section 1771.5(a) applies to contracts under the jurisdiction of the <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong>, a telephone number to call for inquiries, questions, or assistance with regard to the <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong>, and the name of the agent or office administering the <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong>.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Section 1771.5, <strong>Labor</strong> Code.<br />
Article 3. Reports and Audits<br />
§16430. Filing of Statements of Economic Interest (FPPC Form 700) by Designated Employees and<br />
Consultants of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
(a) An Awarding Body that operates either its own labor compliance program or that contracts with a<br />
third party to operate all or part of its labor compliance program shall determine and designate those<br />
employees and consultants of the program who participate in making governmental decisions for the<br />
Awarding Body within the meaning of Title 2, California Code of Regulations, sections 18700 –<br />
18702.4. Those designated employees and consultants shall be required to file Statements of Economic<br />
Interest (FPPC Form 700) and to comply with other applicable requirements of the Political Reform<br />
Act (commencing with Section 87100 of the Government Code) in connection with work performed on<br />
behalf of the Awarding Body.<br />
(b) Designated employees and consultants who operate or are employed by a third party labor<br />
compliance program shall file their Statements of Economic Interest (FPPC Form 700) with the filing<br />
officer of each Awarding Body with which the third party program contracts, unless the Department of<br />
Industrial Relations or the Fair Political Practices Commission specifies a different or alternative<br />
filing location.<br />
Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 87100, et seq., Government Code; Section<br />
1771.5, <strong>Labor</strong> Code.<br />
§16431. Annual Report.<br />
(a) The <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall submit to the Director an annual report on its operation<br />
within 60 days after the close of its annual reporting period, as defined in subpart (c) (d) below. The<br />
annual report shall be made on the appropriate form [LCP-AR1, LCP-AR2, or LCP-AR3], for the type<br />
of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> that is submitting the report, unless the Director has agreed to a<br />
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different reporting format for a <strong>Program</strong> that has been granted extended authority under section 16427<br />
above. A third party <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> that contracted with more than one Awarding Body<br />
or Joint Powers Authority during the annual reporting period shall separately report on <strong>Labor</strong> Code<br />
Section 1771.5(b) enforcement activities for each Awarding Body or Joint Powers Authority covered by<br />
the report.<br />
(b) The Annual Report for a person or entity operating a third party <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall<br />
also include (1) a certification of compliance with conflict of interest disclosure requirements by<br />
employees and consultants who participate in making governmental decisions, as defined under Title 2,<br />
California Code of Regulations, section18701, and (2) a current statement disclosing the information<br />
required under section 16426(a)(2), (3) and (5) above.<br />
(c) Information in the Annual Report shall be reported in sufficient detail to afford a basis for<br />
evaluating the scope and level of enforcement activity of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>. An annual<br />
report shall also include such additional information as the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> may be<br />
required to report as a condition of its approval.<br />
(d) For purposes of this section, the annual reporting period shall be deemed to commence on the first<br />
of the month in which a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> is first granted approval pursuant to Ssection<br />
16425 or 16426 above and shall conclude on the last day of the month immediately preceding that date<br />
in the following year. A <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall use the same reporting period in succeeding<br />
years; provided that for good cause the Director may authorize a change in the reporting period.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1771.5, 1771.6 and 1777.1, <strong>Labor</strong><br />
Code.<br />
** Annual Report Forms LCP-AR1 [awarding body program enforcing on some but not all<br />
projects], LCP-AR2 [awarding body program enforcing on all projects], and LCP-AR3<br />
[third-party program] are available on the Department of Industrial Relations’ website<br />
at http://www.dir.ca.gov/lcp.asp.<br />
§16432. Investigation Methods for <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> – Definitions and Minimum<br />
Requirements, Including Review, Confirmation and Audits of Payroll Records; On-Site<br />
Visits; and Early Resolution of Audits.<br />
(a) The primary function of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> is to ensure that public works contractors<br />
comply with the prevailing wage requirements found in the <strong>Public</strong> Works Chapter of the <strong>Labor</strong> Code.<br />
This regulation is intended to establish minimum requirements which all <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s<br />
shall meet or exceed in carrying out that function. Definitions found throughout this regulation are<br />
intended to provide <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s and representatives of the Department of Industrial<br />
Relations and the Division of <strong>Labor</strong> Standards Enforcement with common terminology as they each<br />
perform their respective roles in prevailing wage enforcement in furtherance of the <strong>Labor</strong> Code<br />
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provisions establishing <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s. This regulation is also intended to confirm that<br />
the proactive investigation methods, as described in detail herein, only comprise the minimum<br />
obligations required of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>s to satisfy their duty to the Director to operate a<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> as specified in sections 16428 and 16434.<br />
(b) Payroll records furnished by contractors and subcontractors in accordance with section 16421(a)<br />
(3) above, and in a format prescribed at section 16401 of Title 8 of the California Code of<br />
Regulations, shall be reviewed by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> as promptly as practicable after<br />
receipt thereof, but in no event more than 30 days after such receipt. “Review” for this purpose shall<br />
be defined as inspection of the records furnished to determine if (1) all appropriate data elements<br />
identified in <strong>Labor</strong> Code Section 1776(a) have been reported; (2) certification forms have been<br />
completed and signed in compliance with <strong>Labor</strong> Code Section 1776(b); and (3) the correct prevailing<br />
wage rates have been reported as paid for each classification of labor listed thereon, with confirmation<br />
of payment in the manner and to the extent described in subpart (c) below.<br />
(c) “Confirmation” of payroll records furnished by contractors and subcontractors shall be defined as<br />
an independent corroboration of reported prevailing wage payments. Confirmation may be<br />
accomplished through worker interviews, examination of paychecks or paycheck stubs, direct<br />
confirmation of payments from third party recipients of “Employer Payments” (as defined at section<br />
16000 of Title 8 of the California Code of Regulations), or any other reasonable method of<br />
corroboration. For each month in which a contractor or subcontractor reports having workers<br />
employed on the public work, confirmation of furnished payroll records shall be undertaken randomly<br />
for at least one worker for at least one weekly period within that month. Confirmation shall also be<br />
undertaken whenever complaints from workers or other interested persons or other circumstances or<br />
information reasonably suggest to the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> that payroll records furnished by a<br />
contractor or subcontractor are inaccurate.<br />
(d) Representatives of the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall conduct in-person inspections at the site<br />
or sites at which the contract for public work is being performed (“On-Site Visits”). On-Site Visits<br />
may be undertaken randomly or as deemed necessary by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>, but shall be<br />
undertaken during each week that workers are present at sites at which the contract for public work is<br />
being performed. All On-Site Visits shall include visual inspection of (1) the copy of the<br />
determination(s) of the Director of Industrial Relations of the prevailing wage rate of per diem wages<br />
required to be posted at each job site in compliance with <strong>Labor</strong> Code Section 1773.2, and (2) the<br />
Notice of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> Approval required to be posted at the job site in accordance with<br />
section 16429 above, listing a telephone number to call for inquiries, questions, or assistance with<br />
regard to the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>. On-Site Visits may include other activities deemed<br />
necessary by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> to independently corroborate prevailing wage payments<br />
reported on payroll records furnished by contractors and subcontractors.<br />
(e) An Audit, as defined herein, shall be prepared by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> whenever the<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has determined that there has been a violation of the <strong>Public</strong> Works<br />
Chapter of the <strong>Labor</strong> Code resulting in the underpayment of wages. An “Audit” for this purpose shall<br />
be defined as a written summary reflecting prevailing wage deficiencies for each underpaid worker,<br />
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and including any penalties to be assessed under <strong>Labor</strong> Code Sections 1775 and 1813, as determined<br />
by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> after consideration of the best information available as to actual<br />
hours worked, amounts paid, and classifications of workers employed in connection with the public<br />
work. Such available information may include, but is not limited to, worker interviews, complaints<br />
from workers or other interested persons, all time cards, cancelled checks, cash receipts, trust fund<br />
forms, books, documents, schedules, forms, reports, receipts or other evidences which reflect job<br />
assignments, work schedules by days and hours, and the disbursement by way of cash, check, or in<br />
whatever form or manner, of funds to a person(s) by job classification and/or skill pursuant to a public<br />
works project. An Audit is sufficiently detailed when it enables the <strong>Labor</strong> Commissioner, if requested to<br />
determine the amount of forfeiture under section 16437, to draw reasonable conclusions as to<br />
compliance with the requirements of the <strong>Public</strong> Works Chapter of the <strong>Labor</strong> Code, and to enable<br />
accurate computation of underpayments of wages to workers and of applicable penalties and<br />
forfeitures. An Audit using the forms in Appendix B, when accompanied by a brief narrative<br />
identifying the Bid Advertisement Date of the contract for public work and summarizing the nature of<br />
the violation and the basis upon which the determination of underpayment was made, presumptively<br />
demonstrates sufficiency. Records supporting an Audit shall be maintained by the <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong> to satisfy its burden of coming forward with evidence in administrative review proceedings<br />
under <strong>Labor</strong> Code Section 1742 and the Prevailing Wage Hearing Regulations found at sections<br />
17201-17270 of Title 8 of the California Code of Regulations.<br />
(f) After the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has determined that violations of the prevailing wage laws<br />
have resulted in the underpayment of wages and an audit has been prepared, notification shall be<br />
provided to the contractor and affected subcontractor of an opportunity to resolve the wage deficiency<br />
prior to a determination of the amount of forfeiture by the <strong>Labor</strong> Commissioner pursuant to these<br />
regulations. The contractor and affected subcontractor shall be provided at least 10 days following<br />
such notification to submit exculpatory information consistent with the “good faith mistake” factors set<br />
forth in <strong>Labor</strong> Code Section 1775(a)(2)(A)(i) and (ii). If, based upon the contractor's submission, the<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> reasonably concludes that the failure to pay the correct wages was a good<br />
faith mistake, and has no knowledge that the contractor and affected subcontractor have a prior record<br />
of failing to meet their prevailing wage obligations, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall not be<br />
required to request the <strong>Labor</strong> Commissioner for a determination of the amount of penalties to be<br />
assessed under <strong>Labor</strong> Code Section 1775 if the underpayment of wages to workers is promptly<br />
corrected and proof of such payment is submitted to the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>. For each<br />
instance in which a wage deficiency is resolved in accordance with this regulation, the <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> shall maintain a written record of the failure of the contractor or subcontractor<br />
to meet its prevailing wage obligation. The record shall identify the public works project, the<br />
contractor or affected subcontractor involved, and the gross amount of wages paid to workers to<br />
resolve the prevailing wage deficiency; and the record shall also include a copy of the Audit prepared<br />
pursuant to subpart (e) above along with any exculpatory information submitted to the <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> by the affected contractor or subcontractor.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1742, 1771.5, 1773.1, 1773.2, 1775,<br />
1776, and 1813, <strong>Labor</strong> Code.<br />
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Appendix B<br />
Audit Record Worksheet Forms [DLSE forms available separately]<br />
3. <strong>Public</strong> Works Investigation Worksheet<br />
4. <strong>Public</strong> Works Audit Worksheet<br />
5. Prevailing Wage Determination Summary<br />
Article 4. Limited Exemption from the Requirement to Pay Prevailing Wages<br />
§16433. Limited Exemption.<br />
(a) As provided in <strong>Labor</strong> Code Section 1771.5(a), an Awarding Body which operates an approved<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> for all public works projects in which the Awarding Body participates<br />
shall not require payment of the general rate of per diem wages or the general rate of per diem wages<br />
for holiday and overtime work for any public works project of $25,000 or less when the project is for<br />
construction or installation work, or of $15,000 or less when the project is for alteration, demolition,<br />
repair, or maintenance work.<br />
(b) A project for construction, installation, alteration, demolition, repair, or maintenance work shall be<br />
identified as such in the call for bids, and in the contract or purchase order.<br />
(c) If the amount of a contract subject to subdivision (a) is changed and, as a result, exceeds the<br />
applicable limit under which the payment of the general rate of per diem wages is not required,<br />
workers employed on the contract after the amount due the contractor has reached the applicable limit<br />
shall be paid the general rate of per diem wages for regular, holiday or overtime work, as the case may<br />
be.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1720(a)(1) and 1771.5, <strong>Labor</strong> Code.<br />
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§16434. Duties of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>.<br />
Article 5. Enforcement<br />
(a) A <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall have a duty to the Director to enforce the requirements of<br />
Chapter 1 of Part 7 of Division 2 of the <strong>Labor</strong> Code and these regulations in a manner consistent with<br />
the practice of the <strong>Labor</strong> Commissioner. It is the practice of the <strong>Labor</strong> Commissioner to refer to the<br />
Director’s ongoing advisory service of web-posted public works coverage determinations as a source<br />
of information and guidance in making enforcement decisions. It is also the practice of the <strong>Labor</strong><br />
Commissioner to be represented by an attorney in prevailing wage hearings conducted pursuant to<br />
<strong>Labor</strong> Code Section 1742(b) and sections 17201 – 17270 of Title 8 of the California Code of<br />
Regulations.<br />
(b) Upon receipt of a written complaint alleging that a contractor or subcontractor has failed to pay<br />
prevailing wages as required by the <strong>Labor</strong> Code, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall do all of the<br />
following:<br />
(1) Within 15 days after receipt of the complaint, send a written acknowledgment to the<br />
complaining party that the complaint has been received and identifying the name, address, and<br />
telephone number of the investigator assigned to the complaint;<br />
(2) Within 15 days after receipt of the complaint, provide the affected contractor with the notice<br />
required under <strong>Labor</strong> Code section 1775(c) if the complaint is against a subcontractor;<br />
(3) Notify the complaining party in writing of the resolution of the complaint within ten days<br />
after the complaint has been resolved by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>;<br />
(4) Notify the complaining party in writing at least once every 30 days of the status of a<br />
complaint that has not been resolved by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>; and<br />
(5) Notify the complaining party in writing at least once every 90 days of the status of a<br />
complaint that has been resolved by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> but remains under review<br />
or in litigation before another entity.<br />
(c) The duties of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> with respect to apprenticeship standards are as follows:<br />
(1) Either the Awarding Body or the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> acting on its behalf shall (A) inform<br />
contractors and subcontractors bidding public works about apprenticeship requirements, (B) send<br />
copies of awards and notices of discrepancies to the Division of Apprenticeship Standards as required<br />
under Section 1773.3 of the <strong>Labor</strong> Code, and (C) refer complaints and promptly report suspected<br />
violations of apprenticeship requirements to the Division of Apprenticeship Standards.<br />
(2) The <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall be responsible for enforcing prevailing wage pay<br />
requirements for apprentices consistent with the practice of the <strong>Labor</strong> Commissioner, including (A) that<br />
any contributions required pursuant to <strong>Labor</strong> Code Section 1777.5(m) are paid to the appropriate<br />
entity, (B) that apprentices are paid no less than the prevailing apprentice rate, (C) that workers listed<br />
and paid as apprentices on the certified payroll records are duly registered as apprentices with the<br />
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Division of Apprenticeship Standards, and (D) requiring that the regular prevailing wage rate be paid<br />
(i) to any worker who is not a duly registered apprentice and (ii) for all hours in excess of the<br />
maximum ratio permitted under <strong>Labor</strong> Code Section 1777.5(g), as determined at the conclusion of the<br />
employing contractor or subcontractor’s work on the public works contract.<br />
(d) For each public work project subject to a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>’s enforcement of prevailing<br />
wage requirements, a separate, written summary of labor compliance activities and relevant facts<br />
pertaining to that particular project shall be maintained. That summary shall demonstrate that<br />
reasonable and sufficient efforts have been made to enforce prevailing wage requirements consistent<br />
with the practice of the <strong>Labor</strong> Commissioner. Appendix C following this section provides a suggested<br />
format for tracking and monitoring enforcement activities. <strong>Compliance</strong> records for a project shall be<br />
retained until the later of (1) at least one year after the acceptance of the public work or five years<br />
after the cessation of all labor on a public work that has not been accepted, or (2) one year after a<br />
final decision or judgment in any litigation under <strong>Labor</strong> Code Section 1742. For purposes of this<br />
section, a written summary or report includes information maintained electronically, provided that the<br />
summary or report can be printed out in hard copy form or is in an electronic format that (1) can be<br />
transmitted by e-mail or compact disk and (2) would be acceptable for the filing of documents in a<br />
federal or state court of record within this state.<br />
(e) The <strong>Labor</strong> Commissioner may provide, sponsor, or endorse training on how to enforce prevailing<br />
wage requirements, including but not necessarily limited to the subjects of (1) ascertaining prevailing<br />
wage requirements and rates from the Division of <strong>Labor</strong> Statistics and Research, (2) monitoring and<br />
investigation under section 16432 above, (3) enforcement responsibilities under this Ssection and<br />
Ssections 16435 – 16439 below, and (4) procedural requirements and responsibilities as an enforcing<br />
agency under <strong>Labor</strong> Code Sections 1741 – 1743 and 1771.6 and sections 17201 – 17270 of Title 8 of<br />
the California Code of Regulations.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1741 – 1743, 1771.5, 1771.6, 1773.3,<br />
and 1777.5 through 1777.7, <strong>Labor</strong> Code.<br />
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Awarding Body:<br />
Project Name:<br />
Appendix C<br />
Suggested Single Project <strong>Labor</strong> <strong>Compliance</strong> Review and Enforcement Report Form<br />
Name of Approved <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>:<br />
Bid Advertisement Date:<br />
Acceptance Date:<br />
Notice of Completion Recordation Date:<br />
Summary of <strong>Labor</strong> <strong>Compliance</strong> Activities<br />
1. Contract Documents Containing Prevailing Wage Requirements (Identify)<br />
2. Prejob Conference(s) -- Attach list(s) of attendees and dates<br />
3. Notification to Project Workers of <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong>’s Contact Person. (Explain<br />
Manner of Notification for each project work site.)<br />
4. Certified Payroll Record Review<br />
a. CPRs Received From:<br />
Contractor/Subcontractor For weeks ending (“w/e”) through w/e<br />
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b. Classifications identified in CPRs and applicable Prevailing Wage Determinations<br />
Classification Determination No.<br />
5. Further investigation or audit due to CPR review, information or complaint from worker or other<br />
interested person, or other reason:<br />
a. Independent Confirmation of CPR Data<br />
Worker Interviews Reconciled CPRs with Pay-<br />
Contractor/Subcontractor (Yes/No)<br />
checks or Stubs (Yes/No)<br />
b. Employer Payments (Health & Welfare, Pension, Vacation/Holiday) Confirmation<br />
Recipients of Written confirmation<br />
Contractor/Subcontractor Employer Payments Obtained (Yes/No)<br />
c. Contributions to California Apprenticeship Council or Other Approved Apprenticeship <strong>Program</strong><br />
Recipients of Written confirmation<br />
Contractor/Subcontractor Contributions Obtained (Yes/No)<br />
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d. Additional Wage Payments or Training Fund Contributions Resulting from Review of CPRs<br />
Additional amounts Additional Expla-<br />
Contractor/Subcontractor Paid to Workers Training Fund nation<br />
* Use separate page(s) for explanation<br />
6. Complaints Received Alleging Noncompliance with Prevailing Wage Requirements.<br />
Name of Resolution or<br />
Complainant Date Received Current Status<br />
7. Requests for Approval of Forfeiture to <strong>Labor</strong> Commissioner<br />
*Use separate page(s) to explain resolution or current status<br />
Contractor/Subcontractor Date of Request Approved/Modified/Denied<br />
8. Litigation Pending Under <strong>Labor</strong> Code Section 1742<br />
Contractor/Subcontractor DIR Case Number<br />
9. (Check one): Final report this project Annual report this project<br />
Authorized Representative for <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong><br />
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*<br />
*<br />
*<br />
*<br />
*<br />
*
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Procedures <strong>Manual</strong><br />
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§16435. Withholding Contract Payments When Payroll Records are Delinquent or Inadequate.<br />
(a) "Withhold" means to cease payments by the Awarding Body, or others who pay on its behalf, or<br />
agents, to the general contractor. Where the violation is by a subcontractor, the general contractor<br />
shall be notified of the nature of the violation and reference made to its rights under <strong>Labor</strong> Code<br />
Section 1729.<br />
(b) "Contracts." Except as otherwise provided by agreement, only contracts under a single master<br />
contract, including a Design-Build contract, or contracts entered into as stages of a single project, may<br />
be the subject of withholding.<br />
(c) "Delinquent payroll records" means those not submitted on the date set in the contract.<br />
(d) "Inadequate payroll records" are any one of the following:<br />
(1) A record lacking any of the information required by <strong>Labor</strong> Code Section 1776;<br />
(2) A record which contains all of the required information but is not certified, or is certified by<br />
someone who is not an agent of the contractor or subcontractor;<br />
(3) A record remaining uncorrected for one payroll period, after the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has<br />
given the contractor or subcontractor notice of inaccuracies detected by audit or record review.<br />
However, prompt correction will stop any duty to withhold if such inaccuracies do not amount to one<br />
(1) percent of the entire Certified Weekly Payroll in dollar value and do not affect more than half the<br />
persons listed as workers employed on that Certified Weekly Payroll, as defined in <strong>Labor</strong> Code Section<br />
1776 and section 16401 of Title 8 of the California Code of Regulations.<br />
(e) The withholding of contract payments when payroll records are delinquent or inadequate is<br />
required by <strong>Labor</strong> Code Section 1771.5(b)(5), and it does not require the prior approval of the <strong>Labor</strong><br />
Commissioner. The Awarding Body shall only withhold those payments due or estimated to be due to<br />
the contractor or subcontractor whose payroll records are delinquent or inadequate, plus any<br />
additional amount that the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has reasonable cause to believe may be needed<br />
to cover a back wage and penalty assessment against the contractor or subcontractor whose payroll<br />
records are delinquent or inadequate; provided that a contractor shall be required in turn to cease all<br />
payments to a subcontractor whose payroll records are delinquent or inadequate until the <strong>Labor</strong><br />
<strong>Compliance</strong> <strong>Program</strong> provides notice that the subcontractor has cured the delinquency or deficiency.<br />
(f) When contract payments are withheld under this section, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall<br />
provide the contractor and subcontractor, if applicable, with immediate written notice that includes all<br />
of the following: (1) a statement that payments are being withheld due to delinquent or inadequate<br />
payroll records, and that identifies what records are missing or states why records that have been<br />
submitted are deemed inadequate; (2) specifies the amount being withheld; and (3) informs the<br />
contractor or subcontractor of the right to request an expedited hearing to review the withholding of<br />
contract payments under <strong>Labor</strong> Code Section 1742, limited to the issue of whether the records are<br />
delinquent or inadequate or the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has exceeded its authority under this<br />
section.<br />
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(g) No contract payments shall be withheld solely on the basis of delinquent or inadequate payroll<br />
records after the required records have been produced.<br />
(h) In addition to withholding contract payments based on delinquent or inadequate payroll records,<br />
penalties shall be assessed under <strong>Labor</strong> Code Section 1776(g) for failure to timely comply with a<br />
written request for certified payroll records. The assessment of penalties under <strong>Labor</strong> Code Section<br />
1776(g) does require the prior approval of the <strong>Labor</strong> Commissioner under section 16436 of these<br />
regulations.<br />
NOTE: Authority cited: section 1773.5, <strong>Labor</strong> Code. Reference: sections 1729, 1771.5, and 1776, <strong>Labor</strong> Code.<br />
§16435.5 Withholding Contract Payments When, After Investigation, It Is Established<br />
That Underpayment or Other Violation Has Occurred.<br />
(a) "Withhold" and “contracts” have the same meaning set forth in Ssections 16435(a) and 16435(b)<br />
of these regulations.<br />
(b) Where the violation is by a subcontractor, the general contractor shall be notified of the nature of<br />
the violation and reference made to its rights under <strong>Labor</strong> Code Section 1729.<br />
(c) "Amount equal to the underpayment" is the total of the following determined by payroll review,<br />
audit, or admission of contractor or subcontractor:<br />
(1) The difference between amounts paid workers and the correct General Prevailing Rate of Per Diem<br />
Wages, as defined in <strong>Labor</strong> Code Section 1773, and determined to be the prevailing rate due workers<br />
in such craft, classification or trade in which they were employed and the amounts paid;<br />
(2) The difference between amounts paid on behalf of workers and the correct amounts of Employer<br />
Payments, as defined in <strong>Labor</strong> Code Section 1773.1 and determined to be part of the prevailing rate<br />
costs of contractors due for employment of workers in such craft, classification or trade in which they<br />
were employed and the amounts paid;<br />
(3) Estimated amounts of "illegal taking of wages";<br />
(4) Amounts of apprenticeship training contributions paid to neither the program sponsor's training<br />
trust nor the California Apprenticeship Council;<br />
(5) Estimated penalties under <strong>Labor</strong> Code Sections 1775, 1776, and 1813.<br />
(d) The withholding of contract payments when, after investigation, it is established that<br />
underpayment or other violations have occurred requires the prior approval of the <strong>Labor</strong><br />
Commissioner under Ssections 16436 and 16437 of these regulations.<br />
NOTE: Authority cited: section 1773.5, <strong>Labor</strong> Code. Reference: sections 1729, 1771.5, 1773, 1773.1, 1775,<br />
1776, 1777.5, 1778, 1813 and 1815, <strong>Labor</strong> Code.<br />
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§16436. Forfeitures Requiring Approval by the <strong>Labor</strong> Commissioner.<br />
(a) For purposes of this section and section 16437 below, “forfeitures” means the amount of wages,<br />
penalties, and forfeitures assessed by the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> and proposed to be withheld<br />
pursuant to <strong>Labor</strong> Code Ssection 1771.6(a), and includes the following: (1) the difference between the<br />
prevailing wage rates and the amount paid to each worker for each calendar day or portion thereof for<br />
which each worker was paid less than the prevailing wage rate by the contractor or subcontractor; and<br />
(2) penalties assessed under <strong>Labor</strong> Code Sections 1775, 1776 and 1813.<br />
(b) If the aggregate amount of forfeitures assessed as to a contractor or subcontractor is less than<br />
$1000.00, the forfeitures shall be deemed approved by the <strong>Labor</strong> Commissioner upon service and the<br />
<strong>Labor</strong> Commissioner’s receipt of copies of the following: (1) the Notice of Withholding of Contract<br />
Payments authorized by <strong>Labor</strong> Code Section 1771.6(a); (2) an Audit as defined in section 16432(e) of<br />
these regulations, and (3) a brief narrative identifying the Bid Advertisement Date of the contract for<br />
public work and summarizing the nature of the violation, the basis of the underpayment, and the<br />
factors considered in determining the assessment of penalties, if any, under <strong>Labor</strong> Code Section 1775.<br />
(c) For all other forfeitures, approval by the <strong>Labor</strong> Commissioner shall be requested and obtained in<br />
accordance with section 16437 below.<br />
NOTE: Authority cited: sections 1773.5, <strong>Labor</strong> Code. Reference: sections 1771.6, 1775, 1776, and 1813,<br />
<strong>Labor</strong> Code.<br />
§16437. Determination of Amount of Forfeiture by the <strong>Labor</strong> Commissioner.<br />
(a) Where the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> requests a determination of the amount of forfeiture, the<br />
request shall include a file or report to the <strong>Labor</strong> Commissioner which contains at least the<br />
information specified in subparts (1) through (9) below. Appendix D is a suggested format for a<br />
Request for Approval of Forfeiture under this section.<br />
(1) Whether the public work has been accepted by the awarding body and whether a valid notice of<br />
completion has been filed, the dates if any when those events occurred, and the amount of funds being<br />
held in retention by the Awarding Body;<br />
(2) Any other deadline which if missed would impede collection;<br />
(3) Evidence of violation, in narrative form;<br />
(4) Evidence of violation obtained under section 16432 of these regulations and a copy of the Audit<br />
prepared in accordance with section 16432(e) setting forth the amounts of unpaid wages and<br />
applicable penalties;<br />
(5) Evidence that before the forfeiture was sent to the <strong>Labor</strong> Commissioner (A) the contractor and<br />
subcontractor were given the opportunity to explain why there was no violation, or that any violation<br />
was caused by good faith mistake and promptly corrected when brought to the contractor or<br />
subcontractor’s attention, and (B) the contractor and subcontractor either did not do so or failed to<br />
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convince the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> of its position;<br />
(6) Where the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> seeks not only wages but also a penalty as part of the<br />
forfeiture, and the contractor or subcontractor has unsuccessfully contended that the cause of violation<br />
was a good faith mistake that was promptly corrected when brought to the contractor or<br />
subcontractor’s attention, a short statement should accompany the proposal for a forfeiture, with a<br />
recommended penalty amount pursuant to <strong>Labor</strong> Code Section 1775(a);<br />
(7) Where the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> seeks only wages or a penalty less than $50 per day as part<br />
of the forfeiture because the contractor or subcontractor has successfully contended that the cause of<br />
the violation was a good faith mistake that was promptly corrected when brought to the contractor or<br />
subcontractor’s attention, the file should include the evidence as to the contractor or subcontractor's<br />
knowledge of his or her obligation, including the program's communication to the contractor or<br />
subcontractor of the obligation in the bid invitations, at the prejob conference agenda and records, and<br />
any other notice given as part of the contracting process. With the file should be a statement, similar to<br />
that described in (6), and recommended penalty amounts, pursuant to <strong>Labor</strong> Code Section 1775(a);<br />
(8) The previous record of the contractor and subcontractor in meeting their prevailing wage<br />
obligations; and<br />
(9) Whether the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> has been granted approval on only an interim or<br />
temporary basis under sections 16425 or 16426 above or whether it has been granted extended<br />
approval under section 16427 above.<br />
(b) The file or report shall be served on the <strong>Labor</strong> Commissioner as soon as practicable after the<br />
violation has been discovered, and not less than 30 days before the final payment, but in no event not<br />
less than 30 days before the expiration of the limitations period set forth in <strong>Labor</strong> Code Section 1741.<br />
(c) A copy of the recommended forfeiture and the file or report shall be served on the contractor and<br />
subcontractor at the same time as it is sent to the <strong>Labor</strong> Commissioner. The <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong> may exclude from the documents served on the contractor and subcontractor copies of<br />
documents secured from the contractor or subcontractor during an audit, investigation, or meeting if<br />
those are clearly referenced in the file or report.<br />
(d) The <strong>Labor</strong> Commissioner shall affirm, reject, or modify the forfeiture in whole or in part as to the<br />
wages and penalties due.<br />
(e) The <strong>Labor</strong> Commissioner's determination of the forfeiture is effective on one of the two following<br />
dates:<br />
(1) For all programs other than those having extended authority under section 16427 of these<br />
regulations, on the date the <strong>Labor</strong> Commissioner serves by first class mail, on the <strong>Labor</strong> <strong>Compliance</strong><br />
<strong>Program</strong>, on the Awarding Body if different, on the contractor and on the subcontractor, if any, an<br />
endorsed copy of the proposed forfeiture, or a newly drafted forfeiture statement which sets out the<br />
amount of forfeiture approved. Service on the contractor or subcontractor is effective if made on the<br />
last address supplied by the contractor or subcontractor in the record. The <strong>Labor</strong> Commissioner's<br />
approval, modification or disapproval of the proposed forfeiture shall be served within 30 days of<br />
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receipt of the proposed forfeiture.<br />
(2) For programs with extended authority under section 16427 above, approval is effective 20 days<br />
after the requested forfeitures are served upon the <strong>Labor</strong> Commissioner, unless the <strong>Labor</strong><br />
Commissioner serves a notice upon the parties, within that time period, that this forfeiture request is<br />
subject to further review. For such programs, a notice that approval will follow such a procedure will<br />
be included in the transmittal of the forfeiture request to the contractor. If the <strong>Labor</strong> Commissioner<br />
notifies the parties of a decision to undertake further review, the <strong>Labor</strong> Commissioner's final approval,<br />
modification or disapproval of the proposed forfeiture shall be served within 30 days of the date of<br />
notice of further review.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 1771.5 and 1775, <strong>Labor</strong> Code.<br />
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Awarding Body LCP State of California Requirements as of January 21, 2009<br />
Procedures <strong>Manual</strong><br />
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Appendix D<br />
Suggested Format for Request for Approval of Forfeiture [separately form]<br />
§16438. Deposits of Penalties and Forfeitures Withheld.<br />
(a) Where the involvement of the <strong>Labor</strong> Commissioner had been limited to a determination of the<br />
actual amount of penalty, forfeiture or underpayment of wages, and the matter has been resolved<br />
without litigation by or against the <strong>Labor</strong> Commissioner, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall deposit<br />
penalties and forfeitures with the Awarding Body.<br />
(b) Where collection of fines, penalties or forfeitures results from administrative proceedings or court<br />
action to which the <strong>Labor</strong> Commissioner and Awarding Body or its <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> are<br />
both parties, the fines, penalties or forfeitures shall be divided between the general funds of the state<br />
and the Awarding Body, as the Hearing Officer or court may decide.<br />
(c) All penalties recovered in administrative proceedings or court action brought by or against the<br />
<strong>Labor</strong> Commissioner and to which the Awarding Body or its <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> is not a party,<br />
shall be deposited in the general fund of the state.<br />
(d) All wages and benefits which belong to an employee and are withheld or collected from a<br />
contractor or subcontractor, either by withholding or as a result of administrative proceedings or any<br />
court action, and which have not been paid to the employee or irrevocably committed on the<br />
employee's behalf to a benefit fund, shall be deposited with the <strong>Labor</strong> Commissioner, who shall handle<br />
such wages and benefits in accordance with <strong>Labor</strong> Code Section 96.7.<br />
NOTE: Authority cited: Section 1773.5, <strong>Labor</strong> Code. Reference: Sections 96.7, 1771.6 and 1775, <strong>Labor</strong> Code.<br />
§16439. Request for Review of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> Enforcement Action; Settlement<br />
Authority.<br />
(a) A contractor or subcontractor may request a settlement meeting pursuant to <strong>Labor</strong> Code sSection<br />
1742.1(b) and may request review of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> enforcement action in accordance<br />
with <strong>Labor</strong> Code Sections 1771.6(b) and 1742 and the regulations found at sections 17201-17270 of<br />
Title 8 of the California Code of Regulations. The <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall have the rights<br />
and responsibilities of the Enforcing Agency (as defined in section 17202(f) of Title 8 of the California<br />
Code of Regulations), in responding to such a request for review, including but not limited to the<br />
obligations to serve notices, transmit the Request for Review to the hearing office, and provide an<br />
opportunity to review evidence in a timely manner, to participate through counsel in all hearing<br />
proceedings, and to meet the burden of establishing prima facie support for the Notice of Withholding<br />
of Contract Payments.<br />
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Procedures <strong>Manual</strong><br />
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(b) If a contractor or subcontractor seeks review of a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> enforcement action,<br />
the <strong>Labor</strong> Commissioner may intervene to represent the Awarding Body, or to enforce relevant<br />
provisions of the <strong>Labor</strong> Code consistent with the practice of the <strong>Labor</strong> Commissioner, or both.<br />
(c) Except in cases where the <strong>Labor</strong> Commissioner has intervened pursuant to subpart (b) above, the<br />
<strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall have the authority to prosecute, settle, or seek the dismissal of any<br />
Notice of Withholding of Contract Payments issued pursuant to <strong>Labor</strong> Code Section 1771.6 and any<br />
review proceeding under <strong>Labor</strong> Code Section 1742, without any further need for approval by the <strong>Labor</strong><br />
Commissioner. Whenever a <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> settles in whole or in part or seeks and<br />
obtains the dismissal of a Notice of Withholding of Contract Payments or a review proceeding under<br />
<strong>Labor</strong> Code Section 1742, the <strong>Labor</strong> <strong>Compliance</strong> <strong>Program</strong> shall document the reasons for the<br />
settlement or request for dismissal and shall make that documentation available to the <strong>Labor</strong><br />
Commissioner upon request.<br />
NOTE: Authority cited: Sections 54, 55, 1742(b), and 1773.5, <strong>Labor</strong> Code. Reference: Sections 1742, 1742.1(b),<br />
and 1771.6, <strong>Labor</strong> Code.<br />
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SFUSD - 113 - Appendix E