PREVAILING WAGE/ LABOR COMPLIANCE SEMINAR

Transcription

1 PREVAILING WAGE/ LABOR COMPLIANCE SEMINAR HANDOUT MATERIALS Thursday 8:00 a.m. 4:00 p.m. Double Tree by Hilton Fresno Hotel & Conference Center 2233 Ventura Street Fresno, California 93721

2 PREVAILING WAGE/LABOR COMPLIANCE SEMINAR Thursday 8:00 a.m. 4:00 p.m. Double Tree by Hilton Fresno Hotel & Convention Center 2233 Ventura Street Fresno, California Agenda 8:00 AM 8:30 AM Registration and Continental Breakfast* *Sponsored by 8:30 AM 9:00 AM Welcome and Opening Remarks Bryan Berthiaume - Executive Director (Page 1) Foundation for Fair Contracting 9:00 AM 10:00 AM Office of the Director Legal Unit (Page 3) Speaker: Isaac S. Nicholson Counsel 10:00 AM 10:15 AM BREAK 10:15 AM 11:15 AM Office of Policy, Research and Legislation (Page 25) Speaker: Isaac S. Nicholson Counsel 11:15 AM 12:30 PM LUNCH Provided On Site* *Sponsored by 12:30 PM 1:30 PM Division of Labor Standards Enforcement (Page 47) Speaker: David Cross, Counsel 1:30 PM 2:30 PM Division of Labor Standards Enforcement (Page 82) Speaker: Rachel Morton, Deputy Labor Commissioner II 2:30 PM - 2:45 PM BREAK Agenda Page i of ii

3 2:45 PM 3:45 PM US Department of Labor - Wage and Hour Division (Page 143) Speakers: Jamika P. Lopez, Community Outreach & Resource Planning Maria Ortiz, Wage and Hour Investigator 3:45 PM 4:00 PM Closing Remarks Evaluation Agenda Page ii of ii

4 BIOGRAPHY Bryan Berthiaume is the Executive Director for the Foundation for Fair Contracting, one the oldest and leading fair contracting organizations operating in the northern forty-six counties of California. Bryan has worked in and around the construction industry for over 28 years. Bryan performs training seminars throughout Northern California. Bryan holds a degree from the California State University, Hayward. Page 1 of 172

5 Page 2 of 172

6 Public Works Page 3 of 172

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8 Office of the Director Legal Unit (OD Legal) Assists the Director with drafting coverage determinations Acts as hearing officers for appeals of wage/penalty assessments Office of Policy, Research and Legislation (OPRL) Issues Prevailing Wage Determinations Division of Labor Standards Enforcement (DLSE) (also known as Labor Commissioner s Office) Enforces prevailing wage and apprenticeship laws Division of Apprenticeship Standards (DAS) Administers apprenticeship laws, programs, and standards Approves apprenticeship programs Page 5 of 172

9 Construction and related work Paid for in any part out of public funds Done under contract Public Work Page 6 of 172

10 LABOR CODE SECTIONS 1720 AND 1771 Prevailing wages apply to all public works over $1,000, unless there s an exception. What is construction, alteration, demolition, installation, repair, or maintenance work? What are public funds? Page 7 of 172

11 Paid for in whole or in part out of public funds (Labor Code 1720(b)) 1. The payment of money or the equivalent of money... directly to or on behalf of the public works contractor, subcontractor, or developer. 2. Performance of construction work... in execution of the project. 3. Transfer... of an asset of value for less than fair market price. Page 8 of 172

12 Paid for in whole or in part out of public funds (Labor Code 1720(b)) 4.Fees, costs, rents, insurance or bond premiums, loans, interest rates, or other obligations that would normally be required in the execution of the contract, that are paid, reduced, charged at less than fair market value, waived, or forgiven Money loaned... that is to be repaid on a contingent basis. 6.Credits that are applied... against repayment obligations.... Page 9 of 172

13 Public funds includes state, local and/or federal monies. (8 CCR 16001) Federally Funded or Assisted Projects: The application of state prevailing wage rates when higher is required whenever federally funded or assisted projects are controlled or carried out by California awarding bodies of any sort. California Prevailing Wage Law (CPWL) cannot be applied to a project which is under the complete control of the federal government. (Southern Cal. Labor Management Committee v. Aubry (1997) 54 Cal.App.4th 873, 886.) EXAMPLE: If US DOT fully funds a project, but Caltrans controls or carries it out, CPWL applies. Be careful other Davis Bacon requirements may also apply. Check with DOL. If project is under the complete control of US DOT, only Davis Bacon applies. Page 10 of 172

14 Section 1772 (in the execution of the contract ) Workers employed by contractors or subcontractors in the execution of any contract for public work are deemed to be employed upon public work. Off-Site Hauling (On and Off-Haul from Outside the Public Works Job Site) O. G. Sansone v. Department of Transportation (1976) 55 Cal.App.3d 434 (On-haul) Williams v. SnSands Corp. (2007) 156 Cal.App.4th 742 (Off-haul) Off-Site Prefabrication Sheet Metal Workers' International Association, Local 104 v. Duncan (2014) 229 Cal.App.4th 192. (Russ Will) Offsite fabrication is not covered by the prevailing wage law if it takes place at a permanent, offsite manufacturing facility and the location and existence of that facility is determined wholly without regard to the particular public works project. Page 11 of 172

15 Other definitions of public works Section 1720(a) 1) Standard definition: (Construction work done under contract paid for in any part out of public funds) 2) Work done for irrigation, utility, reclamation, and improvement districts, and other districts of this type. 3) Street, sewer, or other improvement work done under the direction and supervision or by the authority of any officer or public body of the state, or of any political subdivision or district... Page 12 of 172

16 Other definitions of public works Section 1720(a) 4)The laying of carpet done under a building lease-maintenance contract and paid for out of public funds. 5)The laying of carpet in a public building done under contract and paid for in whole or in part out of public funds. 6)Public transportation demonstration projects (Streets and Highways Code s 143) 7)(A) Infrastructure project grants from the California Advanced Services Fund pursuant to Section 281 of the Public Utilities Code. Page 13 of 172

17 Other definitions of public work Section 1720(e) [Work on electric transmission system] Section [Private construction leased to public entity] Section [Off-haul of refuse] Section [Private renewable energy projects on public property] Section [Work done under private contract on general acute care hospitals] Section [Hauling of ready-mixed concrete] Page 14 of 172

18 Exceptions: - (c)(1) exception for private residential projects built on private property - (c)(2) exception for public improvement on a private project required as a condition of regulatory approval - (c)(3) de minimis exception - (c)(4) affordable housing exception for RDA money - (c)(5)(a)-(e) various exceptions for private residential projects: housing for homeless, downpayment or mortgage assistance, below market rate loans for low income housing projects. Page 15 of 172

19 COVERAGE DETERMINATIONS The coverage determination process is spelled out in Labor Code section and Cal. Code Regs., title 8, sections Two types of coverage determinations Whether a project is covered Whether a type of work is covered. Page 16 of 172

20 What is a coverage determination? Section and Cal. Code Regs., Title 8, Sections The Director has the power to determine that a project or a type of work is public work through issuing what is known as a coverage determination. The administrative process consists of an initial coverage determination and a final determination on administrative appeal. Depending on when the parties make their submissions, the entire process can take many months. Page 17 of 172

21 Coverage Determination Process A party requests a coverage determination DIR requests information and documents from interested parties Parties respond to DIR s request The Director issues a coverage determination A party may file an administrative appeal within 30 days Parties submit additional information and legal argument on appeal The Director issues a final decision on administrative appeal (DOA) A party may challenge DOA in court Page 18 of 172

22 Coverage Determination Process: Suggestions Request the coverage determination as early as possible! Provide a complete description of the nature of the work and the funding sources, along with all pertinent documents. If you are aware of other interested parties, identify them to DIR. The more complete your submission, the more promptly DIR can respond. DIR staff can answer questions by telephone or , but only the Director can issue coverage determinations. Check DIR s website for coverage determinations from 2001 to the present. Such determinations may provide guidance in your situation, although different facts may produce different results. Page 19 of 172

23 New California Laws Page 20 of 172

24 New California Laws Effective 1/1/2017 Industry Advancement Funds Amends Section to allow credit for payment to industry advancement funds only if required under a collective bargaining agreement. (SB 954) Page 21 of 172

25 New California Laws Effective 1/1/2017 Apprentice Preemployment Activities When contractors request dispatch of an apprentice but requires apprentice to fill out an application, undergo testing, training, examination, or other preemployment process, apprentice must be paid for time spent on that activity, including travel to and from the activity. (AB 1926). Page 22 of 172

26 New California Laws Applies 7/1/2016 AB 219 Hauling and delivery of ready-mixed concrete to carry out a public works contract Includes receiving the concrete at the factory or batching plant and the return trip. Rates where the plant is located apply. Must have written subcontract agreement. Must submit CPRs to GC within 3 working days. Page 23 of 172

27 Useful Links DIR s Public Works Home Page The Director s Public Works Coverage Determinations The Director s General Prevailing Wage Determinations DLSE s Public Works Manual California Labor Code California Code of Regulations Page 24 of 172

28 Public Works Page 25 of 172

29 GOALS Brief Introduction of Prevailing Wage Determinations Review OPRL s website to find rates Discuss the meanings of terms on the determinations Page 26 of 172

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31 Reviewing prevailing wage determinations Locate craft/classification/ type of worker by geographical area Statewide, Northern or Southern California, or by County Examine the Basic Hourly Rate, Employer Payments, and Total Hourly Rate Review Advisory Scope of Work Provisions Review Holiday, Travel and Subsistence, and Shift Differential Provisions Review Important Notices Figure out what rates to pay according to the type, time, and location of work Pay workers the correct rates Page 28 of 172

32 Geographical Area Statewide Northern California Southern California County by County Subtrades San Diego Page 29 of 172

33 Prevailing Wage Determinations Overtime Basic Hourly Rate Travel and Subsistence Shift Differential Total Hourly Rate Apprentice Rates Employer Payments Residential Rates Holiday Page 30 of 172

34 Employer Payments Employer Payments Health and Welfare Pension Vacation Training Other Payment Page 31 of 172

35 Employer Payments Example Health and Welfare $10.00 Pension $7.50 Vacation $5.00 Other Payment $2.50 Training $0.50 Basic Hourly Rate $40.00 Employer Payments $25.50 Page 32 of 172

36 Employer Payments Example Pension $15.00 Vacation $7.50 Health and Welfare $2.50 Training $0.50 Basic Hourly Rate $40.00 Employer Payments $25.50 Other Payment $0.00 Page 33 of 172

37 Employer Payments Example Pension $25.00 Training $0.50 Basic Hourly Rate $40.00 Health and Welfare $0.00 Employer Payments $25.50 Vacation $0.00 Other Payment $0.00 Page 34 of 172

38 Regular v. Overtime Rate Basic Hourly Rate $40.00 Employer Payments $15.00 Total Hourly Rate $55.00 Overtime Basic Hourly Rate $60.00 Overtime Total Hourly Rate $75.00 Employer Payments $15.00 Page 35 of 172

39 Apprenticeable Crafts (#) - Wage determinations include a symbol ( # ) next to the craft designation to indicate an Apprenticeable Craft. - For non-apprenticeable crafts, training fund contributions should be paid directly to the worker or to the DAS-approved apprenticeship program, if required by a CBA. Page 36 of 172

40 Holiday Provisions - Most classifications have Holiday provisions listing the holidays on which the posted Holiday rates apply. - If there are no Holiday provisions, then State holidays will control. Page 37 of 172

41 Advisory Scope of Work Provisions - Classifications also include advisory scope of work provisions that provide guidance on what type of work falls under that classification. Page 38 of 172

42 Travel and Subsistence 50 miles 75 miles City Hall Job Site Page 39 of 172

43 Shift Differential Provisions Example 8:00am to 4:30pm 4:30 pm to 1:00 am + x% premium 12:30am to 9:00 am + y% premium Page 40 of 172

44 Effective Date of Determinations - Prevailing wage determinations are generally published twice a year on February 22 and August Prevailing wage determinations become effective 10 days after publication. Published February 22, 2016 Effective March 3, 2016 Published August 22, days 10 days Effective September 1, 2016 Page 41 of 172

45 Single Asterisk - Rates in effect on bid advertisement date apply to the life of the project, if there is a single asterisk on the determination. Rate Published 2/22/16 Rate Effective 3/3/16 Rate Published 8/22/16 Rate Effective 9/1/16 Project Advertised 8/30/16 Project Completed 8/22/19 Page 42 of 172

46 Double Asterisk - If there is a double asterisk, increases to the pay rates have been predetermined and the employer must pay the increases as the project progresses. Predetermined increase 7/1/17 Rate Effective 9/1/16 Predetermined increase 7/1/18 Predetermined increase 7/1/19 Project Advertised 9/22/16 Project Completed 8/22/19 Page 43 of 172

47 Prevailing Wage Determinations for Apprentices - Apprentice Prevailing Wage Determinations follow a format similar to the General Prevailing Wage Determinations. - Apprentice rates can only be paid to apprentices registered with Division of Apprenticeship Standards. Page 44 of 172

48 Residential Prevailing Wage Determinations - Residential Prevailing Wage Determinations are separated by county. - Not all crafts, classifications, or types of workers have residential rate determinations. Page 45 of 172

49 Important Notices - Review the important notices applicable to the craft/classification/type of worker and the geographical area the work is being performed in. Page 46 of 172

50 California s Prevailing Wage System An Overview from the Perspective of the Division of Labor Standards Enforcement. Who does the law protect? A. All workers employed on Public Works (Labor Code 1771) (includes employees, independent contractors, partners, sole proprietor, owner operators) B. Public Works defined 1. Labor Code Posted Public Works coverage determinations C. Limited Exemptions 1. Work carried out by a public agency with its own forces (Labor Code 1771) 2. Certain janitorial services/guards (8 CCR 16000) What must Public Works contractors do to comply with the law? A. Maintain and furnish records (Labor Code 1776) B. Pay the prevailing rate to all workers (Labor Code 1771, 1774 and 1813) C. Comply with apprenticeship requirements (Labor Code ) What is the prevailing wage rate? A. Published prevailing wage determinations B. Process by which prevailing wage rates are established (Labor Code and ; 8 CCR ) How does DLSE enforce the law? A. Conduct investigations 1. Investigate complaints from workers, monitoring agencies, contractors and awarding bodies 2. Obtain relevant documents (certified payroll records, contract documents, inspector logs, prevailing wage determinations, bond information) 3. Prepare audits and findings B. Issue and serve civil wage and penalty assessments ( CWPAs ) (Labor Code 1741) and determinations of civil penalty ( Determinations ) (Labor code ) C. Defend CWPAs and Determinations in administrative review proceedings and in court (Labor Code ; 8 CCR ) D. Collect and disburse wages and penalties (Labor Code 1743) E. Debarment proceedings (Labor Code ) F. Labor Commissioner approval of forfeiture requests from approved labor compliance programs (8 CCR 16437) G. Compliance Monitoring Unit (CMU) Note: All of the citations to the Labor Code sections and the California Code of Regulations (CCR) noted above are available by accessing the California Department of Industrial Relations Home Page ( and links to that page. The web site also includes the public works coverage determinations, the prevailing wage determinations and the public works manual. 1 Page 47 of 172

51 How do I respond to requests for CPRs? A. Responding to inspection requests: where and when (Labor Code 1776(a) (c)) 1. From employee or authorized representative, awarding body, DSLSE or DAS: furnished or available for inspection at principal office of contractor, upon request, at all reasonable hours 2. From the public: no public access to records at contractor s office; request must be made through awarding body, DLSE or DAS B. Responding to requests for copies: how and when (Labor Code 1776(a) (e) 1. Contractor has ten days after receipt of written request to file CPRs with public entity making request 2. Redaction of personal information from CPRs furnished to the public (Labor Code 1776e) 3. Regulations apply to requests for inspection or copies made through awarding body, DLSE or DAS (8 CCR ) 4. Limited reimbursement for costs (Labor Code 1776(b) (3); 8 CCR 16402) C. How long should I keep CRPs? 1. No specific retention period stated in Public Works chapter of Labor Code (Labor code ) 2. Itemized statements under Labor Code 226(a) must be kept by employers for at least three years 3. DLSE recommendation: keep CPRs for at least five years after cessation of labor on a Public Works project What Are Certified Payroll Records, Why Should I care and How Do I Respond to Requests for These Records? What are Certified Payroll Records ( CPRs )? A. Payroll Records defined 1. Statutory definition: name, address, SS#, work classification, straight time and overtime hours worked by day and week, actual wages paid (Labor Code 1776(a) and Labor Code 1812) 2. Regulatory definition: all inclusive; anything having anything to do with job assignments, work schedules and wage/benefit disbursements (8 CCR 16000) 3. Includes itemized statements (aka check stubs) under Labor Code 226(a) 2 Page 48 of 172

52 B. Certified defined 1. Legal definition: to authenticate or verify in writing (Black s Law Dictionary, 7th ed) 2. Statutory definition: written declaration contained in records is true and correct (Labor Code 1776(a) (1)) 3. Regulatory definition: 8 CCR DIR Form (8 CCR 16401(b)) C. How to maintain CPRs: DIR makes it easy? 1. DIR Form A (8CCR 16401(a)) 2. Statement of employer payments to obtain credit for fringe benefit disbursements (DLSE Form PW 26) Why should I care? A. Statutory penalties for non compliance 1. Labor Code 1776(g): $ per calendar day per worker until strict compliance 2. Labor Code 1777: Misdemeanor 3. Labor Code 1814: Misdemeanor 4. Labor Code : Debarment B. Withholding of contract payments 1. Labor Code 1726(b) and Labor Code 1776(g): awarding body withholds statutory penalties from contractor 2. Labor Code (b) (5): awarding body with Labor Compliance Program withholds contract payments when CPRs delinquent or inadequate C. Contractors who fail to comply may be unable to prove workers were paid prevailing wage 1. Labor Code 1742(b): burden to prove prevailing wages were paid effectively falls on contractors 2. Hernandez v. Mendoza (1988) 199 Cal. App.3d 721: consequences for failure to keep records falls on contractor 3. Labor Code 1743(a): joint and several liability of contractor/subcontractor for prevailing wage deficiencies, penalties and liquidated damages D. Statutory incentive for prime contractors to obtain and review CPRs from all subcontractors (Labor Code 1775(b) (2) 3 Page 49 of 172

53 Taking Proper credit for Fringe Benefit Payments A. Labor Code (a) identifies nine types of Employer Payments which are entitled to credit against obligation of contractors to pay prevailing rate of wages B. Typical Examples of Authorized Employer payment : 1. Health insurance premiums paid by employer 2. Pension plan contributions paid by employer 3. Vacation plan contributions paid by employer C. Employer Payments Defined: Labor Code (b) 1. Rate of contributions irrevocably made by employer to trustee pursuant to plan 2. Rate of actual costs to employer to provide benefits to workers pursuant to enforceable commitment to carry out financially responsible plan communicated in writing to workers 3. Payments to California Apprenticeship Council pursuant to Labor Code D. No credit for employer payments required to be provided by other state or federal law (e.g. employer payments to EDD for unemployment benefits) (Labor Code (c) E. Credit for Employer Payments cannot reduce contractor s obligation to pay workers basic hourly rate shown on applicable prevailing wage determination issued by Director (Labor Code (c) F. Annualized Basis required if contractor seeks credit for employer payments that are higher for Public Works projects than for private construction (Labor Code (d)) 1. Analogous federal guidelines to compute annualized credit: U.S. Department of labor Field Enforcement Handbook (6/29/90, 15F11) 2. Sample annualized credit calculation under federal guidelines: divide total employer contributions for year by total number of hours worked on all projects, public or private, for maximum hourly rate of credit available 3. DLSE annualization calculation is explained at p.43 of the Public Works manual G. Contractors may choose to pay any or all Employer Payment amounts identified on applicable prevailing wage determination issued by director as hourly wages to workers (WSB Electric, Inc. v Curry 88 F.3d 788 (9th Cir. 1996)) 1. Caution: Enforceable contractual agreements entered into by contractor may require that certain contributions be made to specified plans 2. Exception: Training amounts identified on applicable prevailing wage determination must generally be paid to California Apprenticeship Council or an eligible, DAS approved apprenticeship program, not to workers (Labor code (m) (1)) 4 Page 50 of 172

54 Review Proceedings Administrative Review of CWPAs and Determinations. Labor Code 1742 provides contractors served with a CWPA an opportunity to timely request administrative review of the monetary assessment. If no hearing is requested within 60 days after service, the CWPA becomes final (Labor Code 1742 (a)), and enables DLSE to either obtain contract funds withheld by the awarding body or, if insufficient funds have been retained, to enter a court judgment against the contractors served, without the necessity of an administrative hearing and without filing a lawsuit. (Labor Code 1742(d) and (e)). If any of the contractors served with the CWPA timely transmit a written request for a review hearing, a hearing will be provided by the DIR before the assessment can become a final order. (Labor Code 1742(b)). The same process is followed for review of a Determination issued under Labor Code The administrative review process involves several different participants from DLSE and DIR, and their respective roles follow. Role of DIR / OD Legal. The Director, currently through the Office of the Director s Legal Unit, is responsible under Labor Code 1742(b) to both hold an administrative review hearing in accordance with the procedures established under the Prevailing Wage Hearing Regulations found at 8 CCR , and issue a written decision affirming, modifying, or dismissing the assessment. The hearing process is required to be fair and impartial, and the findings in the written decision must be supported by substantial evidence in the light of the whole record. The proceedings must provide affected contractors with the protections of due process. To guarantee due process, affected contractors are specifically provided with an opportunity to obtain court review of any written decision by filing a writ under Code of Civil Procedure (Labor Code 1742(c)). Prevailing Wage Hearing Regulations. The regulations which are in effect during the entire period after a contractor files a request for a review hearing and until those proceedings conclude, either by dismissal of the proceedings by the hearing officer (generally, because of settlement) or on the date which a written decision signed by the Director affirming, modifying, or dismissing the assessment becomes final, are found at 8 CCR Settlement Meetings and Settlements. Labor Code , in addition to providing the availability of liquidated damages (an amount equal to the wages covered by the CWPA if those wages remain unpaid 60 days after service of the CWPA), requires that contractors served with a CWPA be afforded an opportunity to meet to attempt to settle any dispute regarding the assessment, if such a request is made by the contractor within 30 days following service. The CWPA form (at page 3) identifies the investigator who issued the CWPA as the person to contact to arrange a settlement meeting. The meeting may be held by phone or in person, and nothing said in the meeting is either subject to discovery, or admissible as evidence, in any administrative or civil proceeding. 5 Page 51 of 172

55 Liquidated Damages. A contractor may avoid liability for liquidated damages by depositing with the DIR the full amount of the assessment (Labor Code (b)). The contractor should be directed to submit a letter, a copy of the CWPA, along with a check or money order made payable to the Department of Industrial Relations, Attention: Cashiering unit, P.O. Box , San Francisco, CA The DIR will hold the deposit until the administrative and judicial review is complete. The DIR will disburse the funds pursuant to instructions provided by the parties. CWPAs and Determinations Which Become Final / Collection from Awarding Body / Judgments. Labor Code 1742(a) provides that a CWPA becomes final if no review hearing has been requested within 60 days after service. Labor Code section (c)(1) contains the same rule for Determinations. CWPAs and Determinations that have become final may be submitted to the awarding body withholding contract funds under that CWPA to obtain the amounts due. Labor Code 1742(f). If funds are not available from the awarding body, DLSE counsel may request entry of judgment in the Superior Court in any county in which the affected contractors have property or a place of business. (Labor Code 1742(d)). These provisions also apply to Determinations. Labor Code (c)(2). Debarment. Labor Code authorizes the Labor Commissioner to seek an order of debarment against contractors, subcontractors, and specific individuals identified (Labor Code )) who have been found to: (1) be in violation of the prevailing wage laws with an intent to defraud, (2) have committed recurring willful violations within three years of a separate and previous willful violation, or (3) failed to prove a timely response to a request to produce certified payroll records pursuant to Labor Code Those terms are expressly defined in the stature or regulations promulgated there under. (8 CCR and LC (e), respectively). The period of debarment is from one to three years, and prohibits contractors or individuals subject to a debarment order from either bidding on or being awarded a contract for a public works project, or performing work as a subcontractor on any public works project. (Labor Code (a) and (b). The procedures DLSE must follow in initiating a debarment proceeding and obtaining an order of debarment are set forth in regulations duly promulgated by the Labor Commissioner and found at 8 CCR Debarments for violations of Labor Code are handled through the same process. Debarment Investigations. The DLSE conducts investigations to determine if a contractor, subcontractor, or individual has committed violations of the prevailing wage laws which authorize the debarment remedy. Generally, the investigations are based upon the facts and circumstances discovered in prior DLSE investigations which resulted in the issuance and service of CWPAs. However, DLSE may also conduct debarment investigations resulting from complaints filed by any person as that term is defined at 8 CCR Posting of Debarment Orders. A list of contractors, subcontractors, or individuals which are debarred, the period of debarment and the identity of the entities and persons subject to the debarment order are posted on DLSE s website for the duration of the debarment. 6 Page 52 of 172

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85 California Labor Commissioner s Office Public Works Unit California Labor Commissioner Julie Su Page 82 of 172

86 Dept. of Industrial Relations - Labor Commissioner s Office Terms and Definitions Awarding Bodies Cognizance Compliance SB 96 Project Registration Pre Qualification of Contractor s Available Resources Q & A Page 83 of 172

87 Department of Industrial Relations Director s Office Office of Policy, Research and Legislation (OPRL), formerly known as the Division of Labor Statistics and Research- Publish General Prevailing Wage Determinations Legal Unit (OD Legal)-Assists the Director with drafting coverage determinations and provides hearing officers under Labor Code 1742 for appeals of CWPAs Labor Commissioner s Office, also known as the Division of Labor Standards Enforcement Division of Apprenticeship Standards Cal-OSHA, also known as the Division of Occupational Safety and Health Division of Workers Compensation Page 84 of 172

88 Mission Statement The mission of the California Labor Commissioner's Office is to ensure a just day's pay in every workplace in the State and to promote economic justice through robust enforcement of labor laws. By combating wage theft, protecting workers from retaliation, and educating the public, we put earned wages into workers' pockets and help level the playing field for law-abiding employers. Page 85 of 172

89 Labor Commissioner s Office Wage Claim Adjudication (WCA) Retaliation Complaint Investigations (RCI) Licensing & Registration Bureau of Field Enforcement (BOFE) Public Works Unit Criminal Investigation Unit (CIU) Legal Judgment Enforcement Unit (JEU) Cashiering Unit Page 86 of 172

90 Public Works Vision Statement The Public Works Unit will effectively combat prevailing wage theft through vigorous labor law enforcement, foster strong working relationships with stakeholders and robust apprenticeships on public works projects, and provide education to workers, contractors, and awarding bodies to ensure workers who build and maintain the infrastructure of California receive a just day s pay for a hard day s work and law abiding contractors can thrive and compete. Page 87 of 172

91 Terms and Definitions Page 88 of 172

92 Public Works Basic Definition Under the California Labor Code, [P]ublic works means: Construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds,... (Section 1720(a)(1)) Page 89 of 172

93 Public Works Includes construction includes work performed during the design and preconstruction phases of construction, including, but not limited to, inspection and land surveying work, and work performed during the postconstruction phases of construction, including, but not limited to, all cleanup work at the jobsite. For purposes of this paragraph, installation includes, but is not limited to, the assembly and disassembly of freestanding and affixed modular office systems. (Labor Code 1720(a)(1)) This section is applicable only to work performed under contract, and is not applicable to work carried out by a public agency with its own forces. This section is applicable to contracts let for maintenance work. (Labor Code 1771) Page 90 of 172

94 Awarding Body Awarding body or body awarding the contract means department, board, authority, officer or agent awarding a contract for public work. (Labor Code 1722) Any state or local government agency, department, board, commission, bureau, district, office, authority, political subdivision, regional district officer, employee, or agent awarding/letting a contract/purchase order for public works. (Title 8, CCR 16000) Page 91 of 172

95 Contractor and Subcontractor For the purposes of this chapter, contractor and subcontractor include a contractor, subcontractor, licensee, officer, agent, or representative thereof, acting in that capacity, when working on public works pursuant to this article and Article 2 (commencing with Section 1770). (Labor Code ) Page 92 of 172

96 Payroll Records All time cards, cancelled checks, cash receipts, trust fund forms, books, documents, schedules, forms, reports, receipts or other evidences which reflect job assignments, work schedules by days and hours, and the disbursement by way of cash, check, or in whatever form or manner, of funds to a person(s) by job classification and/or skill pursuant to a public works project. (Title 8, CCR 16000) Page 93 of 172

97 Notice of Completion / Acceptance Document Valid notice of completion for the public work filed in the office of the county recorder, or a document evidencing the awarding body s acceptance of the public work on a particular date, whichever occurs later. [Labor Code (b)(1)] Bid Advertisement Date/Bid Date The date the first notice inviting bids was published in a newspaper of general circulation or promulgated in a legally sufficient manner which results in a contract being awarded with or without competitive bidding. (Title 8, CCR 16000) Note: The Date that Bids Are Advertised determines the prevailing wage rate to be used throughout the life of the project. Page 94 of 172

98 Prevailing Wage Rate Determination The Director of the Department of Industrial Relations shall determine the general prevailing rate of per diem wages The prevailing wage determination rates are issued twice a year : February 22nd and August 22nd The effective date is 10 days after the issue date of the determination : March 3rd in leap years and March 4th in nonleap years, and September 1st, respectively. Page 95 of 172

99 Awarding Bodies Page 96 of 172

100 Cognizance Under the California Labor Code, The body awarding the contract for public work shall take cognizance of violations of this chapter committed in the course of the execution of the contract, and shall promptly report any suspected violations to the Labor Commissioner (Section 1726(a)) Page 97 of 172

101 What Must Awarding Bodies do to Comply with the Law? Page 98 of 172

102 1. Submit the PWC-100 Report to DIR within 30 days of the award, but in no event later than the first day in which a contractor has workers employed upon the public work (Labor Code ) Shall include contractor name(s) and PWC Registration number(s) ABs required to withhold final payment to contractor until at least 30 days after PWC-100 information has been submitted, including a complete list of subcontractors * Does not apply to projects of $25,000 or less when the project is for construction, alteration, demolition, installation, or repair work or for projects of $15,000 or less when the project is for maintenance work Page 99 of 172

103 2. Ensure contractors are registered (Labor Code ) 3. Include the Notice of the requirement described in Labor Code subdivision (a), in all bid invitations and public works contracts. A bid shall not be accepted nor any contractor or subcontract entered into without proof of the contractor or subcontractor s current registration to perform public work * Does not apply to projects of $25,000 or less when the project is for construction, alteration, demolition, installation, or repair work or for projects of $15,000 or less when the project is for maintenance work Page 100 of 172

104 4. Obtain prevailing wage rates from DIR 5. Post or require contractors to post jobsite notices on public works requirements ( (a)(2)) 6. Ensure that public works contractors pay prevailing wages and are in compliance with public works laws and report any suspected violations to the Labor Commissioner ( 1726) Except for public works projects of one thousand dollars ($1,000) or less, (Labor Code 1771) 7. Withhold and retain all amounts required to satisfy the Civil Wage and Penalty Assessment. ( 1727(a)) Page 101 of 172

105 Senate Bill 96 Page 102 of 172

106 Senate Bill 96 Penalties may be assessed against Awarding Bodies for the following (Labor Code (c)): Failing to timely submit PWC-100 information; Entering into a contract with an unregistered contractor; or Allowing an unregistered contractor to perform work on a project it awarded Civil Penalty Subject to penalties of $100 per day in violation of either requirement, up to $10,000 per project (c) Page 103 of 172

107 Senate Bill 96 Penalties may also be assessed against an Awarding Body (Labor Code (d)): Final payment was made and it is later discovered than an unregistered contractor worked on the project Civil Penalty Subject to penalties of $100 for each calendar day of noncompliance, for a period of up to 100 days, for each unregistered contractor or subcontractor (d) Page 104 of 172

108 Senate Bill 96 Awarding Body debarment (Labor Code (f)) : Whenever the Labor Commissioner determines that an awarding agency has willfully violated the requirements of this section or chapter with respect to two or more public works contracts or projects in any 12-month period, the awarding agency shall be ineligible to receive state funding or financial assistance for any construction project undertaken by or on behalf of the awarding agency for one year Page 105 of 172

109 Senate Bill 96 Stop Order (Labor Code (j): Where a contractor or subcontractor engages in the performance of any public work contract without having been registered in violation of the requirements of Section or this section, the Labor Commissioner shall issue and serve a Stop Order prohibiting the use of the unregistered contractor or the unregistered subcontractor on all public works until the unregistered contractor or unregistered subcontractor is registered. The stop order shall not apply to work by registered contractors or subcontractors on the public work. A Stop Order is served ONLY upon the unregistered contractor or subcontractor Page 106 of 172

110 Senate Bill 96 Failure to observe Stop Order (Labor Code (k)): Failure of a contractor or subcontractor, owner, director, officer, or managing agent of the contractor or subcontractor to observe a Stop Order issued and served upon him or her pursuant to subdivision (j) is guilty of a misdemeanor punishable by imprisonment in county jail not exceeding 60 days or by a fine not exceeding ten thousand dollars ($10,000), or both. Page 107 of 172

111 Precautionary Legal Notice to Awarding Bodies The Labor Commissioner wants to remind all awarding bodies that Article 2 also includes Labor Code Section 1777, which was enacted in 1937 and remains the law today. Section 1777 establishes a criminal penalty (misdemeanor) against any officer, agent, or representative of the state or of any political subdivision who willfully violates any provision of Article 2. Page 108 of 172

112 Public Works Project Registration (PWC-100) Page 109 of 172

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119 Page 116 of 172

120 Pre-Qualification of Contractors Page 117 of 172

121 History 1999 AB 574 enacted allowing public agencies to require contractors pre-qualify before bidding on public works projects Process may be use for individual projects or for all projects during a specified period The law does not require any agency to adopt a pre-qualification system Prequalification procedures must include: Standardized Questionnaire and Financial Statement Uniform system of rating bidders Appeal procedures Page 118 of 172

122 Role of the Department of Industrial Relations DIR instructed to develop model guidelines for rating bidders, and draft the standardized questionnaire There were consultations with Awarding Bodies, Contractors, Surety & other interested parties from Jan thru Oct 2000 Late 2000 DIR established a method that complied with the 1999 legislation Not currently being used by awarding bodies Page 119 of 172

123 New Process Created by Labor Commissioner s office, Public Works Unit Updates old method Provides incentives for using system Questions are related to Labor Commissioner s enforcement objectives Holds contractor's that have a pattern or history of utilizing subcontractors who violate the law accountable Provides an effective scoring system Page 120 of 172

124 Goals of New Process Quickly prequalify responsible law-abiding contractors Spend time examining application materials only where warranted for questionable contractors Provide a more level playing field for law-abiding contractors Provide quality performance-based prequalification More easily determine bidder responsibility Page 121 of 172

125 Why ABs Should Adopt New Process Prevent irresponsible contractors from bidding on projects in the first place Avoid feeling stuck with questionable bid May reduce liability exposure Avoid having to reject bids based on a perceived subjective judgment call More easily fulfill statutory obligations to ensure public funds are appropriately used for public works projects LC 1726 specifically requires the body awarding the contract for public work shall take cognizance of violations Reduce likelihood of problems during the course of construction such as: Delays Audits / investigations Legal issues Page 122 of 172

126 Current Status Currently working to finalize the new process Pilot Program established to calibrate the scoring process and obtain feedback Stay tuned for updates Page 123 of 172

127 Available Resources Page 124 of 172

128 INDUSTRIAL WELFARE COMMISSION ORDER #16 The Industrial Welfare Commission Order # 16 is applicable to the Construction Industry Daily Time Records Meal Periods Rest Periods Tools and Equipment Page 125 of 172

129 Public Works Manual This Manual is designed to be used by the Labor Commissioner s office to ensure consistent, timely, and accurate enforcement of the law statewide and is also intended as an educational tool for our public works stakeholder community Page 126 of 172

130 Director's Prevailing Wage Enforcement Decisions This page contains links to Decisions by the Director of Industrial Relations in cases arising out of prevailing wage enforcement actions under Labor Code section These Decisions have not been designated precedential and, therefore, under the Administrative Procedures Act s Administrative Adjudication Bill of Rights, they cannot be relied on as authority in future cases. The Decisions are being provided to the regulated public to show how the Director has interpreted the statutory scheme, and applied its provisions, in specific factual settings. Page 127 of 172

131 OPRL Points-of-Contact Contact OPRL for classification and prevailing wage rate inquiries at (415) For general inquiries, please send your request to For constituent inquiries, please send your request to Page 128 of 172

132 Searching for Registered Contractors Page 129 of 172

133 Page 130 of 172

134 Page 131 of 172

135 Page 132 of 172

136 Searching for Contractor Debarment Page 133 of 172

137 Page 134 of 172

138 Public Works Newsline Launched December 2015: Keeps all users apprised of the latest public works laws and updates: PWC 100 Enhancement Project Electronic Certified Payroll Record Application Contractor Registration Application New Public Works Laws AB 219 SB 96 Page 135 of 172

139 Go to DIR website Click on Director s office tab Page 136 of 172

140 Click on Press Room Page 137 of 172

141 Click Subscribe to a distribution list Page 138 of 172

142 Page 139 of 172

143 Public Works Contacts Page 140 of 172

144 Page 141 of 172

145 Thanks for Listening Page 142 of 172

146 Page 143 of 172

147 DBA/DBRA Compliance Principles Page 144 of 172

148 DBA/DBRA Compliance Principles Laborers and mechanics Fringe Benefits Site of the work Deductions Classification of Work Certified Payrolls Page 145 of 172

149 Laborers and Mechanics Workers whose duties are manual or physical in nature; Includes apprentices, trainees and helpers; and For CWHSSA, includes guards and watchmen. Page 146 of 172

150 Laborers and Mechanics Does not include: Timekeepers, inspectors, architects, engineers; or Bona fide executive, administrative, and professional employees as defined under FLSA. Working foremen are generally non exempt: must be paid the Davis Bacon (DB) rate for the classification of work performed if not 541 exempt. Page 147 of 172

151 Site of the Work Davis Bacon applies only to laborers and mechanics employed directly on the site of the work. A three part definition applies to determine the scope of the term site of the work. Page 148 of 172

152 Site of the Work Definition 1 DBA applies only to workers directly on the site of the work: The physical place or places where the construction called for in the contract will remain after work has been completed; and Any other site where a significant portion of the building or work is constructed, provided that such site is established specifically for the contract. Page 149 of 172

153 Site of the Work Definition 2 Site of the work also includes job headquarters, tool yards, batch plants, borrow pits, etc., provided they are: Located adjacent or virtually adjacent to the site of the work described in paragraph 1; and Dedicated exclusively or nearly so to the performance of the contract or project. Except if they are excluded see next slide Page 150 of 172

154 Site of the Work Definition 3 Site of the work does not include a contractor s or subcontractor s: permanent home office, branch locations, fabrication plants, tool yards, etc.; whose location and continuance in operation are determined without regard to a particular covered project. Page 151 of 172

155 Definition 3 (Cont d.) Also not included in the site of the work are: Fabrication plants, batch plants, job headquarters, tool yards, etc., of a commercial supplier established by a supplier of materials: Before the opening of bids for a project; and Not located on the actual site of the work. Such permanent, previously established facilities, are not part of the site of the work, even where the operations for a period of time may be dedicated exclusively, or nearly so, to the performance of a contract. Page 152 of 172

156 Truck Drivers Truck drivers of the contractor or subcontractor are covered by Davis Bacon for time: Spent working on the site of the work; and/or Spent loading or unloading materials and supplies on the site of the work, if such time is more than de minimis. (Slides coming up discuss material suppliers.) Page 153 of 172

157 Truck Drivers Truck drivers are also covered when: Transporting materials and supplies between a facility that is part of the site of the work and the actual construction site; or Transporting portions of a building or work between a site where a significant portion of the project is being constructed and the physical place where the building or work will remain. Page 154 of 172

158 Truck Drivers Owner Operators DOL has an enforcement position with respect to bona fide owner operators of trucks who are independent contractors (an owner operator is a person who owns and drives a truck). Certified payrolls including the names of such owner operators do not need to show the hours worked or the rates paid, only the notation owner operator. This position does not apply to owner operators of other equipment such as bulldozers, cranes, etc. Page 155 of 172

159 Material Suppliers The manufacture and delivery to the work site of supply items such as sand, gravel, and ready mixed concrete by bona fide material suppliers, are activities not covered by DBA/DBRA requirements (even though the materials are delivered directly into a contractor s work site mixing facilities). Bona fide material suppliers (including truck drivers) whose only contractual obligations for on site work are to deliver materials and/or pick up materials are not considered contractors under the DBA/DBRA. Thus, their employees are not subject to the Davis Bacon labor standards. Page 156 of 172

160 Material Suppliers (cont d.) However, laborers and mechanics employed at the site of the work by a material supplier, manufacturer, or carrier that undertakes to perform a part of a construction contract as a subcontractor: Would be subject to Davis Bacon labor standards in the same manner as those employed by any other contractor or subcontractor. For enforcement purposes, if such a worker spends more than an incidental amount (20%) of his/her time in a workweek engaged in construction work on the site, he/she is covered for all time spent on the site during workweek. Page 157 of 172