New California law aims to weed out bad actors and fund enforcement of prevailing wage compliance

On July 1, 2014, the California Department of Industrial Relations (DIR) launched a program designed to prevent bad actors from bidding on public works and to provide money to the department to enforce compliance against contractors who violate the law.

Relevant portions of Senate Bill 854, which became effective June 20, 2014, establish a program at the DIR, providing that any contractor bidding on public works in the state of California must register with and be certified by the State in order to bid on such projects.

On July 1 the DIR launched its online application website for public works contractors. The registration website will also provide public entities with a searchable database of certified contractors.

In order to bid on public works projects in the state, contractors will be required to pay an annual fee of $300 to DIR, which will be used for enforcement, and register with DIR by certifying under penalty of perjury that:

  • They have Workers Compensation coverage for all employees;
  • They possess a contractors’ license from the Contractors State License Board (CSLB) for the trade in which they are performing work;
  • They have no delinquent unpaid wage or penalty assessments owing and due to any employee or agency;
  • They are not under debarment; and
  • They must certify they are not in violation of the registration requirement in a prior year, once it becomes effective.

In addition, beginning March 1, 2015, contractors bidding on public works must list only registered contractors and subcontractors on bids. Finally, for all projects awarded on or after April 1, 2015, only contractors and subcontractors who are registered public works contractors may perform work.

DIR was instrumental in passage of the new legislation, which is modeled on similar successful laws in New Mexico and New Jersey.

In addition to the registration program above, DIR will be phasing in a requirement that all contractors and subcontractors on all public works projects shall submit certified payroll records to the Labor Commissioner, unless they are explicitly excluded from this requirement.

For more information, contact your Labor Law counsel.

By Sharon A. Seidenstein | July 30, 2014

Legal Developments