Workers, Wages and Wage Assessments: California Labor Commissioner Cracks Down on Prevailing Wage Violations
Don’t mess with the California Labor Commissioner.
Seriously.
Don’t.
Julie Su, California’s Labor Commissioner, has been making headlines recently as California’s Division of Labor Standards Enforcement (“DLSE”) has cracked down on prevailing wage violations. In a report issued this past month, the DLSE reports that it assessed over $25 million in back wages and civil penalties on public works projects in 2012, the highest recovered since 2002.
And 2013 may be another record breaking year.
This past month the Labor Commissioner assessed over $1.8 million in prevailing wage violations against three subcontractors on public works projects in Southern California (Pow!), in early June she assessed nearly $750,000 against four general contractors on public works projects in Central and Southern California (Bam!), and just over a week later assessed over $8 million against another general contractor on a hotel project which had received rent credits from a public entity (Wham!).
Prevailing Wages
Prevailing wages, like state and federal minimum wages, set a minimum wage rate that employers must pay to workers. However, unlike minimum wages, prevailing wages do not apply to all employers, but only to employers who work on public works projects (or, under certain federal contracts), and the prevailing wage that must be paid by an employer depends on the classification or type of work performed by each worker.
California’s Prevailing Wage Law, like the federal prevailing wage law, the Davis-Bacon Act, dates back to 1931. Enacted during the Great Depression, California’s Prevailing Wage Law and the federal Davis-Bacon Act, require that employers working on public works contracts pay their workers wage rates “prevailing” in the local area, the idea being that it would limit the incentive for employers to recruit lower-wage workers from outside the area.
The Davis-Bacon Act
The federal Davis-Bacon Act, codified at 40 U.S.C. §§3141 et seq., provides that contractors and subcontractors performing work on federally-funded or -assisted contracts in excess of $2,000 for the construction, alteration or repair of public buildings or public works pay their workers no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area as set by the U.S. Department of Labor (“DOL”).
Contractors and subcontractors are required to pay covered workers weekly and submit weekly certified payroll records to the contracting agency. In addition, contractors and subcontractors are required to post Davis-Bacon Act wage determinations and a Davis-Bacon Act poster on the job site.
Failure to pay prevailing wages may be grounds for withholding contract payments, contract termination, and liability for costs to the government and debarment from future contracts for up to three years.
Further information on the Davis-Bacon Act and the DOL’s prevailing wage determinations can be found at the DOL’s website.
California’s Prevailing Wage Law
California’s Prevailing Wage Law, codified at California Labor Code sections 1720 et seq., provides that contractors and subcontractors performing work on state, municipal or local public works projects with a value of over $1,000 pay their workers not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed as set by the California Department of Industrial Relations (“DIR”).
However, charter cities may exempt a public works project within the city limits from prevailing wage requirements if 100% of the funding comes from local city funding sources. In addition, for small public works projects, if an entity has an approved labor compliance program, prevailing wages are not required to be paid on public works projects of $25,000 or less involving new construction, or public works projects of $15,000 or less involving alteration, demolition, repair or maintenance.
Failure to pay prevailing wages may be grounds for assessment of back wages and civil penalties.
Further information on the Prevailing Wage Law and DIR’s wage determinations can be found at the DIR’s website.
A Warning to Contractors
In a press release issued by the DIR earlier this month, Labor Commissioner Su warned contractors, “Failure to pay the proper prevailing wage is a form of wage theft. We will crack down on not only the subcontractors who steal workers’ wages and fail to pay apprenticeship training contributions, but also on the general contractors so we put proper incentives on them to deal only with honest, law-abiding businesses in California.”
You’ve been warned.
California Construction Law Blog | Nomos LLP 
41 Responses to “Workers, Wages and Wage Assessments: California Labor Commissioner Cracks Down on Prevailing Wage Violations”
if an employee is driving an employer’s vehical and have to deliver parts to do a job at a prevailing wage job to do the work. Does the employer have to pay their employees prevailing wage for delivering drive time? Just the delivery and drive time that im concern if they are on company’s truck?
Delivery of parts, no. Delivery of ready-mixed concrete, yes.
Hi Garret,
Is there a prescribed time limit for payment of prevailing wage earnings? My current employer takes months to pay out on prevailing wage jobs. In the past two months I’ve been paid for only an hour and a half out of nearly 50 hours of prevailing wage work. I’ve never encountered this kind of behavior before and every time I ask about it I’m told that the employees don’t get paid until our company has been paid by the prime contractor.
Thanks for your time.
Can’t do it – https://www.dir.ca.gov/dlse/FAQ_Paydays.htm.
Hello,
How can I find out if a jobsite is prevailing wage? I know that a private company doing work could fall under prevailing wage requirements if it is being funded by taxe payer money or from some program dealing with government funds. DIR only has jobsite that have been reported, but the ones that haven’t how would I go about finding that info? PG&E is regulated by the federal government.
Short of submitting a request for a legal opinion to the DIR about whether a project is subject to prevailing wages, it would be difficult.
Is it possible to have a prevailing wage job that is not a public works project? If so, do CAC training funds contributions need to be made if it is not a public works project?
Hi Amy. It is possible if a project labor agreement was signed. Whether CAC training fund contributions would have to be paid would depend on the terms of the agreement.
HI In a California special district (water district) If a customer has a contractor install a pipeline and then deeds said pipeline to the district does the Prevailing Wage Law apply ?
Hi Richard. This is going to be a very lawyerly answer. I think it depends. It depends on whether public funds are used for the installation of the pipeline, whether the pipeline is being installed as a condition, say, of a development agreement with the special district, and what the relationship is of the customer and the special district. I would talk to the water district first and if necessary you can ask for an opinion letter from the Department of Industrial Relations.
How do I find out if my jobsite is prevailing wage?
Hi Jose. In general, with the exception of charter cities, if it’s a federal, state or local public works project it’s probably subject to prevailing wages.
Is there a way or website that can generate a list of prevailing wage job sites by there location address for ever city? If so how can I uptain a copy? And is it updated yearly? Thanks.
Hi Carla. I’m not aware of a means of obtaining that information but you may want to check with the DIR.
Hi Garret, this is probably a redundantly simple question so please bear with me. When you’re performing work on a Federally subsidized project in California, and your employees have an alternative workweek schedule, does OT pay apply according to the alternative workweek schedule or after 8 hours per day? Thanks in advance.
Hi Alan. Sorry for the delay responding. Your question may be redundantly simple for an employment lawyer, but for me, it wades a little to far into the thickets. I did, however, run across something from the California Department of Industrial Relations which you mind find helpful – http://www.dir.ca.gov/dlse/faq_overtime.htm
He’d need to look up the Wage Determination on the DIR website to determine the answer to that question. In California, overtime starts after 8 hours, but many unions (ha, I mean the State, via the unions) have Wage Determinations which require different overtime for Saturday, still different OT for Sunday, and different OT for 2nd and third shifts (because a 2nd shift may have OT after 7.5 hrs, and a 3rd after 7 hours). The essential key is the wage determination, which overrides state law on public works projects for covered work.
Hi Julio. Yes, you are required to be paid prevailing wages, but your employer may already be paying you a wage which exceeds the prevailing wage rates for jobs you are working on.
Thanks Barbra. You can also find a fillable PDF copy of the DAS 140 form on the Department of Industrial Relations’ website – http://www.dir.ca.gov/das/DASForm140.pdf
We have been assessed for not sending in a request for an apprenticeship (i believe the DAS 140 or 142?). In all of the years that that has been required we have still never received an apprentice and we have been in business for over 50 years. The people still get their money out of our employees paycheck, but over a piece of faxed paper ht they say they did not receive means we get fined for that? even though we still pay and do everything else? and as I have stated previously the council has never dispatched an apprentice to us ever. and we have never been negligent in any way before but they assessed us as we were we have tried the settlement meeting but nothing has worked and the DIR says since it has been assessed already that there is nothing that they can do. Is there any resource to get this taken off or to help us get it taken off?We have never received a bill saying our company must pay ____. Just an assessment and no breakdown or anything. What happens if you fail to pay it? What other ways can you fight it?
Hi Christian. As you’re aware, you are required to request apprentices on public works projects unless you qualify for an exemption. For a first violation you are subject to a civil penalty of up to $100 for each full calendar day of non-compliance (or, in lieu of a civil penalty for a first time violation, be required to provide apprentice employment equivalent to the work hours that would have been provided for apprentices during the period of noncompliance), and for subsequent violations within a three year period, are subject to a civil penalty of up to $300 for each full calendar day of non-compliance. The California Labor Commissioner considers five factors when determining the amount of civil penalties: (1) whether the violation was intentional; (2) whether the party has committed other violations of the apprenticeship requirements; (3) whether eh party took steps to remedy violation upon notice of the violation; (4) whether, and to what extent, the violation resulted in lost training opportunities for apprentices; and (5) whether, and to what extent, the violation otherwise harmed apprentices or apprenticeship programs. If a penalty is assessed you can request review of the penalty.
If work is being performed by the company owner (independent electrical contractor, no employees) do state prevailing wage laws come in to play. The work in question would be small jobs ranging from a few hundred to a few thousand dollars over an entire year.
Tim, good question, and one that I hadn’t thought about. At first blush, a company owner, say a sole proprietor without any employees, would not seem to fall within the prevailing wage rubric if the sole proprietor has no employees. However, the California Department of Industrial Relations (“DIR”), which oversees the prevailing wage laws, takes a different view. According to the DIR’s Public Works Manual, “An individual who performs skilled or unskilled labor on a public works project is entitled to be paid the applicable prevailing wage rate for the time the work is performed, regardless of whether the individual holds a particular status such as partner, owner, owner-operator, independent contractor or sole proprietor, or holds a particular title with the employer such as president, vice-president, superintendent or foreman.” Thus, it’s the work that is performed, not the title or legal relationship of the individual to the business entity, which dictates whether prevailing wages must be paid.
If the company signed contract before prevailing wage law was in effect does that mean the company doesnt have to pay prevailing wage for the 10 years of contract work
Hi Bob. I don’t think I understand your question. California has had some sort form of prevailing wage law or another in effect since 1931.
I feel we (myself and fellow apprentices) are being misclassified as helpers. We are not registered apprentices with the DIR but we do have a company apprenticeship program. Our company only pays prevailing wages to the one journeyman lead on the job, even if there are other journeyman there. Myself and other apprentices work side by side with them and use all of the “tools of the trade” and perform the same duties just at a somewhat limited pace. I feel the “helper” classification is incorrect and my employer is stealing wages. Do you have any more info that I should be aware of?
Hi Occub. The Division of Labor Standards Enforcement (“DLSE”) has a complaint form if you feel that you (and others) have been misclassified. The DLSE complaint form can be found at – http://www.dir.ca.gov/dlse/howtofilepwcomplaint.htm
Hi Garret-
I have a Sub who refuses to submit a Non-Performance Statement with their certified payroll. I’ve explained everything to them and why I need it, but they stand by the fact they have never been forced to do so in their 35 year existence. They also point out that Caltrans doesn’t enforce it. I’ve explained to them that being the Prime Contractor, the DIR can request certified payroll 3 years after the project is complete. I have searched the internet; the labor codes go into detail about certified payroll when hours are worked, but nothing during non-performed weeks. Same with the DIR and DOL websites. I spoke with one person at the DIR who said ‘The Labor Codes aren’t black and white, some is implied’. Clearly I found one, and cannot find an answer. I am playing phone tag with another person at the DIR in the Prevailing Wage Public Works Monitoring Unit, but I was wondering if you have/know of anything I can show the subcontractor to force the submission of the Non-Performance Statement. Thanks!
Hi Deborah. A document, such as a Non-Performance Statement, is a contractual not a legal requirement. In other words, neither the Labor Code nor regulations provide that a Non-Performance Statement, or other document indicating that a subcontractor has not worked during a certain time period, needs to be submitted by a subcontractor to a prime contractor. You can, of course, contractually require that your subcontractor do so in your contract with them. In the event your contract does not contain such a requirement you may want to check with the public agency to see whether you, as the prime contractor, can indicate that no work was performed by the subcontractor during the time period at issue.
My dad is undocumented. He does drywall construction. I don’t know what they’re called i think formans? Anyway the forman shui is in charge of telling him how much a house is worth and where he will work or which house to work on etc always lies to him about how much a house is worth. For example, he did a house the forman told him was wortg $1500 when it was actually worth $1665, but because he’s illegal he can’t do anything cuz if he does then they will just fire him if he sues and then he’ll be jobless. Is there anything that can be done?
Hi Irving. The term is “foreman.” I’m not sure what you mean when you say the foreman “is in charge of telling [your father] how much a house is worth and where he will work or which house to work on etc. always lies to him about how much a house is worth.” If your father is an employee working on a private works project (which it sounds like he is based on your description of houses) he is entitled to be paid the state minimum wage which is currently $9.00 per hour as well as overtime and is also entitled to meal and rest breaks. It doesn’t matter if your father is undocumented or not. For further information see the California Department of Industrial Relations website.
What is the next step if a case with violation of prevailing wages of a subcontractor sent to State of CA from a public agency? How State of CA will handling it?
Is there any fine for prime contractor in this case?
Hello. The Department of Industrial Relations will conduct an investigation, and if the investigation reveals that there has been a violation of the prevailing wage laws, a civil wage and penalty assessment will be sent to the contractor who can request review of the civil wage and penalty assessment. If a prime contractor’s subcontractor failed to pay prevailing wages, the prime contractor will not be subject to a fine
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Are there penalties assessed for a employee when a claim is filed for not being paid correctly?
Hi Craig. Yes, there are penalties, and they can be substantial. Up to $200 per day for each worker paid less than the prevailing wage. This is in addition to payment of the required prevailing wage rate.
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Can u report a company anonymously for prevailing wage theft?
Not that I am aware. You would need to file a complaint with the California Department of Industrial Relations (“DIR”). DIR’s complaint requires that you include your contact information, certify that the information contained in the complaint is true, and that you agree that your name can be used in the investigation. Further information on filing a prevailing wage complaint with the DIR can be found at http://www.dir.ca.gov/dlse/HowToFilePWComplaint.htm.
Thank u. There isnt any kinda tip line to call a take it?
Not that I’m aware of, but you may want to contact the DIR. They may have one, but I could see why they wouldn’t, as they wouldn’t want to open up an investigation file without a complainant to stand behind the complaint.