SR 01-24-2017 3A
Ci ty Council
Report
City Council Meeting : January 24, 2017
Agenda Item: 3.A
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To: Mayor and City Council
From: Susan Cline, Director , Public Works, Civil Engineering
Subject: Construction Contract for the Marine Park Irrigation Retrofit Project
Recommended Action
Staff recommends that the City Council:
1. Award Bid #SP2242 to Sul ly -Miller Contracting Co ., a California -based company
for the Marine Park Irrigation Retrofit Project;
2. Authorize the City Manager to negotiate and execute a contract with Sully -Miller
Contracting Co ., in an amount not to exceed $2,271,610 (including a 1 0 %
contingency);
3. Award RF P #SP1982 to Arcadis US, Inc., a Colorado -based company for
construction management and inspection services for Marine Park Irrigation
Retrofit Project;
4. Authorize the City Manager to negotiate and execute an agreement with Arcadis
US, Inc., a Colorado -based company, in an amount not to exceed $245,41 0
(including a 10% contingency);
5. A dopt the resolution adopt ing a labor compliance program for all Proposition 84
grant projects and authorize the City’s labor consultant to su bmit the draft Labor
Compliance Program Manual to the State Department of Industrial Relations for
approval ; and
6 . Authorize the Director of Public Works to issue any necessary change orders to
complete additional work within contract authority.
Executiv e Summary
In accordance with the Sustainable City plan, t he City of Santa Monica has a 100
percent water supply self -sufficiency goal by the year 2020 in which a major component
of the plan includes reduction in overall water demand . The Marine Park Irrig ation
Retrofit Project (Project) would assist in achieving that goal by reducing overall water
demand through usage of alternat ive water supply methods for irrigation needs at
Marine Park . The project aims to conserve nearly 3.5 million gallons of potable water
per year which would assist the City in reaching the overall water supply self -sufficiency
goal through water conservation .
The Marine Park Irrigation Retrofit Project (Project) includes the installation of
approximately 5,000 linear feet of treated urban runoff (TUR) water pipeline from a 2.75 -
million -gallon reservoir located beneath Penmar Park in the City of Los Angeles into a
daily holding tank at Marine Park. The tank would provide storage for the TUR, and a
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pump system would deliver water from the tank to the irrigation system at Marine Park.
The Project would reduce the demand for imported water by utilizing treated wet -
weather (stormwater) and dry -weather (non -stormwater) runoff for irrigation purposes.
S taff recommends Sully -Miller Contract ing Co. for the construction of the Project in an
amount not to exceed $$2,271,610 (including a 1 0 % contingency). Staff recommends
Arcadis US, Inc. to provide construction management and inspection services in an
amount not to exceed $245,410 (including a 10% contingency).
The Marine Park Project is funded by the Clean Beaches and Ocean Parcel Tax
(Measure V) and Proposition 84 through the California Depa rtment of Water Resources
(DWR). Per the grant requirements of Prop osition 84, the C ity is required to adopt a
Labor Compliance program.
Background
C urrently, the City’s groundwater treatment facilities supply up to 75 percent of the
City’s water needs while the other 25 percent of the water demand is outsourced
through the Metropolitan Water District (M WD).
The Marine Park Project is funded by the Clean Beaches and Ocean Parcel Tax
(Measure V) and Proposition 84 through the California Department of Water Resources
(DWR), and is considered an Integrated Regional Water Management (IRWM) Project
which impr oves water reliability, protects and improves water quality, and improves local
water security by reducing dependence on imported water. The Proposition 84 grant is
funding approximately forty percent of the project.
The Los Angeles County Flood Control District and the DWR have entered into a grant
agreement to provide funding assistance to public agencies in Los Angeles County to
implement various IRWM projects, including the City of Santa Monica’s Marine Park
project and the City of Los Angeles’ Penma r Water Quality Improvement and Runoff
Reuse Project (Penmar Project).
The Penmar Project consists of two phases. Phase I is complete and diverts urban
runoff from the cities of Santa Monica and Los Angeles into a 2.75 -million -gallon
reservoir (runoff ca pture facility) that was constructed beneath Penmar Park in the City
of Los Angeles . Phase II of the Penmar project is currently in construction and consists
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of installing the systems required to treat the captured stormwater and distribute it to
three pri mary stakeholders. Treated storm water would be used to irrigate Penmar Golf
Course (City of Los Angeles), Penmar Park (City of Los Angeles), and Marine Park (City
of Santa Monica). Phase II includes the installation of an urban runoff treatment system,
a s well as other required infrastructure and components that will integrate the treatment
system into the existing irrigation treatment systems at the three locations.
Memorandum of Agreement
Pursuant to the terms of the Grant Agreement, the City of Santa Monica and City of Los
Angeles are required to enter into a Memorandum of Agreement (MOA) for purposes of
supplying TUR from the City of Los Angeles runoff capture facility to the City of Santa
Monica’s Marine Park. The primary terms of the agreement incl ude: yearly term of the
agreement, project implementation roles, project operation and maintenance, cost for
TUR use, available supply of TUR, and pump operation for the distribution of TUR.
Currently, the MOA is under review at the City of Los Angeles. T he City of Los Angeles
estimates the MOA will be executed by March 9, 2017. Awarding the construction
contract, and subsequently commencing construction, prior to MOA execution places
the City at risk of building the planned facilities without a guarantee d supply of TUR or a
legally binding TUR rate. However, deferring the construction award, and construction,
until after MOA execution, places the City at risk of missing the Prop 84 grant project
completion deadline of December 31, 2017. In order to help alleviate the prior risk, the
City of Los Angeles provided the City of Santa Monica with a Letter of Intent (LOI)
(Attachment C ) detailing the agreed upon terms of $2.85 per hundred cubic feet that the
City of Santa Monica would have to pay for receiving the treated water from the Penmar
Project . This equates to 80 percent of the City’s potable water rates.
Labor Compliance Program
Proposition 84 (Safe Drinking Water, Water Quality and Supply, Flood Control, River
and Coastal Protection Bond Act of 2006 ) requires that awarding bodies have an
approved Labor Compliance Program (LCP). LCPs are entities which are approved by
the Director of Industrial Relations to monitor and enforce compliance with state
prevailing wage laws on public works projects. An L CP is required to inform contractors
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about their prevailing wage obligations, monitor compliance by obtaining and reviewing
certified payrolls reports, investigating complaints and other suspected violations and
take appropriate enforcement action when vio lations are found. In order to receive
Proposition 84 grant funds, the City has to have an approved LCP enforcement
manual. T o assist with prevailing wage compliance, the City has contracted with
Gafcon to serve as the labor compliance consultant under t his Labor Compliance
P rogram. A resolution must be adopted by City Council prior to the City submitting its
LCP application to the State (Attachment A). As part of its scope of work, Gafcon
drafted a LCP Manual (Attachment B), which documents the City’s im plementation of its
proposed LCP. If approved by Council, the LCP Manual will need to be reviewed by the
State Department of Industrial Relations as part of its approval of the City’s proposed
LCP.
Discussion
The Project would convey treated urban runoff produced by the Penmar Project Phase
II via pressure main piping from the 2.75 -million -gallon reservoir constructed as part of
Penmar Project Phase I to a 25,000 gallon daily holding tank located at Marine Park.
The new below ground holding tank is sized to provide peak daily irrigation needs to the
park during dry summer months. A newly designed above ground pump station skid
system would supply treated urban runoff to the existing irrigation system. Marine Park
uses approximately 3.5 million gallons, equivalent to four Olympic sized swimming pools
of potable water , each year, with nearly all of the usage to irrigation. From recent
estimation the project would supply the entire 3.5 million gallons/year of water usage for
irrigation via treated urban wat er runoff from the Penmar Project, resulting in potable
water savings.
The Marine Park Irrigation Retrofit Project is included in the City of Santa Monica’s
Measure V 5 -year Capital Improvement Plan and is consistent with the type of projects
identified b y the Santa Monica Bay Beaches Bacterial TMDL Implementation Plan.
Rather than using the estimated annual 3.5 million gallons of potable water, this project
effectively functions as a water saving measure by using treated non -potable water to
irrigate la ndscape. This project is unique because of the joint usage between Santa
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Monica and Los Angeles cities for the treatment and reuse of non -potable water.
Construction is anticipated to begin in April 2017 and be completed by December 2017.
Contractor S election - Construction
On November 10, 2016, the City published Notices Inviting Bids for construction
services for the Marine Park Irrigation Retrofit Project. The bid was posted on the City’s
online bidding site, and notices were advertised in the Santa Monica Daily Press in
accordance with City Charter and Municipal Code provision s . A total of 1982 vendors
were notified and 63 vendors downloaded the bid. Five bids were received and publicly
opened on December 12, 2016. Bid results are as follows:
Bi dder Base Bid Amount Alternate Bid
Amount
Total Bid
Amount
Blois Construction, Inc (withdrawn) $1,318,850.00 $246,000.00 $1,564,850.00
Sully -Miller Contracting Co. $1,920,300.00 $144,800.00 $2,065,100.00
Bosco Constructors, Inc. $2,142,976.00 $98,500.0 0 $2,241,476.00
J.R. Filanc, Inc. $2,187,900.00 $255,000.00 $2,442,900.00
PPC Construction, Inc. $2,281,680.00 $246,700.00 $2,528,380.00
Engineer’s Estimate $1,885,114.00 $166,400.00 $2,051,514.00
On December 9, 2016, staff received a formal letter fr om Blois Construction Inc.,
requesting that its bid be withdrawn due to a clerical error. The City Attorney reviewed
the applicable provisions in Public Contract Code Section 5103 , and based on that
review advised staff to return the bid bond submitted by Blois Construction Inc.
The contractor ’s estimate and bid breakdowns were reviewed in detail for validation. It
was found that the original contractor’s estimate did not include the correct quantity
calculations for the paving operations on the project. After spending considerable time
and effort to determine if the contractor could overcome these omissions , the contractor
concluded that the substantially reduced price would not allow them to provide the
quality needed on this project forcing them to with draw its bid .
Bids were evaluated based on criteria in SMMC 2.24.072, including pricing,
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understanding of the project scope, direct experience with similar projects, approach to
the work, technical competence, qualifications of the proposed staff, and th e ability to
meet the project schedule. Staff contacted reference agencies listed by the
recommended contractor to ascertain past performance on similar projects, including
City of Lomita , City of La Habra, City of Fontana, and City of Moreno Valley. Sta ff also
verified with the Contractors State License Board that Sully -Miller Contracting Co. and
its subcontractors’ licenses are current, active, and in good standing. Based on these
criteria, Sully -Miller Contracting Co., is recommended as the best bidder for construction
services of the Marine Park Irrigation Retrofit.
Consultant Selection - Construction Management
On September 22, 2015 , the City issued a Request for Qualifications (RFQ) for
construction management and inspection services for upcoming c onstruction projects
on the City’s online bidding website. A total of 1674 venders were notified and 124
vendors downloaded the RFQ. The City received 25 proposals. Responses to the RFQ
were reviewed by a selection panel of staff from the Public Works De partment.
Evaluation was based on the selection criteria set forth in SMMC Section 2.24.0 73 , with
specific review of the following: technical competence, staffing capability, project
approach, past performance, dispute resolution, quality control, cost c ontrol,
management services, customer service, and the ability to meet required time frames.
The top four firms (Anderson -Penna, Arcadis, CWE, and GK Associates) were invited to
participate in the Request for Proposal (RFP) phase in June 2016.
Based on the selection criteria set forth in SMMC 2.24.073, Arcadis US, Inc. is
recommended as the best qualified firm to provide construction management and
inspection services based on its qualifications and its directly related experience
providing similar servi ces for municipal agencies. Arcadis US, In c . has extensive
knowledge and experience on numerous construction projects in the cities of Los
Angeles, Coachella, Highland, South Pasadena, Santa Monica , and Irvine.
Services provided by Arcadis US, Inc. woul d include construction management
services, continuous inspection of the contractor’s work, verification and management of
field changes and unforeseen conditions, monitoring and mitigation of impacts as a
result of the construction activities, attendance at the construction contractor’s safety
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meeting s , attendance at periodic progress meetings, recordkeeping of all necessary
inspection documentation relevant to the work performed during construction, and
public outreach.
Public Outreach
Public outreach d uring construction of this P roject would be provided by the City and by
the City’s construction management consultant as part of the construction management
effort. Public outreach would include notifications distributed to adjacent properties and
the sur rounding community regarding the scope of the P roject, and schedule periodic
updates on the City’s “Know Before You Go” (aka KBUG) website and Monday editions
of the Santa Monica Daily Press. Notifications would also be posted on social media
and in local newspapers.
Properties impacted by the P roject would receive two construction notices. The first
general notice would be hand delivered to properties adjacent to the proposed Project
two weeks prior to the start of construction. A second two -day notice would be
subsequently hand -delivered to each adjacent property with detailed information
regarding the planned construction activity, potential impacts, and contact information.
The notices would be prepared by Public Works staff and distributed by the construction
management consultant . A project specific outreach campaign, including one -on -one
coordination with: 1) City of Los Angeles’ Penmar Park/Golf Course, 2) Marine Park and
3) Growing Place day care at the Marine Park Campus would commence prior to start
of construction and continue through completion of the P roject .
Street Parking along Dewey Street
The new treated urban runoff pipe alignment would be just south of the centerline of
Dewey Street. Currently, parking is on the north side of Dewey Street only. During
construction, some parking on the north side would be impacted, however, residents
would continue to have unimpeded access to their properties, and after each working
day, all impacted parking would be restored.
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Environmental Exemptio n
In 2012, a Notice of CEQA Exemption was submitted and subsequently approved by
the State Clearinghouse with a Categorical Exemption per State Guide section 15301(b)
and 15061(b)(3) (Attachment D ). Section 15301(b) allows for minor alterations to
existing publicly -owned structures, including utilities. Section 15061(b) (3) states that
provisions of CEQA only apply to those projects which have the potential to cause a
significant adverse environmental impact. The City determined that the proposed project
wi ll not have a significant adverse impact on the environment, therefore, this project is
exempt from CEQA requirements.
Financial Impacts and Budget Actions
The contract to be awarded to Sully -Miller Contracting Co. is for an amount not to
exceed $2,271,6 10 (including a 1 0 % contingency). Funds in the amount of $1,258,525
are available in the FY 2016 -17 Capital Improvement Program budget in account
C066022.589000 and $1,013,085 in account C209032.589000.
The contract to be awarded to Arcadis US, Inc. is for an amount not to exceed $245,410
(including a 10% contingency). Funds in the amount of $245,410 are available in the
FY 2016 -17 Capital Improvement Program budget in account C066022.589000 .
Prepared By: Joshua Carvalho, Civil Engineer
Approved
Forward ed to Council
Attachments:
A. Resolution LCP for Prop 84 Grant
B. Labor Compliance Program Manual
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C. Letter of Intent
D. Notice of CEQA Exemption
E. Oaks Initiative Disclosure Form Sully -Miller
F. OAKS Form: ARCADIS OaksInitiative -signed
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City of Santa Monica
1437 Fourth Street, Suite 300
Santa Monica, CA 90401
Labor Compliance Program
November 27, 2016
Contact:
Ms. Margaret Talamantes
Engineering Support Services Supervisor
City of Santa Monica
1437 Fourth Street , Suite 200
Santa Monica, CA 90401
Margaret.Talamantes@smgov.net
P - (310) 458 -8721 office
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TABLE OF CONTENTS PAGE NO.
SECTION I : Introduction ......................................................................................................................... 3
SECTION II : Conflict of Interest ............................................................................................................. 4
SECTION III: Request for Payroll Records ............................................................................................. 6
SECTION IV : Labor Compliance Program .............................................................................................. 9
Article I Public Works Subj ect to Prevailing Wage Laws ................................................ 9
Article II Competitive Bidding on COSM Public Work Contra cts .................................. 10
Article III Job Start Meeting .............................................................................................. 10
Article IV Contractor Payroll Requirement s; Review a nd Audit Procedures .................... 1 1
Article V Reporting of Willful Violations to th e Labor Commissioner ........................... 17
Article VI Enforcement Action .......................................................................................... 18
Article VII Notice of Withholding o f Cont ract Payments; Review Thereof; a nd Settlement
Authority ........................................................................................................... 25
Article VIII D istribution of Forfeited Sums ......................................................................... 28
Article IX Outreach Activities ........................................................................................... 28
Article X Annual Reports ................................................................................................. 29
Attachment A – Checklist of Labor Law Requirements ................................................... 3 0
Attachment B – Audit Record Form ................................................................................. 33
Attachment C – Notice of Withholding of Contract Payments ........................................ 38
Attachment D – Notice of Temporary Withholding of Contract Payments ...................... 40
Attachment E – Notice of Transmittal .............................................................................. 43
Attachment F – Notice of Opportunity to Review Evidence ............................................ 44
Attachment G – Public Work s Form 100 ......................................................................... 47
SECTION V : Implementation Plan ........................................................................................................... 48
SECTION V I : Operation Manual .............................................................................................................. 49
SECTI O N VI I : Procedures ........................................................................................................................ 52
SECTION VI I I : Forms
Form 1: Sample Prevailing Wage Contractor Information Handout ............................................ 55
Form 2: Apprenticeship Information ............................................................................................ 64
Form 3: Sample Public Works Contract Award Information ....................................................... 70
Form 4: Sample Request for Dispatch of An Apprentice ............................................................. 71
Form 5: Sample T raining Fund Contributi ons Form .................................................................... 72
Form 6 : Sample Contractor Fringe Benefit Statement .................................................................. 73
Form 7 : Sample Public Works Payroll Reporting Form ............................................................... 7 4
Form 8 : Sample General Prevailing Wage Determination ........................................................... 76
Form 9 : Sample Labor Standards Interview Form ........................................................................ 77
Form 10 : Sample Site Visitation Log ........................................................................................... 78
Form 11 : Sample Missing Document List .................................................................................... 79
Form 12 : Sample Report of Action for Prevailing Wage Violation ............................................. 80
Form 13 : Sample Withholding Amount Calculation .................................................................... 81
Form 14 : Sample Single Project Labor Compliance Review and Enforcement Report Form ...... 82
For m 15 : Sample Labor Compliance Program Annual Report ..................................................... 85
Form 1 6 : Sample Request for Approval of Forfeiture .................................................................. 89
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INTRODUCTION
The City of Santa Monica ("COSM ") institutes this Labor Compliance Program (“LCP”)
for the purpose of implementing its policy relative to the labor compliance provisions of state and
federally -funded public works contracts and specifically to comply with the provisions of Labor
Code sec tion 1771 pertaining to the use of public funds. This LCP contains the labor compliance
standards required by state and federal laws, regulations, and directives, as well as the COSM ’s
policies and contract provisions.
A Labor Compliance Pro gram shall have a duty to the Director to enforce the requirements
of Chapter 1 of Part 7 of Division 2 of the Labor Code and these regulations in a manner consistent
with the practice of the Labor Commissioner. It is the practice of the Labor Commissioner to refer
to the Director's ongoing advisory service of web -posted public works coverage determinations as
a source of information and guidance in making enforcement decisions. It is also the practice of
the Labor Commissioner to be represented by an attor ney in prevailing wage hearings conducted
pursuant to Labor Code Section 1742(b) and sections 17201 -17270 of Title 8 of the California
Code of Regulations
The California Labor Code section 1770, et seq., and the Public Contracting Code section
20133 requi re s that contractors on public works projects pay their workers based on the prevailing
wage rates which are established and issued by the Office of Policy Research and Legislation
(“OPRL ”).
The COSM adheres to the statutory requirements as set forth in Labor Code section
1771.5(b). Further, it is the intent of the COSM to actively enforce this LCP by monitoring
applicable COSM construction sites for the payment of prevailing wage rates, and by requiring
contractors and subcontractors having workers on a pplicable COSM sites to submit copies of
certified payroll records demonstrating their compliance with the payment of prevailing wage
rates.
It is the responsibility of the COSM Labor Compliance Program to enforce prevailing
wage requirements, consistent with the policy of the state as expressed in Labor Code Section
90.5(a). A Labor Compliance Program shall take reasonable, vigorous, and prompt action to (1)
determine whether vi olations exist, and (2) enforce compliance, including through imposition of
appropriate penalties and formal enforcement action, when violations are found. A Labor
Compliance Program shall neither avoid use of its enforcement authority based on cost
consid erations nor shall it use that authority in an unreasonable manner to gain leverage over a
contractor or subcontractor. Unreasonable use of enforcement authority includes, but is not
necessarily limited to, prolonged or excessive withholdings of contract p ayments without making
a determination that a violation has occurred.
Should applicable sections of the Labor Code or Title 8 of the California Code of
Regulations undergo alteration, amendment, or deletion, the COSM will modify the affected
portions of t his program accordingly.
The COSM ’s Labor Compliance Officer (“LCO ”) shall be responsible for implementation
and enforcement of the COSM ’s LCP.
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CONFLICT OF INTEREST
The COSM , as the awarding body whose employees operate the COSM ’s LCP , shall
determine and designate the employees and/or consultants who participate in making
governmental decisions. (California Code of Regulations, tit.8, section 16430.) The designated
employees and/or consultants shall file Statement of Economic Interest (Fair Political Practices
Commission (“FPPC ”) Form 700) with the filing officer of the COSM and comply with other
applicable requirements of the Political Reform Act (Gov. Code, sectio n 87100, et seq.).
Government Code section 82019, in pertinent part, defines a designated employee as “any
officer, employee, member, or consultant of any agency whose position with the agency …[i ]s
designated in a Conflict of Interest Code because the position entails the making or participation
in the making of decisions which may foreseeably have a material effect on any financial interest.”
(Gov. Code, § 82019 , subd. (a)(3).) An employee or a consultant is considered a public official
and therefore subject to the Political Reform Act when either makes substantive recommendations
that are, and over an extended period of time have been, regularly approved without significant
amendment or modifications by another public official or government agency. (C al.Code Regs.,
tit. 2, § 18701 , subd. (a)(1)(A)(iii).)
The determination is made according to the factors set forth in California Code of
Regulations, tit. 2, Sections 18701 et seq.:
1. Determine whether the employee or consultant is making, participating in making,
or using his or her official position to influence the making of a governmental
decision. (Cal.Code Regs., tit. 2, § 18701 , subd. (a).)
2. If yes, ascertain the economic interest and determine whether the economic interest
is directly or indirectly involved in the governmental decision. (Cal.Code Regs.,
tit. 2, §§ 18702 – 18702.3.)
3. If an economic interest is involved, the materiality of th e effect of the decision on
the economic interest must be ascertained. (Cal.Code Regs., tit. 2, § 18705.)
Further, the effect of the governmental decision on the employee or the consultant ’s
economic interests must be distinguished from the governmental decisions effect
on the general public.
4. If a determination is made that all of these are affirmative, then there is a conflict
of interest.
5. However, the following exceptions exist in the making or participating in making
a governmental decision:
a. Tho se governmental decisions or actions by an employee or consultant that
is solely ministerial, secretarial, manual, or clerical.
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b. Actions where the employee or the consultant appears before a government
agency on a matter related to his or her own personal interests or that of
their immediate family;
c. Communicates with the general public or the press; and
d. Negoti ates his or her own compensation.
(Cal.Code Regs., tit. 6, § 18702.4.)
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SECTION III
REQUEST FOR PAYROLL RECORDS
Requests may be made by any person for certified copies of payroll records. Requests shall
be made to any of the following:
(1) the body awarding the contract, or
(2) any office of the Division of Labor Standards Enforcement, or the Division of Apprentic eship
Standards.
(b) Requests for certified copies of payroll records pursuant to Section 1776 of the Labor Code
may be made by any person. However, any such request shall be in writing and contain at least the
following information:
(1) The body awardin g the contract;
(2) The contract number and/or description;
(3) The particular job location if more than one;
(4) The name of the contractor;
(5) The regular business address, if known.
NOTE: Requests for records of more than one contractor of subcont ractor must list the information
regarding that contractor individually, even if all requests pertain to the same particular public
works project. Blanket requests covering an entire public works project will not be accepted; unless
contractor and subcontr actor responsibilities regarding the project are not clearly defined.
(c) Acknowledgment of Request. The public entity receiving a request for payroll records shall
acknowledge receipt of such, and indicate the cost of providing the payroll records based on an
estimate by the contractor, subcontractor or public entity. The acknowledgment of the receipt of
said request for payroll records may be accomplished by the public entity's furnishing a copy of
its written correspondence requesting certified copies o f the payroll records sent to the specific
contractor pursuant to Section 16400(d) below, to the person who requested said records.
(d) Request to Contractor. The request for copies of payroll records by the requesting public entity
shall be in any form and/or method which will assure and evidence receipt thereof. The request
shall include the following:
(1) Specify the records to be provided and the form upon which the information is to be provided;
(2) Conspicuous notice of the following:
(A) that the person certifying the copies of the payroll records is, if not the contractor, considered
as an agent acting on behalf of the contra ctor; and
(B) that failure to provide certified copies of the records to the requesting public entity within 10
working days of the receipt of the request will subject the contractor to a penalty of one hundred
($100 .00) dollars per calendar day or portio n thereof for each worker until strict compliance is
effectuated;
(3) Cost of preparation as provided in Section 16402; and
(4) Provide for inspection.
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(e) Inspection of Payroll Records. Inspection of the original payroll records at the office of the
co ntractor(s) pursuant to subdivision (b) of Section 1776 of the Labor Code shall be limited to the
public entities upon reasonable written or oral notice.
NOTE: Authority cited: Sections 54, 1773.5 and 1776, Labor Code. Reference: Sections 1773.5
and 1776 , Labor Code.
Reporting Format. The format for reporting of payroll records requested pursuant to Labor
Code Section 1776 shall be on a form provided by the public entity. Copies of the forms may be
procured at any office of the Division of Labor Standards Enforcement (DLSE) throughout the
state and/or:
Division of Labor Statistics & Research
P.O. Box 420603
San Francisco, CA 94101
ATTENTION: Prevailing Wage Unit
Acceptance of any other format shall be conditioned upon the requirement that the alternate
fo rmat contain all of the information required pursuant to Labor Code Section 1776. If, however,
the contractor does not comply with the provisions of Labor Code Section 1776, the Labor
Commissioner may require the use of DIR's suggested format, "Public Work s Payroll Reporting
Form" (Form A -1 -131).
(b) Words of Certification. The form of certification shall be as follows: I, ________________
(Name -print) the undersigned, am ________________ (position in business) with the authority to
act for and on behalf o f ________________, (name of business and/or contractor) certify under
penalty of perjury that the records or copies thereof submitted and consisting of
________________ (description, no. of pages) are the originals or true, full and correct copies of
the originals which depict the payroll record(s) of the actual disbursements by way of cash, check,
or whatever form to the individual or individuals named. Date:____________
Signature:_______________________
A public entity may require a more strict and/or m ore extensive form of certification.
NOTE: Authority cited: Sections 54 and 1773.5, Labor Code. Reference: Section 1776, Labor
Code.
The cost of preparation to each contractor, subcontractor, or public entity when the request
was made shall be provided in advance by the person seeking the payroll record. Such cost shall
be $1 for the first page of the payroll record and .25 cents for each page thereafter, plus $10 to the
contractor or subcontractor for handling costs. Payment in the form of cash, check or certified
money order shall be made prior to release of the documents to cover the actual costs of
preparation.
NOTE: Authority cited: Section 1776, Labor Code. Reference: Section 1776(h), Labor Code.
Records received from the employing contractor shall be kept on file in the office or entity
that processe d the request for at least 18 months following completion and acceptance of the
project. Thereafter, they may be destroyed unless administrative, judi cial or other pending
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litigation, including arbitration, mediation or other methods of dispute resolution, are in process.
Copies on file shall not be obliterated in the manner prescribed in subdivision (b) below;
(b) copies provided to the public upon wr itten request shall be marked, obliterated or provided in
such a manner that the name, address and Social Security number, and other private information
pertaining to each employee cannot be identified. All other information including identification of
the contractor shall not be obliterated;
(c) the public entity may affirm or deny that a person(s) was or is employed on a public works
contract (by a specific contractor) when asked, so long as the entity requires such information of
an identifying nature w hich will reasonably preclude release of private or confidential information.
NOTE: Authority cited: Sections 54, 1773.5 and 1776, Labor Code. Reference: Section 1776,
Labor Code.
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LABOR COMPLIANCE PROGRAM
ARTICLE I
PUBLIC WORKS SUBJECT TO PREVAILING WAGE LAWS
State prevailing wage rates apply to all public works contracts as set forth in Labor Code
Sections 1720 et seq., and include, but are not limited to, such types of work as construction,
alteration, demolition, repair, or maintenance work. The Office of Policy Research and Legislation
(OPRL ) predetermine the appropriate prevailing wage rates for particular construction trades and
crafts by COSM . For more information, see the Sample Prevailing Wage Contractor Information
Handout attached hereto as Form 1 .
1. Types of Contracts to Which Prevailing Wage Requirements Apply
The COSM institutes this general Labor Compliance Program “LCP” for the purpose of
implementing its policy relative to the labor compliance provisions of State and Federally -funded
public works contracts.
As provided in Labor Code s ection 177 1 , an Awarding Body shall require payment of the
general rate of per diem wages or the general rate of per diem wages for holiday and overtime
work for any public works project of $1,000 or more.
A project for construction, installation, alteration, demolition, repair, or maintenance work
shall be identified as such in the call for bids, and in the contract or purchase order.
If the amount of a contract subject to Labor Code section 1771 is chang ed and, as a result,
exceeds the applicable limit under which the payment of the general rate of per diem wages is not
required, workers employed on the contract after the amount due the contractor has reached the
applicable limit shall be paid the general rate of per diem wages for regular, holiday or overtime
work, as the case may be.
2. Applicable Dates for Enforcement of the LCP
No contracts shall be subject to Labor Compliance Program jurisdiction nor shall the
limited exemption from payment of prevaili ng wages pursuant to Labor Code s ection 1771.5 ,
subdivision (a) apply to any contract of an Awarding Body unless and until the Labor Compliance
Program has been approved by the Director pursuant to this subchapter. The applicable dates for
enforcement of awarding body Labor Compliance Program is established by t itle 8 of the
California Code of Regulations section 16422.
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ARTICLE II
COMPETITIVE BIDDING ON COSM PUBLIC WORKS CONTRACTS
The COSM publicly advertises upcoming public works projects to be awarded according
to a competitive bidding process. All COSM bid advertisements (or bid invitations) and public
works contracts shall contain appropriate language concerning the requirements of the Labor Code.
In the case of a contract for which there is no Call for Bids, the applicable date shall be the date of
the award of the contract.
Notice of approval of the COSM ’s Labor Compliance Program shall be given in the Call
for Bids and in the contr act or purchase order and shall also be posted at the job site. If more than
one job site exists or where such posting would endanger public safety, the notice may be posted
in the manner prescribed by section 16100(b) of t itle 8 of the California Code of Regulations.
The notice of an approved Labor Compliance Program shall contain, at the minimum, the
effective date of the Director ’s approval, a telephone number to call for inquiries, questions, or
assistance with regard to the LCP , and the name of the agent or office administering the Labor
Compliance Program.
ARTICLE III
JOB START MEETING
After the COSM awards the public works contract, and prior to the commencement of the
work, the COSM shall conduct a mandatory Job Start meeting (Pre -Construction conference),
which shall be conducted by the LCO with the contractor and those subcontractors listed in the
contractor ’s bid documents.
At that meeting, the LCO will discuss the federal and state labor law requirements
applicable to the contract, including prevailing wage requirements, the respective record keeping
responsibilities, the requirement for the submittal of certified payroll records to the COSM , and
th e prohibition against discrimination in employment.
The LCO will provide the contractor and each subcontractor attending the Job Start
Meeting with a Checklist of Labor Law Requirements (attached hereto as Attachment A ) and
shall discuss the items on the Checklist of Labor Law Requirements at the Job Start Meeting.
The contractors and subcontractors present at the Job Start meeting will be given the
opportunity to ask questions of the LCO relative to the items contained in the Checklist of Labor
Law Requi rements. The Checklist will then be signed by the contractor ’s representative and the
COSM ’s LCO.
At the Job Start meeting, the LCO will provide the contractor with a copy of the COSM ’s LCP
package which includes: a copy of the approved LCP, the Checklis t of Labor Law Requirements,
blank certified payroll record forms, fringe benefit statements, and state apprenticeship
requirements. A copy of the Labor Code relating to Public Works and Public Agencies (Part 7,
11
Chapter 1, Sections 1720 -1861) and Prevaili ng Wage Rate Determination may be obtained at the
Department of Industrial Relations website (http://www.dir.ca.gov/DLSR.html) and is available
for viewing at the COSM ’s main office at 1437 4th Street, Suite 300, Santa Monica, CA 90401.
.
It will be the contractor ’s responsibility to provide copies of the LCP package to all listed
subcontractors and to any substituted subcontractor performing work on a COSM project.
ARTICLE IV
CONTRACTOR PAYROLL REQUIREMENTS; REVIEW AND AUDIT PROCEDURES
1. Certified Payroll Records Required
The contractor and each subcontractor shall maintain payrolls and basic payroll -related
records (i.e. timecards, canceled checks, cash receipts, trust fund forms, accounting ledgers, tax
forms, superintendent and foreman daily logs, etc.) during the course of the work and shall preserve
them for a period of three (3) years thereafter for all trades workers working on COSM projects
which are subject to the LCP. Such records shall include the name, address, and social security
number of each worker, his or her classification, a general description of the work each worker
performed each day, the rate of pay (including rates of contributions for, or costs assumed to
provide fringe benefits), daily and weekly number of hours worked, and actual wages paid. Time
cards, front and back copies of cancelled checks, daily logs, employee sign -in sheets and/or any
other records maintai ned for the purposes of reporting payroll may be requested by the LCO at
any time and shall be provided immediately following the receipt of the request.
See Form s 6 and 7 attached hereto .
a. Submittal of Certified Payroll Records
The co ntractor and each subcontractor shall maintain weekly certified payroll
records for submittal to the COSM LCO as required. All certified payroll records shall be
accompanied by a statement of compliance signed by the contractor or each subcontractor under
penalty of perjury pursuant to Labor Code section 1771.5 , subdivision (b)(3) and applicable
regulations indicating that the payroll records are correct and complete, that the wage rates
contained therein are not less than those determined by the Director of the Department of Industrial
Relations, and that the classifications set forth for each employee conform with the work
performed.
The certified payroll records required by Labor Code s ection 1776 may be
maintained and submitted electronically if so called out in the contract document, and will be
subject to all of the following conditions:
(i) The reports must contain all of the information required by Labor Code
s ection 1776, with the information organized in a manner that is similar or identical to how the
information is reported on the Department of Industrial Relations ’ suggested “Public Works
Payroll Reporting Form ” (Form A -1 -131) (Form 7 attached hereto);
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(ii) The reports shall be in a format and use software that is readily accessible
and available to contractors, t he COSM , the COSM ’s Labor Compliance Program, and the
Department of Industrial Relations;
(iii) Reports submitted to an awarding body, a Labor Compliance Program, the
Division o f Labor Standards Enforcement, or other entity within the Department of Industrial
Relations must be either (1) in the form of a non -modifiable image or record that bears an
electronic signature or includes a copy of any original certification made on pape r, or alternatively
(2) printed out and submitted on paper with an original signature;
(iv) The requirements for redacting certain information shall be followed when
certified payroll records are disclosed to the public pursuant to Labor Code Section 1776(e),
whether the records are provided electronically or as hard copies; and
(v) No contractor or subcontractor shall be mandated to submit or receive
electronic reports when it otherwise lacks the resources or capacity to do so, nor shall any
contractor or subcon tractor be required to purchase or use proprietary software that is not generally
available to the public.
b. Full Accountability
Each individual, laborer or craftsperson working on a public works contract must
appear on the payroll. The basic concept is t hat the employer who pays the trades worker must
report that individual on its payroll. This includes individuals working as apprentices in an
apprenticeable trade. Owner -operators are to be reported by the contractor employing them; rental
equipment ope rators are to be reported by the rental company paying the workers ’ wages.
Sole owners and partners who work on a contract must also submit a certified
payroll record listing the days and hours worked and the trade classification descriptive of the work
actually done.
The contractor shall (i) provide the records required under this section to the COSM
within five (5) days of each payday, and (ii) make available the records for inspection by the
Department of Industrial Relations, and (iii) permit representatives of the COSM and the
Department of Industrial Relations to intervie w trades workers during working hours on the project
site.
c. Responsibility for Subcontractors
The contractor shall be responsible for ensuring adherence to labor standards
provisions by its subcontractors. Moreover, the prime contractor is responsible for Labor Code
violations of its subcontractors in accordance with Labor Code section 1775.
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2. Payment to Employees
Employees shall be paid on a regular basis. An employer must establish a fixed workweek
(Sunday through Saturday, for example) and payday (such as every Friday or the preceding day
should such payday fall on a holiday). On each and every payday, each worker must be paid all
sums due as of the end of the preceding workweek and must be provided with an itemized wage
statement.
If an individu al is called a subcontractor, whereas in fact, he/she is merely a journey level
mechanic supplying only his/her labor, such an individual would not be deemed a bona fide
subcontractor and must be reported on the payroll of the prime contractor as a trades worker.
Moreover, any person who does not hold a valid contractor ’s license cannot be a subcontractor,
and anyone hired by that person is the worker or employee of the general contractor for purposes
of prevailing wage requirements, certified payroll repo rting, and workers ’ compensation laws.
The worker ’s rate for straight time hours must equal or exceed the rate specified in the
contract by reference to the “Prevailing Wage Determinations ” for the class of work actually
performed. Any work performed on Saturday, Sunday, and/or on a holiday, or portion thereof,
must be paid for hours worked in excess of eight (8) hours in a day and forty (40) hours in a
workweek shall be premium pay. All work performed on Saturday, Sunday and holidays shall be
paid purs uant to the Prevailing Wage Determination. See Form 8 attached hereto .
3. Apprentices
The Labor Compliance Program shall be responsible for enforcing prevailing wage pay
requirements for apprentices consistent with the practice of the Labor Commissioner, including
(A) that any contributions required pursuant to Labor Code Section 1777.5(m) are paid to the
appropriate entity, (B) that apprentices are paid no less than the prevailing apprentice rate, (C) that
workers listed and paid as apprentices on the cer tified payroll records are duly registered as
apprentices with the Division of Apprenticeship Standards, and (D) requiring that the regular
prevailing wage rate be paid (i) to any worker who is not a duly registered apprentice and (ii) for
all hours in exc ess of the maximum ratio permitted under Labor Code Section 1777.5(g), as
determined at the conclusion of the employing contractor or subcontractor ’s work on the public
works contract.
Either the COSM or the COSM ’s Labor Compliance Consulant acting on its behalf shall
(A) inform contractors and subcontractors bidding public works about apprenticeship
requirements, (B) send copies of awards and notices of discrepancies to the Division of
Apprenticeship Standards as required under Section 1773.3 of the Labor Code, and (C) refer
complaints and promptly report suspected violations of apprenticeship requirements to the
Division of Apprenticeship Standards.
Apprentices shall be permitted to work as such only when they are registered, individually,
under a bona fide apprenticeship program registered and approved by the State Division of
Apprenticeship Standards. The allowable ratio of apprentices to journeypersons in any
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craft/classification shall not be greater than the ratio permitted to the contractor as to i ts entire
workforce under the registered program.
Any worker listed on a payroll at an apprentice wage rate who is not registered shall be
paid the journey level wage rate determined by the Department of Industrial Relations for the
classification of the work he/she actually performed. Pre -apprentice tra inees, trainees in non -
apprenticeable crafts, and others who are not duly registered will not be permitted on public works
projects unless they are paid full prevailing wage rates as journeypersons. For additional
information, see Form 2 attached hereto .
Compliance with California Labor Code section 1777.5 requires all public works
contractors and subcontractors to:
a. Submit contract award information to the Apprenticeship Committee for
each apprenticeable craft or trade in the area of the Project; See Form 3 attached hereto and
b. Request dispatch of apprentices from the applicable Apprenticeship
Program(s) and employ apprentices on public works projects in a ratio to journeypersons which in
no case shall be less than one (1) hour of apprentice work to each five (5) hours of journeyperson
work.; See Form 4 attached hereto and
c. Contribute to the applicable Apprenticeship Program(s) or the California
Apprenticeship Council in the amount identified in the prevailing wage rate publication for
journeyper sons and apprentices. If payments are not made to an Apprenticeship Program, they
shall be made to the California Apprenticeship Council, Post Office Box 511283 , Los Angeles ,
CA 9 0051 -7838 . See Form 5 attached hereto .
If the contractor is registered to train apprentices, it shall furnish to the COSM written
evidence of the registration (i.e., Apprenticeship Agreement or Statement of Registration) of its
training program and apprentices, as well as the ratios allowed and the wage rates required to be
paid thereunder for the area of construction, prior to using any apprentices in the contract work. It
should be noted that a prior approval for a separate project does not confirm approval to train on
any project. The contr actor/subcontractor must check with the applicable Joint Apprenticeship
Committee to verify status.
4. Review and Audit of Certified Payroll Records
The primary function of the COSM Labor Compliance Program is to ensure that
public works contractors comply with the prevailing wage requirements found in the Public Works
Chapter of the Labor Code. This regulation is intended to establish minimum requirements which
all Labor Compliance Programs shall meet or exceed in carrying out that function. Definitions
fou nd throughout this regulation are intended to provide Labor Compliance Programs and
representatives of the Department of Industrial Relations and the Division of Labor Standards
Enforcement with common terminology as they each perform their respective role s in prevailing
wage enforcement in furtherance of the Labor Code provisions establishing Labor Compliance
Programs. This regulation is also intended to confirm that the proactive investigation methods, as
15
described in detail herein, only comprise the mini mum obligations required of Labor Compliance
Programs to satisfy their duty to the Director to operate a Labor Compliance Program as specified
in sections 16428 and 16434.
(i) Payroll records furnished by contractors and subcontractors in
accordance with secti on 16421(a)(3), and in a format prescribed at section 16401 of t itle 8 of the
California Code of Regulations, shall be reviewed by the COSM ’s Labor Compliance Program as
promptly as practicable after receipt thereof, but in no event more than 30 days afte r such receipt.
“Review ” for this purpose shall be defined as inspection of the records furnished to determine if
(1) all appropriate data elements identified in Labor Code s ection 1776(a) have been reported; (2)
certification forms have been completed an d signed in compliance with Labor Code s ection
1776(b); and (3) the correct prevailing wage rates have been reported as paid for each classification
of labor listed thereon with confirmation of payment as outlined below.
(ii) Representatives of the Labor Compliance Program shall conduct
in -person inspections at the site or sites at which the contract for public work is being performed (
“On -Site Visits”). On -Site Visits may b e undertaken randomly or as deemed necessary by the
Labor Compliance Program, but shall be undertaken during each week that workers are present at
sites at which the contract for public work is being performed. All On -Site Visits shall include
visual inspe ction of (1) the copy of the determination(s) of the Director of Industrial Relations of
the prevailing wage rate of per diem wages required to be posted at each job site in compliance
with Labor Code Section 1773.2, and (2) the Notice of Labor Compliance Program Approval
required to be posted at the job site in accordance with section 16429 above, listing a telephone
number to call for inquiries, questions, or assistance with regard to the Labor Compliance Program.
On -Site Visits may include other activiti es deemed necessary by the Labor Compliance Program
to independently corroborate prevailing wage payments reported on payroll records furnished by
contractors and subcontractors.
(ii) “Confirmation ” of payroll records furnished by contractors and
subcontractor s shall be defined as an independent corroboration of reported prevailing wage
payments. Confirmation may be accomplished through worker interviews, examination of
paychecks or paycheck stubs, direct confirmation of payments from third party recipients of
“Employer Payments ” (as defined at section 16000 of Title 8 of the California Code of
Regulations), or any other reasonable method of corroboration. For each month in which a
contractor or subcontractor reports having workers employed on the public work, confirmation of
furnished payroll records shall be undertaken randomly for at least one worker for at least one
weekly period within that month. Confirmation shall also be undertaken whenever complaints
from workers or other interested persons or other c ircumstances or information reasonably suggest
to the COSM ’s Labor Compliance Program that payroll records furnished by a contractor or
subcontractor are inaccurate.
An Audit, as defined herein, shall be prepared by the Labor Compliance Progr am
whenever the Labor Compliance Program has determined that there has been a violation of the
Public Works Chapter of the Labor Code resulting in the underpayment of wages. An “Audit” for
this purpose shall be defined as a written summary reflecting preva iling wage deficiencies for each
underpaid worker, and including any penalties to be assessed under Labor Code Sections 1775 and
1813, as determined by the Labor Compliance Program after consideration of the best information
available as to actual hours wo rked, amounts paid, and classifications of workers employed in
16
connection with the public work. Such available information may include, but is not limited to,
worker interviews, complaints from workers or other interested persons, 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, o f funds to a person(s) by job
classification and/or skill pursuant to a public works project. An Audit is sufficiently detailed when
it enables the Labor Commissioner, if requested to determine the amount of forfeiture under
section 16437, to draw reasonab le conclusions as to compliance with the requirements of the
Public Works Chapter of the Labor Code, and to enable accurate computation of underpayments
of wages to workers and of applicable penalties and forfeitures. An Audit using the forms in
Attachment B, when accompanied by a brief narrative identifying the Bid Advertisement Date of
the contract for public work and summarizing the nature of the violation and the basis upon which
the determination of underpayment was made, presumptively demonstrates suf ficiency. Records
supporting an Audit shall be maintained by the Labor Compliance Program to satisfy its burden of
coming forward with evidence in administrative review proceedings under Labor Code Section
1742 and the Prevailing Wage Hearing Regulations f ound at sections 17201 -17270 of Title 8 of
the California Code of Regulations.
After the Labor Compliance Program has determined that violations of the prevailing
wage laws have resulted in the underpayment of wages and an audit has been prepared, notification
shall be provided to the contractor and affected subcontractor of an opportunity to resolve the wage
deficiency prior to a determination of the amount of forfeiture by the Labor Commissioner
pursuant to these regulations. The co ntractor and affected subcontractor shall be provided at least
10 days following such notification to submit exculpatory information consistent with the “good
faith mistake” factors set forth in Labor Code Section 1775(a)(2)(A)(i) and (ii). If, based upon the
contractor's submission, the Labor Compliance Program reasonably concludes that the failure to
pay the correct wages was a good faith mistake, and has no knowledge that the contractor and
affected subcontractor have a prior record of failing to meet th eir prevailing wage obligations, the
Labor Compliance Program shall not be required to request the Labor Commissioner for a
determination of the amount of penalties to be assessed under Labor Code Section 1775 if the
underpayment of wages to workers is pro mptly corrected and proof of such payment is submitted
to the Labor Compliance Program. For each instance in which a wage deficiency is resolved in
accordance with this regulation, the Labor Compliance Program shall maintain a written record of
the failure of the contractor or subcontractor to meet its prevailing wage obligation. The record
shall identify the public works project, the contractor or affected subcontractor involved, and the
gross amount of wages paid to workers to resolve the prevailing wage deficiency; and the record
shall also include a copy of the Audit prepared pursuant to subpart (e) above along with any
exculpatory information submitted to the Labor Compliance Program by the affected contractor or
subcontractor.
The audit record form (attached hereto as Attachment B ) demonstrates the sufficient
detail that is necessary to verify compliance with Labor Code requirements.
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ARTICLE V
REPORTING OF WILLFUL VIOLATIONS TO THE LABOR COMMISSIONER
It is the COSM ’s policy that the public works prevailing wage requirements set forth in the
Labor Code, sections 1720 – 1861, be strictly enforced. Therefore, contractors and subcontractors
found to be willful violators under Labor Code section 1777.1 shall be referred to the Labor
Commissioner for debarment from bidding on or otherwise being awarded any public work
contract in California for the performance of construction and/or maintenance services for a period
not to exceed three (3) years in duration. The debarment period shall depend upon the nature and
severity of the Labor Code violations and any mitigating and/or aggravating factors, which may
be presented at the hearing conducted by the Labor Commissioner for such purpose.
If an investigation reveals that a wi llful violation of Labor Code section 1777.1 has
occurred, the LCO will make a written report to the COSM and the Labor Commissioner (see
Form 13 attached hereto ) which shall include: (1) an Audit consisting of a comparison of payroll
records to the best available information as to the actual hours worked and (2) the classification of
workers employed on the public works contract. Six (6) types of willful violations shall be
reported:
1. Failure to Comply with Prevailing Wage Rate Requirements
Failure to c omply with prevailing wage rate requirements (as set forth in the Labor Code
and COSM contracts) is determined a willful violation whenever less than the stipulated basic
hourly rate is paid to trades workers , or if overtime, holiday rates, fringe benefits, and/or employer
payments are paid at a rate less than stipulated.
2. Falsification of Payroll Records, Misclassification of Work, and/or Failure to
Accurately Report Hours of Work
Falsification of payroll records and failure to accurately report h ours of work is
characterized by deliberate underreporting of hours of work; underreporting the headcount; stating
that the proper prevailing wage rate was paid when, in fact, it was not; clearly misclassifying the
work performed by the worker; and any oth er deliberate and/or willful act which results in the
falsification or inaccurate reporting of payroll records. Such violations are deemed to be willful
violations committed with the intent to defraud.
3. Failure to Submit Certified Payroll Records
Contrac tors or subcontractors who refuse to comply with a request by the COSM Labor
Compliance Program for certified payroll reports or substantiating information and records will
be determined to be in willful violation of the Labor Code. Additionally, refusal to correct
inaccuracies or omissions that have been discovered will also be determined to be a willful
violation of the Labor Code.
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4. For Failure to Pay Fringe Benefits
Fringe benefits are defined as the amounts stipulated for employer payments or trust fund
contributions and are determined to be part of the required prevailing wage rate. Failure to pay or
provide fringe benefits and/or make trust fund contributions on a timely basis is equivalent to
payment of less than the stipulated wage rate and shall be reported to the COSM and the Labor
Commissioner as a willful violation, upon completion of an investigation and audit.
5. Failure to Pay the Correct Apprentice Rates and /or Misclassification of
Workers as Apprentices
Failure to pay the correct apprentice rate or classifying a worker as an apprentice when not
properly registered is equivalent to payment of less than the stipulated wage rate and shall be
reported to the CO SM and the Labor Commissioner as a willful violation, upon completion of an
investigation and Audit.
6. For the Taking of Kickbacks
Accepting or extracting kickbacks from employee wages under Labor Code section 1778
constitutes a felony and may be prosecute d by the appropriate enforcement agency.
ARTICLE VI
ENFORCEMENT ACTION
1. Duty of the COSM as the Awarding Body
a. Duty to Director of Department of Industrial Relations.
The COSM ’s Labor Compliance Program has a duty to the Director of the
Department of Industrial Relations to enforce the requirements of Chapter 1 of Part 7 of Division
2 of the Labor Code and Chapter 8 of Division 1 of the California Code of Regulations in a manner
consis tent with the practice of the Labor Commissioner (8 Cal Code Reg 16434 A). It is the
practice of the Labor Commissioner to refer to the Director ’s ongoing advisory service of web -
posted public works coverage determinations as a source of information and g uidance in making
enforcement decisions. These are available at the Department of Industrial Relations web site
(www.dir.ca.gov ) and the Office of Policy Research and Legislation link. It is also the practice of
the Labor Commissioner to be represented by an attorney in prevailing wage hearings conducted
pursuant to Labor Code section 1742(b) and sections 17201 – 17270 of Title 8 of the California
Code of Regulations.
b. Labor Compliance Program Record Keeping Duty
For each public work project subject to a Labor Compliance Program ’s
enforcement of prevailing wage requirements, a separate, written summary of labor compliance
activities and relevant facts pertaining to that particular project shall be maintained (see Form 14
attached hereto ). That summary shall demonstrate that reasonable and sufficient efforts have
19
been made to enforce prevailing wage requirements consistent with the practice of the Labor
Commissioner. Compliance records for a project shall be retained until the later of (1) at least one
year after the acceptance of the public work or five years after the cessation of all labor on a public
work that has not been accepted, or (2) one year after a final de cision or judgment in any litigation
under Labor Code section 1742. For purposes of this section, a written summary or report includes
information maintained electronically, provided that the summary or report can be printed out in
hard copy form or is in an electronic format that (1) can be transmitted by e -mail or compact disk
and (2) would be acceptable for the filing of documents in a federal or state court of record within
this state.
2. Withholding Contract Payments When Payroll Records are Delinquent or
Inadequate
The COSM shall withhold contract payments when payroll records are delinquent or
inadequate or when, after an investigation, it is established that underpayment of the prevailing
wage has occurred. Withholding of contract payments by a Lab or Compliance Program, approved
by the Department of Industrial Relations , is authorized by Labor Code section 1771.6 and t itle 8,
California Code of Regulations, section 16435, et seq. The COSM ’s Labor Compliance Program
will refer to the Director ’s ongo ing advisory service of web -posted public works coverage
determinations as a source of information and guidance in making enforcement decisions.
a. “Withhold ” means to cease payments by the Awarding Body, or others who
pay on its behalf, or agents, to the ge neral contractor. Where the violation is by a subcontractor,
the general contractor shall be notified of the nature of the violation and reference made to its
rights under Labor Code s ection 1729.
b. Except as otherwise provided by agreement, only contracts under a single
master contract, including a Design -Build contract, or contracts entered into as stages of a single
project, may be the subject of withholding.
c. “Delinquent payroll records ” means those not submitted on the date set in
the COSM contract and the Labor Compliance Program .
d. “Inadequate payroll records ” are any one of the following:
(i) A record lacking any of the information required by Labor Code
s ection 1776;
(ii) A record which contains all of the required information but is not
certified, or is certified by someone who is not an agent of the contractor or subcontractor;
(iii) A record remaining uncorrected for one payroll period , after the
COSM ’s Labor Compliance Program has given the contractor or subcontractor notice of
inaccuracies detected by audit or record review. However, prompt correction by contractor or
subcontractor will stop any duty of COSM to withhold if such inaccuracies do not amount to one
(1) percent of the entire Certified Weekly Payroll in dollar value and do not affect more t han half
the persons listed as workers employed on that Certified Weekly Payroll, as defined in Labor Code
s ection 1776 and s ection 16401 of t itle 8 of the California Code of Regulations .
20
e. The withholding of contract payments when payroll records are del inquent
or inadequate is required by Labor Code s ection 1771.5 , subdivision (b)(5), and it does not require
the prior approval of the Labor Commissioner is not mandatory, however . The COSM shall only
withhold those payments due or estimated to be due to t he contractor or subcontractor whose
payroll records are delinquent or inadequate, plus any additional amount that the COSM ’s LCP
has reasonable cause to believe may be needed to cover a back wage and penalty assessment
against the contractor or subcontrac tor whose payroll records are delinquent or inadequate;
provided that a contractor shall be required in turn to cease all payments to a subcontractor whose
payroll records are delinquent or inadequate until the Labor Compliance Program provides notice
that the subcontractor has cured the delinquency or deficiency.
f. When contract payments are withheld under this section, the LCP shall
provide the contractor and subcontracto r (if applicable ) with immediate written notice that includes
all of the following: (1) a statement that payments are being withheld due to delinquent or
inadequate payroll records, identifying what records are missing or states why records that have
been submitted are dee med inadequate; (2) specifies the amount being withheld; and (3) informs
the contractor or subcontractor of the right to request an expedited hearing to review the
withholding of contract payments under Labor Code s ection 1742, limited to the issue of whet her
the records are delinquent or inadequate or the Labor Compliance Program has exceeded its
authority under this section. Form attached hereto as Attachment C .
g. No contract payments shall be withheld solely on the basis of delinquent or
inadequate payrol l records after the required records have been produced.
h. In addition to withholding contract payments based on delinquent or
inadequate payroll records, penalties shall be assessed under Labor Code s ection 1776 , subdivision
(h ) for failure to timely compl y with a written request for certified payroll records. The assessment
of penalties under Labor Code s ection 1776 , subdivision (h ) does require the prior approval of the
Labor Commissioner under section 1643 5 of t itle 8 of the California Code of R egulatio ns , which
the Labor Compliance Program shall obtain .
3. Receipt of a Written Complaint
Upon receipt of a written complaint alleging that a contractor or subcontractor has failed
to pay prevailing wages as required by the Labor Code, the Labor Compliance Program shall do
all of the following:
a. Within 15 days after receipt of the complaint, send a written
acknowledgment to the complaining party that the complaint has been received and identifying the
name, address, and telephone number of the investigator assigned to the complaint;
b. Within 15 days after receipt of the complaint, provide the affected
contractor with the notice required under Labor Code section 1775 , subdivision (c) if the complaint
is against a subcontractor;
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c. Notify the complaining party in writing of the resolution of the complaint
within ten days after the complaint has been resolved by the Labor Compliance Program;
d. Notify the complaining party in writing at least once every 30 days of the
status of a complaint that has not been resol ved by the Labor Compliance Program; and
e. Notify the complaining party in writing at least once every 90 days of the
status of a complaint that has been resolved by the Labor Compliance Program but remains under
review or in litigation before another ent ity.
4. Withholding for Violation for Not Paying the Per Diem Prevailing Wage
a. “Amount equal to the underpayment ” is the total of the following
determined by payroll review, audit, or admission of t he contractor or subcontractor :
(i) The difference between the amounts paid to workers and the
correct General Prevailing Wage Rate of Per Diem Wages as defined in s ection 16000 et. seq. of
t itle 8 of the California Code of Regulations;
(ii) The difference between the amounts paid to workers and the
correct amounts of emp loyer payments, as defined in s ection 16000 et seq. of t itle 8 of the
California Code of Regulations and determined to be part of the prevailing rate costs of contractors
due for employment of workers in such craft, classification, or trade in which they w ere employed
and the amounts paid;
(iii) Estimated amounts of “illegal taking of wages ”; and
(iv) Amounts of apprenticeship training contributions paid to neither
the program sponsor ’s training trust nor the California Apprenticeship Council.
b. P enalties under Labor Code sections 1775 and 1813:
(i) Pursuant to Labor Code section 1775, the contractor shall, as a
penalty to the COSM , forfeit up to two hundred ($200 ) for each calendar day, or portion thereof,
for each worker paid less than the prevailing wages.
(ii) Pursuant t o Labor Code section 1813, the contractor shall, as a
penalty to the COSM , forfeit one hundred dollars ($100 ) for each worker employed in the
execution of the contract by the contractor or by any subcontractor for each calendar day during
which such worker is required or permitted to work more than eight (8) hours in any one calendar
day and forty (40) hours in any one calendar week.
5. Forfeitures Requiring Approval by the Labor Commissioner
F orfeitures are assessed by the Labor Compliance Pro gram for the violations of the
prevailing wage laws and which are proposed to be withheld pursuant to Labor Code Section
1771.6(a). Forfeitures are assessed for the following (1) the difference between the prevailing
22
wage rates and the amount paid to eac h worker for each calendar day or portion thereof for which
each worker was paid less than the prevailing wage rate by the contractor or subcontractor; and (2)
penalties assessed under Labor Code s ections 1775, 1776 and 1813.
If the aggregate amount of fo rfeitures assessed as to a contractor or subcontractor is less than
$1000.00, the forfeitures shall be deemed approved by the Labor Commissioner upon service and
the Labor Commissioner ’s receipt of copies of the following: (1) the Notice of Withholding of
Contract Payments authorized by Labor Code s ection 1771.6(a); (2) an Audit as defined in section
16432(e) of these regulations, and (3) a brief narrative identifying the Bid Advertisement Date of
the contract for public work and summarizing the nature of t he violation, the basis of the
underpayment, and the factors considered in determining the assessment of penalties, if any, under
Labor Code section 1775.
The LCP shall request and obtain approval f or all other forfeitures from the Labor
Commissioner for f ail ure to pay the correct rate of prevailing wages . Failure to pay the correct rate of
prevailing wages means those public works violations which the Labor Commissioner has exclusive
authority to approve before they are recoverable by the LCP, and which are appealable by the
contractor before the Director of the Department of Industrial Relations under Labor Code sections
1742 and 1742.1 and pursuant to Sections 17201 through 17270 of Title 8 of the California Code
of Regulations. Form attached hereto as Form 16
Regardless of what is defined as prevailing wages in contract terms, noncompliance with
the following are considered failures to pay prevailing wages:
(i) Nonpayment of items defined as “Employer Payments ” and
“General Prevailing Rate of Per Diem Wages ” in s ection 16000 of t itle 8 of the California Code
of Regulations and Labor Code section 1771;
(ii) Failure to provide complete and accurate payroll records, as
required by Labor Code section 1776;
(iii) Paying apprentice wages lower than the journey level rate to a
worker who is not an apprentice as defined in Labor Code section 3077, working under an
apprentice agreement in a recognized program;
(iv) Accepting or extracting kickbacks, in violation of Labor Code
section 1778;
(v) Engaging in prohibited actions rela ted to fees for registration as a
public works employee, in violation of Labor Code section 1779; and
(vi) Failure to pay overtime for work over eight (8) hours in any one
day or forty (40) hours in any one week, in violation of Labor Code sections 1813, 1815, s ection
16200(a)(3)(F) of t itle 8 of the California Code of Regulations.
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6. Determination of Amount of Forfeiture by the Labor Commissioner
a. W here the Labor Compliance Program requests a determination from the
Labor Commissioner of the amount of forfeiture, the request shall include a file or report to the
Labor Commissioner which contains at least the information specified in subparts (i ) through (ix )
below.
(i) Whether the public work has been accepted by the COSM and
whether a valid notice of completion has been filed, the dates if any when those events occurred,
and the amount of funds being held in retention by the COSM ;
(ii) A ny other deadline which if missed would impede collection;
(iii) Evidence of violation, in narrative form;
(iv) Evidence of violation obtained under title 8 of the California Code
of Regulation section 16432 and a copy of the Audit prepared in accordance with title 8 of the
California Code of Regulation section 16432 (e) setting forth the amounts of unpaid wages and
applicable penalties;
(v) Evidence that before the request for forfeiture was sent to the
Labor Commissioner (A) the contractor and subcontractor were given the opportunity to explain
why there was no violation, or that any violation was caus ed by good faith mistake and promptly
corrected when brought to the contractor or subcontractor ’s attention, and (B) the contractor and
subcontractor either did not do so or failed to convince the Labor Compliance Program of its
position;
(vi) Where the Labor Compliance Program seeks not only wages but
also a penalty under Labor Code section 1775 as part of the forfeiture, and the contractor or
subcontractor has unsuccessfully contended that the cause of violation was a good faith mistake, a
short statement sho uld accompany the proposal for a forfeiture, with a recommended penalty
amount pursuant to Labor Code s ection 1775 , subdivision (a);
(vii) Where the Labor Compliance Program seeks only wages or a
penalty computed at less than $200 per day as part of the forfeit ure and the contractor or
subcontractor has successfully contended that the cause of the violation was a good faith mistake
that was promptly corrected when brought to the contractor or subcontractor ’s attention, the file
should include the evidence as to the contractor or subcontractor ’s knowledge of his or her
obligation, including the LCP ’s communication to the contractor or subcontractor of the obligation
in the bid invitations, the Job Start Meeting agenda and records, and any other notice given as pa rt
of the contracting process. If the amount of wages sought includes overtime, penalties under
Labor Code section 1813 should be computed at $100 per day for each calendar day during which
each worker was required or permitted to work more than eight (8 ) hours in any one calendar day
and 40 hours in any one calendar week. With the file should be a statement, similar to that
described in (vi above ), and recommended penalty amounts, pursuant to Labor Code s ection 1775 ,
subdivision (a);
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(viii) The previous record of the contractor and subcontractor in meeting
their prevailing wage obligations; and
(ix) Whether the Labor Compliance Program has been granted
approval on only an interim or temporary basis under title 8 of California Code of Regulations
sections 164 25 or 16426 or whether it has been granted extended approval under section 16427 .
b. The file or report shall be served on the Labor Commissioner as soon as
practicable after the violation has been discovered, and not less than 30 days before the final
paym ent, but in no event later than 3 0 days after the filing of a valid Notice of Completion in the
Office of the COSM Recorder, whichever occurs last .
c. A copy of the proposed forfeiture and the file or report shall be served on
the contractor , and subcontract or if applicable, at the same time as it is sent to the Labor
Commissioner. The Labor Compliance Program may exclude from the documents served on the
contractor and subcontractor copies of documents secured from the contractor or subcontractor
during an A u dit, investigation, or meeting if those are clearly referenced in the file or report.
d. The Labor Commissioner shall affirm, reject, or modify the forfeiture in
whole or in part as to the wages and penalties due.
e. The Labor Commissioner ’s determination of the forfeiture is effective on
one of the two following dates:
(i) For all programs other than those having extended authority under
title 8 of the California Code of Regulation s ection 16427, on the date the Labor Commissioner
serves by first class mail, on the Labor Compliance Program, on the COSM , on the contractor and
on the subcontractor, if any, an endorsed copy of the proposed forfeiture, or a newly drafted
forfeiture statement which sets out the amount of forfeiture approved. Service on the contracto r
or subcontractor is effective if made on the last address supplied by the contractor or subcontractor
in the record. The Labor Commissioner ’s approval, modification or disapproval of the proposed
forfeiture shall be served within 30 days of receipt of th e proposed forfeiture.
(ii) For programs with extended authority under title 8 of the
California Code of Regulation section 16427, approval is effective 20 days after the requested
forfeitures are served upon the Labor Commissioner, unless the Labor Commission er serves a
notice upon the parties, within that time period, that this forfeiture request is subject to further
review. For such programs, a notice that approval will follow such a procedure will be included in
the transmittal of the forfeiture request to the contractor. If the Labor Commissioner notifies the
parties of a decision to undertake further review, the Labor Commissioner ’s final approval,
modification or disapproval of the proposed forfeiture shall be served within 30 days of the date
of notice of further review.
7. Deposits of Penalties and Forfeitures Withheld
a. Where the involvement of the Labor Commissioner has been limited to a
determination of the actual amount of penalty, forfeiture, or underpayment of wages, and the
25
matter has been resolved without litigation by or against the Labor Commissioner, the COSM shall
deposit penalties and forfeitures into its General Fund.
b. Where collection of fines, penalties, or forfeitures results from court action
to which the Labor Commissioner and the COSM are both parties, the fines, penalties, or
forfeitures shall be divided between the General Funds of the State of California and the COSM ,
as the court may decide.
c. All amounts recovered by suit brought by the Labor Commissioner, and to
which the COSM is not a party, shall be deposited in the General Fund of the State of California.
d. A
ll wages and benefits which belong to a worker and are withheld or collected from a contractor or
subcontractor, either by withholding or as a result of court action pursuant to Labor Code section
1775, and which have not been paid to the worker or irrevocably committed on the worker ’s behalf
to a benefits fund, shall be deposited with the Labor Commissioner, who will deal with such wages
and benefits in accordance with Labor Code section 96.7.
ARTICLE VII
NOTICE OF WITHHOLDING OF CONTRACT PAYMENTS; REVIEW THEREOF ;
AND SETTLEMENT AUTHORITY
1. Notice of Withholding of Contract Payments
After determination of the amount of forfeiture by the Labor Commissioner, the COSM
shall provide notice of withholding of contract payments (“Notice” or “NWCP”) to the contractor
and subcontractor, if applicable. The Notice shall be in writing and shall describe the nature of
the violation and the amount of wages, penalties, and forfei tures withheld. Service of the Notice
shall be completed pursuant to Civil Procedure Code section 1013 by first -class and certified mail
to the contractor and subcontractor, if applicable. The Notice shall advise the contractor and
subcontractor (if appl icable ) of the procedure for obtaining review of the withholding of contract
payments. The COSM shall also serve a copy of the Notice by certified mail to any bonding
company issuing a bond that secures the payment of wages covered by the Notice and to an y surety
on a bond, if their identities are known to the COSM . A sample of the Notice of Withholding of
Contract Payments to be utilized by the COSM is attached hereto as Attachment C, D .
2. Review of N otice of W ithholding of C ontract P ayments
a. An affected contractor or subcontractor may obtain a review of a NWCP by
transmitting a written request for a review hearing to the LCP within sixty (60) days after service
of the NWCP. If no hearing is requested within sixty (60) days after service of the Notice , th e
NWCP shall become final.
b. Within ten (10) days following the receipt of the request for a review
hearing , the LCP shall transmit to the Office of the Director -Legal Unit the request for review and
copies of the NWCP, any A udit summary that accompanied th e notice, and a proof of service or
other documents showing the name and address of any bonding company or surety that secures
26
the payment of the wages covered by the notice. A copy of the required Notice of Transmittal to
be utilized is Attachment E to t his document.
c. The COSM may be represented by an attorney in prevailing wage hearings
conducted pursuant to Labor Code section 17429 , subdivision (b) and sections 17201 - 17270 of
t itle 8 of the California Code of Regulations.
d. Upon receipt of a timely requ est, a hearing shall be commenced within
ninety (90) days before the Director, who shall appoint an impartial hearing officer possessing the
qualifications of an administrative law judge pursuant to Government Code section 11502 ,
subdivision (b). The appo inted hearing officer shall be an employee of the D epartment of
Industrial Relations , but shall not be an employee of the Division of Labor Standards Enforcement.
The contractor or subcontractor shall be provided an opportunity to review evidence to be ut ilized
by the L abor C ompliance P rogram at the hearing within twenty (20) days of the receipt of the
written request for a hearing. Any evidence obtained by the L abor C ompliance P rogram
subsequent to the twenty (20) day cutoff shall be promptly disclosed to the contractor or
subcontractor. A copy of a Notice of Opportunity to Review Evidence pursuant to Labor Code
section 1742(b) form attached hereto as Attachment F .
e. The contractor or subcontractor shall have the burden of proving that the
basis for the NWCP is incorrect. The NWCP shall be sufficiently detailed to provide fair notice
to the contractor or subcontractor of the issues at the hearing.
f. Within forty five (45) days of the co nclusion of the hearing, the Director
shall issue a written decision affirming, modifying, or dismissing the assessment. The decision of
the Director shall consist of a notice of findings, findings, and an order. This decision shall be
served on all part ies pursuant to Code of Civil Procedure section 1013 by first -class mail at the
last known address of the party on file with the L abor C ompliance P rogram . Within fifteen (15)
days of the issuance of the decision, the Director may reconsider or modify the decision to correct
an error, except that a clerical error may be corrected at any time.
g. The Director has adopted regulations setting forth procedures for hearings .
The regulations (California Code of Regulations, t itle 8, c hapter 8, s ubchapter 6 , sectio ns 17201 -
17270) may be found at www.dir.ca.gov and are available for review at the COSM ’s office located
at 1437 4 th Street, Suite 300, Santa Monica, CA 90401.
h. An affected contractor or subcontractor may obtain review of the decision
of the D irector by filing a petition for a writ of mandate to the appropriate superior court pursuant
to Code of Civil Procedure section 1094.5 within forty five (45) days after serv ice of the decision.
If no petition for writ of mandate is filed within forty five (45) days after service of the decision,
the order shall become final. If it is claimed in a petition for writ of mandate that the findings are
not supported by the eviden ce, abuse of discretion is established if the court determines that the
findings are not supported by substantial evidence in the light of the whole record.
i. A certified copy of a final order may be filed by the Labor Commissioner
in the office of the cler k of the superior court in any COSM in which the affected contractor or
27
subcontractor has property or has or had a place of business. The clerk, immediately upon the
filing, shall enter judgment for the state against the person assessed in the amount show n on the
certified order.
j. A judgment entered pursuant to this procedure shall bear the same rate of
interest and shall have the same effect as other judgments and shall be given the same preference
allowed by law on other judgments rendered for claims for taxes. The clerk shall not charge for
the service performed by him or her pursuant to this section.
k. This procedure shall provide the exclusive method for review of a NWCP
by the COSM to withhold contract payments pursuant to Labor Code section 1771.5 .
l. Note that a release under Civil Code section 3196 may not be posted for the
release of funds being withheld for violations of the prevailing wage law.
3. Settlement Authority
A contractor or subcontractor may request a settlement meeting pursuant to Labor Co de
s S ection 1742.1(b) and may request review of a Labor Compliance Program enforcement action
in accordance with Labor Code Sections 1771.6(b) and 1742 and the regulations found at
sections 17201 -17270 of Title 8 of the California Code of Regulations . The Labor Compliance
Program shall have the rights and responsibilities of the Enforcing Agency (as defined in section
17202(f) of Title 8 of the California Code of Regulations ), in responding to such a request for
review, including but not limited to the obl igations to serve notices, transmit the Request for
Review to the hearing office, and provide an opportunity to review evidence in a timely manner,
to participate through counsel in all hearing proceedings, and to meet the burden of establishing
prima faci e support for the Notice of Withholding of Contract Payments.
If a contractor or subcontractor seeks review of a Labor Compliance Program
enforcement action, the Labor Commissioner may intervene to represent the Awarding Body, or
to enforce relevant provi sions of the Labor Code consistent with the practice of the Labor
Commissioner, or both.
Except in cases where the Labor Commissioner has intervened pursuant to 8 California
Code of Regulations, section 16439 (b), the Labor Compliance Program shall have t he authority
to prosecute, settle, or seek the dismissal of any NWCP issued pursuant to Labor Code section
1771.6 and any review proceeding under Labor Code section 1742, without any further need for
approval by the Labor Commissioner. Whenever the LCP se ttles in whole or in part or seeks and
obtains the dismissal of a NWCP or a review proceeding under Labor Code section 1742, the Labor
Compliance Program shall document the reasons for the settlement or request for dismissal and
shall make that documentati on available to the Labor Commissioner upon request.
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ARTICLE VIII
DISTRIBUTION OF FORFEITED SUMS
1. Before making payments to the contractor of money due under a contract for public
work, the COSM shall withhold and retain there from all amounts required to satisfy the NWCP.
The amounts required to satisfy the NWCP shall not be disbursed by the COSM until receipt of a
final order that is no longer subject to judicial review.
2. From the amount withheld and/or recovered, the wage cl aim shall have priority
status and be satisfied prior to the amount being applied to penalties. Thus, all workers employed
on the public works project who are paid less than the prevailing wage rate shall have priority over
all Stop Notices filed against the prime contractor. If insufficient money is withheld or recovered
to pay each underpaid worker in full, the money shall be prorated among all workers affected.
Workers employed on the public works project who are paid less than the prevailing wage rate
shall have PRIORITY over any Stop Notice filed against the contractor pursuant to Civil Code
section 3179 et seq.
3. Wages for workers who cannot be located shall be placed in the Industrial Relations
Unpaid Fund and held in trust for the workers pursuant t o Labor Code section 96.7. Penalties shall
be paid into the General Fund of the COSM that has enforced this chapter pursuant to Labor Code
section 1771.5.
ARTICLE IX
OUTREACH ACTIVITIES
To ensure the successful implementation of the COSM ’s LCP, there shall be several
outreach activities initiated and maintained.
1. Providing Information to the Public
The LCO shall be responsible for communication and outreach activities relative to
public information on the COSM ’s LCP:
a. Regular presentations to contractors at all Job Start Meetings (Pre -
Construction conferences).
b. Ongoing communication via correspondence and on site interviews with
workers at COSM job sites which are described in greater detail in the attached Operation Manual .
c. Periodic meetings with contracto r organizations, prime contractors and
subcontractors interested in public works contracting.
2. In -service Management training on the LCP
The LCO shall provide ongoing management in -servicing and workshops for the
administration of the LCP.
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ARTICLE X
ANNUAL REPORTS
The COSM Labor Compliance Program shall submit to the Director an annual
report on its operation by no later than August 31 of each year. The annual report shall cover the
twelve month period commencing on July 1 of the preceding calendar year and ending on June 30
of the year in which the report is due. For good cause, the Director may authorize a Labor
Compliance Program to use a different reporting period and provide for the annual report to be
due no later than 60 days followin g the close of that reporting period. For a Labor Compliance
Program approved prior to July 1, 2009, the Director may require the filing of an interim or
supplmental report to cover any gap between the reporting period prescribed under former subpart
(d) o f this section prior to August 1, 2010 and subpart (a).
The COSM annual report shall be made on the appropriate form for the type of
Labor Compliance Program that is submitting the report, unless the Director has agreed to a
different repor ting format for a Program that has been granted extended authority under section
16427 above. A third party Labor Compliance Program that contracted with more than one
Awarding Body or Joint Powers Authority during the annual reporting period shall separat ely
report on Labor Code Section 1771.5(b) enforcement activities for each Awarding Body or Joint
Powers Authority covered by the report. (Form 15 )
The Annual Report for a person or entity operating a third party Labor Compliance
P rogram shall also include (1) a certification of compliance with conflict of interest disclosure
requirements by employees and consultants who participate in making governmental decisions, as
defined under Title 2, California Code of Regulations, section 1 8701, and (2) a current statement
disclosing the information required under section 16426(a)(2), (3) and (5) above.
Information in the Annual Report shall be reported in sufficient detail to afford a
basis for evaluating the scope and level of enforcement activity of the Labor Compliance Program.
An annual report shall also include such additional information as the Labor Compliance Program
may be required to report as a condition of its approval.
A Labor Co mpliance Program that has ceased operating, either due to the voluntary
termination of its program or the revocation of its approval by the Director, shall file a closing
annual report within sixty (days) following its last day of operation as an approved program.
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ATTACHMENT A
1 OF 3
CHECKLIST OF LABOR LAW REQUIREMENTS
FOR REVIEW AT JOB START MEETINGS
(In accordance with Section 16421 of Title 8 of the California Code of Regulations)
The federal and state labor law requirements applicable to the contract are composed of,
but not limited to, the following:
1. Payment of Prevailing Wage Rates
The award of a public works contract requires that all workers employed on the
project be paid not less than the specified general prevailing wage rates by the contractor and its
subcontractors pursuant to Labor Code section 1770 et seq.
The contractor is responsible for obtaining and complying with all applicable
general prevailing wage rates for trades workers and any rate changes, which may occur duri ng
the term of the contract. Prevailing wage rates and rate changes are to be posted at the job site for
workers to view.
2. Apprentices
It is the duty of the contractor and subcontractors to employ registered apprentices
on public works projects pursua nt to Labor Code section 1777.5.
3. Penalties
Penalties, including forfeitures and debarment, shall be imposed for
contractor/subcontractor failure to pay prevailing wages, failure to maintain and submit accurate
certified payroll records upon request, f ailure to employ apprentices, and for failure to pay
employees for all hours worked at the correct prevailing wage rate, in accordance with Labor Code
sections 1775, 1776, 1777.7, and 1813.
4. Certified Payroll Records
Pursuant to Labor Code section 1776 , contractors and subcontractors are required
to keep accurate payroll records which reflect the name, address, social security number, and work
classification of each employee; the straight time and overtime hours worked each day and each
week; the fringe benefits; and the actual per diem wages paid to each journeyperson, apprentice,
worker, or other employee hired in connection with a public works project.
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2 OF 3
Employee payroll records shall be certified and shall be made available for
inspection at all reasonable hours at the principal office of the contractor/subcontractor, or shall be
furnished to any employee, or to his or her authorized representative on request.
Contractors and subcontractors shall maintain their certified payrolls on a weekly
basis and shall submit said payrolls weekly to the LCO. In the event that there has been no work
performed during a given week, the certified payroll record shall be annotated “No Work ” for that
week.
5. Nondiscrimination in Employment
Prohibitions agai nst employment discrimination are contained in Labor Code
sections 1735 and 1777.6; the Government Code; the Public Contracts Code; and Title VII of the
Civil Rights Act of 1964, as amended.
6. Kickback Prohibited
Pursuant to Labor Code section 1778, con tractors and subcontractors are prohibited
from accepting, taking wages illegally, or extracting “kickback ” from employee wages.
7. Acceptance of Fees Prohibited
Contractors and subcontractors are prohibited from exacting any type of fee for
registering individuals for public work (Labor Code section 1779); or for filling work orders on
public works contracts (Labor Code section 1780).
8. Listing of Subcontractors
Contractors are required to list all subcontractors hired to perform work on a public
work s project when that work is equivalent to more than one -half of one percent of the total effort
(Public Contract Code section 4104.).
9. Proper Licensing
Contractors and subcontractors are required to be properly licensed. Penalties will
be imposed for employing workers while unlicensed (Labor Code section 1021 and Business and
Professions Code section 7000, et seq. under California Contractors License Law).
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3 OF 3
10. Unfair Competition Prohibited
Contractors and subcontractors are prohibited from engaging in unfair competition
(Business and Professions Code sections 17200 -17208).
11. Workers ’ Compensation Insurance
All contractors and subcontractors are required to be insured against liability for
workers ’ compensation, or to undertake self -insur ance in accordance with the provisions of Labor
Code sections 3700 and 1861.
12. OSHA
Contractors and subcontractors are required to comply with the Occupational
Safety and Health laws and regulations applicable to the particular public works project.
13. P rohibition against hiring undocumented workers
Federal law prohibits contractors and subcontractors from hiring undocumented
workers and requires all contractors and subcontractors to secure proof of eligibility/citizenship
from all workers.
14. Itemized w age statements
Contractors and subcontractors are required to provide itemized wage statements
to employees pursuant to Labor Code section 226.
The undersigned contractor hereby acknowledges that the COSM has provided the contractor with
information regarding each item listed above. In accordance with federal and state laws, and with
COSM ’s policy and contract documents, the undersigned contractor herein certifies that it will
comply with the foregoing la bor law requirements; and fully understands that failure to comply
with these requirements will subject it to the penalties cited herein.
For the Contractor: For the COSM
_________________________________ _________________________________
Signature Date Signature Date
Company:_________________________
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ATTACHMENT B
1 OF 2
AUDIT RECORD FORM
(For Use with Section 16432 of Title 8 of the
California Code of Regulations)
An audit record is sufficiently detailed to “verify compliance with the requirements of
Chapter 1, Public Works, Part 7 of Division 2,” when the audit record displays that the following
procedures have been followed:
1. Audit of the obligation to carry workers ’ compensation insurance means producing
written evidence of a binder issued by the carrier, or telephone or written inquiry to the Workers ’
Compensation Insurance Rating Bureau;
2. Audit of the obligation to employ and train apprentices means inquiry to the
program sponsor for the apprenticeable craft or trade in the area of the public work as to: whether
contract award information was received, including an estimate of journeyperson hours to be
performed and the number of apprentices to be employed; whether apprentices have been
requested, and whether the req uest has been met; whether the program sponsor knows of any
amounts received from the contractor or subcontractor for the training fund or the California
Apprenticeship Council; and whether persons listed on the certified payroll in that craft or trade
bei ng paid less than the journeyperson rate are apprentices registered with that program and
working under apprentice agreements approved by the Division of Apprenticeship Standards;
3. Audit of the obligation to pass through amounts, made part of the bid, f or
apprenticeship training contributions to either the training trust or the California Apprenticeship
Council, means asking for copies of checks remitted, or when the audit occurs more than thirty
(30) days after the month in which payroll has been paid a nd copies of canceled checks remitted;
4. Audit of “illegal taking of wages ” means inspection of written authorizations for
deductions (as listed in Labor Code section 224) in the contractor ’s files and comparison to wage
deduction statements furnished to employees (Labor Code section 226), together with an interview
of several employees as to any payments made which are not reflected on the wage deduction
statements;
5. Audit of the obligation to keep records of working hours (8 CCR section 16432),
and p ay not less than required for hours worked in excess of eight (8) hours/day and forty (40)
hours/week (8 CCR section 16200(a)(3)(F)), means review and audit of weekly certified payroll
records;
6. Audit of the obligation to pay the prevailing per diem wag e means review and audit
of weekly -certified payroll records for compliance with:
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2 OF 2
a. All elements defined as the General Prevailing Rate of Per Diem Wages in
Section 16000 et seq. of Title 8 of the California Code of Regulations, which were det ermined to
be prevailing in the Director ’s determination in effect on the date of the call for bids, or as reflected
in any subsequent revised determination issued by the Director ’s office, copies of which are
available at the LCO ’s office and posted at th e public works job site;
b. All elements defined as Employer Payments to Workers set forth in Section
16000 et. seq. of Title 8 of the California Code of Regulations, which were determined to be
prevailing in the Director ’s determination in effect on the date of the call for bids, or as reflected
in any subsequent revised determination issued by the Director ’s office, copies of which are
available at the LCO ’s office and posted at the public works job site.
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36
37
38
ATTACHMENT C
1 OF 2
TO:
TO:
Date: In Reply Refer to Case No.:
Notice of Withholding of Contract Payments
Awarding Body
Work Performed in County of
Project Name
Contract No. / Project No.
Prime Contractor
Subcontractor
After an investigation concerning the payment of wages to workers employed in the execution of the contract for the above -
named publ ic works project, the Labor Compliance Program of the COSM has determined that the contractor and/or
subcontractor identified above has committed violations of the California Labor Code. In accordance with Labor Code sections
1771.5 and 1771.6, the COSM he reby issue this Notice of Withholding of Contract Payments.
The nature of the violations of the Labor Code and the basis for the assessment are as follows:
- Failure to pay its workers the applicable prevailing wage rates
The COSM LCO has determined that
1) the total amount of wages due is: $ 0.00
2) the total amount of penalties assessed under Labor Code sections 1775 and 1813 is: $ 0.00
3) the amount of penalties assessed under Labor Code section 1776 is: $ 0.00
4) TOTAL WITHHOLD:
$ 0.00
THE COSM
LABOR COMPLIANCE PROGRAM
By:
(Name, Title)
39
2 OF 2
Notice of Right to Obtain Review - Formal Hearing
In accordance with Labor Code sections 1742 and 1771.6, an affected contractor or subcontractor may obtain review of this
Notice of Withholding of Contract Payments by transmitting a written request to the office of the Labor Compliance Program
within 60 d ays after service of the notice. To obtain a hearing, a written Request for Review form must be transmitted to
the following address: The COSM ,1437 4 th Street, Suite 300, Santa Monica, CA 90401 . A Request for Review shall clearly
identify the Notice of Wi thholding of Contract Payments from which review is sought, including the date of the notice (a copy
of the notice shall be included as an attachment), and shall also set forth the basis upon which the notice is being conteste d.
Failure by a contractor or subcontractor to submit a timely Request for Review will result in a final order that shall
be binding on the contractor and subcontractor, and which shall also be binding, with respect to the amount due, on a
bonding company issuing a bond that secures the payment of wages and a surety, Labor Code Section 1743.
The COSM ’s Labor Compliance Manager shall acknowledge receipt of the Request for Review by sending the contractor and/or
subcontractor a Notice of Opportunity to Review Evidence letter. The cont ractor and/or subcontractor must transmit the Request
to Review Evidence letter to the Labor Compliance Manager. In accordance with Labor Code section 1742, the contractor or
subcontractor shall be provided an opportunity to review evidenc e to be utilized by the COSM ’s Labor Compliance Manager at
the hearing within 20 days of the COSM receipt of the written Request for Review.
In accordance with Labor Code section 1742(d), a certified copy of a final order may be filed by the Labor Commissioner in th e
offi ce of the clerk of the superior court in any County in which the affected contractor or subcontractor has property or has or
had a place of business. The clerk, immediately upon the filing, shall enter judgment for the State against the person asses sed
in the amount shown on the certified order.
Opportunity for Settlement Meeting
In accordance with Labor Code Section 1742.1 (b), the COSM Labor Compliance Manager shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the service of the Notice of Withholding of Contract Payments,
afford the contractor or subcontractor the opportunity to meet with the Labor Compliance Program's designee to attempt to
settle a dispute regarding the notice . The settlement meetin g may be held in person or by telephone and shall take place before
the expiration of the 60 -day period for seeking a hearing as set forth above under the heading Notice of Right to Obtain Review.
No evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, the settlement meeting
is admissible or subject to discovery in any administrative or civil proceeding. No writing prepared for the purpose of, in t he
course of, or pursuant to, the settlement meeting, other th an a final settlement agreement, is admissible or subject to discovery
in any administrative or civil proceeding. This opportunity to timely request an informal settlement meeting is in addition to
the right to obtain a formal hearing, and a settlement mee ting may be requested even if a written Request for Review has already
been made. Requesting a settlement meeting, however, does not extend the 60 -day period during which a formal hearing may
be requested. A written request to meet with the Labor Complianc e Program's designee to attempt to settle a dispute regarding
this notice must be transmitted to the address in the first paragraph, above.
Labor Compliance Liquidated Damages
In accordance with Labor Code section 1742.1 and/or by contract, after 60 days following the service of the Notice of
Withholding of Contract Payments, the affected contractor, subcontractor, performance bond surety, and surety on a bond or
bonds issued to secure the payment of wages covered by the notice shall be liable for labor co mpliance liquidated damages in
an amount equal to the wages, or portion thereof that still remain unpaid. If the notice subsequently is overturned or modifi ed
after administrative or judicial review, labor compliance liquidated damages shall be payable onl y on the wages found to be due
and unpaid. If the contractor/subcontractor demonstrates to the satisfaction of the Director of the Department of Industrial
Relations that he or she had substantial grounds for believing the assessment or notice to be an err or, the Director shall waive
payment of the liquidated damages.
The amount of Labor Compliance Liquidated Damages available under this notice is $0.00
40
ATTACHMENT D
1 OF 3
[Name and Contact Information for person issuing Notice]
Date: Case or Contract No.:
NOTICE OF TEMPORARY WITHHOLDING OF CONTRACT PAYMENTS DUE TO
DELINQUENT OR INADEQUATE PAYROLL RECORDS (8 CCR §16435)
Awarding Body:
Work performed in the of:
Project Name and Number (if any):
Prime Contractor:
Subcontractor:
Pursuant to Labor Code §1771.5(b)(5) and 8 CCR §16435, contract payments are being withheld due to delinquent
or inadequate payroll records.
Contractor or subcontractor whose payroll records are delinquent or inadequate:
The following payroll records are delinquent (specify weeks and due dates):
The following payroll records are inadequate (specify weeks and ways in which records are deemed
inadequate under 8 CCR §16435(d)):
Estimated amount of contract payments due to contractor or subcontractor that are being withheld pursuant to this
Notice:
See page 2 for additional information, including appeal rights.
Labor Compliance Officer
Prime Contractor Obligations : If contract payments are being withheld due to the delinquency or inadequacy of
your subcontractor’s payroll records, you are required to cease all payments to that subcontractor until the Labor
Compliance Program provides notice that the subcontractor has cured the delinquency or deficiency.
41
2 OF 3
Notice of Right to Obtain Review – Expedited Hearing
An affected contractor or subcontractor may request review an expedited hearing to review this Notice of W ithholding
of Contract Payments under Labor Code §1742. The only issue in any such review proceeding is whether the specified
payroll records are in fact delinquent or inadequate within the meaning of 8 CCR §16435 or whether the Labor
Compliance Program h as exceeded its authority under 8 CCR §16435. To obtain an expedited hearing, a written
request must be transmitted to the both the Labor Compliance Program and to the Lead Hearing Officer for
the Director of the Department of Industrial Relations, as fol lows:
[Name of Labor Compliance Officer,
address, and fax number]
Office of the Director – Legal Unit
Attention: Lead Hearing Officer
Expedited Hearing Request
Fax to: (415) 703 -4277
The request for expedited hearing should specify the basis for challenging this Notice and include a copy of this Notice
as an attachment. The request should also identify and provide contact information for the person who will represent
the contractor or subcontractor at the hearing.
Important Additional Information : This is a Notice of Temporary Withholding of Contract Payments for
Delinquent or Inadequate Payroll Records only . This is not a determination of liability for wages or penalties under
L abor Code §§1775 and 1776 or any other statute. Contract payments cannot continue to be withheld pursuant to this
notice, once the required records have been produced. However, the contractor and subcontractor may still be subject
to the assessment of ba ck wages and penalties and the withholding of contract payments if, upon investigation, a
determination is made that the contractor or subcontractor violated the public works requirements of the Labor Code.
This Notice only addresses rights and responsi bilities under state law. Awarding bodies, labor compliance programs,
and contractors may have other rights or responsibilities under federal or local law, where applicable, and may also
have additional rights or remedies under the public works contract.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
42
3 OF 3
Enclosure – text of 8 CCR §16435
§16435. Withholding Contract Payments When Payroll Records are Del inquent or Inadequate.
(a) "Withhold" means to cease payments by the Awarding Body, or others who pay on its behalf,
or agents, to the general contractor. Where the violation is by a subcontractor, the general
contractor shall be notified of the nature o f the violation and reference made to its rights under
Labor Code Section 1729.
(b) "Contracts." Except as otherwise provided by agreement, only contracts under a single master
contract, including a Design -Build contract, or contracts entered into as stage s of a single project,
may be the subject of withholding.
(c) "Delinquent payroll records" means those not submitted on the date set in the contract.
(d) "Inadequate payroll records" are any one of the following:
(1) A record lacking any of the informati on required by Labor Code Section 1776;
(2) A record which contains all of the required information but is not certified, or is certified by
someone who is not an agent of the contractor or subcontractor;
(3) A record remaining uncorrected for one payroll period after the Labor Compliance Program has given the
contractor or subcontractor notice of inaccuracies detected by audit or record review. However, prompt correction
will stop any duty to withhold if such inaccuracies do not amount to one (1) percent of the entire Certified Weekly
Payroll in dollar value and do not affect more than half the persons listed as workers employed on that Certified
Weekly Payroll, as defined in Labor Code Section 1776 and se ction 16401 of Title 8 of the California Code of
Regulations.
(e) The withholding of contract payments when payroll records are delinquent or inadequate is required by Labor
Code Section 1771.5(b)(5), and it does not require the prior approval of the Labor Commissioner. The Awarding
Body shall only withhold those pa yments due or estimated to be due to the contractor or subcontractor whose payroll
records are delinquent or inadequate, plus any additional amount that the Labor Compliance Program has reasonable
cause to believe may be needed to cover a back wage and pen alty assessment against the contractor or subcontractor
whose payroll records are delinquent or inadequate; provided that a contractor shall be required in turn to cease all
payments to a subcontractor whose payroll records are delinquent or inadequate unt il the Labor Compliance Program
provides notice that the subcontractor has cured the delinquency or deficiency.
(f) When contract payments are withheld under this section, the Labor Compliance Program shall provide the
contractor and subcontractor, if appl icable, with immediate written notice that includes all of the following: (1) a
statement that payments are being withheld due to delinquent or inadequate payroll records, and that identifies what
records are missing or states why records that have been su bmitted are deemed inadequate; (2) specifies the amount
being withheld; and (3) informs the contractor or subcontractor of the right to request an expedited hearing to review
the withholding of contract payments under Labor Code Section 1742, limited to th e issue of whether the records are
delinquent or inadequate or the Labor Compliance Program has exceeded its authority under this section.
(g) No contract payments shall be withheld solely on the basis of delinquent or inadequate payroll records after the
required records have been produced.
(h) In addition to withholding contract payments based on delinquent or inadequate payroll records, penalties shall be
assessed under Labor Code Section 1776(g) for failure to timely comply with a written request for ce rtified payroll
records. The assessment of penalties under Labor Code Section 1776(g) does require the prior approval of the Labor
Commissioner under section 16436 of these regulations.
43
ATTACHMENT E
1 OF 1
LABOR COMPLIANCE PROGRAM
________________________________
Review Office - Notice of Withholding
of Contract Payments
_________________________________
_________________________________
_________________________________
Phone:
Fax:
(SEAL )
Date:
In Reply Refer to Case No.:
Notice of Transmittal
To: Department of Industrial Relations
Office of the Director -Legal Unit
Attention: Lead Hearing Officer
P. O. Box 420603
San Francisco, CA 94142 -0603
Enclosed herewith please find a Request for Review, dated __________________, postmarked
___________________, and received by this office on ____________________.
Also enclosed please find the following:
____ Copy of Notice of Withholding of Contract Payments
____ Copy of Audit Summary
LABOR COMPLIANCE PROGRAM
________________________________
By:_____________________________
cc: Prime Contractor
Subcontractor
Bonding Company
Please be advised that the Request for Review identified above has been received and transmitted
to the address indicated. Please be further advised that the gove rning procedures applicable to these
hearings are set forth at Title 8, California Code of Regulations sections 17201 -17270. These
hearings are not governed by Chapter 5 of the Government Code, commencing with section 11500.
44
ATTACHMENT F
1 OF 3
LABOR COMPLIANCE PROGRAM
[Insert Agency Name]
Review Office - Notice of Withholding
of Contract Payments
[Insert Agency Address]
_________________________________
_________________________________
Phone:
Fax:
Date:
In Reply Refer to Case No.:
Notice of Opportunity to Review Evidence Pursuant to Labor Code Section 1742(b)
To: Prime Contractor
[Insert Name]
[Insert Address]
__________________________
Subcontractor
__________________________
__________________________
__________________________
Please be advised that this office has received your Request for Review , dated _____________, and pertaining to the
Notice of Withholding of Contract Payments issued by the Labor Compliance Program in Case No. _____________.
In accordance with Labor Code section 1742(b), this notice provides you with an opportunity to review evidence to
be utilized by the Labor Compliance Program at the hearing on the Request for Review, and the procedures for
reviewing such evid ence.
Rule 17224 of the Prevailing Wage Hearing Regulations provides as follows:
(a) Within ten (10) days following its receipt of a Request for Rev iew, the Enforcing Agency shall
also notify the affected contractor or subcontractor of its opportunity and the procedures for
reviewing evidence to be utilized by the Enforcing Agency at the hearing of the Request for Review.
(b) An Enforcing Agency shall be deemed to have provided the opportunity to review evidence
required by this Rule if it (1) gives the affected contractor or subcontractor the option at said party ’s
own expense to either (i) obtain copies of all such evidence through a commercial copying service
or (ii) inspect and copy such evidence at the office of the Enforcing Agency during normal business
hours; or if (2) the Enforcing Agency at its own expense forwards copies of all such evidence to the
affected contractor or subcontractor.
2 OF 3
TO: CONTRACTOR FROM: OBMMWC
45
(c) The evidence required to be provided under this Rule sh all include the identity of witnesses
whose testimony the Enforcing Agency intends to present, either in person at the hearing or by
declaration or affidavit. This provision shall not be construed as requiring the Enforcing Agency to
prepare or provide an y separate listing of witnesses whose identities are disclosed within the written
materials made available under subpart (a).
(d) The Enforcing Agency shall make evidence available for review as specified in subparts (a)
through (c) within 20 days of its receipt of the Request for Review; provided that , this deadline may
be extended by written request or agreement of the aff ected contractor or subcontractor. The
Enforcing Agency ’s failure to make evidence available for review as required by Labor Code section
1742(b) and this Rule, shall preclude the enforcing agency from introducing such evidence in
proceedings before the H earing officer or the Director.
(e) This Rule shall not preclude the Enforcing Agency from relying upon or presenting any evidence
first obtained after the initial disclosure of evidence under subparts (a) through (d), provided that ,
such evidence is pro mptly disclosed to the affected contractor or subcontractor. This Rule also shall
not preclude the Enforcing Agency from presenting previously undisclosed evidence to rebut new
or collateral claims raised by another party in the proceeding.
In accordance with the above Rule, please be advised that the Labor Compliance Program ’s procedure for you to
exercise your opportunity to review evidence is as follows:
Within five calendar days of the date of this notice, please transmit the attached Request to
Revi ew Evidence to the following address:
[Insert Agency Name]
[Insert Address]
________________________________
________________________________
Attention: [Insert Labor Compliance Officer ’s Name]
46
3 OF 3
Request to Review Evidence
To: [Insert Labor Compliance Officer ’s Name]
[Insert Name]
[Insert Address]
______________________________
From: [Contractor/Subcontractor Name]
[Contractor/Subcontractor Address]
______________________________
______________________________
Regarding Notice of Withholding of Contract Payments dated ____________.
Our Case No.: _________________
The undersigned hereby requests an opportunity to review evidence to be utilized by the Labor Compliance Program
at the hearing on t he Request for Review.
________________________________
Phone No.:_______________________
Fax No.:_________________________
TO: OBMMWC FROM: CONTRACTOR
47
ATTACHMENT G
1 OF 1
48
IMPLEMENTATION PLAN
1. LCO shall receive all construction contract work schedules.
2. LCO shall participate in Job -Start (Pre -Construction) meeting.
3. LCO shall provide site monitors with work schedules.
4. Site monitors, both COSM employees and others, shall conduct site interviews and return
interview sh eets to LCO .
5. LCO shall enter information from interviews into database.
6. LCO shall Review (Review and Confirm are defined in the LCP Manual) certified payroll
records from contractor and Confirm information from certified payroll records, or upon
rece ipt of a request or complaint from a worker or other interested person.
7. When payroll records are found to be delinquent or inadequate, LCO shall issue a Notice
of Temporary Withholding of Contract Payments Due to Delinquent or Inadequate Payroll
Records i mmediately . (see Attachment D attached hereto)
8. When violation is found, a formal Notice of Withholding of Contract Payment is issued.
(see Attachment C attached hereto)
9. Upon completion of an the Audit, a report shall be sent to the Department of Industrial
Relations with recommendations for penalties to be applied to the contractor.
8 . LCO shall prepare and submit public works violation reports, such as reports of willful
violations or noti ce of withholding of contract payments, to the Labor Commissioner as
required.
9 . LCO shall periodically communicate with contractors, workers, building and trade
organizations, and other community entities and provide in -service management to COSM
perso nnel.
1 0 . LCO shall retain prevailing wage records, documentation of Reviews, Audits, and all
communication with the Labor Commissioner.
11 . LCO shall prepare an Annual Report and submit to the COSM Board , and the Director of
the Department of Indust rial Relations..
49
OPERATION MANUAL
A. SITE VISITATIONS
Representatives of the COSM ’s Labor Compliance Program shall conduct in -person
inspections at the site or sites at which the contract for public work is being performed (“On -Site
Visits”). On -Site Visits will be undertaken randomly or as deemed necessary by the COSM ’s
Labor Compliance Program, but shall be undertaken during each week that workers are present at
sites at which the contract for public work is being performed. All On -Site Visits shall include
visual inspection of (1) the copy of the determination(s) of the Director of In dustrial Relations of
the prevailing wage rate of per diem wages required to be posted at each job site in compliance
with Labor Code Section 1773.2, and (2) the Notice of Labor Compliance Program Approval
required to be posted at the job site in accordanc e with California Code of Regulations section
16429, listing a telephone number to call for inquiries, questions, or assistance with regard to the
Labor Compliance Program. On -Site Visits may include other activities deemed necessary by the
COSM ’s Labor C ompliance Program to independently corroborate prevailing wage payments
reported on payroll records furnished by contractors and subcontractors.
1. Safety is the paramount factor for any site visit to any COSM construction projects.
Do not ente r any area that appears unsafe. Site monitors are expected to exercise reasonable
caution at all times.
2. All authorized personnel visiting any COSM construction site are required to be
properly identified as a COSM representative by wearing visible pic ture ID’s (badge), or
identifying themselves as such. Additionally, all authorized personnel are required to follow safety
requirements of the construction site .
3. Authorized personnel shall visit all sites on a non -interference basis and take a
minimum amount of the workers’ time for interview purposes.
4. Upon arrival at a site, the site monitor will check in at the site superintendent’s
(contractor’s) trailer prior to any interviewing. In the event there is not a construction trailer, you
will check in at the site’s administrative office. Identify yourself and state the purpose of the visit.
Sign in if required to do so. If the site superintendent cites some reason that denies access to the
site, promptly and politely remove yourself. Make a note of this occurrence and report to the LCO.
5. Check to see that the following are displayed in the contractor’s trailer:
Prevailing wage sheets posted
Sign -in Log (if such log is required of contractor)
Listing of subcontractors on site
50
If any of thes e items are not readily visible, remind the contractor that these postings are
part of the contractual requirements. On subsequent visits, make sure that these items are posted,
or the contractor will be found to be in noncompliance.
6. There will be tim es when the site superintendent is somewhere on the site and/or
there is no contractor present in the trailer. In that situation, you should check in at the project
trailer . The project manager and or project superintendent will also be able to tell you which
contractors are on the site at that time. If all trailers are empty or locked, try to locate the site
project manager or superintendent on the site prior to commencing interviewing.
B. INTERVIEWING
1. Once you have checked in with the site superintendent and obtain access to the site,
try to locate tradespersons working in clusters. For instance, several painters, electricians, roofers,
etc. working in one area. Approach the workers individually in a non -threatening, professional
manner. Identify yourself, indicate that you are a COSM representative, and that you need only a
few seconds of their time to ask some very generic questions to ensure that they are receiving the
proper rate of pay for the ty pe of work they are doing. Again, do not endanger yours or any
tradesperson’s safety in conducting these interviews. Do not insist that someone on a scaffold
come down for an interview. Do not ask anyone to form a line until you can get to them; allow
t hem to continue working until you can get to them individually.
Any persons missed are usually picked up on the next visit. If only one tradesperson is at
the site, then interview that person if possible. If you are told that the rest of the crew will be there
in an hour, do not wait, unless your total site interviewing will take that length of time. Thirty
minutes of interviewing per site is typically sufficient, depending upon the site size and/or number
of subcontractors present. Contractor tradesp erson should also be interviewed.
Confirmation of payroll records may be accomplished by interviewing workers. For each
month in which a contractor or subcontractor reports having workers employed on the public work,
confirmation of furnished payroll rec ords shall be undertaken randomly for at least one (1) worker
for at least one (1) weekly period with that month.
2. Using the Labor Compliance Site Visitation Interview form (attached hereto as
Form 9 ), ask each person the following: name, social securi ty number, employer, title (trade),
rate of pay, and task being performed at the time of interview.
3. Should someone decline to speak with you, respect those wishes. If someone asks
if this is union -related, tell them no. The COSM works with both open and closed shop trades.
4. If you try to interview someone who does not speak English and you cannot
communicate in the appropriate language, try to locate a coworker who can interpret for you. If
you find an entire crew unable to s peak English and no interpreter, include this in your report to
the LCO.
51
5. If someone refuses to disclose his social security number to you, respect those
wishes. However, assure that person that all information given is kept strictly confidential.
6 . If someone does not know their rate of pay (most tradespersons don’t know), ask
for a guesstimate. If the response is, “whatever prevailing wage is”, so indicate on the form.
7. If someone indicates that he is an apprentice, make sure that you ask him what
period. These can be anywhere from 1st to 10th. If he’s not sure, ask him how many years he has
been apprenticed in the specific trade and/or to guesstimate and so indicate on the interview form.
8. ALWAYS thank them for their time.
9. Keep in min d that you are there to collect information only; do not tell them how
to do their jobs. Should you witness what you consider a potentially unsafe or unwarranted
condition, you are to contact the site inspector or job superintendent of your findings immed iately
and make a note on your site visitation log of what you observed. Upon your return to the office,
report your findings to the LCO.
C. REPORTING
All original interview forms shall be timely submitted to the LCO.
52
SECTION VII
PROCEDURES
A. CERTIFIED PAYROLL VERIFICATION PROCEDURES FOR THE COSM
1. All construction work schedules shall be provided to the LCO.
2. Upon receipt of certified payroll reports from general/subcontractors once a week,
compare information from the Labor Compliance Visitation Log (attached hereto as Form 10 ) to
the contractors certified payroll and the prevailing wage schedule.
3. Compare name and social security number with trade classification listed.
4. Ensure prevailing wage listed is correct for the classification listed using the
prevailing wage schedule .
5. Check for employment of apprentices, correct rate of pay, and proper ratio to
journey w orkers.
6. Should certified payroll be delinquent or inadequate, issue a Notice of Temporary
Withholding of Contract Payments Due to Delinquent or Inadequate Payroll Records (8 CCR
16435) (attached hereto as Attachement D).
7. In addition to withholding contract payments based on delinquent or inadequate
payroll records, penalties shall be assessed under Labor Code Section 1776 (g) for failure to timely
comply with a written request for certified payroll records. The assessment will be sent to the
Department of I ndustrial Relations for approval.
8. Retain all original interview forms and annotate the database as applicable.
B. SITE MONITOR PROCEDURES
1. Receive construction site work schedule from LCO.
2. Schedule the interviews to allow worker interviews in accordance with the
confirmation procedures established in the LCP Manual. For each month in which a contractor or
subcontractor reports having workers employed on the public work, confirmation of furnished
payroll records shall be undertaken randomly for at least o ne (1) worker for at least one (1) weekly
period with that month.
3. Check in with site administrative office/site superintendent.
4. Utilizing the Labor Compliance Site Visitation Interview form (attached hereto as
Form 9 ), conduct interviews with workers.
53
5. Note on your form any infractions you may observe while conducting the interview.
6. Return interview form to the LCO.
7. Report any infractions you observed to the LCO.
54
SECTION VIII
FORMS
55
PREVAILING WAGE CONTRACTOR INFORMATION HANDOUT
THE PUBLIC WORKS REQUIREMENTS ARE:
(1) The contractor's duty to pay prevailing wages under Labor Code Section 1770 et seq., should the project
exceed the exemption amounts;
(2) The contractor's duty to employ registered apprentices on the public works project under Labor Code Section
1777.5;
(3) The penalties for failure to pay prevailing wages (for non -exempt projects) and employ apprentices including
forfeitures and debarm ent under Labor Code Sections 1775 and 1777.7;
(4) The requirement to keep and submit copies upon request of certified payroll records under Labor Code
Section 1776, and penalties for failure to do so under Labor Code Section 1776(g);
(5) The prohibition against employment discrimination under Labor Code Section 1777.6; the Government
Code, and Title VII of the Civil Rights Act of 1964;
(6) The prohibition against accepting or extracting kickback from employee wages under Labor Code Section
1778;
(7) Th e prohibition against accepting fees for registering any person for public work under Labor Code Section
1779; or for filling work orders on public works under Labor Code Section 1780;
(8) The requirement to list all subcontractors under Public Contracts Code Section 4104;
(9) The requirement to be properly licensed and to require all subcontractors to be properly licensed a nd the
penalty for employing workers while unlicensed under Labor Code Section 1021 and under the California
Contractors License Law, found at Business and Professions Code Section 7000 et seq;
(10) The prohibition against unfair competition under Busines s and Professions Code Section s 17200 -17208;
(11) The requirement that the contractor be properly insured for Workers Compensation under Labor Code
Section 1861;
(12) The requirement that the contractor abide by the Occupational, Safety and Health laws a nd regulations that
apply to the particular construction project;
(13) The federal prohibition against hiring undocumented workers, and the requirement to secure proof of
eligibility/citizenship from all workers.
(14) The requirement to provide itemized wage statements to employees under Labor Code Section 226.
THE AWARDING BODY SHALL:
IN ACCORDANCE WITH CCR 16421
(1) The Call for Bids, Design -Build Request, and the contract or purchase order shall contain appro priate language
concerning the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code.
(2) A prejob conference shall be conducted before commencement of the work with contractors and subcontractors
listed in the bid or who are required to be identified or prequalified in a Design -Build Contract. At the prejob
conference applicable federal and state labor law requirements shall be discussed, and copies of suggested reporting
forms furnished. A checklist, showing which federal and state labor la w requirements were discussed, shall be kept
for each conference. A checklist in the format of Appendix A presumptively meets this requirement.
(3) A requirement that certified payroll records be kept by the contractor in accordance with Labor Code Sectio n
1776 and furnished to the Labor Compliance Program at times designated in the contract, which shall be at least
monthly, or within 10 days of any request by the Awarding Body. Use of the current version of DIR's "Public Works
Payroll Reporting Form" (A -1 -131) and Statement of Employer Payments (PW26) constitute presumptive
compliance with the requirement for certified payroll records kept in accordance with Labor Code Section 1776,
FORM 1
56
provided the forms are filled out accurately and completely. These suggest ed forms are available from the
Department of Industrial Relations.
(4) A program for orderly review of payroll records and, if necessary, for audits to verify compliance with the
requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code.
(5) A prescribed routine for withholding penalties, forfeitures, and underpayment of wages for violations of the
requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code.
(6) All contracts to which prevailing wage requirements apply shall include a provision that contract payments shall
not be made when payroll records are delinquent or inadequate.
(b) To the extent otherwise authorized by law, an Awarding Body or a Joint Powers Authority consisting of two
or more Awarding Bodies may contract with a third party to initiate and enforce all or part of its Labor
Compliance Program,provided thatthe third party has been approved by the Director to operate a Labor
Compliance Program in accordance with these regulations. However, this subpart (b) shall not be construed as
limiting an Awarding Body's or Joint Powers Authority's authority to contract for services for the operation of its
own approved Labor Compliance Program, including services by persons licensed or certified by the State of
California to pra ctice one of the following recognized professions: law, architecture, engineering, or accounting.
(c) [reserved]
(d) Nothing in this section or these regulations shall be construed as limiting the responsibility and authority of
an Awarding Body to take cognizance of prevailing wage violations under Section 1726 of the Labor Code and
take any appropriate action pursuant to and in accordance with that responsibility and authority.
(e) It is the responsibility of a Labor Compliance Program to enforce preva iling wage requirements, consistent
with the policy of the state as expressed in Labor Code Section 90.5(a). A Labor Compliance Program shall take
reasonable, vigorous, and prompt action to (1) determine whether violations exist, and (2) enforce compliance ,
including through imposition of appropriate penalties and formal enforcement action, when violations are found.
A Labor Compliance Program shall neither avoid use of its enforcement authority based on cost considerations
nor shall it use that authority i n an unreasonable manner to gain leverage over a contractor or subcontractor.
Unreasonable use of enforcement authority includes, but is not necessarily limited to, prolonged or excessive
withholdings of contract payments without making a determination tha t a violation has occurred.
(f) The failure of an Awarding Body or Labor Compliance Program to comply with any requirement imposed by
this subchapter shall not of itself constitute a defense to the failure to pay prevailing wages or to comply with any
oth er obligation imposed by Chapter 1 (commencing with Section 1720), Part 7, Division 2 of the Labor Code.
THE LABOR COMPLIANCE PROGRAM SHALL:
IN ACCORDANCE WITH CCR 16434
(a) A Labor Compliance Program shall have a duty to the Director to enforce the requirements of Chapter 1 of Part 7
of Division 2 of the Labor Code and these regulations in a manner consistent with the practice of the Labor
Commissioner. It is the practice of the Labor Commissioner to refer to the Director's ongoing advisory service o f
web -posted public works coverage determinations as a source of information and guidance in making enforcement
decisions. It is also the practice of the Labor Commissioner to be represented by an attorney in prevailing wage
hearings conducted pursuant to Labor Code Section 1742(b) and sections 17201 -17270 of Title 8 of the California
Code of Regulations.
(b) Upon receipt of a written complaint alleging that a contractor or subcontractor has failed to pay prevailing wages
as required by the Labor Code, the Labor Compliance Program shall do all of the following:
(1) Within 15 days after receipt of the complaint, send a written acknowledgment to the complaining party
that the complaint has been received and identifying the name, address, and telephone number of the
investigator assigned to the complaint;
57
(2) Within 15 days after receipt of the complaint, provide the affected contractor with the notice required
under Labor Code section 1775(c) if the complaint is against a subcontractor;
(3) Notify the complain ing party in writing of the resolution of the complaint within ten days after the
complaint has been resolved by the Labor Compliance Program;
(4) Notify the complaining party in writing at least once every 30 days of the status of a complaint that has
not been resolved by the Labor Compliance Program; and
(5) Notify the complaining party in writing at least once every 90 days of the status of a complaint that has
been resolved by the Labor Compliance Program but remains under review or in litigation before another
entity.
(c) The duties of a Labor Compliance Program with respect to apprenticeship standards are as follows:
(1) Either the Awarding Body or the Labor Compliance Program acting on its behalf shall (A) inform
contractors and subcontractors biddin g public works about apprenticeship requirements, (B) send copies of
awards and notices of discrepancies to the Division of Apprenticeship Standards as required under Section
1773.3 of the Labor Code, and (C) refer complaints and promptly report suspected violations of
apprenticeship requirements to the Division of Apprenticeship Standards.
(2) The Labor Compliance Program shall be responsible for enforcing prevailing wage pay requirements
for apprentices consistent with the practice of the Labor Commission er, including (A) that any
contributions required pursuant to Labor Code Section 1777.5(m) are paid to the appropriate entity, (B) that
apprentices are paid no less than the prevailing apprentice rate, (C) that workers listed and paid as
apprentices on the certified payroll records are duly registered as apprentices with the Division of
Apprenticeship Standards, and (D) requiring that the regular prevailing wage rate be paid (i) to any worker
who is not a duly registered apprentice and (ii) for all hours in excess of the maximum ratio permitted
under Labor Code Section 1777.5(g), as determined at the conclusion of the employing contractor or
subcontractor's work on the public works contract.
(d) For each public work project subject to a Labor Compliance Pro gram's enforcement of prevailing wage
requirements, a separate, written summary of labor compliance activities and relevant facts pertaining to that
particular project shall be maintained. That summary shall demonstrate that reasonable and sufficient effor ts have
been made to enforce prevailing wage requirements consistent with the practice of the Labor Commissioner.
Appendix C following this section provides a suggested format for tracking and monitoring enforcement activities.
Compliance records for a pro ject shall be retained until the later of (1) at least one year after the acceptance of the
public work or five years after the cessation of all labor on a public work that has not been accepted, or (2) one year
after a final decision or judgment in any li tigation under Labor Code Section 1742. For purposes of this section, a
written summary or report includes information maintained electronically, provided that the summary or report can
be printed out in hard copy form or is in an electronic format that (1 ) can be transmitted by e -mail or compact disk
and (2) would be acceptable for the filing of documents in a federal or state court of record within this state.
(e) The Labor Commissioner may provide, sponsor, or endorse training on how to enforce prevaili ng wage
requirements, including but not necessarily limited to the subjects of (1) ascertaining prevailing wage requirements
and rates from the Division of Labor Statistics and Research, (2) monitoring and investigation under section 16432
above, (3) enfor cement responsibilities under this section and sections 16435 -16439 below, and (4) procedural
requirements and responsibilities as an enforcing agency under Labor Code sections 1741 -1743 and 1771.6 and
sections 17201 -17270 of Title 8 of the California Code of Regulations.
THE CONTRACTOR AND SUBCONTRACTOR SHALL:
(1) Pay not less than the prevailing wage to all workers, as defined in CCR ’s section 16000(a), and as set forth
in Labor Code sections 1771 and 1774;
(2) Comply with the provisions of Labor Code sections 1773.5, 1775, and 1777.5 regarding public works job
sites;
(3) Provide workers ’ compensation coverage as set forth in Labor Code section 1861;
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(4) Comply with Labor Code sections 1778 and 1779 regarding receiving a portion of wages or acceptance o f a
fee;
(5) Maintain and make available for inspection payroll records, as set forth in Labor Code section 1776;
(6) Pay workers overtime pay, as set forth in Labor Code section 1815 or as provided in the collective bargaining
agreement adopted by the Dir ector as set forth in Section 16200(a)(3) of Title 8 of the California Code of
Regulations; and
(7) Comply with Section 16101 of these regulations regarding discrimination.
(8) Be subject to provisions of Labor Code section 1777.7 which specifies the pena lties imposed on a contractor
who willfully fails to comply with provisions of Labor Code section 1777.5.
(9) Comply with those requirements as specified in Labor Code sections 1810 and 1813.
(10) Comply with other requirements imposed by law.
APPRENTICE TRAINING:
SEE LABOR CODE SECTION 1777.5 (e)
Prior to commencing work on a contract for public works, every contractor shall submit contract award information
to an applicable apprenticeship program that can supply apprentices to the site of the public wor k. The information
submitted shall include an estimate of journeyman hours to be performed under the contract, the number of apprentices
proposed to be employed, and the approximate dates the apprentices would be employed. A copy of this information
shal l also be submitted to the awarding body if requested by the awarding body.
Within sixty (60) days after concluding work on the contract, each contractor and subcontractor shall submit to the
awarding body, if requested, and to the apprenticeship program a verified statement of the journeyman and apprentice
hours performed on the contract. The information under this subdivision shall be public. The apprenticeship programs
shall retain this information for twelve (12) months.
APPRENTICE TRAINING CONTRIBUTION REQUIREMENTS:
SEE CALIFORNIA CODE OF REGULATIONS: TITLE 8, ARTICLE 4, 16200(G) Wage rates, training contributions
and apprenticeship contributions.
Apprenticeship rates shall be determined by the Director of Industrial Relations using appre ntice wage standards set
forth in the collective bargaining agreement and/or approved by the California Apprenticeship Council. A contractor
or subcontractor on a public works contract must pay training fund contributions or apprenticeship contributions in
one of the following manners:
1. into the appropriate craft apprenticeship program in the area of the site of the public work; or
2. (if the trust fund is unable to accept such contributions) an equivalent amount shall be paid to the
California Apprenti ceship Council (CAC) administered by DAS.
3. If neither of the above will accept the funds, cash pay shall be as provided for in Section
16200(a)(3)(I) of Title 8 of the California Code of Regulations.
SEE CALIFORNIA CODE OF REGULATIONS: TITLE 8, ARTICLE 10, SECTION 230.2
§230.2. Payment of Apprenticeship Training Contributions to the Council:
59
(a) Contractors who are neither required nor wish to make apprenticeship training contributions to the applicable
local trai ning trust fund shall make their training contributions to the Council. Contractors may refer to the Director
of the Department of Industrial Relations applicable prevailing wage determination for the amount owed for each hour
of work performed by journeym en and apprentices in each apprenticeable occupation.
(b) Training contributions to the Council are due and payable on the 15th day of each month for work performed
during the preceding month.
(c) Training contributions to the Council shall be paid by ch eck and shall be accompanied by a completed CAC -
2 Form, Training Fund Contributions, (Rev. 10/91), or the following information:
(1) The name, address, and telephone number of the contractor making the contribution.
(2) The contractor ’s license number.
(3) The name and address of the public agency that awarded the contract.
(4) The jobsite location, including the COSM where the work was performed.
(5) The contract or project number.
(6) The time period covered by the enclosed contributions.
(7) The contribu tion rate and total hours worked by apprenticeable occupation.
CERTIFYING PERSON
SEE CALIFORNIA CODE OF REGULATIONS: TITLE 8, GROUP 3, ARTICLE 1, 16000 DEFINITIONS.
A person with the authority to affirm under penalty of perjury that the records provided, depict truly, fully and correctly
the type of work performed, the hours worked, days worked and amounts paid.
CHANGES TO PREVAILING RATE AFTER AWARD
SEE LABOR CODE SECTION: 1773.6
No effect once the contract notice to bidders is published.
1773.6. I f during any quarterly period the Director of Industrial Relations shall determine that there has been a change
in any prevailing rate of per diem wages in any locality he shall make such change available to the awarding body and
his determination shall be final. Such determination by the Director of Industrial Relations shall not be effective as to
any contract for which the notice to bidders has been published. Exceptions; classifications marked as a double
asterisks.
CREDITS, FOR FRINGE BENEFIT PAYMEN TS
SEE CALIFORNIA CODE OF REGULATIONS: TITLE 8, GROUP 3, ARTICLE 4, 16200(i) Credit Available For
Actual Payment of Fringe Benefit Costs up to the Prevailing Amount.
The contractor obligated to pay the full prevailing rate of per diem wages may take credit for amounts up to the total
of all fringe benefit amounts listed as prevailing in the appropriate wage determination. This credit may be taken only
as to amounts whi ch are actual payments under Employer Payments Section 16000(1)-(3) of Title 8 of the California
Code of Regulations. In the event the total of Employer Payments by a contractor for the fringe benefits listed as
prevailing is less than the aggregate amount set out as prevailing in the wage determination, the contractor must pay
the difference directly to the employee. No amount of credit for payments over the aggregate amount of employer
payments shall be taken nor shall any credit decrease the amount of di rect payment of hourly wages of those amounts
found to be prevailing for straight time or overtime wages.
THE RULE
The contractor can pay amounts for individual benefits different than the state shows in the wage reports so long as it
is not more than the total amount permitted for all benefits. Any contractor paid amount less than the total benefit
requirements listed in the state wage reports must be paid to the employee.
60
EMPLOYEE ’S SUBJECT TO PREVAILING WAGES
SEE LABOR CODE SECTION 1771, 1772 & 177 6 .
All workers on the project shall be paid the wage of the trade they are most closely related to.
1771. Except for public works projects of one thousand dollars ($1,000) or less, 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, and not
less than the general prevailing rate of per diem wages for holiday and overtime work fixed as provided in this chapter,
shall be paid to all workers employed on public w orks.
1772. Workers employed by contractors or subcontractors in the execution of any contract for public work are deemed
to be employed upon public work.
1776. (a) Each contractor and subcontractor shall keep an accurate payroll record, showing the na me, address, social
security number, work classification, and straight time and overtime hours worked each day and week, and the actual
per diem wages paid to each journeyman, apprentice, worker, or other employee employed by him or her in connection
with the public work.
EMPLOYER PAYMENTS
SEE CALIFORNIA CODE OF REGULATIONS: TITLE 8, ARTICLE 1, SECTION 16000 DEFINITIONS
(1) The rate of contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person
pursuant to a fund, pla n, or program for the benefit of employees, their families and dependents, or retirees;
(2) The rate of costs to the contractor or subcontractor which may be reasonably anticipated in providing benefits
to employees, their families and dependents or to re tirees pursuant to an enforceable commitment or agreement to
carry out a financially responsible plan or program which was communicated in writing to the workers affected; and
(3) The rate of contribution irrevocably made by the contractor or subcontractor for apprenticeship or other
training programs authorized by Labor Code sections 3071 and/or 3093.
FRINGE BENEFIT PAYMENT REQUIREMENTS
SEE CALIFORNIA CODE OF REGULATIONS: TITLE 8, GROUP 3, ARTICLE 1, 16000 DEFINITIONS
All fringe benefits mu st be irrevocably paid to an authorized fund or to the employee. No unpaid amounts are allowed.
FRINGE BENEFITS INCLUDE
SEE CALIFORNIA CODE OF REGULATIONS: TITLE 8, ARTICLE 1, SECTION 16000. DEFINITIONS
The prevailing rate of employer payments for any o r all programs or benefits for employees, their families and dependents,
and retirees which are of the types enumerated below:
(A) medical and hospital care, prescription drugs, dental care, vision care, diagnostic services,
and other health and welfare be nefits;
(B) retirement plan benefits;
(C) vacations and holidays with pay, or cash payments in lieu thereof;
(D) compensation for injuries or illnesses resulting from occupational activity;
(E) life, accidental death and dismemberment, and disability or si ckness and accident
insurance;
(F) supplemental unemployment benefits;
(G) thrift, security savings, supplemental trust, and beneficial trust funds otherwise designated,
provided all of the money except that used for reasonable administrative expenses is
r eturned to the employees;
61
(H) occupational health and safety research, safety training, monitoring job hazards, and the
like, as specified in the applicable collective bargaining agreement;
(I) See definition of “Employer Payments,” (3).
(J) other bonafide benefits for employees, their families and dependents, or retirees as the
Director may determine; and
T ravel time and subsistence pay as provided for in Labor Code section 1773.8.
FRINGE BENEFITS DO NOT INCLUDE
CALIFORNIA CODE OF REGULATIONS: TITLE 8, ARTICLE 1, SECTION 16000. DEFINITIONS
The term “general prevailing rate of per diem wages ” does not include any employer payments for:
(1) Job related expenses other than travel time and subsistence pay;
(2) Contract admin istration, operation of hiring halls, grievance processing, or similar
purposes except for those amounts specifically earmarked and actually used for
administration of those types of employee or retiree benefit plans enumerated above;
(3) Union, organizati onal, professional or other dues except as they may be included in and
withheld from the basic taxable hourly wage rate;
(4) Industry or trade promotion;
(5) Political contributions or activities;
(6) Any benefit for employees, their families and dependents, or retirees including any benefit
enumerated above where the contractor or subcontractor is required by Federal, State, or
local law to provide such benefit; or
(7) Such other payments as the Director may determine to exclude. Interested Party. When
used with reference to a particular prevailing wage determination made by the Director,
includes:
PAYROLL RECORDS INCLUDE
CALIFORNIA CODE OF REGULATIONS: TITLE 8, ARTICLE 1, SECTION 16000. DEFINITIONS
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.
PERSONS REQUIRED TO RECEIVE PREVAILING WAGES
SEE LABOR CODE SECTIONS:
1771. Prevailing wage shall be paid to all workers employed on public works.
1774. The contractor to whom th e contract is awarded, and any subcontractor under him, shall pay not less than the
specified prevailing rates of wages to all workmen employed in the execution of the contract.
WITHHOLDING CONTRACT PAYMENTS WHEN AFTER AN INVESTIGATION, IT IS ESTABLISHED
THAT UNDERPAYMENT OR OTHER VIOLATION HAS OCCURRED
IN ACCORDANCE WITH CCR 16435.5
62
(a) "Withhold" and "contracts" have the same meaning set forth in sections 16435(a) and 16435(b) of these
regulations.
(b) Where the violation is by a subcontract or, the general contractor shall be notified of the nature of the violation
and reference made to its rights under Labor Code Section 1729.
(c) "Amount equal to the underpayment" is the total of the following determined by payroll review, audit, or
admiss ion of contractor or subcontractor:
(1) The difference between amounts paid workers and the correct General Prevailing Rate of Per Diem Wages, as
defined in Labor Code Section 1773, and determined to be the prevailing rate due workers in such craft,
classi fication or trade in which they were employed and the amounts paid;
(2) The difference between amounts paid on behalf of workers and the correct amounts of Employer Payments, as
defined in Labor Code Section 1773.1 and determined to be part of the prevailing rate costs of contractors due for
employment of workers in such craft, classification or trade in which they were employed and the amounts paid;
(3) Estimated amounts of "illegal taking of wages";
(4) Amounts of apprenticeship training contrib utions paid to neither the program sponsor's training trust nor the
California Apprenticeship Council;
(5) Estimated penalties under Labor Code Sections 1775, 1776, and 1813.
(d) The withholding of contract payments when, after investigation, it is estab lished that underpayment or other
violations have occurred requires the prior approval of the Labor Commissioner under sections 16436 and 16437 of
these regulations.
WITHHOLDING PAYMENTS, JUSTIFICATION
SEE LABOR CODE SECTION: 1727 & 1771.5(b),(5)
SEE CALI FORNIA CODE OF REGULATIONS: TITLE 8, ARTICLE 5, SECTION 16435 AN 16435.5
(a) “Withhold ” means to cease payments by the awarding body, or others who pay on its behalf, or agents, to
the general contractor. Where the violation is by a subcontractor, the ge neral contractor shall be notified of the nature
of the violation and reference made to its rights under Labor Code section 1729.
(b) “Contracts.” Except as otherwise provided by agreement, only contracts under a single master contract, or
contracts ente red into as stages of a single project, may be the subject of withholding.
(c) “Delinquent payroll records ” means those not submitted on the date set in the contract.
(d) “Inadequate payroll records ” are any one of the following:
(1) A record lacking the i nformation required by Labor Code section 1776; or
(2) A record which contains the required information but not certified, or certified by someone not an
agent of the contractor or subcontractor; or
(3) A record remaining uncorrected for one payroll peri od, after the awarding body has given the
contractor notice of inaccuracies detected by audit or record review. Provided, however, that prompt
correction will stop any duty to withhold if such inaccuracies do not amount to 1 percent of the entire Certified
Weekly Payroll in dollar value and do not affect more than half the persons listed as workers employed on
that Certified Weekly Payroll, as defined in Labor Code Section 1776 and Section 16401 of Title 8 of the
California Code of Regulations.
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FORFEITURES REQUIRING APPROVAL BY THE LABOR COMMISSIONER
IN ACCORDANCE WITH CCR 16436
(a) For purposes of this section and section 16437 below, "forfeitures" means the amount of wages, penalties, and
forfeitures assessed by the Labor Compliance Program and proposed to be withheld pursuant to Labor Code section
1771.6(a), and includes the following: (1) the difference between the prevailing wage rates and the amount paid to
each worker for each calendar day or portion thereof for which each worker was paid less than t he prevailing wage
rate by the contractor or subcontractor; and (2) penalties assessed under Labor Code Sections 1775, 1776 and 1813.
(b) If the aggregate amount of forfeitures assessed as to a contractor or subcontractor is less than $1000.00, the
forfei tures shall be deemed approved by the Labor Commissioner upon service and the Labor Commissioner's
receipt of copies of the following: (1) the Notice of Withholding of Contract Payments authorized by Labor Code
Section 1771.6(a); (2) an Audit as defined in section 16432(e) of these regulations, and (3) a brief narrative
identifying the Bid Advertisement Date of the contract for public work and summarizing the nature of the violation,
the basis of the underpayment, and the factors considered in determining t he assessment of penalties, if any, under
Labor Code Section 1775.
(c) For all other forfeitures, approval by the Labor Commissioner shall be requested and obtained in accordance with
section 16437
COURT DECISIONS:
Standard Traffic Services v. Department of Transportation Shasta (case 132667): partners are due prevailing
wages.
64
STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF APPRENTICESHIP STANDARDS
28 CIVIC CENTER PLAZA, ROOM 525
SANTA ANA, CA 9270 1
TO ALL PUBLIC WORKS CONTRACTORS
The Division of Apprenticeship Standards wishes to bring to your attention your responsibilities under
California Labor Code section 1777.5 Apprentices on Public Works. (Excerpts from California Labor Code
relating to apprentices on public works. DAS -10 is attached).
Compliance with California Labor Code section 1777.5 requires all public works contractors and
subcontractors to:
Submit contract award information within 10 days of contract award, to the applicable Joi nt Apprenticeship
Committee, which shall include an estimate of Journeymen hours to be performed under the contract, the
number of apprentices to be employed, and the approximate dates the apprentices will be employed. This
information may be submitted on the attached form DAS 140.
Employ apprentices on the public work in a ratio to journeymen of no less than one hour of apprentices
work for every five hours of labor performed by a journeyman.
Pay the apprentice rate on public works projects only to those apprentices who are registered as defined in
Labor Code section 3077.
Contribute to the training fund in the amount identified in the Prevailing Wage Rate publication for
journeymen and apprentices. Contractors who choose not to contribute to the local tr aining trust fund must
make their contribution to the California Apprenticeship Council (CAC) at P.O. Box 511283 Los Angeles,
CA 90051 -7838
Training fund contributions to the CAC are due and payable on the 15 th day of each month for work
performed during t he preceding month.
Training fund contributions to the CAC shall be paid by check and shall be accompanied by a completed
form CAC -2 (attached).
Failure to comply with the provisions of the Labor Code section 1777.5 may result in the loss of the right to
bid on all public works projects for a period of one to three years and the imposition of a civil penalty of $100.00
for each calendar day of noncompliance. Contractors should provide a copy of this material to each
subcontractor.
If the Division of Apprenticeship Standards can be of assistance to you, please contact our office at (213)
576 -7750
FORM 2
65
EXCERPTS FROM THE
CALIFORNIA LABOR CODE
RELATING TO APPRENTICES
ON PUBLIC WORKS
Chapter 1 of Division 2:
APPRENTICES ON PUBLIC WORKS
1773.3. An awarding agency whose public works
contract falls within the jurisdiction of Section 1777.5
shall, within five days of the award, send a copy of the
award to the Division of Apprenticeship Standards.
When specifically requested b y a local joint
apprenticeship committee, the division shall notify the
local joint apprenticeship committee regarding all such
awards applicable to the joint apprenticeship committee
making the request. Within five days of a finding of
any discrepancy re garding the ratio of apprentices to
journeymen, pursuant to the certificated fixed number
of apprentices to journeymen, the awarding agency
shall notify the Division of Apprenticeship Standards.
1776. (a) Each contractor and subcontractor shall keep
accu rate payroll records, showing the name, address,
social security number, work classification, straight
time and overtime hours worked each day and week,
and the actual per diem wages paid to each journeyman,
apprentice, worker, or other employee employed b y
him or her in connection with the public work. Each
payroll record shall contain or be verified by a written
declaration that it is made under penalty of perjury,
stating both of the following:
(1) The information contained in the payroll record is
t rue and correct.
(2) The employer has complied with the requirements
of Sections 1771, 1811, and 1815 for any work
performed by his or her employees on the public works
project.
(b) The payroll records enumerated under subdivision
(a) shall be certif ied and shall be available for
inspection at all reasonable hours at the principal office
of the contractor on the following basis:
(1) A certified copy of an employee ’s payroll record
shall be made available for inspection or furnished to
the employee or his or her authorized representative on
request.
(2) A certified copy of all payroll records enumerated
in subdivision (a) shall be made available for inspection
or furnished upon request to a representative of the
body awarding the contract, the Div ision of Labor
Standards Enforcement, and the Division of
Apprenticeship Standards of the Department of
Industrial Relations.
(3) A certified copy of all payroll records enumerated
in subdivision (a) shall be made available upon request
by the public fo r inspection or for copies thereof.
However, a request by the public shall be made through
either the body awarding the contract, the Division of
Apprenticeship Standards, or the Division of Labor
Standards Enforcement. If the requested payroll
records h ave not been provided pursuant to paragraph
(2), the requesting party shall, prior to being provided
the records, reimburse the costs of preparation by the
contractor, subcontractors, and the entity through
which the request was made. The public shall not be
given access to the records at the principal office of the
contractor.
(c) The certified payroll records shall be on forms
provided by the Division of Labor Standards
Enforcement or shall contain the same information as
the forms provided by the div ision.
(d) A contractor or subcontractor shall file a certified
copy of the records enumerated in subdivision (a) with
the entity that requested the records within 10 days after
receipt of a written request.
(e) Any copy of records made available for inspection
as copies and furnished upon request to the public or
any public agency by the awarding body, the Division
of Apprenticeship Standards, or the Division of Labor
Standards Enforcement shall be marked or obliterated
in a manner so as to prevent disclosure of an
individual ’s name, address, and social security number.
The name and address of the contractor awarded the
contract or the subcontractor performing the contract
shall not be marked or obliterate d.
(f) The contractor shall inform the body awarding the
contract of the location of the records enumerated under
subdivision (a), including the street address, city and
COSM , and shall, within five working days, provide a
notice of a change of location and address.
(g) The contractor or subcontractor shall have 10 days
in which to comply subsequent to receipt of a written
notice requesting the records enumerated in subdivision
(a). In the event that the contractor or subcontractor
fails to comply wi thin the 10 -day period, he or she
shall, as a penalty to the state or political subdivision
on whose behalf the contract is made or awarded,
forfeit one hundred ($100 ) for each calendar day, or
portion thereof, for each worker, until strict compliance
is e ffectuated. Upon the request of the Division of
Apprenticeship Standards or the Division of Labor
Standards Enforcement, these penalties shall be
withheld from progress payments then due. A
contractor is not subject to a penalty assessment
pursuant to th is section due to the failure of a
subcontractor to comply with this section.
(h) The body awarding the contract shall cause to be
inserted in the contract stipulations to effectuate this
section.
(i) The director shall adopt rules consistent with t he
California Public Records Act, (Chapter 3.5
(commencing with Section 6250), Division 7, Title 1,
Government Code) and the Information Practices Act
of 1977, (Title 1.8 (commencing with Section 1798),
66
Part 4, Division 3, Civil Code) governing the release of
these records, including the establishment of
reasonable fees to be charged for reproducing copies of
records required by this section.
(j) This section shall remain in effect only until
January 1, 2003, and as of that date is repealed, unless
a lat er enacted statute, that is enacted before January 1,
2003, deletes or extends that date.
1777.5. (a) Nothing in this chapter shall prevent the
employment of properly registered apprentices upon
public works.
(b) Every apprentice employed upon public works
shall be paid the prevailing rate of per diem wages for
apprentices in the trade to which he or she is registered
and shall be employed only at the work of the craft or
trade to which he or she is registered.
(c) Only apprentices, as defined in Se ction 3077, who
are in training under apprenticeship standards that have
been approved by the Chief of the Division of
Apprenticeship Standards and who are parties to
written apprentice agreements under Chapter 4
(commencing with Section 3070) of Division 3 are
eligible to be employed at the apprentice wage rate on
public works. The employment and training of each
apprentice shall be in accordance with either (1) the
apprenticeship standards and apprentice agreements
under which he or she is training or (2 ) the rules and
regulations of the California Apprenticeship Council.
(d) When the contractor to whom the contract is
awarded by the state or any political subdivision, in
performing any of the work under the contract, employs
workers in any apprenticea ble craft or trade, the
contractor shall employ apprentices in at least the ratio
set forth in this section and may apply to any
apprenticeship program in the craft or trade that can
provide apprentices to the site of the public work for a
certificate appr oving the contractor under the
apprenticeship standards for the employment and
training of apprentices in the area or industry affected.
However, approval or denial of the apprenticeship
program shall be subject to review by the Administrator
of Apprentic eship. The apprenticeship program or
programs, upon approving the contractor, shall arrange
for the dispatch of apprentices to the contractor. A
contractor covered by an apprenticeship program ’s
standards shall not be required to submit any additional
ap plication in order to include additional public works
contracts under that the program. “Apprenticeable craft
or trade,” as used in this section, means a craft or trade
determined as an apprenticeable occupation in
accordance with rules and regulations pr escribed by the
California Apprenticeship Council. As used in this
section, “contractor ” includes any subcontractor under
a contractor who performs any public works not
excluded by subdivision (o).
(e) Prior to commencing work on a contract for public
works, every contractor shall submit contract award
information to an applicable apprenticeship program
that can supply apprentices to the site of the public
work. The information submitted shall include an
estimate of journeyman hours to be performed und er
the contract, the number of apprentices proposed to be
employed, and the approximate dates the apprentices
would be employed. A copy of this information shall
also be submitted to the awarding body if requested by
the awarding body. Within 60 days af ter concluding
work on the contract, each contractor and subcontractor
shall submit to the awarding body, if requested, and to
the apprenticeship program a verified statement of the
journeyman and apprentice hours performed on the
contract. The informatio n under this subdivision shall
be public. The apprenticeship programs shall retain
this information for 12 months.
(f) The apprenticeship program that can supply
apprentices to the area of the site of the public work
shall ensure equal employment and a ffirmative action
in apprenticeship for women and minorities.
(g) The ratio of work performed by apprentices to
journeymen employed in a particular craft or trade on
the public work may be no higher than the
ratio stipulated in the apprenticeship standards under
which the apprenticeship program operates where the
contractor agrees to be bound by those standards, but,
except as otherwise provided in this section, in no case
shall the ratio be less than one hour of apprentice work
for every five hour s of journeyman work.
(h) This ratio of apprentice work to journeyman work
shall apply during any day or portion of a day when any
journeyman is employed at the jobsite and shall be
computed on the basis of the hours worked during the
day by journeymen so employed. Any work performed
by a journeyman in excess of eight hours per day or 40
hours per week shall not be used to calculate the ratio.
The contractor shall employ apprentices for the number
of hours computed as above before the end of the
contra ct or, in the case of a subcontractor, before the
end of the subcontract. However, the contractor shall
endeavor, to the greatest extent possible, to employ
apprentices during the same time period that the
journeymen in the same craft or trade are employe d at
the jobsite. Where an hourly apprenticeship ratio is not
feasible for a particular craft or trade, the Division of
Apprenticeship Standards, upon application of an
apprenticeship program, may order a minimum ratio of
not less than one apprentice for each five journeymen
in a craft or trade classification.
(i) A contractor covered by this section that
has agreed to be covered by an a pprenticeship
program ’s standards upon the issuance of the approval
certificate, or that has been prev iously approved for an
apprenticeship program in the craft or trade, shall
employ the number of apprentices or the ratio of
67
apprentices to journeymen stipulated in the applicable
apprenticeship standards, but in no event less than the
1 -to -5 ratio required by subdivision (g).
(j) Upon proper showing by a contractor that he or she
employs apprentices in a particular craft or trade in the
state on all of his or her contracts on an annual average
of not less than one hour of apprentice work for every
five h ours of labor performed by journeymen, the
Division of Apprenticeship Standards may grant a
certificate exempting the contractor from the 1 -to -5
hourly ratio, as set forth in this section for that craft or
trade.
(k) An apprenticeship program has the di scretion to
grant to a participating contractor or contractor
association a certificate, which shall be subject to the
approval of the Administrator of Apprenticeship,
exempting the contractor from the 1 -to -5 ratio set forth
in this section when it finds t hat any one of the
following conditions is met:
(1) Unemployment for the previous three -month
period in the area exceeds an average of 15 percent.
(2) The number of apprentices in training in the area
exceeds a ratio of 1 to 5.
(3) There is a show ing that the apprenticeable craft or
trade is replacing at least one -thirtieth of its journeymen
annually through apprenticeship training, either on a
statewide basis or on a local basis.
(4) Assignment of an apprentice to any work
performed under a pub lic works contract would create
a condition that would jeopardize his or her life or the
life, safety, or property of fellow employees or the
public at large, or the specific task to which the
apprentice is to be assigned is of a nature that training
canno t be provided by a journeyman.
(l) When an exemption is granted pursuant to
subdivision (k) to an organization that represents
contractors in a specific trade from the 1 -to -5 ratio on a
local or statewide basis, the member contractors will
not be requir ed to submit individual applications for
approval to local joint apprenticeship committees, if
they are already covered by the local apprenticeship
standards.
(m) A contractor to whom a contract is awarded, who,
in performing any of the work under the c ontract,
employs journeymen or apprentices in any
apprenticeable craft or trade shall contribute to the
California Apprenticeship Council the same amount
that the director determines is the prevailing amount of
apprenticeship training contributions in the area of the
public works site. A contractor may take as a credit for
payments to the council any amounts paid by the
contractor to an approved apprenticeship program that
can supply apprentices to the site of the public works
project. The contractor may a dd the amount of the
contributions in computing his or her bid for the
contract. At the end of each fiscal year the California
Apprenticeship Council shall make grants to each
apprenticeship program in proportion to the number of
hours of training provide d by the program for which the
program did not receive contributions, weighted by the
regular rate of contribution for the program. These
grants shall be made from funds collected by the
California Apprenticeship Council during the fiscal
year pursuant to this subdivision from contractors that
employed registered apprentices but did not contribute
to an approved apprenticeship program. All these
funds received during the fiscal year shall be distributed
as grants.
(n) The body awarding the contract shal l cause to be
inserted in the contract stipulations to effectuate this
section. The stipulations shall fix the responsibility of
compliance with this section for all apprenticeable
occupations with the prime contractor.
(o) This section does not apply to contracts of general
contractors or to contracts of specialty contractors not
bidding for work through a general or prime contractor
when the contracts of general contractors or those
specialty contractors involve less than thirty thousand
dollars ($30,000) or 20 working days.
(p) All decisions of an apprenticeship program under
this section are subject to Section 3081.
1777.6. It shall be unlawful for an employer or a labor
union to refuse to accept otherwise qualified employees
as registered apprentices on any public works, on the
ground of the race, religious creed, color, national
origin, ancestry, sex, or age, except as provided in
Section 3077, of such employee.
1777.7. (a) A contractor or subcontractor that
knowingly violates Section 17 77.5 shall forfeit as a
civil penalty an amount not exceeding one hundred
dollars ($100) for each full calendar day of
noncompliance. The amount of this penalty shall be
based on consideration whether the violation was a
good faith mistake due to inadvert ence. A contractor
or subcontractor that knowingly commits a second or
subsequent violation of Section 1777.5 within a three -
year period, where the noncompliance results in
apprenticeship training not being provided as required
by this chapter, shall forf eit as a civil penalty the sum
of not more than three hundred dollars ($300) for each
full calendar day of noncompliance. Notwithstanding
Section 1727, upon receipt of a determination that a
civil penalty has been imposed, the awarding body shall
withhold the amount of the civil penalty from contract
progress payments then due or to become due.
(b) (1) In the event a contractor or subcontractor is
determined by the Administrator of Apprenticeship to
have knowingly violated any provision of Section
1777.5, the Administrator shall deny to the contractor
or subcontractor, both individually and in the name of
the business entity under which the contractor or
subcontractor is doing business, the right to bid on or
68
receive any public works contract for a perio d of up to
one year for the first violation and for a period of up to
three years for a second or subsequent violation. Each
period of debarment shall run from the date the
determination of noncompliance by the Administrator
of Apprenticeship.
(2) An af fected contractor or subcontractor may
obtain a review of the debarment or civil penalty by
transmitting a written request to the office of the
Administrator within 30 days after service of the order
of debarment or civil penalty. If the Administrator
rec eives no request for review within 30 days after
service, the order of debarment or civil penalty shall
become final for the period authorized.
(3) Within 20 days of the timely receipt of a request
for hearing, the Administrator shall provide the
contra ctor or subcontractor the opportunity to review
any evidence the Administrator may offer at the
hearing. The Administrator shall also promptly
disclose to the contractor or subcontractor any
nonprivileged documents obtained after the 20 -day
time limit.
(4) Within 90 days of the timely receipt of the a
request for hearing, a hearing shall be commenced
before an impartial hearing officer designated by the
Administrator and possessing the qualifications of an
administrative law judge pursuant to Section 11 502 of
the Government Code. The contractor or subcontractor
shall have the burden of showing compliance with
Section 1777.5. The decision to debar shall be
reviewed by a hearing officer or court only for abuse of
discretion.
(5) Within 45 days of the conclusion of the hearing,
the hearing officer shall issue a written decision
affirming, modifying, or dismissing the debarment or
civil penalty. The decision shall contain a notice of
findings, findings, and an order. This decision shall be
deemed the f inal decision of the Administrator and
shall be served on all parties and the awarding body
pursuant to Section 1013 of the Code of Civil
Procedure by first -class mail at the last known address
of the party on file with the Administrator. Within 15
days o f issuance of the decision, the hearing officer
may reconsider or modify the decision to correct an
error, except that a clerical error may be corrected at
any time.
(6) An affected contractor or subcontractor may
obtain review of the final decision of the Administrator
by filing a petition for a writ of mandate to the
appropriate superior court pursuant to Section 1094.5
of the Code of Civil Procedure within 45 days after
service of the final decision to debar or to assess a civil
penalty. If no petiti on for a writ of mandate is filed
within 45 days after service of the final decision, the
order shall become final. If the petitioner claims that
the findings are not s upported by the evidence, abuse of
discretion is established if the court determines th at the
findings are not supported by substantial evidence in
light of the entire record.
(7) The Administrator may file a certified copy of a
final order with the clerk of the superior court in any
County in which the affected contractor or
subcontracto r has property or has or had a place of
business.
(c) If a subcontractor is found to have violated
Section 1777.5, the prime contractor of the project is
not liable for any penalties under subdivision (a), unless
the prime contractor had knowledge of th e
subcontractor ’s failure to comply with the provisions of
Section 1777.5 or unless the prime contractor fails to
comply with any of the following requirements:
(1) The contract executed between the contractor and
the subcontractor or the performance of work on the
public works project shall include a copy of the
provisions of Sections 1771, 1775, 1776, 1777.5, 1813,
and 1815.
(2) The contractor shall continually monitor a
subcontractor ’s use of apprentices required to be
employed on the public works project pursuant to
subdivision (d) of Section 1777.5, including, but not
limited to, periodic review of the certified payroll of the
subcontractor.
(3) Upon becoming aware of a failure of the
subcontractor to employ the required number of
apprentices, the contractor shall take corrective action,
including, but not limited to, retaining funds due the
subcontractor for work performed on the public works
project until the failure is corrected.
(4) Prior to making the final payment to the
subcontractor f or work performed on the public works
project, the contractor shall obtain an affidavit signed
under penalty of perjury from the subcontractor that the
subcontractor has employed the required number of
apprentices on the public works project.
(d) In lie u of the penalty provided for in subdivision
(a) or (b), the director may for a first -time violation and
with the concurrence of the apprenticeship program,
order the contractor or subcontractor to provide
apprentice employment equivalent to the work hours
that would have been provided for apprentices during
the period of noncompliance.
(e) Any funds withheld by the awarding body
pursuant to this section shall be deposited in the
General Fund if the awarding body is a state entity, or
in the equivalent f und of an awarding body if the
awarding body is an entity other than the state.
(f) The interpretation and enforcement of Section
1 777.5 and this section shall be in accordance with the
rules and procedures of the California Apprenticeship
Council.
69
Division of Apprenticeship Standards - APPRENTICES ON PUBLIC WORKS
SUMMARY OF REQUIREMENTS
Compliance with California Labor Code Section 1777.5 requires all public works contractors and subcontractors to:
Submit contract award information to the applicable joint apprenticeship committee, including an estimate of the
journeyman hours to be performed under the contract, the number of apprentices to be employed, and the
approximate dates the apprentices will be emplo yed.
The contract award information shall be in writing, and shall be provided to the applicable apprenticeship
committee within 10 days of the date of the agreement or contract award, but in no event later than the first day
in which the contractor has w orkers employed upon the public work. (California Code of Regulations, Title 8,
Section 230.)
Employ apprentices on the public work in a ratio to journeymen of no less than one hour of apprentice work for
every five hours of labor performed by a journeym an.
Contribute to the training fund in the amount identified in the Prevailing Wage Rate publication for journeymen
and apprentices. Contractors who choose not to contribute to the local training trust fund must make their
contributions to the California Apprenticeship Council, P.O. Box 511283 , Los Angeles , CA 90051 -7838 .
Training contributions to the Council are due and payable on the 15 th of the month for work performed during
the preceding month.
Training contributions to the Council shall be paid b y check and shall be accompanied by a completed CAC2
form, Training Fund Contributions, or the following information (California Code of Regulations, Title 8,
Section 230.2 c):
1. The name, address and telephone number of the contractor making the contributi on.
2. The contractor ’s license number.
3. The name an address of the public agency that awarded the contract.
4. The jobsite location, including the COSM where the work was performed.
5. The contract or project number
6. The time period covered by the enclosed contribut ions.
7. The contribution rate and total hours worked by the apprenticable occupation(s).
Pay the apprentice rate on public works projects only to those apprentices who are registered, as defined in Labor
Code Section 3077:
Sec. 3077. The term “apprentice ” as used in this chapter, means a person at least 16 years of age who has entered into
a written agreement, in this chapter called an “apprentice agreement ”, with an employer or program sponsor. The
term of apprenticeship for each apprenticeable occupatio n shall be approved by the chief, and in no case shall provide
for no less than 2,000 hours or reasonably continuous employment for such person for his or her participation in an
approved program of training through employment and through education in rela ted and supplemental subjects.
70
PUBLIC WORKS
CONTRACT AWARD INFORMATION
Name of Contractor: Contractor ’s State License
No.:
Contractor ’s Mailing Address -- Number & Street, City, Zip Code: Area Code & Telephone No.:
Name & Location of Public Works Project: Date of Contract Award:
Date of Expected or Actual
Start
of Project:
Name & Address of Public Agency Awarding
Contract:
Estimated Number of
Journeymen Hours:
APPRENTICES
Occupation of Apprentice
Number To Be Employed Approximate Dates To Be
Employed
Check One Of The Boxes Below
Please Note: Your election of options is not to be deemed a request for the immediate dispatch of
apprentices. Contractors must make a separate request for actual dispatch.
Box 1
Box 2
Box 3
Signature:
Typed Name
Title: Date:
State of California -- Department of Industrial Relations
TO BE COMPLETED BY CONTRACTOR
This form should be sent to the Apprenticeship Committee of the craft
or trade in area of the site of the public work. If you have any questions as
to the address of the appropriate Apprenticeship Committee,
contact the nearest office of the Division of Apprenticeship Standards
(DAS). Consult your telephone directory unde r California, State of,
Industrial Relations, for the DAS office in your area. Do not send this form
to the Division of Apprenticeship Standards .
We will request dispatch of apprentice(s) for this job in accordance with Section 230.1 (A), California Code
of Regulations. We voluntarily choose to comply with the applicable Apprenticesh ip Committee Standards
for the duration of this job only, with regard to training apprentices and to the payment of training
contributions.
We will request dispatch of apprentice(s) for this job in accordance with Section 230.1 (A), California Code
of Regulations, but do not agree to be bound by the applicable Apprenticeship Committee Standards in
training the apprentices; instead, we agree to employ and train apprentice(s) in accordance with the
California Apprenticeship Council regulations, including section 230.1 of the California Code of Regulations,
governing employment of apprentices on public work projects.
We are already approved to train apprentices by the applicable Apprenticeship Committee and we will
employ and train under the Standards. We will request dispatch of apprentices for this job in accordance
with Section 230.1 (A), California Code of Regulations.
FORM 3
71
FORM 4
72
State of California
Department of Industrial Relations
P.O. Box 511283
Los Angeles , CA 90051 -7838
TRAINING FUND CONTRIBUTIONS
California Apprenticeship Council
Name and Address of Contractor/Subcontractor making Contribution Contractor ’s License Number
Contract or Project Number
Name and Address of Public Agency Awarding Contract Jobsite Location (Including
County )
Period Covered by Contribution
Classification(s) or Workers (Carpenter, Plumber, Electrician, Etc.) Hours Cont. Rate Amou
nt
per Hour
Signature Date
Title Area Code & Telephone Number
CAC 2
Please use a separate form for each jobsite, listing
the occupations for the jobsite. One check, payable
to the California Apprenticeship Council, may be
submitted for all jobsites and/or occupations.
Training fund contributions are not accepted by the
California Apprentice Council for federal public
works projects, or for non -apprenticable
occupations such as laborers, utility technicians,
teamsters, etc.
TO BE COMPLETED BY CONTRACTOR
FORM 5
73
TO BE COMPLETED BY CONTRACTOR
CONTRACTOR FRINGE BENEFIT STATEMENT
Contract Number / Name: Contract Location: Today ’s Date:
Contractor / Subcontractor Name: Business Address:
Classification: Effective Date: Subsistence or Travel Pay:
$
Health & $ PAID TO: Name:
Welfare Address:
Pension $ PAID TO: Name:
Address:
Vacation/ $ PAID TO: Name:
Holiday Address:
Training $ PAID TO: Name:
and/or Other Address:
Classification: Effective Date: Subsistence or Travel Pay:
$
Health & $ PAID TO: Name:
Welfare Address:
Pension $ PAID TO: Name:
Address:
Vacation/ $ PAID TO: Name:
Holiday Address:
Training $ PAID TO: Name:
And/or Other Address:
Classification: Effective Date: Subsistence or Travel Pay:
$
Health & $ PAID TO: Name:
Welfare Address:
Pension $ PAID TO: Name:
Address:
Vacation/ $ PAID TO: Name:
Holiday Address:
Training $ PAID TO: Name:
And/or Other Address:
Submitted: Contractor / Subcontractor By: Name / Title
In order that the proper Fringe Benefit rates can be verified when checking payrolls on the above contract, the hourly rates for fringe benefits, subsistence
and/or travel allowance payment made for employees on the various classes of work are tabulated below.
FR
I
N
G
E
B
E
N
E
F
I
T
S
FR
I
N
G
E
B
E
N
E
F
I
T
S
FR
I
N
G
E
B
E
N
E
F
I
T
S
Supplemental statements must be submitted during the progress of work should a change in rate of any of the classifications be made.
FORM 6
74
FORM 7
75
76
FORM 8
77
LABOR STANDARDS INTERVIEW FORM
Confidential: This document contains personal information and it shall be kept confidential in order to protect against unauthorized disclosure
I. Project Information
Project: Employer:
Employee Name: Superintendent:
Social Security Number: Date and Time of Interview:
Phone Number: Prime Contractor:
II. Interview Information
Work being performed at time of interview:
Mailing Address:
How long have you worked for
employer:
What date did you begin work on this project: Last date you worked on this project before today: # of
Hours:
Present job/classification:
Journeyman _______ What is your hourly pay rates?
Apprentice _______ Straight Overtime Double Time/Holiday
Do you work overtime: Are you paid at 1.5 X for hours over 8 per day/40 per
week? If NO, please explain:
Yes Are you paid: Do you
keep a
record of
your hours
worked:
Yes
Yes No No Weekly Biweekly No
Describe t he work you have been doing in the past week: Tools/Equipment Used:
Do you understand the prevailing wage
requirements on this Public Works project:
Yes Do you understand the Apprenticeship requirements on this Public Works
project (if applicable):
Yes
No No
Have you ever been threatened, intimidated
or coerced into giving up any of your pay:
Yes What deductions other than taxes, social security and disability insurance are taken
from your wages:
No
Interviewer's Comments/Notes/Observations:
I HAVE READ THE INFORMATION ON THIS FORM AND CERTIFY IT TO BE CORRECT TO THE BEST OF MY KNOWLEDGE
Employee's Signature: Date:
Interviewer's Signature: Date:
III. Payroll Review
Payroll Auditor's Comments/Notes:
78
Payroll Wage: Payroll Classification: Reviewed/Certified BY:
FORM 9
79
SITE VISITATION LOG
SITE VISIT
DATE
PRIME
CONTRACTO
R
SUB
CONTRACTO
R
EMPLOYEE
NAME
SOCIAL
SECURITY #
POSITION TITLE TASK
PERFORMED AT
INTERVIEW
PAY
RATE
COMPLIAN
T / NON
COMPLIAN
T
LABOR COMPLIANCE
OFFICE COMMENTS
Hoover 9/1/99 Baker Mills John Doe 111 -11 -1111 Plumber Repairing
Plumbing
$34.19 Compliant Certified Payroll Records
check out
Hoover 9/1/00 Baker Mills Mark Baker 222 -22 -2222 Laborer Painting $10.40 Non Certified Payroll does not
check out with interview
FORM 10
80
Prime Contractor:
Project:
Original Request: 02/08/00
This Request: 02/08/00
1. Apprenticeship Training Agreement (similar to Form DAS 1) must be provided for:
2. Apprenticeship Training Agreement (similar to Form DAS 7) must be provided for:
3. Training Fund Contributions (Form CAC 2 or equivalent) must be provided for:
4. Public Works Contract Award Information (Form DAS 140) with the name, address and phone number of
the training program notified by all project contractors must be provided for:
5. Fringe Benefits Statements must be provided for:
6. Signed certified Payroll report or statement of Non -Performance with original signatures must be provided
for:
contractors a re responsible for submittal of their payrolls and those of their respective subcontractors
as one package, which must be in the COSM ’s Labor Compliance Officer within one week of each
weekly paycheck . In the event there has been no work performed during a given week, the certified
payroll record shall be annotated with the words “No Work ” for that week.
7. To determine the required hours for apprentices on this project we will need the contractor to Identify all
sub -contractors who will perform work in invo lving less than $30,000 or who will be on the project less
than 20 calendar days or both.
8. Either the Public Works Payroll Reporting Form (Form A -1 -131) or the COSM reporting form must be
used.
FORM 11
81
Report of Action for Prevailing Wage Violations
Name of Project:
Contract Number: First Advertised Date:
Where Work Is Performed:
Date Notice of Completion Filed:
Date of Project Acceptance or Current Percent Complete:
Name and Address of Prime Contractor:
Project ’s Scope of Work:
Contractors in Violation of the Labor Code and their Scope of Work:
Statement of the Issues Identified to the Contractor:
Summary of the Audit Investigation:
CPR Spread Sheets
Labor Code Sections Violated:
Summary of Penalty Assessment Justification:
Identify Labor Code 1775 and 1813 Penalties Requested with Calculated Totals:
Is the Violation Due to Mistake, Inadvertence or is it a Willful Failure to Pay the Correct Wages:
Previous Record in Meeting Prevailing Wage Obligations:
Identify and Provide All Correspondence:
Identify and Provide Any Contractor Response:
Recommend Penalty Assessment:
FORM 12
82
WITHHOLDING AMOUNT CALCULATION
Attachment 2 ACME HIGH SCHOOL RE -ROOF
PRIME CONTRACTOR: ACME ROOFING CO., INC
Original Issue date: 00 -00 -0000
Latest Issue: 00 -00 -0000
REPORTING CONTRACTOR :COMMERCIAL AND INDUSTRIAL ROOFING CO.,INC
COSM ’s comments
CONTRACTOR PROVIDED INFORMATION
Employee Name & Social Security
Number
Work Classification Week
Ending
Rate Paid Fringes
Paid
Gross Per
Hour
Hours
Worked
Gross
Amount Paid
Prevailing
Wage Rate
Amount they
should have been
paid
Difference
$0.00
$0.00
$0.00 $0.00
$0.00
$0.00
$0.00 $0.00
$0.00
$0.00
$0.00 $0.00
$0.00
$0.00
$0.00 $0.00
Total Contractor Difference: $0.00
Total Project Difference: $0.00
FORM 13
83
Sample Single Project Labor Compliance Review and Enforcement Report Form
[Appendix C following 8 CCR §16434]
Awarding Body:
Project Name:
Name of Approved Labor Compliance Program:
Bid Advertisement Date:
Acceptance Date:
Notice of Completion Recordation Date:
Summary of Labor Comp liance Activities
1. Contract Documents Containing Prevailing Wage Requirements (Identify)
2. Prejob Conference(s) -- Attach list(s) of attendees and dates
3. Notification to Project Workers of Labor Compliance Program’s Contact Person. (Explain
Manner of Notification for each project work site.)
4. Certified Payroll Record Review
a. CPRs Received From:
Contractor/Subco ntractor For weeks ending (“w/e”) through w/e
b. Classifications identified in CPRs and applicable Prevailing Wage Determinations
Classification Determination No.
5. Further investigation or audit due to CPR review, information or complaint from worker or other
interested person, or other reason:
FORM 14
84
a. Independent Confirmation of CPR Data
Worker Interviews Reconciled CPRs with Pay -
Contractor/Subcontractor (Yes/No) checks or Stubs (Yes/No)
b. Employer Payments (Health & Welfare, Pension, Vacation/Holiday) Confirmation
Recipients of Written confirmation
Contractor/Subcontractor Employer Payments Obtained (Yes/No)
c. Contributions to California Apprenticeship Council or Other Approved Apprenticeship
Program
Recipients of Written confirmation
Contractor/Subcontractor Contributions Obtained (Yes/No )
d. Additional Wage Payments or Training Fund Contributions Resulting from Review of
CPRs
Additional amounts Additional Expla -
Contractor/Subcontractor Paid to Workers Training Fund nation
*
*
*
*
* Use separate page(s) for explanation
6. Complaints Received Alleging Noncompliance with Prevailing Wage Requirements.
Name of Resolution or
Complainant Date Received Current Status
*
*
*
*
*Use separate page(s) to explain resolution or current status
85
7. Requests for Approval of Forfeiture to Labor Commissioner
Contractor/Subcontractor Date of Request Approved/Modified/Denied
8. Litigation Pending Under Labor Code Section 1742
Contractor/Subcontractor DIR Case Number
9. (Check one): Final report this project Annual report this project
Authorized Representative for Labor Compliance Program
86
FORM 15
87
88
89
90
L abor Compliance Program Regulations
REQUEST FOR APPROVAL OF FORFEITURE
1. AWARDING BODY / THIRD PARTY LCP:
Name and Contact Information:
Date of Request :
Name and Contact Information for Awarding Body if different
from LCP:
LCP Approval Status (specify if either
interim or temporary or if LCP has
extended authority):
2. PROJECT INFORMATION:
Project Name:
Contract Number:
Project Location:
Bid Advertisement Dates:
Estimated Date Project is to be completed:
Acceptance Date of Project by the Awarding Body:
Notice of Completion/Date Recorded with COSM
Recorder:
Other Relevant Deadline (specify): Amount being held in Retention:
3. CONTRACTOR INFORMATION:
Name and address of Affected Contractor:
Name and address of Affected Subcontractor:
General Description of Scope of Work of the Entire Project:
General Description of Scope of Work covered in the proposed Forfeiture (describe and attach relevant portions
of contract or subcontract):
FORM 16
91
4. LABOR COMPLIANCE PROGRAM INVESTIGATION AND FINDINGS:
Total Amount of Request for Notice of Withholding of Contract Payments:
Wages Due:
Training Funds Due: Total Penalties Due:
Potential Liquidated
Damages [Wages +
Training Funds]:
LC 1775 Penalties Due: LC 1813 Penalties
Due:
LC 1776 Penalties Due:
Other:
[Provide narrative summaries covering the following]:
A . Statement of Issues.
B. Investigative Report (detailed narrative including but not limited to how the investigation was conducted
including worker declarations, reviewing certified payroll records, verification of employer payment
contributions, etc.).
C. Audit Report (detailed explanation of how audit was completed addressing each of the issues above).
D. Affected contractor and subcontractor in formation (how affected contractor and subcontractor were
informed of potential violations; summary of their response with respect to violations and penalty issues; and
any other information considered in determining recommended penalties).
E. Recommended penalties under Labor Code Section 1775(a) and basis for recommendation, including how
factors in subsection (a)(2) of Section 1775 were applied to arrive at the recommended amount(s).
Reference:
Contract No. 10415 (CCS)
&
Agreement No. 10416 (CCS)
&
Resolution No. 11014 (CCS)