Welcome to the Department of Industrial Relations
Labor Compliance Programs - Office of the Director

Introduction:

Labor Code section 1771.5 authorizes the establishment of Labor Compliance Programs (“LCPs”) to enforce prevailing wage requirements on public works construction projects. LCPs enforce prevailing wage laws on behalf of the public agencies that award public works contracts (known as “awarding bodies”) and serve as an alternative to the traditional enforcement role of the Division of Labor Standards Enforcement.

LCPs are required, among other things, to inform contractors about their prevailing wage obligations, to monitor compliance by obtaining and reviewing certified payroll reports, to investigate complaints and other suspected violations, and to take appropriate enforcement action when violations are found.  LCPs must be approved, may have their approval revoked, and must follow specific reporting and performance standards in accordance with regulations adopted by the Director of the Department of Industrial Relations at Title 8, California Code of Regulations, sections 16421 – 16439.

Labor Compliance Program Information and Resources

SBX2-9 Implementation

On February 20, 2009, Governor Schwarzenegger signed into law SBX2-9, which amended several laws requiring the use of labor compliance programs (“LCPs”) on specified public works projects, so that awarding bodies will be required instead to pay a fee for prevailing wage monitoring and enforcement by this Department.  I am pleased now to announce the start of our formal rulemaking to establish the regulatory standards that will govern fee-based monitoring under SBX2-9.  Attached to this e-mail are the Notice of Proposed Rulemaking, the text of the proposed amendments, and the Initial Statement of Reasons.

Please note that each of these documents is also posted on the Department’s website at http://www.dir.ca.gov/LaborComplianceRegulations/LCP-SBX2-9.htm

Major subject matters addressed by these proposals include: (1) standards governing notices, fees, and fee waivers for public agencies that undertake projects subject to the new fee-monitoring systems; (2) standards governing prevailing wage monitoring and enforcement by DIR’s new Compliance Monitoring Unit; and (3) amendments to the existing LCP regulations.  Some of the major elements of these proposals are:

  • Fees set at ¼ of 1% of bond proceeds for bond-funded projects and ¼ of 1% of total project costs (less land acquisition costs) for design-build and other statutorily authorized projects.
  • Fee waivers, which will apply automatically, for awarding bodies with previously approved LCPs that they continue to use either for all of their own public works projects or for all projects that otherwise would be subject to a fee under SBX2-9.
  • Project notices, which DIR intends to combine with the notices required under Labor Code section 1773.3 (i.e. the DAS-13) and provide for online submission.
  • Submission of all certified payroll records to the CMU for review.  DIR also intends to provide for electronic submission of these records at no cost to contractors.
  • Review of all certified payroll records, and random audits and site visits to corroborate reported payroll information and confirm compliance with prevailing wage requirements.
  • Requirements for accepting and investigating complaints of suspected violations.
  • Notice requirements and an expedited hearing for withholdings of contract payment based on delinquent or inadequate payroll reports.
  • Conforming changes in the LCP regulations as well as some unrelated changes, including a new threshold standard for revocation based on failure to enforce and a return to fiscal year reporting by all programs.

Our proposals were developed in consultation with representatives of unions, contractors, public agencies, labor compliance programs, and others with a specific interest in prevailing wage enforcement.  We look forward to receiving more input from the public during this formal rulemaking to help us refine and improve these proposals before we adopt final regulations.

Please read the rulemaking documents for more detailed information about the proposals, and please see the Notice of Proposed Rulemaking for specific information on how and when to submit comments.  If you have additional questions about these proposals, please contact legal counsel John Cumming at (415) 703-4265 or Public Works Compliance Manager Nance Steffen at (415) 703-5063.