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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 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, monitor compliance by obtaining and reviewing certified payroll reports, investigate complaints and other suspected violations, and 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 set forth in regulations adopted by the Director of Industrial Relations at Title 8, California Code of Regulations, sections 16421 – 16439.

Labor Compliance Program Information and Resources

Status of LCPs Following Adoption and Implementation of SBX2-9 and AB 436

In 2009, the Legislature adopted SBX2-9 to shift responsibility for compliance monitoring and enforcement on state bond-funded and other types of public works projects from LCPs to the Department of Industrial Relations.  Regulations to implement this statute and create a new Compliance Monitoring Unit (“CMU”) were adopted in 2010.  However, due to legal concerns that jeopardized the issuance of state public works bonds, the Department took emergency action to temporarily repeal these regulations and suspend operation of the CMU.

On September 9, 2011, the Legislature passed AB 436 (Solorio) to address the legal concerns that had been raised about SBX2-9 and make other related changes.  The legislation was approved by the Governor on September 30, 2011, and became effective on January 1, 2012 and applies to public works projects for which the construction contract was awarded on or after January 2, 2012. Additional information about AB 436 is available here.

The new DIR monitoring and requirements apply to most state-bond funded projects and several other categories of projects. For additional information about the Department’s monitoring and enforcement requirements and the CMU, please go to the CMU webpage.

The implementation of AB 436 and the CMU largely supersedes the need for DIR-approved LCPs, and the Department has stopped approving LCPs except when use of a DIR-approved LCP is still required by statute. The exceptions are for: (1) LCPs required by Labor Code section 1771.7 (AB 1506) and other statutes to complete projects awarded prior to January 1, 2012, and (2) projects that receive funds through Proposition 84 (Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006).