SB96 | New Law has Immediate Impact on Public Works Projects
Senate Bill 96, the budget trailer bill, was signed by Governor Jerry Brown on June 27, 2017 and went into effect immediately. The bill contained a hodgepodge of various laws and amendments from wage increases for judges to new procedures for recall elections and several changes to the prevailing wage requirements. Listed below is a summary of those changes:
Impacting Contractors and those who perform work requiring the payment of prevailing wages:
- Public Contractor Registration fee increased to $400 a year.
- Starting in 2019, contractors can renew for up to three years at a time.
- Failure to renew registration, based on good faith mistake, allows for a penalty of $400, plus $400 registration fee if done within 90 days (by September 28)
- Public Contractor Registration NOT required when the prime contract with the Agency does not exceed $25,000 for construction, alteration, demolition, installation or repair, or $15,000 for maintenance work. This applies to the prime contract amount between the contractor and the
- Agency and not a subcontract amount.
- Contractors who do not have to be registered because of $25,000/$15,000 exemption above do NOT have to submit certified payroll through the DIR’s eCPR system.
- Contractors not registered cannot work on a public works projects over the $25,000/$15,000 exemption.
- Penalty for registering after bidding on a public works contract and/or working on a public works project (without being registered) is $400 registration fee, plus $2,000 registration penalty, plus $100 a day for each day worked on a public works project without being registered up to a maximum of $8,000.
- Prime contractors who have a subcontractor which is required to be registered and is not registered are also subject to a separate fine of $100 a day for each day worked by that unregistered subcontractor up to a maximum of $10,000.
- Prevailing wages still apply to all public works (including maintenance) over $1,000. Contractors are required to keep sufficient certified payroll and related records for each project.
Impacting Public Agencies or grant recipients required to enforce prevailing wages:
- No PWC-100 required to be filed when the project/contract does not exceed $25,000 for construction, alteration, demolition, installation or repair; or $15,000 for maintenance work. This applies to the prime contract amount between the contractor and the Agency and not a subcontract amount.
- PWC-100 form is required on all other public works project in excess of the $25,000/$15,000 limits set forth above. PWC-100 forms are to be completed within 30 days of the contract award but not later than the first-day work begins on the project.
- New contract clauses are required. See Labor Code Section 1771.4 and 1860.
- Penalties of $100 per day worked are assessed against the Public Agency if a PWC-100 is not properly filed and/or if an unregistered contractor is allowed to work on the project.
- Two or more willful violations within 12 months (failure to file a PWC-100 or allowing an unregistered contractor to work on a project) makes the Agency ineligible for State funding for construction projects for 1 year.
- Prevailing wages still apply to all public works (including maintenance) over $1,000. Contractors are required to keep sufficient certified payroll and related records for each project.
- Agencies are still required to be cognizant of prevailing wage compliance on all projects and either report violations to the DIR or investigate and require compliance, (Labor Code section 1726).
Article by Deborah E.G. Wilder
Deborah Wilder is a licensed attorney in California and Oregon and the President of Contractor Compliance and Monitoring Inc, a consulting company assisting public agencies and contractors comply with prevailing wage requirements. dwilder@ccmilcp.com