California Prevailing Wage Information
GENERAL INFORMATION
California’s prevailing wage laws ensure that the ability to get a public works contract is not based on paying lower wage rates than a competitor. All bidders are required to use the same wage rates when bidding on a public works project. California law requires that not less than the general prevailing rate of per diem wages be paid to all workers employed on a public works project.
“Public works” refers to construction, alteration, demolition, installation, or repair work (including maintenance) done under contract and paid by public funds. Public works projects do not include those done by a public agency with its own employees. With minor exceptions, all workers employed on public works projects must be paid the prevailing wage determined by the Director of the Department of Industrial Relations according to the type of work and location.
The Director of DIR also makes coverage determinations, hears enforcement appeals, and oversees labor compliance programs, while the Labor Commissioner is responsible for all compliance monitoring, investigations, and enforcement.
HOW PREVAIING WAGE RATES ARE DETERMINED
The prevailing wage rate is the basic hourly rate paid on public works projects to a majority of workers engaged in a particular craft, classification or type of work within the locality and in the nearest labor market area (if a majority of such workers are paid at a single rate). If there is no single rate paid to a majority, then the single or modal rate being paid to the greater number of workers is prevailing.
GENERAL WAGE DETERMINATION
Moreover, when the director of the California Department of Industrial Relations determines that the general prevailing rate of per diem wages for a particular craft, classification, or type of worker is uniform throughout an area, the director issues a determination enumerated county-by-county, but covering the entire area.
SPECIAL WAGE DETERMINATIONS
When a particular craft, classification or type of worker is not covered by a general determination, the awarding body may request a special prevailing wage determination. Requests must be made at least 45 days prior to the bid advertisement date.
COVERAGE DETERMINATION
A process in which the awarding body or any other interested party (such as a contractor, employee, union or labor-management compliance organization) may request a written determination by the director of the DIR about a specific construction project or type of work to be performed.
THRESHOLD
Prevailing wages must be paid to all workers employed on a public works project when the public works project is over $1,000. If an awarding body elects to initiate and enforce a labor compliance program, that has been approved by the Director of the Department of Industrial Relations, for every public works project under the authority of the awarding body, prevailing wages are not required to be paid for any public works project of less than $25,000 when the project is for construction work, or for any public works project less than $15,000 when the project is for alteration, demolition, repair, or maintenance work.
TIMING
General wage determinations are issued twice a year on February 22 and August 22. The effective date is the date upon which the determinations of the director of the CA DIR go into effect. This date is 10 days after the issue date of the determination.
ASTERISS AFTER EXPIRATION DATE
The expiration date on the determination indicates when the wage determination is subject to change
A single asterisk (“*”) after the expiration date, which are in effect on the date of advertisement for bids, remain in effect for the life of the project.
A double asterisk (“**”) after the expiration date on the wage determination indicates that the basic hourly wage rate, overtime, holiday pay rates and employers’ payments for work performed after this date have been predetermined. If work is to extend past this date, the new rates must be paid and should be incorporated in contracts entered into now. Go to the original wage determination for the project and then look for any published increases.
CONTRACTOR REGISTRATION AND AGENCY OBLIGATION TO FILE PROJECT WITH DIR
All prime contracts awarded $25,000 or greater, or $15,000 or more for maintenance work require the contractor and ALL subcontractors to register as a Public Works Contractor prior to the bid. Contractors who are not registered cannot work on the project. Registering after the bid is submitted subjects the contractor to a $2,000 fine (in addition to the $400 annual fee). Registration is required for any entity that must pay prevailing wage or will be contracting out any work which requires prevailing wage. For example: an engineering firm hired by the City for a project will subcontract out surveying work. Even though the engineering firm may not be performing work subject to prevailing wage, the fact that they are subcontracting out the surveying work will require the engineering company and the surveying company to both be registered as public works contractors.
If a contractor is not registered and works on a project, that offending contractor plus the prime contractor plus the Awarding Agency are subject to fine of $100 per day for each day the contractor performed work on the project.
Awarding Agencies are required to register each project with the DIR if the prime contract equals or exceeds $25,000 for all construction related work and $15,000 for any maintenance work. This must be filed not later than the first day work is performed on the project. Penalty is $100 for each day the registration is late.
OVERTIME
Compensation for all hours worked in excess of eight hours per day and 40 hours during any one week should be not less than one-and-one-half times the basic rate of pay. For specific overtime requirements, please refer to the prevailing wage determinations.
WORK ON WEEKENDS
According to California prevailing wage requirements, workers receive different wage rates for working on the weekends based on their trade classification. Typically work for more than 8 hours a day, plus Saturday work is generally paid at the OT rate. Work performed on Sundays and for more than 12 hours a day are typically paid double-time. Each craft in each county may have different (more restrictive) overtime requirements.
WORKING ON LEGAL HOLIDAYS
Under California prevailing wage law, workers receive different wage rates for working on legally recognized holidays, typically the double-time rate
All crafts recognize the following holidays:
1) New Years Day
2) Memorial Day
3) July 4th.
4) Labor Day
5) Thanksgiving Day
6) Christmas
However, not all crafts recognize the following holidays:
1) Veterans Day
2) Martin Luther King Day
3) Day after Thanksgiving
4) Juneteenth
5) Veterans Day
6) President’s Day
Some crafts have additional floating holiday. Certain crafts need to default to various State recognized holidays. For additional information regarding which trade receives payment for which holiday, please refer to wage determinations.
SHIFT DIFFERENTIALS
Under California prevailing wage law, various trade classifications have different wage rates for workers depending on the shift worked throughout the day (e.g., swing, graveyard, etc.). The rules regarding whether a shift differential applies are craft specific, thus some trades do not have shift differential payments. Generally, shift rates are higher payments than regular wage rate payments, and they require overtime to be paid at 7.0 or 7.5 hours. Please see the DIR webpage to view shift rates and when shift rates are applicable.
FRINGE BENEFITS
Under California prevailing wage requirements, different trade classifications receive different fringe benefits. Please see the applicable wage determinations for exact fringe benefit amount based on the trade classification. Some companies have fringe benefit amount established on a per hour basis. Those you pay a weekly, monthly or quarterly premium must amortize that benefits across all hours worked to establish a per hour rate.
TRAINING CONTRIBUTION
Training contributions are never paid to the employee on the paycheck and are always made to a third-party apprenticeship committee (approved by the Division of Apprenticeship Standards) or to the California Apprenticeship Council. There is a limited exception for a few selected crafts that are non-apprenticeable.
Training contributions must be made to an approved training program (i.e., a program approved by the DAS) or to the California Apprenticeship Council (CAC). If the contribution is made to an apprenticeship committee, then that contribution should be listed on a fringe benefit statement. Otherwise, a contractor making the training contribution to the CAC must use a CAC2 form. Training contributions are to be made monthly and posted by the 15th of the month for work performed in the prior month. Training contributions apply to all hours worked.
For contractors who may be using apprentices from an approved program, sometimes the program requires a higher training contribution than is listed on the prevailing wage determination. In those instances, a contractor would pay the higher training rate for those apprenticeship hours, but would only pay the specified training amount for all journeyman hours.
There is no requirement in state law that specific forms be used for certified payrolls and fringe benefits as long as the same information is conveyed and certified under penalty of perjury. However, some Awarding Bodies are requiring, as a matter of contract, that only certain forms or electronic submission of certified payroll be used. If the contractor intends to send training contributions to the CAC, the CAC-2 form is required.
Please note that contractors are required to submit electronic certified payrolls (eCPR) to the DIR’s portal not less than once a month.
APPRENTICE REQUIREMENTS
On all projects where the prime contract equals or exceeds $30,000 a contractor must file appropriate DAS-140 and DAS-142 forms. The DAS-140 form must be filed on or before the first day worked on the project. The DAS-142 is also required to be filed during the life of the project for all apprenticeable trades. Be aware that a contractor must provide 72 hours’ notice (excluding weekends and holidays) before an apprentice needs to be dispatched. Apprenticeship rates vary by trade and county. Please see apprenticeship wage rates and levels published on the DIR’s website.
Apprentices must also be supervised by a journeyman in the same craft. And, each craft has a journeyman to apprentice ratio. Apprentices working unsupervised or working outside the ratio will need to be paid at the full journeyman wage and fringe package.
TRAVEL & SUBSISTENCE
Pursuant to California prevailing wage law, some trade classifications require compensation for travel and subsistence. Please see wage determinations to view what trade classifications require compensation for travel and subsistence.
CONTRACTOR LICENSING
With a few exceptions, all businesses or individuals who work on any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the California Contractors State License Board (CSLB) if the total cost of one or more contracts on the project is $1,000 or more.
PENALTIES
Penalties for violation of prevailing wages are generally assessed even if the contractor corrects the wage error. For that reason, it is essential that a contractor understands and complies with prevailing wage requirements throughout the project.
Wage Violation up to $200 per day per worker
Overtime Violation $25 per day per worker
Failure to provide CPRs within 10 days of a request from a public agency or the DIR $100 per day per number of workers employed on the project.
Apprenticeship Violation: up to $100 per calendar day of non-compliance. Up to $300
Failure to Register as a Public Works Contractor: $2,000 penalty plus annual fee of $400 plus $100 per day for each day worked on a PW project imposed on the offending contractor, prime contractor and the awarding agency.
Failure to register project with the DIR: An awarding body can be fined $100 per day for any late registration of the project with the DIR
LIQUIDATED DAMAGES
If prevailing wages remain unpaid for 60 days after a “Notice to Withhold” or “Notice of Intent to Withhold” is issued to the contractor, the contractor shall be assessed liquidated damages equal to the amount of any unpaid wages.
If a contractor “posts in escrow” the amount of wages and penalties due with the DIR within 60 days of a Notice to Withhold and appeals the wage decision within that time, then liquidated damages may be avoided.
DEBARMENT
Please visit the cite listed below for a list of contractors that are currently barred from bidding on, accepting, or performing any public works contracts, either as a contractor or subcontractor, for the period set forth on this webpage: http://www.dir.ca.gov/dlse/debar.html
