New Law Imposes Significant Changes to Public Works Contractor Registration and Prevailing Wage ReportingOn June 27, 2017 Governor Brown signed SB 96 which is effective immediately and will be implemented by the Department of Industrial Relations starting July 1, 2017. SB 96 makes significant changes to the contractor registration and prevailing wage monitoring program. Some of these changes may be helpful to school and community college districts while others pose new requirements.
The significant changes are as follows:
The public works contractor registration and pending wage monitoring requirements currently applicable to all projects over $1,000, will not apply to maintenance projects of $15,000 or less, or to construction, alteration, demolition, installation, or repair projects of $25,000 or less. This will exempt many small maintenance and repair projects although they are still subject to payment of prevailing wages. (Labor Code section 1725.5 (f), 1771.1(n).) The contractor or subcontractor whose small project is exempt still has to keep wage records for three years.
Public works contractor registration and prevailing wage monitoring requirements, which went into effect in March-April 2015 for bids submitted and contracts entered into after that time, will also apply on or after January 1, 2018 to any public works contract executed before April 1, 2015. (Labor Code sections 1725.5(e) 1771.1(l).)
The public works contractor registration fee is increased from $300 to $400, renewable annually or beginning June 1, 2019, for up to three years at a time. (Labor Code section 1725.5(a).)
Where an unregistered contractor or subcontractor is found to be working on a public works project, the Labor Commissioner can issue a stop order prohibiting the use of the unregistered contractor or subcontractor until they are registered. This stoporder does not apply to registered contractors or subcontractors on the same project, but it could result in some disruption. (Labor Code section 1725.5(j).)
The awarding body’s notice (PWC-100 form) to the Department of Industrial Relations of a public works project subject to registration and monitoring is due within 30 days of the award of the contract, instead of 5 days currently, but no later than the first day a contractor has workers on the job. (Labor Code section 1773.3(a).) The notice must now include the registration numbers of the contractor and any listed subcontractors. (Labor Code section 1773.3(a).)
There is a civil penalty of $100 per day, up to $10,000, available against an awarding body that fails to provide the PWC-100 notice or enters into a contract with or allows an unregistered contractor or subcontractor to perform public work. (Labor Code section 1773.3(b).) The penalty can also be applied after final payment if an unregistered contractor or subcontractor is found to have worked on the project. (Labor Code section 1773.3(d).) Final payment cannot be issued until at least 30 days after all of the information required on the PWC-100 form has been submitted, which may impact some short duration projects with a single payment due. (Labor Code section 1773.3(d).)
If the awarding body is determined by the Labor Commissioner to have willfully violated contractor registration and monitoring requirements on two or more public works projects in a 12-month period, the awarding body becomes ineligible for state construction funding for one year. (Labor Code section 1773.3(f).) Again, this only applies to projects that meet the higher dollar thresholds.
Bids must now include in the subcontractor list the public works contractor registration number of each subcontractor, as well as the subcontractor’s name, location, contractor’s license number and portion of work. This applies to subcontractors for more than one-half of one percent of the total bid amount. As with contractor’s license numbers currently, an inadvertent error in listing a public works contractor registration number is not grounds for a bid protest or for finding a bid to be nonresponsive if the correct registration number is submitted by the prime contractor within 24 hours after the bid opening. (Public Contract Code section 4104(a).)
Should you have any follow-up questions or comments on this information, please contact us by e-mail or by telephone at (714) 573-0900 (Southern California) or (916) 245-8677 (Northern California).