Chapter 1: History, Laws and Regulations Governing Prevailing Wage Requirements

---

• 1-1 Introduction 
• 1-2 History
• 1-3 Labor Compliance Law Applied to Federal Aid Projects
  • 1-3-1 Davis-Bacon and Related Acts
  • 1-3-2 Code of Federal Regulations
  • 1-3-3 Contract Work Hours and Safety Standards Act
  • 1-3-4 Copeland “Anti-Kickback” Act
• 1-4 Labor Compliance Law Applied to State Projects
  • 1-4-1 California Labor Code
  • 1-4-2 California Code of Regulations
  • 1-4-3 Department of Industrial Relations Registration Requirements
• 1-5 Contractor and Subcontractor Labor Compliance Responsibilities
• 1-6 Awarding Body and Labor Compliance Program Responsibilities
  • 1-6-1 Awarding Bodies
  • 1-6-2 Labor Compliance Program Responsibilities
• 1-7 Contract Provisions

---

1-1 Introduction

To provide a framework to Caltrans labor compliance requirements, Chapter 1 presents an overview of the history of labor compliance laws in the California Labor Code, California Code of Regulations, and the federal Davis-Bacon and Related Acts. This chapter also describes the role of the Department of Industrial Relations (DIR) in its administration and enforcement of state laws governing wages, safety, and the apprenticeship program.

1-2 History

Labor laws are enacted to protect employees' rights and set forth employers' obligations and responsibilities. Labor laws provide equal opportunity and pay, and assure workplace safety and diversity. Table 1-A, “History of Labor Laws,” shows California’s long history of labor law.

TABLE 1‑A: HISTORY OF LABOR LAWS

1-3 Labor Compliance Law Applied to Federal Aid Projects

1-3-1 Davis-Bacon and Related Acts

The Davis-Bacon Act (DBA) was enacted by Congress on March 3, 1931, to assure local workers a fair wage and to provide local contractors a fair opportunity to compete for federal government contracts. Large and small contractors must submit bids using the same minimum wage rate. The Federal-Aid Highway Acts extended the Davis-Bacon Act provisions to federally funded construction contracts on federal-aid highways in the United States, the District of Columbia, Guam, Puerto Rico, the Virgin Islands, and other territories.

For public works projects that receive federal funds through grants, loans, guarantees, and insurance, the provisions of the Davis-Bacon and Related Acts (DBRA) apply to all contractors performing “covered” work. DBRA provisions include:

• Requirement that all laborers and mechanics on the public works project are paid the rates from the wage decision incorporated into the contract and that they be paid on a weekly basis.
  • The wage decisions are determined and set by the Department of Labor.
  • The terms laborer and mechanic apply to workers whose responsibilities are manual or physical. The term includes apprentices and trainees.
• Workers must be properly classified based on their assigned scope of work and the DBRA-recognized classification.
• The applicable wage decision for the project must be posted at the job site in a location that is accessible to all workers.

1-3-2 Code of Federal Regulations

The Code of Federal Regulations (CFR) codifies general and permanent rules published by departments and agencies of the federal government. It is divided into 50 titles, three of which specifically address labor standards, and prevailing wages:

• Title 29, Part 1 of the Code of Federal Regulations (29 CFR Part 1): Regulations set forth the procedures for making and applying prevailing wage rates and fringe benefits in accordance with the Davis-Bacon Act.
• 29 CFR Part 3: Rules for any contract subject to federal wage standards on public works funded in whole or in part by the United States.
• 29 CFR Part 5: Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction; also known as Labor Standards Provisions Applicable to Nonconstruction Contracts Subject to the Contract Work Hours and Safety Standards Act.

1-3-3 Contract Work Hours and Safety Standards Act

• The Contract Work Hours and Safety Standards Act (CWHSSA) applies to federally funded construction projects in excess of $100,000, and to federally assisted Davis-Bacon and Related Acts (DBRA) wages and requires that:
  • Workers are paid one and one-half times their basic hourly rate for all hours worked over 40 hours in a work week.
  • Liquidated damages are paid if the worker was required or allowed to work overtime without being paid at the one and one-half wage rate.

1-3-4 Copeland “Anti-Kickback” Act

The act is designed to protect workers against employers who may induce a worker to forego any part of the compensation to which they are entitled under the terms of their employment. The act includes the following safeguards:

• The contractor and subcontractors are required to submit a weekly wage statement to each employee for the preceding week.
• Employees must receive their full pay for the work performed.
• Employees must be paid weekly.
• Certified payroll reports must include: employee name and address, recognized classification and corresponding rate, daily and weekly hours worked, deductions, and actual wages paid.

1-4 Labor Compliance Law Applied to State Projects

1-4-1 California Labor Code

The California Labor Code (the Labor Code) is a collection of civil statutes. The statutes are intended to protect wage earners of California across all industries, to improve their working conditions, and to advance opportunities for employment.

When a project is a public work, its bidding process, contract administration, and labor-related compliance is typically governed by California’s public works laws including the Labor Code. The Labor Code requires that the awarding body notify any contractor or employer bidding on a public works contract that the project is a public work and requires payment of prevailing wages.

1-4-2 California Code of Regulations

The California Code of Regulations (CCR) is a collection of regulations adopted by state agencies. The DIR is the supporting agency for labor compliance-related regulations, which are part of Title 8, “Industrial Relations.” The CCR consists of 28 titles and contains the regulations of approximately 200 regulatory agencies. Caltrans’ labor compliance program is conducted in accordance with California Code of Regulations Title 8, Sections 16000 through 16802 and 17201 through 17270.

1-4-3 Department of Industrial Relations Registration Requirements

Public works reforms under SB 854 became effective June 20, 2014, and resulted in several changes to the administration and enforcement of prevailing wage requirements by the DIR. SB 854 amended Labor Code Sections 1725.5, 1771.1, and 1773.3.

Contractor Registration

One such reform was the formation of a public works contractor registration program to replace the Compliance Monitoring Unit and Labor Compliance Program (LCP) requirements. Requirements of SB 854 include:

• All public works contractors responsible for the payment of prevailing wages are required to register with the Department of Industrial Relations (DIR)
  Contractor Registration Database (Database). The definition of public works
  contractor includes non-performing entities subcontracting to contractors
  performing prevailing wage covered work; sole proprietors, truck and equipment owner-operators, and brokers who are responsible for performing prevailing wage covered work. [Cal. Lab. Code Section 1771.1].
  • Registration is required at the time of bid for all listed contractors and at the time of contract award. Registration is also required throughout the life of the contract. Contractors register or renew their registration by July 1 of every fiscal year and pay the registration fee.
  • If a contract initially not subject to prevailing wage requirements is subject to a change order or change of scope that adds prevailing wage covered work, all contractors responsible for the payment of prevailing wages must register with the DIR at the time of contract modification.
  • Contractors bidding on contracts as a joint venture are not required to be registered at the time of bid as long as the contractors that are parties to the joint venture are registered in the DIR database. The joint venture must be registered by contract award.
• Exceptions:
  • Contractor registration is not required for new construction, alteration, installation, demolition, or repair contracts valued at $25,000 or less, or for maintenance contracts valued at $15,000 or less.
  • All other prevailing wage requirements will be monitored and enforced pursuant to Labor Code Section 1771.1 (n).
  • Contractors on Caltrans projects must register with the DIR but are exempt from submitting certified payroll reports to the DIR’s eCPR (electronic certified payroll report) system and instead must submit them to the Caltrans labor compliance program (LCP).

Project Registration by Awarding Body

Awarding bodies must notify the DIR when awarding a contract for a public works project in accordance with Labor Code Section 1773.3. Registration timeline and information are as follows:

• The awarding body is required to register the project within 30 days of the award, but no later than the first day in which a contractor has workers employed upon the worksite, using the DIR online PWC-100 form.
• The latest date on which the project can be registered is the last day in which a contractor has workers employed on the project.
• The PWC-100 form requires entry of the following information:
  • Subcontractor listed on the successful bid
    • During a project, the awarding body must list added second-tier subcontractors and below to the PWC-100
  • Bid and contract award dates
  • Contract amount
  • Estimated start and completion dates
  • Job site location
  • Any additional information the department specifies that aids in the administration and enforcement of Labor Code Section 1773.3.

1-5 Contractor and Subcontractor Labor Compliance Responsibilities

Contractors and subcontractors that are awarded public works contracts must comply with four general obligations enforced by the Public Works Unit of the Labor Commissioner’s Office listed in Table 1-B, “Contractor and Subcontractor Labor Compliance Responsibilities.” 

TABLE 1‑B: CONTRACTOR AND SUBCONTRACTOR LABOR COMPLIANCE RESPONSIBILITIES

1-6 Awarding Body and Labor Compliance Program Responsibilities

Caltrans has responsibilities as both an awarding body and as an approved labor compliance program (LCP), as outlined in Table 1-C, “Awarding Bodies’ Labor Compliance Responsibilities.”

1-6-1 Awarding Bodies

Awarding bodies’ labor compliance responsibilities are general and apply to all entities that award contracts for public works projects. 

TABLE 1‑C: AWARDING BODIES’ LABOR COMPLIANCE RESPONSIBILITIES

1-6-2 Labor Compliance Program Responsibilities

Labor compliance program (LCP) responsibilities are more specific and are in addition to the general duties of public works awarding bodies. Caltrans LCP responsibilities include but are not limited to those listed in Table 1-D, “LCP Responsibilities.”

TABLE 1‑D: LCP RESPONSIBILITIES

1-7 Contract Provisions

Appropriate language for labor compliance is incorporated into the contract language.

If applicable, refer to Section 7-1.02K, “Labor Code,” of the Standard Specifications.

For STD-213 contracts awarded through the Division of Procurement and Contracts, refer to Exhibit B for state requirements, and for federal requirements refer to Exhibit F (if applicable).

For emergency contracts, refer to the Emergency Force Account Emergency Limited Bid or Confirmation of Verbal Agreement terms and conditions.