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(b) Words of Certification. The form of certification shall be as follows: I, ________________ (Name-print) the undersigned, am ________________ (position in business) with the authority to act for and on behalf of ________________, (name of business and/or contractor) certify under penalty of perjury that the records or copies thereof submitted and consisting of ________________ (description, no. of pages) are the originals or true, full and correct copies of the originals which depict the payroll record(s) of the actual disbursements by way of cash, check, or whatever form to the individual or individuals named. Date:_________________ _____Signature:_______________ _____________ A public entity may require a more strict and/or more extensive form of certification.
Note: Authority cited: Sections 54 and 1773.5, Labor Code. Reference: Section 1776, Labor Code.
s 16402. Cost.
The cost of preparation to each contractor, subcontractor, or public entity when the request was made shall be provided in advance by the person seeking the payroll record. Such cost shall be $1 for the first page of the payroll record and 25 cents for each page thereafter, plus $10 to the contractor or subcontractor for handling costs. Payment in the form of cash, check or certified money order shall be made prior to release of the documents to cover the actual costs of preparation.
Note: Authority cited: Section 1776, Labor Code. Reference: Section 1776(h), Labor Code.
s 16403. Privacy Considerations.
(a) Records received from the employing contractor shall be kept on file in the office or entity that processed the request for at least 6 months following completion and acceptance of the project. Thereafter, they may be destroyed unless administrative, judicial or other pending litigation, including arbitration, mediation or other methods of dispute resolution, are in process. Copies on file shall not be obliterated in the manner prescribed in subdivision (b) below;
(b) copies provided to the public upon written request shall be marked, obliterated or provided in such a manner that the name, address and Social Security number, and other private information pertaining to each employee cannot be identified. All other information including identification of the contractor shall not be obliterated;
(c) the public entity may affirm or deny that a person(s) was or is employed on a public works contract (by a specific contractor) when asked, so long as the entity requires such information of an identifying nature which will reasonably preclude release of private or confidential information.
Note: Authority cited: Sections 54, 1773.5 and 1776, Labor Code. Reference: Section 1776, Labor Code.
s 16410. Definitions.
As used in these regulations, the terms "awarding body," "contractor," and "subcontractor" shall have the same meaning as in Part 7 of Division 2 of the Labor Code. The term "affected subcontractor" shall mean a subcontractor whose alleged failure to pay the prevailing wage or to otherwise comply with the provisions of Labor Code ss 1720-1815 resulted in the withholding of funds pursuant to Labor Code s 1727.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1727, 1730, 1731, 1732, 1733, 1775, 1776(g) and 1813, Labor Code.
s 16411. Notice to Contractor and Affected Subcontractor.
(a) Upon the decision to withhold, retain or forfeit any sum from a payment due to a contractor as permitted by Labor Code s 1727, the Division of Labor Standards Enforcement shall give written notice to the awarding body, the contractor, and to any affected subcontractor, of the withholding, retention, or forfeiture.
(b) Said notice shall include the following information:
(1) The amount to be withheld, retained or forfeited.
(2) A short statement of the factual basis upon which said amount is to be withheld, retained, or forfeited, including, but not limited to, the computation of any wages found to be due, and the computation of any penalties assessed under Labor Code s 1775.
(3) Notice of the right to request a hearing under these regulations, and of the manner in which, and the time within which a hearing must be requested.
(c) Said notice shall be sent by certified mail to the last known address of the contractor, and to the last known address of any affected subcontractor. The records of the State Contractors' License Board may be used to determine the address of a contractor or affected subcontractor.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1727, 1730, 1731, 1732, 1733, 1775, 1776(g) and 1813, Labor Code.
s 16412. Withholding, Retention, or Forfeiture.
(a) When notice has been sent as provided in section 16411, above, the awarding body shall proceed to withhold, retain, or forfeit the amount stated in the notice, pursuant to Labor Code s 1727. Such withholding, retention, or forfeiture shall be subject to the right of a contractor or affected subcontractor to request a hearing, as provided in section 16413, below, and further subject to the right of a contractor or a contractor's assignee to bring suit against the awarding body as provided by Labor Code ss 1731-1733.
(b) Nothing in these regulations shall extend, or affect in any way, the statutory time limits provided by Labor Code ss 1731-1733.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1727, 1730, 1731, 1732, 1733, 1775, 1776(g) and 1813, Labor Code.
s 16413. Request for Hearing.
(a) A contractor or subcontractor desiring a hearing regarding the withholding, retention, or forfeiture of an amount may request such a hearing by letter postmarked within 30 days of the date of the mailing of the notice provided by section 16411, above, mailed to the awarding body, and to:
DIVISION OF LABOR STANDARDS ENFORCEMENT
LEGAL SECTION
455 GOLDEN GATE AVENUE, 9TH FLOOR
SAN FRANCISCO, CALIFORNIA 94102
(b) A request for hearing shall contain a statement of all factual and legal grounds upon which the withholding is contested, identifying the specific element or elements, issue or issues, being contested, including, but not limited to:
(1) the classification of workers included in the computation of wages found to be due;
(2) the hours worked by such workers;
(3) the prevailing wage requirements applicable to such classifications;
(4) the amounts paid to such workers;
(5) the assessment and computation of statutory penalties;
(6) any erroneous mathematical calculations.
Assertions of fact included in the statement shall be supported by documentary evidence, e.g., time cards, canceled checks, cash receipts, trust fund forms, books, documents, schedules, forms, reports, receipts or other evidence which reflect job assignments, work schedules by days and hours, and evidence of the disbursement by way of cash, check, or in whatever form or manner, of funds to a person or persons by job classification and/or skill, and, if appropriate, declarations under penalty of perjury.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1727, 1730, 1731, 1732, 1733, 1775, 1776(g) and 1813, Labor Code.
s 16414. Hearing.
(a) Upon receipt of a timely request for a hearing, the Labor Commissioner, or his or her deputy or agent shall, within 30 days, hold a hearing to determine whether reasonable cause exists to withhold and retain the funds identified in the notice provided under section 16411, above.
(b) The hearing date may be continued at the request of the party seeking the hearing upon a showing of good cause.
(c) The burden of proof at such hearing shall be as provided in Labor Code s 1733.
(d) Within 15 days after the conclusion of the Hearing the Hearing Officer shall issue a decision which affirms, modifies or dismisses the Notice to Withhold. This decision shall consist of a notice of findings, findings, and an order which shall be served on the awarding body and on all parties to the hearing by first class mail at the last known address of the parties on file with the Labor Commissioner. The awarding body shall promptly abide by any decision of the Labor Commissioner with respect to the notice to withhold.
(e) The hearing pursuant to this section shall only determine whether reasonable cause exists for the withholding, retention, or forfeiture of funds pursuant to Labor Code s 1727. A hearing pursuant to this section shall not be deemed to be dispositive as to the contractor's (or affected subcontractor's) compliance with prevailing wage laws. Any decision rendered shall have no res judicata or collateral estoppel effect, and will not preclude the Labor Commissioner from pursuing any action provided by Labor Code s 1775 or any other statutory or common law remedy against any party. Neither the failure of a party to request a hearing nor the Labor Commissioner's decision after a hearing shall preclude the contractor or affected subcontractor from pursuing any other remedy provided by existing law.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1727, 1730, 1731, 1732, 1733, 1775, 1776(g) and 1813, Labor Code.
s 16421. Composition and Components of Labor Compliance Program.
(a) In accordance with Labor Code Section 1771.5(b), a Labor Compliance Program shall include, but not be limited to, the following requirements:
(1) The Call for Bids, Design-Build Request, and the contract or purchase order shall contain appropriate language concerning the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code.
(2) A prejob conference shall be conducted before commencement of the work with contractors and subcontractors listed in the bid or who are required to be identified or prequalified in a Design-Build Contract. At the prejob conference applicable federal and state labor law requirements shall be discussed, and copies of suggested reporting forms furnished. A checklist, showing which federal and state labor law requirements were discussed, shall be kept for each conference. A checklist in the format of Appendix A presumptively meets this requirement.
(3) A requirement that certified payroll records be kept by the contractor in accordance with Labor Code Section 1776 and furnished to the Awarding Body at times designated in the contract or within 10 days of request by the Awarding Body. Use of the current version of DIR's "Public Works Payroll Reporting Form" (A-1-131) and Statement of Employer Payments (PW26) constitute full compliance with this requirement by the Awarding Body. These suggested forms are available from the Department of Industrial Relations.
(4) A program for orderly review of payroll records and, if necessary, for audits to verify compliance with the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code.
(5) A prescribed routine for withholding penalties, forfeitures, and underpayment of wages for violations of the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code.
(6) All contracts to which prevailing wage requirements apply shall include a provision that contract payments shall not be made when payroll records are delinquent or inadequate.
(b) To the extent otherwise authorized by law, an Awarding Body or a Joint Powers Authority consisting of two or more Awarding Bodies may contract with a third party to initiate and enforce all or part of its Labor Compliance Program,provided thatthe third party has been approved by the Director to operate a Labor Compliance Program in accordance with these regulations. However, this subpart shall not be construed as limiting an Awarding Body's or Joint Powers Authority's authority to contract for services for the operation of its own approved Labor Compliance Program, including services by persons licensed or certified by the State of California to practice one of the following recognized professions: law, architecture, engineering, or accounting.
(c) A private entity that is approved by the Director to operate a Labor Compliance Program and that operates a Labor Compliance Program pursuant to a contract with an Awarding Body or a Joint Powers Authority shall have the same rights and responsibilities as the Awarding Body or Joint Powers Authority in administering the Labor Compliance Program, including but not limited to (1) complying with the conflict of interest provisions of the Political Reform Act (commencing with Section 87100 of the Government Code) including disclosure requirements for Labor Compliance Program employees and consultants who participate in making government decisions, as defined under Title 2 California Code of Regulations Section 18701, and (2) maintaining, disclosing, or keeping confidential personnel information, payroll records, and other information and records in accordance with Labor Code Section 1776, the California Public Records Act, (Chapter 3.5 (commencing with Section 6250), Division 7, Title 1, Government Code) and the Information Practices Act of 1977, (Title 1.8 (commencing with Section 1798), Part 4, Division 3, Civil Code).
(d) Nothing in this section or these regulations shall be construed as limiting the responsibility and authority of an Awarding Body to take cognizance of prevailing wage violations under Section 1726 of the Labor Code and take any appropriate action pursuant to and in accordance with that responsibility and authority.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1798-1798.78, Civil Code; Sections 6250-6276.48, 6500-6533 and 87100-87500, Government Code; Sections 1726, 1771.5(b), 1771.7, 1771.8, 1771.9 and 1776, Labor Code.
Appendix A
Suggested Checklist of Labor Law Requirements to Review at Prejob Conference,
Section 16421,with suggested Certification by subcontractor.
The federal and state labor law requirements applicable to the contract are composed of but not limited to the following items:
(1) The contractor's duty to pay prevailing wages under Labor Code Section 1770 et seq., should the project exceed the exemption amounts;
(2) The contractor's duty to employ registered apprentices on the public works project under Labor Code Section 1777.5;
(3) The penalties for failure to pay prevailing wages (for non-exempt projects) and employ apprentices including forfeitures and debarment under Labor Code Sections 1775 and 1777.7;
(4) The requirement to keep and submit copies upon request of certified payroll records under Labor Code Section 1776, and penalties for failure to do so under Labor Code Section 1776(g);
(5) The prohibition against employment discrimination under Labor Code Section 1777.6; the Government Code, and Title VII of the Civil Rights Act of 1964;
(6) The prohibition against accepting or extracting kickback from employee wages under Labor Code Section 1778;
(7) The prohibition against accepting fees for registering any person for public work under Labor Code 1779; or for filling work orders on public works under Labor Code Section 1780;
(8) The requirement to list all subcontractors under Public Contracts Code Section 4104;
(9) The requirement to be properly licensed and to require all subcontractors to be properly licensed and the penalty for employing workers while unlicensed under Labor Code Section 1021 and under the California Contractors License Law, found at Business and Professions Code Section 7000 et seq;
(10) The prohibition against unfair competition under Business and Professions Code Section 17200-17208;
(11) The requirement that the contractor be properly insured for Workers Compensation under Labor Code Section 1861;
(12) The requirement that the contractor abide by the Occupational, Safety and Health laws and regulations that apply to the particular construction project;
(13) The federal prohibition against hiring undocumented workers, and the requirement to secure proof of eligibility/citizenship from all workers.
Certification:
I acknowledge that I have been informed and am aware of the foregoing requirements and that I am authorized to make this certification on behalf of [name of subcontractor]. __________ __________ __________ Date Name of person signing and company
s 16422. Applicable Dates for Enforcement of Awarding Body Labor Compliance Programs.
(a) No contracts shall be subject to Labor Compliance Program jurisdiction nor shall the limited exemption from payment of prevailing wages pursuant to Labor Code Section 1771.5(a) apply to any contract of an Awarding Body unless and until the Labor Compliance Program has been approved by the Director pursuant to this subchapter.
(b) Contracts for which the Date of Notice or the Call for Bids is subsequent to the date of initial or final approval of a Labor Compliance Program are subject to Labor Code Section 1771.5. In the case of a contract for which there is no Call for Bids, the applicable date shall be the date of the award of the contract.
(c) Revocation of approval of a Labor Compliance Program by the Director shall not affect the limited exemption from payment of prevailing wages provided by Labor Code Section 1771.5(a) if the date of such revocation is subsequent to the Date of Notice or Call for Bids or, in the case of a contract for which there is no Call for Bids, subsequent to the date of the award of the contract.
(d) If the Director revokes approval of a Labor Compliance Program, the Director shall give notice to the Awarding Body specifying enforcement responsibilities, including with respect to cases pending hearing, as of the date of revocation.
(e) An Awarding Body may voluntarily terminate its Labor Compliance Program. With respect to each contract pending on the date of termination, the Awarding Body shall:
(1) Notify the Director of its intention and the effective date of the termination;
(2) Notify the contractor(s) and the Labor Commissioner of the identity of the agent who will carry out the compliance enforcement obligations of Labor Code Section 1771.5 on the remaining contracts; and
(3) Specify the fund into which penalties or forfeitures withheld from any contract payments shall be deposited.
(f) The Labor Commissioner may, in writing, agree to assume enforcement obligations on pending contracts of an Awarding Body which has voluntarily terminated its Labor Compliance Program. In such case, penalties and forfeitures shall be deposited in the general fund of the state.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1771.5 and 1771.6, Labor Code.
s 16423. Approved Labor Compliance Program Required for Certain Bond-Funded Projects.
(a) No Awarding Body may use funds derived from one of the following sources for a public works project unless it initiates and enforces with respect to that project a Labor Compliance Program that complies with the requirements of Labor Code Section 1771.5(b) and has been approved by the Director pursuant to this subchapter.
(1) Kindergarten-University Public Education Facilities Bond Act of 2002 (Part 68.1 (commencing with Section 100600) of the Education Code) for public works that commence on or after April 1, 2003.
(2) Kindergarten-University Public Education Facilities Bond Act of 2004 (Part 68.2 (commencing with Section 100800) of the Education Code).
(3) Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002 (Division 26.5 (commencing with Section 79500) of the Water Code).
(4) Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century (Proposed Chapter 20 (commencing with Section 2704) of Division 3 of the Streets and Highways Code) [subject to voter approval]).
(b) The governing board of any Awarding Body that is required to initiate and enforce a Labor Compliance Program under subpart (a) above shall make a written finding that the Awarding Body has
(1) established its own Labor Compliance Program in accordance with the requirements of Labor Code Section 1771.5(b) and this subchapter; or
(2) has contracted with a third party that has been approved by the Director to operate a Labor Compliance Program in accordance with the requirements of Labor Code Section 1771.5(b) and this subchapter.
Copies of the finding required by this subpart together with (A) notice of whether or not the Awarding Body intends to initiate and enforce its Labor Compliance Program for all public works projects in which the Awarding Body participates, and (B) notice of any contract or agreement with a third party to operate a Labor Compliance Program shall be provided promptly to the Labor Commissioner and shall also be provided to the Director in connection with any application for approval of the Labor Compliance Program under sections 16425 through 16427 below.
(c) The limited exemption from payment of prevailing wages provided by Labor Code Section 1771.5(a) shallnotapply to a project funded by one of the sources referred to in subpart (a) unless the Awarding Body initiates and enforces a Labor Compliance Program for all public works projects in which the Awarding Body participates.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 100600-100760 and 100800-100960, Education Code; Sections 1771.5, 1771.7, 1771.8 and 1771.9, Labor Code; Sections 2704-2704.21, Streets and Highways Code [subject to voter approval]; and Sections 79500-79590, Water Code.
s 16424. Application for Approval.
An application for Initial Approval of Awarding Body's Labor Compliance Program or for Approval of a Third Party Labor Compliance Program shall include the information specified either in Section 16425(a) or in Section 16426(a) respectively, and shall be sent to the following address:
Office of the Director Department of Industrial Relations 455 Golden Gate Avenue, 10th Floor San Francisco, CA 94102 Attention: Executive Assistant to the Director
Suggested application forms are available on the Department of Industrial Relations' web site.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1771.5 and 1771.9, Labor Code.
s 16425. Initial Approval of Awarding Body's Labor Compliance Program.
(a) An Awarding Body seeking approval of a Labor Compliance Program shall submit evidence of its ability to operate its Labor Compliance Program. Prior to granting approval, the Director shall consider the following factors for purposes of evaluating the Awarding Body's capacity and ability to operate an effective Labor Compliance Program consistent with applicable legal requirements:
(1) Experience and training of the Awarding Body's personnel on public works labor compliance issues, including private sector experience on behalf of unions or contractors or on a joint labor-management committee established pursuant to the federal Labor Management Cooperation Act of 1978 (section 175a of Title 29 of the United States Code) and participation in any public works enforcement training provided by the Division of Labor Standards Enforcement;
(2) The average number of public works contracts the Awarding Body annually administers;
(3) Whether the Labor Compliance Program is a joint or cooperative venture among Awarding Bodies, and how the resources and expanded responsibilities of the Labor Compliance Program compare to the Awarding Bodies involved;
(4) The Awarding Body's record of taking cognizance of Labor Code violations and of withholding in the preceding five years;
(5) The availability of competent legal support for the Labor Compliance Program;
(6) The availability and quality of a manual outlining the responsibilities and procedures of the Labor Compliance Program to the Awarding Body; and
(7) The method by which the Awarding Body will transmit notice to the Labor Commissioner of violations which may lead to debarment under Labor Code Section 1777.1.
(b) The Director shall notify the Awarding Body within 30 days of receipt of the request for approval that initial approval is granted and the effective date of initial approval, or that the request is incomplete and of the materials necessary to complete the request or that the request is disapproved for other reasons.
(c) Initial approval of a Labor Compliance Program shall automatically expire one year after approval unless an extension is granted in writing by the Director. Where necessary to coordinate with the local government's fiscal year or existing public works procedures, initial approval may be for a period up to 18 months.
(d) The Director will maintain a list of all initially approved Labor Compliance Programs for distribution to interested parties upon request.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1771.5, 1771.6, 1771.7, 1771.8 and 1777.1, Labor Code; and Section 175a, Title 29, United States Code.
s 16426. Initial Approval of Third Party Labor Compliance Program.
(a) Any entity seeking approval to operate a Labor Compliance Program pursuant to a contract with one or more Awarding Bodies or Joint Powers Authorities shall submit evidence of its ability to operate a Labor Compliance Program. Prior to granting approval, the Director shall consider the following factors for purposes of evaluating the entity's capacity and ability to operate an effective Labor Compliance Program consistent with applicable legal requirements:
(1) Experience and training of the entity's personnel on public works labor compliance issues, including private sector experience on behalf of unions or contractors or on a joint labor-management committee established pursuant to the federal Labor Management Cooperation Act of 1978 (section 175a of Title 29 of the United States Code) and participation in any public works enforcement training provided by the Division of Labor Standards Enforcement;
(2) The geographical area in which the entity intends to operate its Labor Compliance Program and the identity of the Awarding Bodies and Joint Powers Authorities, if any, with whom the entity intends to contract for operation of a Labor Compliance Program;
(3) Whether the entity shares personnel, management, ownership or other close affiliation with (A) any contractor or subcontractor that within the preceding five years has been awarded a public works contract within the geographical area with any Awarding Body or Joint Powers Authority identified in subpart (2), (B) any person or entity who has been the surety on such a contract, (C) any joint labor-management committee established pursuant to the Federal Labor Management Cooperation Act of 1978 (section 175a of Title 29 of the United States Code), or (D) any person or entity who has represented workers employed in the same or similar classifications as those employed for such a contract and who has been engaged in (i) an organizational campaign under the National Labor Relations Act with contractors competing for such contracts or (ii) a jurisdictional dispute with another collective bargaining representative of workers utilized for such contracts;
(4) The record of any contractor, subcontractor, surety, or worker representative referred to in subpart (3) with respect to compliance and enforcement or aiding in the compliance and enforcement of prevailing wage requirements under the Labor Code in the preceding five years;
(5) The availability of competent legal support for the Labor Compliance Program and whether the persons or firms providing that support also represent any contractor, subcontractor, surety, or worker representative referred to in subpart (3);
(6) The availability and quality of a manual outlining the responsibilities and procedures of the Labor Compliance Program to any Awarding Body or Joint Powers Authority with which it contracts;
(7) The method by which the Labor Compliance Program will transmit notice to the Labor Commissioner of violations which may lead to debarment under Labor Code Section 1777.1; and
(8) Awareness of the rights and responsibilities imposed on the Labor Compliance Program as an agent of a governmental agency under Section 16421(c) above and the existence of procedures designed to inform personnel of the Labor Compliance Program of these rights and responsibilities and to insure the compliance of employees and consultants who participate in making government decisions with conflict of interest reporting requirements, such as through participation in internet-based or live training programs provided by the Fair Political Practices Commission.
(b) The Director shall notify the applicant within 30 days of receipt of the request for approval that initial approval is granted and the effective date of initial approval, or that the request is incomplete and of the materials necessary to complete the request or that the request is disapproved for other reasons.
(c) Initial approval of a third party Labor Compliance Program shall automatically expire one year after approval unless an extension is granted in writing by the Director.
(d) The Director will maintain a list of all initially approved third party Labor Compliance Programs for distribution to interested parties upon request.
(e) When the Director has approved a third party entity to operate a Labor Compliance Program pursuant to Article 2 of this subchapter, that approval shall extend to any Awarding Body or Joint Powers Authority that has contracted with the approved entity for operation of its Labor Compliance Program, subject to the following:
(1) No such approval shall apply unless the Awarding Body or Joint Powers Authority has first provided written notice to the Director of its contractual relationship with the approved entity together with such further information as the Director may reasonably require to document that relationship, as well as notice of whether or not the Awarding Body intends to initiate and enforce its Labor Compliance Program for all public works projects in which the Awarding Body participates;
(2) The parties shall provide immediate written notice to the Director and the Labor Commissioner upon the termination or proposed termination of such contractual relationship; and
(3) For good cause, the Director may disallow or withdraw approval for the operation of a Labor Compliance Program as to any particular Awarding Body or Joint Powers Authority, whether or not the third party entity remains approved to operate a Labor Compliance Program on behalf of one or more other Awarding Bodies or Joint Powers Authorities.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1771.5, 1771.6, 1771.7, 1771.8, 1771.9 and 1777.1, Labor Code; and Section 175a, Title 29, United States Code.
s 16427. Final Approval.
(a) An Awarding Body or third party entity which has operated a Labor Compliance Program with active enforcement responsibilities for at least eleven continuous months after initial approval may apply to the Director for final approval. The applicant bears the burden of producing evidence that it meets the criteria in subpart (b).
(b) The Director will grant final approval if the applicant has satisfactorily demonstrated its ability to monitor compliance with the requirements of the Labor Code and these regulations, and has filed timely, complete, and accurate reports as required by these regulations.
(c) The Director shall notify the applicant within 30 days of the receipt of a request for final approval that final approval is granted and the effective date of final approval, or that the request for final approval is denied, the reason for the denial and the status of the Labor Compliance Program.
(d) A Labor Compliance Program which has received final approval may enter into an agreement with the Labor Commissioner providing for different procedures for securing approval of forfeitures than those set forth in Section 16437 below.
(e) The Director will maintain a list of all finally approved Labor Compliance Programs, for distribution to interested parties upon request. The Director may agree to alternative reporting formats under Section 16431 of these regulations and shall maintain a list of interested parties who wish notification of alternative reporting formats before adoption.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1771.5 and 1771.6, Labor Code.
s 16428. Revocation of Approval.
(a) The Director may revoke approval of a Labor Compliance Program after giving due notice, conducting a hearing, and finding cause for revocation. Cause for revocation of approval includes, but is not limited to:
(1) Failure of the Labor Compliance Program to monitor compliance with the requirements of the Labor Code and these regulations or to take appropriate enforcement action for violations of which it becomes or should have become cognizant;
(2) Failure of the Labor Compliance Program to file timely, complete, and accurate reports to the Director as required by Section 16431 or elsewhere in these regulations;
(3) A pattern of failures in hearings conducted pursuant to Labor Code Section 1742(b) either (A) to establish violations under Labor Code Sections 1775(a) and 1776(g) for which contract payments have been withheld or (B) to comply with the requirements imposed on enforcing agencies or their representatives in the prevailing wage hearing regulations at Sections 17201-17270 of Title 8 of the California Code of Regulations;
(4) Failure to comply with applicable laws and reporting requirements pertaining to conflicts of interest and the handling of personnel and payroll records and information.
(b) Interested parties may request the Director to revoke approval of a Labor Compliance Program. A request for revocation shall include evidence of failure of the Labor Compliance Program to monitor compliance with the requirements of the Labor Code and these regulations or to take enforcement action after becoming cognizant of a violation of the Labor Code or these regulations. A request for revocation shall also include any other relevant evidence.
(1) Approval of a Labor Compliance Program may be revoked by the Director based on a request by an interested party after a proceeding conducted as provided in subdivision (a). A copy of the request for revocation shall be provided to the Awarding Body as part of the notice required under subdivision (a).
(2) As part of a proceeding for revocation of approval based on a request by an interested party, the Director may require the Labor Compliance Program to furnish a supplemental report for the period between the ending date of the last annual report filed by the Labor Compliance Program pursuant to Section 16431 and the date of notice by the Director, and containing the information listed in subdivision (a) of said Section 16431.
(3) Revocation of approval of a Labor Compliance Program based on a request by an interested party is solely within the discretion of the Director. The duty to operate a Labor Compliance Program in accordance with the requirements of this subchapter runs solely to the Director and not to any worker, contractor, or interested party. The sole remedy for failure to comply with this duty is revocation of approval by the Director.
(c) Upon determining that the request for revocation will be denied without hearing, the Director shall give notice of the decision and of the reasons therefore by mail to the Labor Compliance Program, any Awarding Body or Joint Powers Authority that has contracted with the Labor Compliance Program pursuant to Section 16421(b) above, and any interested party that requested revocation.
(d) Upon determining that a hearing is necessary, the parties will be notified and a hearing on cause for revocation of Labor Compliance Program approval will be held in accordance with the procedures for notice and hearing proceedings set forth in 8 CCR Section 16304.
(e) Nothing in this Section shall be construed as requiring the Director either to extend any term of initial approval granted pursuant to Sections 16425 or 16426 above or to grant Final Approval except in accordance with Section 16427(b) above.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1742(b), 1771.5, 1775(a) and 1776(g), Labor Code.
s 16429. Notice of Labor Compliance Program Approval.
(a) Notice of initial or final approval of an Awarding Body's Labor Compliance Program shall be given in the Call for Bids and in the contract or purchase order and shall also be posted at the job site. If more than one job site exists or where such posting would endanger public safety, the notice may be posted in the manner prescribed by 8 CCR Section 16100(b).
(b) Notice of an approved Labor Compliance Program shall contain, at the minimum, the effective date of the Director's initial or final approval, a statement whether the limited exemption from prevailing wages pursuant to Labor Code Section 1771.5(a) applies to contracts under the jurisdiction of the Labor Compliance Program, a telephone number to call for inquiries, questions, or assistance with regard to the Labor Compliance Program, and the name of the agent or office administering the Labor Compliance Program.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Section 1771.5, Labor Code.
s 16430. Components of LCP.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Section 1771.5(b), Labor Code.
s 16431. Annual Report.
The Labor Compliance Program shall submit to the Director an annual report on its operation within 60 days after the close of its annual reporting period, as defined in subpart (c) below. The annual report shall contain, at the minimum, the following information:
(1) Number of contracts monitored or enforced, and their total value;
(2) If applicable, the number, description, and total value of contracts awarded which were exempt from the requirement of payment of prevailing wages pursuant to Labor Code Section 1771.5(a);
(3) A summary of penalties and forfeitures imposed and withheld, or recovered in proceedings under Labor Code Section 1742 or in a court of competent jurisdiction;
(4) A summary of wages due to employees resulting from failure by contractors or subcontractors to pay prevailing wage rates, the amount withheld from money due the contractors, and the amount recovered by action in any court of competent jurisdiction.
(5) For a private entity operating a third party Labor Compliance Program, (A) a certification of compliance with conflict of interest disclosure requirements by employees and consultants who participate in making governmental decisions, as defined under 2 C.C.R. Section 18701, and (B) a current statement disclosing the information required under 8 C.C.R. Section 16426(a)(2), (3) and (5) above.
(b) A Labor Compliance Program whose contract responsibilities are statewide, or which involves widely dispersed and numerous contracts, or which is required to report contract enforcement to federal authorities in a federal format, may adopt a summary reporting format to aggregate small contracts and estimate numbers and dollar values required by (a)(1) and (2). A summary reporting format may be adopted by agreement with the Director after advance notice to interested parties, and a list of parties requesting such notice shall be kept by the Director.
(c) For purposes of this section, the annual reporting period shall be deemed to commence on the first of the month in which a Labor Compliance Program is first granted initial approval pursuant to Section 16425 or 16426 above and shall conclude on the last day of the month immediately proceeding that date in the following year. A Labor Compliance Program shall use the same reporting period in succeeding years;provided thatfor good cause the Director may authorize a change in the reporting period.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1771.5, 1771.6 and 1777.1, Labor Code.
s 16432. Audits.
(a) Audits may be conducted when deemed necessary by the Labor Compliance Program or upon request of the Labor Commissioner.
(b) An audit consists of a comparison of payroll records to the best available information as to the actual hours worked and classifications of workers employed on the contract. An audit is sufficiently detailed when it enables the Labor Compliance Program, and the Labor Commissioner in reviewing proposed penalties, to draw reasonable conclusions as to compliance with the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code, and to enable accurate computation of underpayment of wages to workers and of applicable penalties and forfeitures. Records shall be made available to show that the audits conducted are sufficiently detailed to verify compliance with the requirements of Chapter 1 of Part 7 of Division 2. An audit record in the form set out in Appendix B presumptively demonstrates sufficiency.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 224, 226, 1771.5, 1773.1, 1773.2, 1776, 1777.5, 1778, 1810, 1815, 1860 and 1861, Labor Code.
Appendix B
Audit Record Form (suggested for use with Section 16432 audits)
An audit record is sufficiently detailed to verify "compliance with the requirements of Chapter 1, of Part 7 of Division 2 of the Labor Code," when the audit record displays that the following procedures were accomplished:
(1) Audits of the obligation to secure workers' compensation means demanding written evidence of a binder issued by the carrier, or telephone or written inquiry to the Workers' Compensation Insurance Rating Bureau;
(2) Audits of the obligations to employ and train apprentices means inquiry to the program sponsor for the apprenticeable craft or trade in the area of the public works as to: whether contract award information was received, including an estimate of journeyperson hours to be performed and the number of apprentices to be employed; whether apprentices have been requested, and whether the request has been met; whether the program sponsor knows of any amounts sent by the contractor or subcontractor to it for the training trust, or the California Apprenticeship Council; and whether persons listed on the certified payroll in that craft or trade as being paid less than the journeyperson rate are apprentices registered with that program and working under apprentice agreements approved by the Division of Apprenticeship Standards;
(3) Audits of the obligation to pass through amounts made part of the bid for apprenticeship training contributions, to either the training trust or the California Apprenticeship Council, means asking for copies of checks sent, or when the audit occurs more than 30 days after the month in which payroll has been paid, copies of canceled checks;
(4) Audits of "illegal taking of wages" means inspection of written authorizations for deductions (listed in Labor Code Section 224) in the contractor or subcontractor's files and comparison to wage deduction statements furnished employees (Labor Code Section 226), together with an interview of several employees as to any payments not shown on the wage deduction statements;
(5) Audits of the obligation to keep records of working hours, and pay not less than required by Title 8 CCR Section 16200(a)(3)(F) for hours worked in excess of 8 hours are the steps for review and audit of Certified Weekly Payrolls under Title 8 CCR Section 16432;
(6) Audits of the obligations to pay the prevailing per diem wage, means such steps for review and audit of Certified Weekly Payrolls which will produce a report covering compliance in the areas of:
(A) All elements defined as the "General Prevailing Rate of Per Diem Wages" in Labor Code Sections 1773 and 1773.1, which were determined to be prevailing in the Director's determination which was in effect on the date of the call for bids, available in its principal office, and posted;
(B) All elements defined as "Employer Payments" set forth in Labor Code Section 1773.1, which were determined to be prevailing in the Director's determination which was in effect on the date of the call for bids, and pursuant to Labor Code Section 1773.2 was to be specified in the call for bids, made available in its principal office and posted.
s 16433. Limited Exemption.
(a) As provided in Labor Code Section 1771.5(a), an Awarding Body which operates an approved Labor Compliance Program for all public works projects in which the Awarding Body participates shall not require payment of the general rate of per diem wages or the general rate of per diem wages for holiday and overtime work for any public works project of $25,000 or less when the project is for construction or installation work, or of $15,000 or less when the project is for alteration, demolition, repair, or maintenance work.
(b) A project for construction, installation, alteration, demolition, repair, or maintenance work shall be identified as such in the call for bids, and in the contract or purchase order.
(c) If the amount of a contract subject to subdivision (a) is changed and, as a result, exceeds the applicable limit under which the payment of the general rate of per diem wages is not required, workers employed on the contract after the amount due the contractor has reached the applicable limit shall be paid the general rate of per diem wages for regular, holiday or overtime work, as the case may be.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1720(a)(1) and 1771.5, Labor Code.
s 16434. Duty of Labor Compliance Program.
A Labor Compliance Program shall have a duty to the Director to enforce the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code and these regulations in accordance with the Precedential prevailing wage decisions issued by the Director and in a manner consistent with the practice of the Labor Commissioner.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1771.5 and 1771.6, Labor Code.
s 16435. Withholding Contract Payments When Payroll Records are Delinquent or Inadequate or When, After Investigation, It Is Established that Underpayment Has Occurred.
(a) "Withhold" means to cease payments by the Awarding Body, or others who pay on its behalf, or agents, to the general contractor. Where the violation is by a subcontractor, the general contractor shall be notified of the nature of the violation and reference made to its rights under Labor Code Section 1729.
(b) "Contracts." Except as otherwise provided by agreement, only contracts under a single master contract, including a Design-Build contract, or contracts entered into as stages of a single project, may be the subject of withholding.
(c) "Delinquent payroll records" means those not submitted on the date set in the contract.
(d) "Inadequate payroll records" are any one of the following:
(1) A record lacking the information required by Labor Code Section 1776;
(2) A record which contains the required information but not certified, or certified by someone not an agent of the contractor or subcontractor;
(3) A record remaining uncorrected for one payroll period, after the Labor Compliance Program has given the contractor or subcontractor notice of inaccuracies detected by audit or record review. Provided, however, that prompt correction will stop any duty to withhold if such inaccuracies do not amount to 1 percent of the entire Certified Weekly Payroll in dollar value and do not affect more than half the persons listed as workers employed on that Certified Weekly Payroll, as defined in Labor Code Section 1776 and Title 8 CCR Section 16401.
(e) "Amount equal to the underpayment" is the total of the following determined by payroll review, audit, or admission of contractor or subcontractor:
(1) The difference between amounts paid workers and the correct General Prevailing Rate of Per Diem Wages, as defined in Labor Code Section 1773, and determined to be the prevailing rate due workers in such craft, classification or trade in which they were employed and the amounts paid;
(2) The difference between amounts paid on behalf of workers and the correct amounts of Employer Payments, as defined in Labor Code Section 1773.1 and determined to be part of the prevailing rate costs of contractors due for employment of workers in such craft, classification or trade in which they were employed and the amounts paid;
(3) Estimated amounts of "illegal taking of wages";
(4) Amounts of apprenticeship training contributions paid to neither the program sponsor's training trust nor the California Apprenticeship Council;
(5) Estimated penalties under Labor Code Sections 1775, 1776, and 1813.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1729, 1771.5, 1773, 1773.1, 1775, 1776, 1777.5, 1778, 1813 and 1815, Labor Code.
s 16435.5. Withholding Contract Payments Equal to the Amount of Underpayment and Applicable Penalties When, After Investigation, It Is Established That Underpayment Has Occurred.
Note: Authority cited: Section 1773.5, Labor Code. Reference: Sections 1729, 1775, 1776, 1777.5, 1777.7, 1778, 1813 and 1815, Labor Code.
s 16436. Forfeitures Requiring Approval by the Labor Commissioner.
(a) "Forfeitures" are the amounts of unpaid penalty and wage money assessed by the Labor Compliance Program for violations of the prevailing wage laws.
(b) "Failing to pay the correct rate of prevailing wages" means those public works violations which the Labor Commissioner has exclusive authority to approve before they are recoverable by the Labor Compliance Program, and which are appealable under Labor Code Sections 1771.6 and 1742. Regardless of what are defined as "prevailing wages" in contract terms, non-compliance with the following are failures to pay prevailing wages. (continued)