Watch This Before Doing a DIR Public Works Project

When it comes to California public works, understanding CAC payments and Labor Code penalties is key to staying compliant. Payments made to the California Apprenticeship Council (CAC) or an approved apprenticeship program are generally exempt from annualization, but only up to the training contribution amount listed in the prevailing wage determination. Anything beyond that has to be annualized unless specifically exempted.

Contractors and subcontractors also share liability for paying workers below the prevailing wage—penalties can reach $200 per day per worker. There’s a “safe harbor” option for prime contractors who act in good faith, correct underpayments, and secure affidavits from subcontractors confirming compliance. Still, primes remain jointly responsible for any unpaid wages or damages.

Penalties under Labor Code §1813 are more rigid—$25 per worker per day for overtime violations, with no discretion for reduction. The Labor Commissioner uses Civil Wage and Penalty Assessments (CWPAs) to calculate unpaid wages and penalties, which become final if not challenged within 60 days.

If unpaid wages linger 60 days after a CWPA or Notice to Withhold, contractors can owe liquidated damages equal to the unpaid amount. Failing to resolve violations can lead to debarment—losing eligibility for public projects for one to three years.

The Labor Commissioner oversees enforcement, but other parties, like workers or joint committees, can also bring actions. Finally, Wage Order 16-2001 adds separate rules for public works contractors, with violations handled through different administrative channels.