Precautionary Legal Notice to Awarding Bodies from the Labor Commissioner
SB 854 includes new or revised statutory obligations for “awarding bodies” (as defined in Labor Code Section 1722). These new and revised obligations are found in the following sections of the Labor Code:
1771.1(b) – Duty to include notice of contractor and subcontractor registration requirement in all bid and contract documents, and duty not to accept bid or enter into a contract without proof of the contractor’s current registration pursuant to Section 1725.5.
1771.4(a)(1) – Duty to specify in bid and contract documents that the project is subject to compliance monitoring and enforcement by the Department of Industrial Relations.
1771.4(a)(2) – Duty to post or require the prime contractor to post job site notices, as prescribed by regulation.
1773.3 – Duty to provide notice to the Department of Industrial Relations of any public works contract within five days of the award [using the online PWC-100 form].
This informational notice is being provided to ensure that awarding bodies are aware of the potential legal consequences arising from a failure to satisfy their own unique statutory obligations found in Article 2 of the Public Works Chapter. Article 2 is comprised of Labor Code Sections 1770 through 1782, and includes the new and revised obligations listed above.
The Labor Commissioner wants to remind all awarding bodies that Article 2 also includes Labor Code Section 1777, which was enacted in 1937 and remains the law today. Section 1777 establishes a criminal penalty (misdemeanor) against “any officer, agent, or representative of the state or of any political subdivision who wilfully violates any provision” of Article 2.
The availability of a criminal penalty applies to a broad group of entities and individuals because:
- The definition of “awarding body” found at Labor Code Section 1722 includes the “department, board, authority, officer, or agent awarding a contract for public work,” and
- The term “political subdivision” as defined in Labor Code Section 1721 “includes any county, city, district, public housing authority, or public agency of the state, and any assessment or improvement districts.”
DIR’s Awarding Body Responsibilities
- Register public works projects with DIR. Project registration must be completed within five days of awarding the contract.
- Obtain prevailing wage rates from DIR.
- Notify potential contractors that they must register with DIR and that the project is subject to enforcement by DIR.
- Require proof of public works contractor registration before accepting a bid or awarding a contract. To find actively registered contractors, use: Public Works Contractor Registration Search.
- Post or require contractors to post jobsite notices on public works requirements.
- Ensure that public works contractors pay prevailing wages (https://www.dir.ca.gov/t8/ch8sb3.html) and are in compliance with public works laws (https://www.dir.ca.gov/public-works/CaliforniaPrevailingWageLaws.pdf).
- Report any suspected public works violations to the Labor Commissioner.
