Public works reforms (SB 854) were signed into law on June 20, 2014 and made several significant changes to the administration and enforcement of prevailing wage requirements by the Department of Industrial Relations (DIR).

Among other things, SB 854 established a public works contractor registration program to replace prior Compliance Monitoring Unit (CMU) and Labor Compliance Program (LCP) requirements for bond-funded and other specified public works projects. The fees collected through the program established by SB 854 are used to fund DIR’s public works activities.

Essentials of the Contractor Registration Program

Contractors are subject to a registration and annual renewal fee set at $400. This fee is non-refundable and applies to all contractors and subcontractors who intend to bid or perform work on public works projects (as defined under the Labor Code).

Contractors apply and pay the fee online and must meet minimum qualifications to be registered as eligible to bid and work on public works projects: 

  • Must have workers’ compensation coverage for any employees and only use subcontractors who are registered public works contractors.
  • Must have Contractors State License Board license if applicable to trade.
  • Must not have any delinquent unpaid wage or penalty assessments owed to any employee or enforcement agency.
  • Must not be under federal or state debarment.
  • Must not be in prior violation of this registration requirement once it becomes effective. However, for the first violation in a 12-month period, a contractor may still qualify for registration by paying an additional penalty.

The registration fee is not related to any project. It is more like a license that enables the registrant to bid on and perform public works.

DIR provides a searchable database of registered contractors and subcontractors on its website, so that awarding bodies and contractors can comply with the requirement to only use registered contractors and subcontractors.

Various protections are built in so that a contractor won’t be in violation for working on a private job that is later determined to be public work. Or, the inadvertent listing of an unregistered subcontractor on a bid doesn’t necessarily invalidate that bid. 

A contract with an unregistered contractor or subcontractor is subject to cancellation but is not void as to past work. An unregistered contractor or subcontractor can be replaced with one who is registered. A contractor whose registration lapses will have a 90-day grace period within which to pay a late fee and renew. The requirement to list only registered contractors and subcontractors on bids became effective on March 1, 2015. Visit www.dir.ca.gov/Public-Works/PublicWorksSB854.html for more information. 

By Dave Sorem, P.E. ECA Government Affairs Chairman Email: [email protected]