Client News Briefs

Important Changes in Labor Laws Related to Prevailing Wage Assessments and Actions, Payroll Records and Public Works Determinations

October 2013
Number 73

Recent changes to the Labor Code make wide-ranging adjustments to the procedures by which prevailing wage violations are investigated and enforced. Two bills recently signed by Governor Brown, Assembly Bill (AB) 1336 and Senate Bill (SB) 377, amend portions of the Labor Code associated with assessments and actions related to prevailing wages, the production of payroll records and public works project determinations.

These changes extend and toll the time for the Labor Commissioner to serve civil wage and penalty assessments and for a joint labor-management committee to commence an action for violation of public works provisions, including the failure to pay prevailing wages. The extension of time affords the Labor Commissioner an opportunity, long after a project has closed out, to consider whether any violations of the public works provisions occurred on that project, to the benefit of employees who provided services under the public works contract. The new legislation also establishes mandatory timelines for the Director of Industrial Relations to determine whether or not a project is a "public work," clarifies payroll record disclosure standards, and requires notification to the Labor Commissioner once a project is complete and accepted by the owner.

Timelines to Issue Assessments and Commence Actions for Violation of Public Works Provisions
Currently, the Labor Code requires the Labor Commissioner to issue a civil wage and penalty assessment to a contractor or subcontractor within 180 days of project completion if it is determined that there has been a violation of the public works provisions, and authorizes a joint labor-management committee to bring an action against any employer who fails to pay prevailing wages within the same timeframe. These deadlines have been extended to not later than 18 months after the filing of a valid notice of completion or acceptance of the public work, whichever occurs last. To assist in tracking these new timelines, owners must now file a notice of completion with the Labor Commissioner within five days of acceptance of the Project.

The extension of these timelines creates a potential issue for owners in evaluating these issues as part of the new prequalification process required by Public Contractor Code section 20111.6. The longer timeline may require contractors to disclose pending prevailing wage violations that would have otherwise been resolved with the shorter timeline. School districts may wish to review their prequalification questionnaire to determine whetherpending violations must be disclosed, If pending violations are part of the prequalification evaluation process, school district may wish to adjust the uniform rating system to allow contractors more latitude on pending violations since the Labor Commissioner will now have significantly longer to address such issues.

Mandatory Timelines for Public Works Determinations
Under the new legislation, when a request is made to the Director for a determination of whether a specific project or type of work awarded is a "public work", the Director must make that determination within 60 days of receipt of the last notice of support or opposition from an interested party relating to that project. Administrative appeal of the Director's determination must be made within 30 days of the date of the determination and requires the Director to issue a determination on that appeal within 120 days.

These new mandatory timelines are beneficial to public agencies as they prevent excessive delays to project schedules when a public agency is seeking a determination as to whether a unique project qualifies as a public works project subject to prevailing wage requirements.

Payroll Disclosure Requirements
Contractors and subcontractors are required by existing law to keep accurate payroll records and provide copies for inspection that have been marked or redacted to prevent disclosure of an individual's name, address and social security number. Under the new legislation, copies of payroll records made available for inspection to a joint labor-management committee shall only be marked to prevent disclosure of an individual's social security number and copies of records furnished to a multiemployer Taft-Hartley trust fund, may only be marked to prevent disclosure of an individual's full social security number but must provide the last four digits of the social security number. This means that the individual's name must be provided when payroll reports are produced for inspection by these specific types of entities.

From time to time, public agencies receive requests for payroll records from labor unions and other members of the public. To the extent that a public agency is continuing to operate its own labor compliance program or otherwise maintains these payroll records, the existing disclosure requirements still apply to these types of requests.

If you have any questions regarding the timelines established by the new Labor Code amendments and their impact, please feel free to contact one of our eight offices located statewide. You can also visit ourwebsite, follow us on Facebook or Twitter, or download our Client News Brief App.

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.