Recently enacted law establishes a new public works program to replace the Compliance Monitoring Unit and Labor Compliance Program requirements for bond-funded and other public works projects. Effective July 1, 2014, the California Department of Industrial Relations' (DIR) program covers all bond-funded and public works projects in the state rather than just selected processes. Public works refers to construction, alteration, demolition, installation, or repair work (including maintenance) done under contract and paid by public funds. It does not include those done by a public agency with its own employees. With minor exceptions, all workers employed on public works projects must be paid the prevailing wage determined by the Director of the DIR according to the type of work and location, and the prevailing wage rates are usually based on rates specified in collective bargaining agreements.

Among other things, the new law requires contractors and subcontractors to be registered and qualified by the DIR in order to bid on, be listed in a bid proposal for, or engage in the performance of any contract for a public work. Contractors and subcontractors will be required to register using the DIR's new online application, pay an initial $300 non-refundable registration fee, pay an annual renewal fee each July 1 thereafter and, as part of the registration process, provide specified information to establish the contractor's/subcontractor's eligibility to be registered; the new law excepts contracts determined to be for public work only after the contract has been awarded or the bid has been awarded, except as specified.

To be eligible to bid and work on California public works projects, contractors and subcontractors must meet minimum qualifications:

  • 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 have no delinquent unpaid wage or penalty assessments owed to any employee or enforcement agency
  • Must not be under federal or state debarment o 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

DIR's new online application is available for contractors and subcontractors who must register with DIR. The online features also provide agencies that oversee California public works projects with a searchable database of qualified contractors; for example, the California Labor Commissioner's Office will continue to monitor and enforce prevailing wage requirements.

The requirement to list only registered contractors and subcontractors on bids is effective March 1, 2015, and the requirement to only use registered contractors and subcontractors on public works projects applies to all projects awarded on or after April 1, 2015.