On June 20, 2014, Governor Brown signed SB 854, which now requires any contractor or subcontractor bidding on a public works project to register with the Department of Industrial Relations ("DIR"). SB 854 also requires that all public agencies only award public works contracts to contractors that are registered. The stated goal of the new registration program is to ensure that only the most responsible and qualified contractors are competing for public works contracts.
- Beginning on July 1, 2014, every contractor or subcontractor bidding on a public works project must register with the Department of Industrial Relations.
- On or after March 1, 2015, all bid invitations and public work contracts must include notice of the registration requirements.
- Beginning on April 1, 2015, any public entity contracting for services may only award contracts to contractors and subcontractors registered with the Department of Industrial Relations.
- After April 1, 2015, DIR may cancel any contract for public work that does not use registered contractors or subcontractors.
- On-line registration was launched on July 1, 2014, and contractors may now log on, create an account, and complete an application.
Before SB 854, DIR implemented a compliance monitoring unit ("CMU") program in 2013 to enforce prevailing wage requirements on public works projects that receive state bond funding. Before the launch of the CMU program, the Division of Labor Standards Enforcement ("DLSE") oversaw the use of labor compliance programs, or LCPs. LCPs are operated by a public entity; the CMU program, on the other hand, is an independent State-run program.
In order to comply with terms of the CMU program, the DLSE required about ninety percent of awarding bodies to file a summary of the agency's public works contract award when awarding a public contract.
Now, SB 854 changes the game again, and replaces the CMU program and LCP requirements with a new Public Works Contractor Registration Program. The Public Works Contactor Registration program applies toall public works projects, not just those that are state-bond funded.
To qualify for registration, every contractor and subcontractor must:
- Pay an initial non-refundable fee of $300, and pay an annual renewal fee set by the Department of Industrial Relations. The fee is due on or before July 1 of each year. The fee will go to Public Works Enforcement Fund to pay for oversight of the program.
- Maintain workers' compensation coverage for any employee. Contractors may only use subcontractors that are registered public works subcontractors.
- The contractor must be licensed by the Contractors State License Board of California, and have no delinquent unpaid wage or penalty assessments owed to an employee or enforcement agency
- Not be under federal or state debarment.
- Not be in prior violation of the registration requirements once they become effective. However, if a contractor violates the registration requirements once in a twelve-month period, it may still qualify for registration by paying an additional fee.
DIR also intends to provide a searchable list of registered contractors and subcontractors, and anticipates that this will make it easier for agencies to ensure that it is only awarding projects to registered contractors.
In addition to the registration requirements, SB 854 also requires contractors and subcontractors to submit to the Labor Commission certified payroll records ("CPRs") for all public works projects. This provision will apply to any new projects awarded on or after April 1, 2015, and will apply to all public works projects, new or on-going, on or after January 1, 2016.
SB 854 also means that awarding agencies need only adopt and enforce DIR-approved LCP where a public works project was awarded before January 1, 2012 and operates under a preexisting LCP requirement; and when the project is funded in whole or in part by Proposition 84 (Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006.) More information about the Public Contract Registration Program is available on the DIR website at http://www.dir.ca.gov/dlse/dlsepublicworks.html