SB 854 – Important Information for Awarding Bodies

18 Sep 2014

Under guise of an “Urgency Measure” the California Department of Industrial Affairs (DIR) has changed SB 854. The changes impact how the DIR Monitors prevailing wage compliance involving public works projects.

Immediate changes:

• The changes have expanded the scope of responsibility for awarding bodies by removing the requirement awarding bodies to pay for monitoring by the DIR for projects that are funded by State Bond measures. These changes include projects from 20 June 2014 forward.
• Labor code section 1773.3 is now changed to include all Public Works Projects and applies to the online PWC 100 Form.

Changes that will be phased-in concerning the Public Works Contractor Registration Program

In what appears to be a way to stop the DIR from taking public works funding to pay for the monitoring of contractors and subcontractors who work on public works projects. The new funding source will come from the contractors and subcontractors who are now required to registered with the DIR and pay an annual fee. That program went into effect 1 July 2014. As of 1 March 2015 changes invoked by SB 854 will bar awarding bodies from awarding or accepting bids from contractors and subcontractors who are not registered with the DIR. The implications of this will help to reduce companies who do not comply with California work standards.

Changes that affect Notice Requirements:

As part of their streamline and legal requirements all new bid packets and contract documents will be changed to reflect the changes implemented by SB 854. Contractors and subcontractors will be required to post notifications in accordance to Code Reg. §16451(d), or the awarding body may take responsibility for posting said documents.

Changes that require Certified Payroll Record transmission to the Labor Commissioner

Beginning on 20 June 2014, the Labor commissioner will require that certified payroll records be supplied by all contractors and subcontractors who work on public works projects. Those project under the supervision of the CMU will remain there until finished. In what looks like a bid to regulate illegal labor and sweatshop type practices SB 854 takes aims at contractors and subcontractors and their hiring and payroll practices. There are exceptions to this rule, but those exceptions are at the discretion of the DIR. They involve Cal Trans, The City of Los Angeles, The Los Angeles Unified School District and the County of Sacramento. These potential exemptions apply where qualifying labor contracts are in place.

Projects that are ongoing and monitored by the Labor Commissioner or CMU

For older projects that are funded by Propositions 47, 55, and 84 remain untouched through the end of the project regardless of the monitoring by the Labor Commissioner. Contractors and Subcontractors will still be required to submit certified payroll records as those requirement dates occur. These changes do not preclude the requirements set forth by bonding agents. The Requirements instated by Proposition 84 remain in effect but said projects may also be monitored by the Labor Commissioner.

These changes will affect how bids are awarded and to whom projects are awarded. These changes aim to strengthen the existing system and make the transition of monitoring each project more efficient.