Government contractors have their hands full when it comes to landing projects and getting the job done. On top of it all they also have to juggle the various regulations that govern everything from workplace safety to payroll. At the federal level this includes following Davis-Bacon and Related Acts or the McNamara-O’Hara Service Contract Act (SCA), but there are many states with similar prevailing wage laws, including California.
Government contractors in California that work on public works projects have to comply with state regulations set up and officiated through the Department of Industrial Relations (DIR).
1. Who qualifies as a public works contractor in California?
Public works contractors, also referred to as government contractors, are construction companies that do work that is paid for in whole or part with public funds. It includes construction, alteration, demolition, installation, maintenance or repair work and it must be performed under a contract.
2. Who can become a government contractor in California?
All contractors and subcontractors can become a government contractor and bid on public works projects in California. You simply have to follow the process set up by the state and make sure you understand the laws and regulations. There are also a few requirements to be eligible, like having workers’ comp covered.
3. How do I register to bid on projects from the state of California?
You must meet a few requirements to be eligible to bid on government contracts in California.
– Have workers’ comp coverage
-If you use subcontractors, they must be registered as public works contractors
– Have a license for your trade from the Contractors’ State License Board, if applicable to the trade.
– Be in good standing with no delinquent, unpaid wage or penalty assessments owed to employees or enforcement agencies.
– Be in good standing and not under federal or state debarment
You also cannot have a prior violation for failing to be registered. However, if you have a single violation for not being registered in a 1-year period, you can pay a penalty and register.
4. How much does it cost to become a contractor with the state of California?
You can register to become a public works contractor in California for one, two or three years. For the purposes of registration, a year runs from July 1 through June 30. The cost to register is as follows:
$400 – One year
$800 – Two years
$1,200 – Three years
5. What does it take to qualify as a public works contractor in California?
Other than the registration fee, contractors must meet a few qualifications to become a public works contractor.
– You must have workers’ comp coverage
– You must have a contractor’s state license board, where applicable
– If you use subcontractors, they must also be registered as public works contractors
– You cannot have unpaid wages or penalty assessments by employees or enforcement agencies.
– You cannot be under state or federal debarment
If you happen to have failed to register once in a 12-month period, you can still qualify by paying a penalty and successfully registering. If you were cited for failing to register more than once in a 12-month period, you are not eligible.
6. Are there exceptions to registration requirements?
There are just a couple exceptions, starting with contractors that work solely on public works projects that were awarded before April 1, 2015. Additionally, there is a limited exception that allows bidding on federally funded or joint venture bids without being registered, as long as all parties are registered by the time the contract is actually awarded.
And finally, contractors that work exclusively on small public works projects don’t need to register as public works contractors. This applies to public works projects that do not exceed:
- $25,000 for new construction, alteration, installation, demolition or repair
- $15,000 for maintenance only
Contractors in this category do not have to file certified payroll reports, but they are required to maintain continuous certified payroll records and provide them upon request. This means as a contractor, you need to conduct yourself the same way as any other public works contractor for the purposes of payroll and reporting, no matter the size of the contract.
7. Do apprentices have to be used on every public works project?
Just about every public works project valued $30,000 and up must hire apprentices. This refers to the overall project value. So, every contractor and subcontractor working on the project is equally obligated to hire apprentices, even if their portion of the project is less than this threshold.
There are a few exceptions to this, which currently include:
- General contractors whose prime contract is valued under $30,000.
- When the craft or trade is not appropriate for apprentices, as listed officially in wage determinations.
- When the contractor is a licensed sole proprietor, and they perform all work on the project without the help of any outside companies.
When it’s a federal project in which no city, county or state money was used; and is not in any way administered or controlled by any California awarding body.
8.Who is required to keep and submit certified payroll records?
Contractors and subcontractors that work on most public works projects, with very few exceptions, must submit certified payroll records to the Labor Commissioner, through the Department of Industrial Relations (DIR). Currently, the following are exceptions to this requirement:
- Projects monitored by the following legacy Labor Compliance Programs:
- California Department of Transportation (Caltrans)
- City of Los Angeles
- Los Angeles Unified School District
- County of Sacramento
- Projects that are covered by a qualifying project labor agreement.Projects that are covered by the small project exemption, which includes projects that do not exceed:
– $25,000 for new construction, alteration, installation, demolition or repair
– $15,000 for maintenance only
9. Do certified payroll reports have to be submitted electronically. Can’t they be submitted as a paper report?
You cannot submit paper certified payroll reports. All certified payroll reports must be submitted electronically through the DIRs online system, which can be accessed here. You’ll need to either enter the information in manually, or upload an XML file with your payroll data.
10. Does submitting certified payroll reports to a union or contractor mean you don’t have to also submit them to the DIR?
If you submit certified payroll reports to a union, prime contractor, awarding body or other compliance program, you still have to submit them to the DIR. Essentially, no matter where else you are required to submit them, you still have to submit them to the Labor Commissioner through the DIR.
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.