California Prevailing Wage
Under California state law, contractors working on public works projects are required to pay their workers prevailing wages and benefits. This requirement applies to all employees working on projects when the total cost of the public works project exceeds $1,000. The prevailing wage rates, which include both hourly wages and benefits, are determined and enforced by the California Department of Industrial Relations (DIR). These regulations ensure that workers receive fair compensation in line with industry standards while promoting fair competition among contractors bidding on public projects.
what qualifies as a public works project?
According to the DIR and Labor Code Section 1720:
A public works project is any construction, alteration, demolition, installation, repair, or maintenance work paid for in whole or in part out of public funds.
This includes, but is not limited to:
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Construction of buildings, roads, and other infrastructure
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Renovation and remodeling of public facilities
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Installation of equipment that is permanently attached (like HVAC systems)
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Cleanup work following construction
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Preconstruction activities (e.g., site survey, soil testing) if covered by contract
Even if only a portion of the funding is public, the project is still considered public works.
who is required to comply?
The following parties must comply with prevailing wage laws on public works:
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Prime Contractors – Hired directly by a public agency.
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Subcontractors – Hired by the prime contractor to perform portions of the job.
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Awarding Bodies – Public entities like school districts, cities, counties, and state agencies that fund and oversee the project.
Their responsibilities include:
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Classifying workers correctly
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Paying the correct prevailing wage for each trade
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Submitting Certified Payroll Records (CPRs)
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Ensuring apprentices are properly utilized
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Posting required notices on the jobsite
How Prevailing Wage Rates Are Determined
Set by the DIR through wage surveys and labor agreements. Rates are broken down by:
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County
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Trade classification
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Craft or occupation
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Apprentice or journeyman level
What each determination includes:
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Hourly base wage
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Fringe benefits
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Overtime rates
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Travel & subsistence if applicable
Contractors must:
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Use the DIR’s Prevailing Wage Determination Tool to find current rates before bidding or starting work.
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Apply the correct rate to each classification of worker on site.
apprenticeship requirements
Law: California Labor Code §1777.5
All contractors on public works projects must:
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Employ registered apprentices on appropriate tasks
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Submit DAS 140 forms to applicable Joint Apprenticeship Training Committees (JATCs) within 10 days of contract signing or first day of work
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Request apprentices using DAS 142 at least 72 hours in advance (excluding weekends/holidays)
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Pay apprentices the correct wage and benefits
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Maintain the appropriate journeyman-to-apprentice ratios
How to comply:
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Use DIR-approved apprenticeship programs
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Submit DAS forms for every job and track apprentice hours
Certified Payroll Records (cprs)
Definition:
CPRs are weekly reports that contractors and subcontractors must submit to verify they are paying workers in accordance with prevailing wage laws.
Must include:
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Worker names and identifying numbers (last 4 digits of SSN)
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Job classifications
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Hours worked each day and total hours per week
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Hourly rate and total wages paid
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Any deductions or fringe benefit contributions
How to file:
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Use the DIR Certified Payroll Portal
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File weekly while work is being performed
Contractors must also respond promptly to any CPR requests from the DIR or awarding agencies—delays or omissions may lead to audits, investigations, or penalties.
fringe benefits
Fringe benefits are part of the total prevailing wage package and include:
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Health insurance
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Pension or retirement contributions
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Vacation and holiday pay
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Training fund contributions
Payment options:
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Contractors can pay these in cash, through a legitimate benefit plan, or a combination.
Important:
All fringe contributions must be documented clearly on the certified payroll.
common violations:
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Failure to Pay Prevailing Wages
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Misclassification of Workers
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Failure to Submit Certified Payroll Records (CPRs)
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Overtime and Holiday Pay Violations
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Failure to Pay Training Fund Contributions
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Unauthorized Use of Apprentices or Failure to Meet Apprentice Ratios
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Kickbacks or Coercion
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Working Without a Valid DIR Registration
Severe Financial Penalties
Contractors found underpaying workers can be fined up to $200 per day for each employee paid less than the applicable prevailing wage rate.
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These penalties accumulate daily, making violations costly even over short periods.
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The fine amount increases for repeat or willful violations, signaling the state’s aggressive stance on enforcement.
Example: Underpaying just 5 workers for 20 days could result in up to $20,000 in fines.
Full Repayment of Back Wages
Contractors are legally required to repay 100% of unpaid prevailing wages, including:
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Base wages
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Fringe benefits
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Overtime differentials
This restitution must be paid directly to the affected workers and can result in significant liability—especially if multiple employees are impacted over a long duration.
Even unintentional mistakes trigger full repayment obligations.
Debarment from Future Contracts
For serious or repeated violations, the California Labor Commissioner can debar a contractor from bidding on or working on any public works projects for up to three years.
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Debarment applies not just to the company, but may also extend to owners, officers, and affiliates.
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This consequence can cripple a contractor’s access to public-sector revenue and severely damage their professional reputation.
Once debarred, reinstatement is difficult and requires full regulatory review.
VIOLATIONS CAN BE COSTLY
LMCC Is here to help!
If you think something isn’t right on a public works jobsite — underpaid workers, misclassifications, missing apprentices, no payroll records, or unsafe conditions — you don’t have to stay silent. We’re here to help you take action — safely and confidentially.
At LMCC, we specialize in monitoring labor compliance on publicly funded construction. Our job is to protect workers, support responsible contractors, and uphold the law.
What We Do:
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Investigate tips and complaints quickly and confidentially
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Work directly with the California Department of Industrial Relations (DIR) to enforce prevailing wage law
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Ensure workers receive the pay and benefits they’ve earned
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Help contractors and awarding agencies stay in compliance
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Conduct site visits, wage audits, and interviews
Whether You’re a:
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Worker unsure if you’re being paid correctly
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Contractor noticing unfair competition
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Concerned community member witnessing violations
ready to report?
You can contact us anonymously or by name. We respect your privacy and will never retaliate.
Reporting a violation helps protect you, your coworkers, and the future of fair construction in California.