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Prevailing Wage Compliance Procedure

Document Type: Procedure
Version: 1.0
Last Updated: February 2026
Distribute To: HR, Payroll, Project Managers, Superintendents

Purpose​

Establish procedures for compliance with prevailing wage requirements on public works projects in California.

What is Prevailing Wage?​

Prevailing wage laws require contractors on public works projects to pay workers the wage rates and fringe benefits established by the California Department of Industrial Relations (DIR) for each craft/classification.

When Prevailing Wage Applies​

California Public Works:​

  • State, city, county, or special district projects
  • Projects using public funds
  • Construction, alteration, repair, or maintenance
  • Generally over $1,000 (new construction)
  • Over $15,000 (maintenance)

Federal Davis-Bacon:​

  • Federal projects
  • Federally-funded projects
  • Over $2,000

Key Requirements Summary​

RequirementCaliforniaFederal
Wage ratesDIR ratesDOL wage decisions
Certified payrollWeeklyWeekly
ApprenticeshipRequiredRequired
Records retention3 years (access), 4 years (audit)3 years
PenaltiesYesYes
DIR registrationRequiredN/A

Pre-Project Requirements​

Before Bidding:​

  • Verify project is public work
  • Obtain wage determination
  • Factor rates into estimate
  • Include compliance costs

After Award:​

  • Confirm DIR registration is current
  • Post required notices
  • Notify employees of rates
  • Set up payroll for certified reporting
  • Coordinate with subs

DIR Contractor Registration​

Registration Required:​

  • All contractors and subcontractors
  • Before bidding on public work
  • Annual renewal

To Register:​

  1. Go to dir.ca.gov/Public-Works/Contractor-Registration.html
  2. Complete registration
  3. Pay annual fee
  4. Receive registration number
  5. Renew annually

Maintain Registration:​

  • No bid on public work without current registration
  • No contract award without current registration
  • Verify sub registration before contract

Determining Wage Rates​

California:​

  1. Go to dir.ca.gov/OPRL/DPreWageDetermination.htm
  2. Enter project location (county)
  3. Select project type
  4. Find applicable craft classifications
  5. Note basic hourly rate AND fringe benefits

Rate Components:​

ComponentDescription
Basic Hourly RateMinimum hourly wage
Health & WelfareInsurance/benefits
PensionRetirement contribution
TrainingTraining fund contribution
OtherVacation, holiday (if listed)
TotalSum of all components

Example Rate:​

Carpenter (Journeyman)
County: Santa Clara
Basic Hourly: $52.50
Health & Welfare: $13.85
Pension: $12.70
Training: $1.05
TOTAL: $80.10

Worker Classification​

Use Correct Classification:​

  • Match work performed to DIR classification
  • Don't misclassify to pay lower rate
  • When multiple crafts, pay higher rate

Common Classifications:​

  • Carpenter
  • Laborer (Group 1-4)
  • Operating Engineer
  • Electrician
  • Plumber
  • Cement Mason
  • Iron Worker

Apprentices:​

  • Must be registered with DAS
  • Follow apprentice ratio requirements
  • Pay apprentice rates (percentage of journeyman)
  • Document in certified payroll

Certified Payroll Requirements​

What is Certified Payroll?​

Weekly submission of payroll records showing compliance with prevailing wage requirements.

Must Include:​

  • Contractor name and address
  • Project name and location
  • Week ending date
  • Worker information (name, address, last 4 SSN)
  • Work classification
  • Hours worked each day
  • Hourly rate (basic + fringe breakdown)
  • Gross wages
  • Deductions
  • Net wages
  • Statement of compliance (signed)

Submission:​

  • Weekly (by Friday of following week)
  • To awarding agency (or as directed)
  • Keep copies for records

Certified Payroll Form (DIR Form A-1-131)​

================================================================
      CONTRACTOR'S CERTIFIED PAYROLL
================================================================

CONTRACT #: _________________  PAYROLL #: ____________________

FOR WEEK ENDING: ____________  PROJECT: ______________________

CONTRACTOR: _________________  LOCATION: _____________________

================================================================

[Table with columns:]
NAME | WORK CLASS | HOURS (M/T/W/TH/F/S/SU) | TOTAL | RATE | GROSS | DEDUCTIONS | NET

[Multiple rows for workers]

================================================================

FRINGE BENEFITS:
☐ Paid to approved plans   ☐ Paid in cash to employees

================================================================

STATEMENT OF COMPLIANCE

I, _________________, do hereby state:
(1) I pay or supervise payment of workers on this project;
(2) The above payroll is correct and complete;
(3) All workers were paid not less than the prevailing rates;
(4) Deductions were only those authorized by law;
(5) Apprentices are properly registered.

Signature: _________________________ Date: ____________
Title: _________________________

================================================================

Apprenticeship Requirements​

California Requirements:​

  • Request apprentices from approved programs
  • Maintain required ratios (typically 1:5)
  • Pay apprentice rates (percentage of journeyman)
  • Document in certified payroll

Process:​

  1. Submit DAS 140 (request for apprentices)
  2. Document response
  3. If no apprentices available, document
  4. Track apprentice hours
  5. Include in certified payroll

Ratios:​

  • Varies by craft
  • Generally 1 apprentice to 5 journeymen
  • Some crafts have different ratios

Posting Requirements​

Post at Jobsite:​

  • Applicable wage rates (job notice)
  • DIR poster (Rights of Workers)
  • Contractor registration number

Employee Notification:​

  • Workers must know prevailing wage applies
  • Must know applicable rate for their classification
  • Access to wage determination

Subcontractor Compliance​

GC Responsibilities:​

  • Verify sub DIR registration
  • Collect certified payrolls weekly
  • Review for compliance issues
  • Report to awarding agency

Sub Requirements:​

  • Submit certified payroll to GC weekly
  • Maintain own compliance
  • Register with DIR
  • Follow all requirements

Collection Process:​

  1. Subcontract requires compliance
  2. Require weekly submission
  3. Review upon receipt
  4. Follow up on issues
  5. Submit to agency as required

Common Violations​

Watch For:​

Underpayment:

  • Wrong classification (lower rate)
  • Missing fringe benefits
  • Unpaid overtime
  • Piece rate miscalculation

Record Keeping:

  • Missing certified payrolls
  • Incomplete information
  • Late submissions
  • Inaccurate records

Apprenticeship:

  • Not requesting apprentices
  • Wrong ratio
  • Paying incorrect rate
  • Not registered apprentices

Other:

  • Unregistered contractors
  • Kickbacks
  • Falsified records

Penalties for Violations​

California:​

  • $200/day per worker for underpayment
  • Forfeiture of contract (severe violations)
  • Debarment (repeated violations)
  • Criminal penalties (falsification)

Back Pay:​

  • Must pay difference + interest
  • Liquidated damages (25-50%)

Audit Preparation​

Maintain Records:​

  • Certified payrolls (all weeks)
  • Time records (original)
  • Canceled checks
  • Fringe benefit payments
  • DAS 140 forms (apprenticeship)
  • Subcontractor payrolls
  • Proof of prevailing wage posting

Retention:​

  • 3 years minimum
  • 4 years for state-funded
  • Until audit complete

Compliance Checklist​

Project Setup:​

  • Verify public work status
  • Obtain wage determination
  • Confirm DIR registration (self and all subs)
  • Set up certified payroll process
  • Post required notices
  • Request apprentices (DAS 140)

Weekly:​

  • Prepare certified payroll
  • Verify rates match determination
  • Include all fringe benefits
  • Collect sub certified payrolls
  • Review for compliance
  • Submit on time

Ongoing:​

  • Monitor wage rate changes
  • Update as rates change
  • Maintain records
  • Track apprentice hours
  • Address any issues immediately
  • DIR Certified Payroll Form (A-1-131)
  • DAS 140 (Apprentice Request)
  • Wage Determination (project-specific)
  • Subcontract Prevailing Wage Exhibit

Resources​

  • DIR Public Works: dir.ca.gov/public-works
  • Wage Determinations: dir.ca.gov/OPRL
  • Contractor Registration: dir.ca.gov/Public-Works
  • Apprenticeship: dir.ca.gov/das

Template provided by support.construction. Verify current requirements with DIR.

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