1720. (a) As used in this chapter, "public works" means:
(1) Construction, alteration, demolition, installation, or repair
work done under contract and paid for in whole or in part out of
public funds, except work done directly by any public utility company
pursuant to order of the Public Utilities Commission or other public
authority. For purposes of this paragraph, "construction" includes
work performed during the design and preconstruction phases of
construction including, but not limited to, inspection and land
surveying work.
(2) Work done for irrigation, utility, reclamation, and
improvement districts, and other districts of this type. "Public work"
does not include the operation of the irrigation or drainage system
of any irrigation or reclamation district, except as used in Section
1778 relating to retaining wages.
(3) Street, sewer, or other improvement work done under the
direction and supervision or by the authority of any officer or
public body of the state, or of any political subdivision or district
thereof, whether the political subdivision or district operates
under a freeholder's charter or not.
(4) The laying of carpet done under a building lease-maintenance
contract and paid for out of public funds.
(5) The laying of carpet in a public building done under contract
and paid for in whole or in part out of public funds.
(6) Public transportation demonstration projects authorized
pursuant to Section 143 of the Streets and Highways Code.
(b) For purposes of this section, "paid for in whole or in part
out of public funds" means all of the following:
(1) The payment of money or the equivalent of money by the state
or political subdivision directly to or on behalf of the public works
contractor, subcontractor, or developer.
(2) Performance of construction work by the state or political
subdivision in execution of the project.
(3) Transfer by the state or political subdivision of an asset of
value for less than fair market price.
(4) Fees, costs, rents, insurance or bond premiums, loans,
interest rates, or other obligations that would normally be required
in the execution of the contract, that are paid, reduced, charged at
less than fair market value, waived, or forgiven by the state or
political subdivision.
(5) Money loaned by the state or political subdivision that is to
be repaid on a contingent basis.
(6) Credits that are applied by the state or political subdivision
against repayment obligations to the state or political subdivision.
(c) Notwithstanding subdivision (b):
(1) Private residential projects built on private property are not
subject to the requirements of this chapter unless the projects are
built pursuant to an agreement with a state agency, redevelopment
agency, or local public housing authority.
(2) If the state or a political subdivision requires a private
developer to perform construction, alteration, demolition,
installation, or repair work on a public work of improvement as a
condition of regulatory approval of an otherwise private development
project, and the state or political subdivision contributes no more
money, or the equivalent of money, to the overall project than is
required to perform this public improvement work, and the state or
political subdivision maintains no proprietary interest in the
overall project, then only the public improvement work shall thereby
become subject to this chapter.
(3) If the state or a political subdivision reimburses a private
developer for costs that would normally be borne by the public, or
provides directly or indirectly a public subsidy to a private
development project that is de minimis in the context of the project,
an otherwise private development project shall not thereby become
subject to the requirements of this chapter.
(4) The construction or rehabilitation of affordable housing units
for low- or moderate-income persons pursuant to paragraph (5) or (7)
of subdivision (e) of Section 33334.2 of the Health and Safety Code
that are paid for solely with moneys from a Low and Moderate Income
Housing Fund established pursuant to Section 33334.3 of the Health
and Safety Code or that are paid for by a combination of private
funds and funds available pursuant to Section 33334.2 or 33334.3 of
the Health and Safety Code do not constitute a project that is paid
for in whole or in part out of public funds.
(5) "Paid for in whole or in part out of public funds" does not
include tax credits provided pursuant to Section 17053.49 or 23649 of
the Revenue and Taxation Code.
(6) Unless otherwise required by a public funding program, the
construction or rehabilitation of privately owned residential
projects is not subject to the requirements of this chapter if one or
more of the following conditions are met:
(A) The project is a self-help housing project in which no fewer
than 500 hours of construction work associated with the homes are to
be performed by the homebuyers.
(B) The project consists of rehabilitation or expansion work
associated with a facility operated on a not-for-profit basis as
temporary or transitional housing for homeless persons with a total
project cost of less than twenty-five thousand dollars ($25,000).
(C) Assistance is provided to a household as either mortgage
assistance, downpayment assistance, or for the rehabilitation of a
single-family home.
(D) The project consists of new construction, or expansion, or
rehabilitation work associated with a facility developed by a
nonprofit organization to be operated on a not-for-profit basis to
provide emergency or transitional shelter and ancillary services and
assistance to homeless adults and children. The nonprofit
organization operating the project shall provide, at no profit, not
less than 50 percent of the total project cost from nonpublic
sources, excluding real property that is transferred or leased. Total
project cost includes the value of donated labor, materials,
architectural, and engineering services.
(E) The public participation in the project that would otherwise
meet the criteria of subdivision (b) is public funding in the form of
below-market interest rate loans for a project in which occupancy of
at least 40 percent of the units is restricted for at least 20
years, by deed or regulatory agreement, to individuals or families
earning no more than 80 percent of the area median income.
(d) Notwithstanding any provision of this section to the contrary,
the following projects shall not, solely by reason of this section,
be subject to the requirements of this chapter:
(1) Qualified residential rental projects, as defined by Section
142 (d) of the Internal Revenue Code, financed in whole or in part
through the issuance of bonds that receive allocation of a portion of
the state ceiling pursuant to Chapter 11.8 of Division 1 (commencing
with Section 8869.80) of the Government Code on or before December
31, 2003.
(2) Single-family residential projects financed in whole or in
part through the issuance of qualified mortgage revenue bonds or
qualified veterans' mortgage bonds, as defined by Section 143 of the
Internal Revenue Code, or with mortgage credit certificates under a
Qualified Mortgage Credit Certificate Program, as defined by Section
25 of the Internal Revenue Code, that receive allocation of a portion
of the state ceiling pursuant to Chapter 11.8 of Division 1
(commencing with Section 8869.80) of the Government Code on or before
December 31, 2003.
(3) Low-income housing projects that are allocated federal or
state low-income housing tax credits pursuant to Section 42 of the
Internal Revenue Code, Chapter 3.6 of Division 31 (commencing with
Section 50199.4) of the Health and Safety Code, or Section 12206,
17058, or 23610.5 of the Revenue and Taxation Code, on or before
December 31, 2003.
(e) If a statute, other than this section, or a regulation, other
than a regulation adopted pursuant to this section, or an ordinance
or a contract applies this chapter to a project, the exclusions set
forth in subdivision (d) do not apply to that project.
(f) For purposes of this section, references to the Internal
Revenue Code mean the Internal Revenue Code of 1986, as amended, and
include the corresponding predecessor sections of the Internal
Revenue Code of 1954, as amended.
(g) The amendments made to this section by either Chapter 938 of
the Statutes of 2001 or the act adding this subdivision shall not be
construed to preempt local ordinances requiring the payment of
prevailing wages on housing projects.
1720.2. For the limited purposes of Article 2 (commencing with
Section 1770) of this chapter, "public works" also means any
construction work done under private contract when all of the
following conditions exist:
(a) The construction contract is between private persons.
(b) The property subject to the construction contract is privately
owned, but upon completion of the construction work, more than 50
percent of the assignable square feet of the property is leased to
the state or a political subdivision for its use.
(c) Either of the following conditions exist:
(1) The lease agreement between the lessor and the state or
political subdivision, as lessee, was entered into prior to the
construction contract.
(2) The construction work is performed according to plans,
specifications, or criteria furnished by the state or political
subdivision, and the lease agreement between the lessor and the state
or political subdivision, as lessee, is entered into during, or upon
completion of, the construction work.
1720.3. For the limited purposes of Article 2 (commencing with
Section 1770), "public works" also means the hauling of refuse from a
public works site to an outside disposal location, with respect to
contracts involving any state agency, including the California State
University and the University of California, or any political
subdivision of the state.
1720.4. (a) This chapter shall not apply to any of the following
work:
(1) Any work performed by a volunteer. For purposes of this
section, "volunteer" means an individual who performs work for civic,
charitable, or humanitarian reasons for a public agency or
corporation qualified under Section 501(c)(3) of the Internal Revenue
Code as a tax-exempt organization, without promise, expectation, or
receipt of any compensation for work performed.
(A) An individual shall be considered a volunteer only when his or
her services are offered freely and without pressure and coercion,
direct or implied, from an employer.
(B) An individual may receive reasonable meals, lodging,
transportation, and incidental expenses or nominal nonmonetary awards
without losing volunteer status if, in the entire context of the
situation, those benefits and payments are not a substitute form of
compensation for work performed.
(C) An individual shall not be considered a volunteer if the
person is otherwise employed for compensation at any time (i) in the
construction, alteration, demolition, installation, repair, or
maintenance work on the same project, or (ii) by a contractor, other
than a corporation qualified under Section 501(c)(3) of the Internal
Revenue Code as a tax-exempt organization, that is receiving payment
to perform construction, alteration, demolition, installation,
repair, or maintenance work on the same project.
(2) Any work performed by a volunteer coordinator. For purposes of
this section, "volunteer coordinator" means an individual paid by a
corporation qualified under Section 501(c)(3) of the Internal Revenue
Code as a tax-exempt organization, to oversee or supervise
volunteers. An individual may be considered a volunteer coordinator
even if the individual performs some nonsupervisory work on a project
alongside the volunteers, so long as the individual's primary
responsibility on the project is to oversee or supervise the
volunteers rather than to perform nonsupervisory work.
(3) Any work performed by members of the California Conservation
Corps or of Community Conservation Corps certified by the California
Conservation Corps pursuant to Section 14507.5 of the Public
Resources Code.
(b) This section shall apply retroactively to otherwise covered
work concluded on or after January 1, 2002, to the extent permitted
by law.
(c) On or before January 1, 2011, the director shall submit a
written report to the Legislature that does both of the following:
(1) Describes the number and the nature of complaints received and
investigations conducted involving the use of volunteers on public
works projects subject to this chapter, that are projects as
described in Section 21190 of the Public Resources Code.
(2) Provides an estimate of each of the following as they relate
to public works projects that involve the acquisition, presentation,
or restoration of natural areas, including parks or ecological
reserves, or other public works projects that have one or more of the
purposes, as described in Section 21190 of the Public Resources
Code:
(A) The number of hours per year that volunteers work on public
works projects.
(B) The cost per year of public works projects, that are projects
as described in Section 21190 of the Public Resources Code, and the
percentage of work performed by volunteers.
(C) The types of work done by volunteers on public works projects,
that are projects as described in Section 21190 of the Public
Resources Code.
(d) The sum of one hundred thousand dollars ($100,000) is hereby
appropriated from the Environmental License Plate Fund for the
purposes of funding the report required pursuant to subdivision (c).
(e) This section shall remain in effect only until January 1,
2012, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 2012, deletes or extends
that date.
1721. "Political subdivision" includes any county, city, district,
public housing authority, or public agency of the state, and
assessment or improvement districts.
1722. "Awarding body" or "body awarding the contract" means
department, board, authority, officer or agent awarding a contract
for public work.
1722.1. For the purposes of this chapter, "contractor" and
"subcontractor" include a contractor, subcontractor, licensee,
officer, agent, or representative thereof, acting in that capacity,
when working on public works pursuant to this article and Article 2
(commencing with Section 1770).
1723. "Worker" includes laborer, worker, or mechanic.
1724. "Locality in which public work is performed" means the county
in which the public work is done in cases in which the contract is
awarded by the State, and means the limits of the political
subdivision on whose behalf the contract is awarded in other cases.
1725. "Alien" means any person who is not a born or fully
naturalized citizen of the United States.
1726. (a) The body awarding the contract for public work shall take
cognizance of violations of this chapter committed in the course of
the execution of the contract, and shall promptly report any
suspected violations to the Labor Commissioner.
(b) If the awarding body determines as a result of its own
investigation that there has been a violation of this chapter and
withholds contract payments, the procedures in Section 1771.6 shall
be followed.
(c) A contractor may bring an action in a court of competent
jurisdiction to recover from an awarding body the difference between
the wages actually paid to an employee and the wages that were
required to be paid to an employee under this chapter, any penalties
required to be paid under this chapter, and costs and attorney's fees
related to this action, if either of the following is true:
(1) The awarding body previously affirmatively represented to the
contractor in writing, in the call for bids, or otherwise, that the
work to be covered by the bid or contract was not a "public work," as
defined in this chapter.
(2) The awarding body received actual written notice from the
Department of Industrial Relations that the work to be covered by the
bid or contract is a "public work," as defined in this chapter, and
failed to disclose that information to the contractor before the bid
opening or awarding of the contract.
1727. (a) Before making payments to the contractor of money due
under a contract for public work, the awarding body shall withhold
and retain therefrom all amounts required to satisfy any civil wage
and penalty assessment issued by the Labor Commissioner under this
chapter. The amounts required to satisfy a civil wage and penalty
assessment shall not be disbursed by the awarding body until receipt
of a final order that is no longer subject to judicial review.
(b) If the awarding body has not retained sufficient money under
the contract to satisfy a civil wage and penalty assessment based on
a subcontractor's violations, the contractor shall, upon the request
of the Labor Commissioner, withhold sufficient money due the
subcontractor under the contract to satisfy the assessment and
transfer the money to the awarding body. These amounts shall not be
disbursed by the awarding body until receipt of a final order that is
no longer subject to judicial review.
1728. In cases of contracts with assessment or improvement
districts where full payment is made in the form of a single warrant,
or other evidence of full payment, after completion and acceptance
of the work, the awarding body shall accept from the contractor in
cash a sum equal to, and in lieu of, any amount required to be
withheld, retained, or forfeited under the provisions of this
section, and said awarding body shall then release the final warrant
or payment in full.
1729. It shall be lawful for any contractor to withhold from any
subcontractor under him sufficient sums to cover any penalties
withheld from him by the awarding body on account of the
subcontractor's failure to comply with the terms of this chapter, and
if payment has already been made to the subcontractor the contractor
may recover from him the amount of the penalty or forfeiture in a
suit at law.
1734. Any court collecting any fines or penalties under the
criminal provisions of this chapter or any of the labor laws
pertaining to public works shall as soon as practicable after the
receipt thereof deposit same with the county treasurer of the county
in which such court is situated. Amounts so deposited shall be paid
at least once a month by warrant of the county auditor drawn upon
requisition of the judge or clerk of said court, to the State
Treasurer for deposit in the General Fund.
1735. A contractor shall not discriminate in the employment of
persons upon public works on any basis listed in subdivision (a) of
Section 12940 of the Government Code, as those bases are defined in
Sections 12926 and 12926.1 of the Government Code, except as
otherwise provided in Section 12940 of the Government Code. Every
contractor for public works who violates this section is subject to
all the penalties imposed for a violation of this chapter.
1736. During any investigation conducted under this part, the
Division of Labor Standards Enforcement shall keep confidential the
name of any employee who reports a violation of this chapter and any
other information that may identify the employee.
1740. Notwithstanding any other provision of this chapter or any
other law of this State, except limitations imposed by the
Constitution, the legislative body of a political subdivision which
has received or is to receive a loan or grant of funds from the
Federal Government or a federal department or agency for public works
of that political subdivision, may provide in its call for bids in
connection with such public works that all bid specifications and
contracts and other procedures in connection with bids or contracts
shall be subject to modification to comply with revisions in federal
minimum wage schedules without the necessity of republication or
duplication of other formal statutory requirements.
1741. (a) If the Labor Commissioner or his or her designee
determines after an investigation that there has been a violation of
this chapter, the Labor Commissioner shall with reasonable promptness
issue a civil wage and penalty assessment to the contractor or
subcontractor or both. The assessment shall be in writing and shall
describe the nature of the violation and the amount of wages,
penalties, and forfeitures due and shall include the basis for the
assessment. The assessment shall be served not later than 180 days
after the filing of a valid notice of completion in the office of the
county recorder in each county in which the public work or some part
thereof was performed, or not later than 180 days after acceptance
of the public work, whichever occurs last. However, if the assessment
is served after the expiration of this 180-day period, but before
the expiration of an additional 180 days, and the awarding body has
not yet made full payment to the contractor, the assessment is valid
up to the amount of the funds retained. Service of the assessment
shall be completed pursuant to Section 1013 of the Code of Civil
Procedure by first-class and certified mail to the contractor,
subcontractor, and awarding body. The assessment shall advise the
contractor and subcontractor of the procedure for obtaining review of
the assessment. The Labor Commissioner shall, to the extent
practicable, ascertain the identity of any bonding company issuing a
bond that secures the payment of wages covered by the assessment and
any surety on a bond, and shall serve a copy of the assessment by
certified mail to the bonding company or surety at the same time
service is made to the contractor, subcontractor, and awarding body.
However, no bonding company or surety shall be relieved of its
responsibilities because it failed to receive notice from the Labor
Commissioner.
(b) Interest shall accrue on all due and unpaid wages at the rate
described in subdivision (b) of Section 3289 of the Civil Code. The
interest shall accrue from the date that the wages were due and
payable, as provided in Part 7 (commencing with Section 1720) of
Division 2, until the wages are paid.
(c) (1) The Labor Commissioner shall maintain a public list of the
names of each contractor and subcontractor who has been found to
have committed a willful violation of Section 1775 or to whom a final
order, which is no longer subject to judicial review, has been
issued.
(2) The list shall include the date of each assessment, the amount
of wages and penalties assessed, and the amount collected.
(3) The list shall be updated at least quarterly, and the
contractor's or subcontractor's name shall remain on that list until
the assessment is satisfied, or for a period of three years beginning
from the date of the issuance of the assessment, whichever is later.
1742. (a) An affected contractor or subcontractor may obtain review
of a civil wage and penalty assessment under this chapter by
transmitting a written request to the office of the Labor
Commissioner that appears on the assessment within 60 days after
service of the assessment. If no hearing is requested within 60 days
after service of the assessment, the assessment shall become final.
(b) Upon receipt of a timely request, a hearing shall be commenced
within 90 days before the director, who shall appoint an impartial
hearing officer possessing the qualifications of an administrative
law judge pursuant to subdivision (b) of Section 11502 of the
Government Code. The appointed hearing officer shall be an employee
of the department, but shall not be an employee of the Division of
Labor Standards Enforcement. The contractor or subcontractor shall be
provided an opportunity to review evidence to be utilized by the
Labor Commissioner at the hearing within 20 days of the receipt of
the written request for a hearing. Any evidence obtained by the Labor
Commissioner subsequent to the 20-day cutoff shall be promptly
disclosed to the contractor or subcontractor.
The contractor or subcontractor shall have the burden of proving
that the basis for the civil wage and penalty assessment is
incorrect. The assessment shall be sufficiently detailed to provide
fair notice to the contractor or subcontractor of the issues at the
hearing.
Within 45 days of the conclusion of the hearing, the director
shall issue a written decision affirming, modifying, or dismissing
the assessment. The decision of the director shall consist of a
notice of findings, findings, and an order. This decision shall be
served on all parties and the awarding body pursuant to Section 1013
of the Code of Civil Procedure by first-class mail at the last known
address of the party on file with the Labor Commissioner. Within 15
days of the issuance of the decision, the director may reconsider or
modify the decision to correct an error, except that a clerical error
may be corrected at any time.
The director shall adopt regulations setting forth procedures for
hearings under this subdivision.
(c) An affected contractor or subcontractor may obtain review of
the decision of the director by filing a petition for a writ of
mandate to the appropriate superior court pursuant to Section 1094.5
of the Code of Civil Procedure within 45 days after service of the
decision. If no petition for writ of mandate is filed within 45 days
after service of the decision, the order shall become final. If it is
claimed in a petition for writ of mandate that the findings are not
supported by the evidence, abuse of discretion is established if the
court determines that the findings are not supported by substantial
evidence in the light of the whole record.
(d) A certified copy of a final order may be filed by the Labor
Commissioner in the office of the clerk of the superior court in any
county in which the affected contractor or subcontractor has property
or has or had a place of business. The clerk, immediately upon the
filing, shall enter judgment for the state against the person
assessed in the amount shown on the certified order.
(e) A judgment entered pursuant to this section shall bear the
same rate of interest and shall have the same effect as other
judgments and shall be given the same preference allowed by law on
other judgments rendered for claims for taxes. The clerk shall not
charge for the service performed by him or her pursuant to this
section.
(f) An awarding body that has withheld funds in response to a
civil wage and penalty assessment under this chapter shall, upon
receipt of a certified copy of a final order that is no longer
subject to judicial review, promptly transmit the withheld funds, up
to the amount of the certified order, to the Labor Commissioner.
(g) This section shall provide the exclusive method for review of
a civil wage and penalty assessment by the Labor Commissioner under
this chapter or the decision of an awarding body to withhold contract
payments pursuant to Section 1771.5.
1742.1. (a) After 60 days following the service of a civil wage and
penalty assessment under Section 1741 or a notice of withholding
under subdivision (a) of Section 1771.6, the affected contractor,
subcontractor, and surety on a bond or bonds issued to secure the
payment of wages covered by the assessment or notice shall be liable
for liquidated damages in an amount equal to the wages, or portion
thereof, that still remain unpaid. If the assessment or notice
subsequently is overturned or modified after administrative or
judicial review, liquidated damages shall be payable only on the
wages found to be due and unpaid.
Additionally, if the contractor or subcontractor demonstrates to
the satisfaction of the director that he or she had substantial
grounds for appealing the assessment or notice with respect to a
portion of the unpaid wages covered by the assessment or notice, the
director may exercise his or her discretion to waive payment of the
liquidated damages with respect to that portion of the unpaid wages.
Any liquidated damages shall be distributed to the employee along
with the unpaid wages. Section 203.5 shall not apply to claims for
prevailing wages under this chapter.
(b) Notwithstanding subdivision (a), there shall be no liability
for liquidated damages if the full amount of the assessment or
notice, including penalties, has been deposited with the Department
of Industrial Relations, within 60 days following service of the
assessment or notice, for the department to hold in escrow pending
administrative and judicial review. The department shall release such
funds, plus any interest earned, at the conclusion of all
administrative and judicial review to the persons and entities who
are found to be entitled to such funds.
(c) The Labor Commissioner shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a civil wage and penalty assessment under Section 1741,
afford the contractor or subcontractor the opportunity to meet with
the Labor Commissioner or his or her designee to attempt to settle a
dispute regarding the assessment without the need for formal
proceedings. The awarding body shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a notice of withholding under subdivision (a) of Section
1771.6, afford the contractor or subcontractor the opportunity to
meet with the designee of the awarding body to attempt to settle a
dispute regarding the notice without the need for formal proceedings.
The settlement meeting may be held in person or by telephone and
shall take place before the expiration of the 60-day period for
seeking administrative review. No evidence of anything said or any
admission made for the purpose of, in the course of, or pursuant to,
the settlement meeting is admissible or subject to discovery in any
administrative or civil proceeding. No writing prepared for the
purpose of, in the course of, or pursuant to, the settlement meeting,
other than a final settlement agreement, is admissible or subject to
discovery in any administrative or civil proceeding. The assessment
or notice shall advise the contractor or subcontractor of the
opportunity to request a settlement meeting.
(d) This section shall become operative on January 1, 2007.
1743. (a) The contractor and subcontractor shall be jointly and
severally liable for all amounts due pursuant to a final order under
this chapter or a judgment thereon. The Labor Commissioner shall
first exhaust all reasonable remedies to collect the amount due from
the subcontractor before pursuing the claim against the contractor.
(b) From the amount collected, the wage claim shall be satisfied
prior to the amount being applied to penalties. If insufficient money
is recovered to pay each worker in full, the money shall be prorated
among all workers.
(c) Wages for workers who cannot be located shall be placed in the
Industrial Relations Unpaid Wage Fund and held in trust for the
workers pursuant to Section 96.7. Penalties shall be paid into the
General Fund.
(d) A final order under this chapter or a judgment thereon shall
be binding, with respect to the amount found to be due, on a bonding
company issuing a bond that secures the payment of wages and a surety
on a bond. The limitations period of any action on a payment bond
shall be tolled pending a final order that is no longer subject to
judicial review.
1720. (a) As used in this chapter, "public works" means:
(1) Construction, alteration, demolition, installation, or repair
work done under contract and paid for in whole or in part out of
public funds, except work done directly by any public utility company
pursuant to order of the Public Utilities Commission or other public
authority. For purposes of this paragraph, "construction" includes
work performed during the design and preconstruction phases of
construction including, but not limited to, inspection and land
surveying work.
(2) Work done for irrigation, utility, reclamation, and
improvement districts, and other districts of this type. "Public work"
does not include the operation of the irrigation or drainage system
of any irrigation or reclamation district, except as used in Section
1778 relating to retaining wages.
(3) Street, sewer, or other improvement work done under the
direction and supervision or by the authority of any officer or
public body of the state, or of any political subdivision or district
thereof, whether the political subdivision or district operates
under a freeholder's charter or not.
(4) The laying of carpet done under a building lease-maintenance
contract and paid for out of public funds.
(5) The laying of carpet in a public building done under contract
and paid for in whole or in part out of public funds.
(6) Public transportation demonstration projects authorized
pursuant to Section 143 of the Streets and Highways Code.
(b) For purposes of this section, "paid for in whole or in part
out of public funds" means all of the following:
(1) The payment of money or the equivalent of money by the state
or political subdivision directly to or on behalf of the public works
contractor, subcontractor, or developer.
(2) Performance of construction work by the state or political
subdivision in execution of the project.
(3) Transfer by the state or political subdivision of an asset of
value for less than fair market price.
(4) Fees, costs, rents, insurance or bond premiums, loans,
interest rates, or other obligations that would normally be required
in the execution of the contract, that are paid, reduced, charged at
less than fair market value, waived, or forgiven by the state or
political subdivision.
(5) Money loaned by the state or political subdivision that is to
be repaid on a contingent basis.
(6) Credits that are applied by the state or political subdivision
against repayment obligations to the state or political subdivision.
(c) Notwithstanding subdivision (b):
(1) Private residential projects built on private property are not
subject to the requirements of this chapter unless the projects are
built pursuant to an agreement with a state agency, redevelopment
agency, or local public housing authority.
(2) If the state or a political subdivision requires a private
developer to perform construction, alteration, demolition,
installation, or repair work on a public work of improvement as a
condition of regulatory approval of an otherwise private development
project, and the state or political subdivision contributes no more
money, or the equivalent of money, to the overall project than is
required to perform this public improvement work, and the state or
political subdivision maintains no proprietary interest in the
overall project, then only the public improvement work shall thereby
become subject to this chapter.
(3) If the state or a political subdivision reimburses a private
developer for costs that would normally be borne by the public, or
provides directly or indirectly a public subsidy to a private
development project that is de minimis in the context of the project,
an otherwise private development project shall not thereby become
subject to the requirements of this chapter.
(4) The construction or rehabilitation of affordable housing units
for low- or moderate-income persons pursuant to paragraph (5) or (7)
of subdivision (e) of Section 33334.2 of the Health and Safety Code
that are paid for solely with moneys from a Low and Moderate Income
Housing Fund established pursuant to Section 33334.3 of the Health
and Safety Code or that are paid for by a combination of private
funds and funds available pursuant to Section 33334.2 or 33334.3 of
the Health and Safety Code do not constitute a project that is paid
for in whole or in part out of public funds.
(5) "Paid for in whole or in part out of public funds" does not
include tax credits provided pursuant to Section 17053.49 or 23649 of
the Revenue and Taxation Code.
(6) Unless otherwise required by a public funding program, the
construction or rehabilitation of privately owned residential
projects is not subject to the requirements of this chapter if one or
more of the following conditions are met:
(A) The project is a self-help housing project in which no fewer
than 500 hours of construction work associated with the homes are to
be performed by the homebuyers.
(B) The project consists of rehabilitation or expansion work
associated with a facility operated on a not-for-profit basis as
temporary or transitional housing for homeless persons with a total
project cost of less than twenty-five thousand dollars ($25,000).
(C) Assistance is provided to a household as either mortgage
assistance, downpayment assistance, or for the rehabilitation of a
single-family home.
(D) The project consists of new construction, or expansion, or
rehabilitation work associated with a facility developed by a
nonprofit organization to be operated on a not-for-profit basis to
provide emergency or transitional shelter and ancillary services and
assistance to homeless adults and children. The nonprofit
organization operating the project shall provide, at no profit, not
less than 50 percent of the total project cost from nonpublic
sources, excluding real property that is transferred or leased. Total
project cost includes the value of donated labor, materials,
architectural, and engineering services.
(E) The public participation in the project that would otherwise
meet the criteria of subdivision (b) is public funding in the form of
below-market interest rate loans for a project in which occupancy of
at least 40 percent of the units is restricted for at least 20
years, by deed or regulatory agreement, to individuals or families
earning no more than 80 percent of the area median income.
(d) Notwithstanding any provision of this section to the contrary,
the following projects shall not, solely by reason of this section,
be subject to the requirements of this chapter:
(1) Qualified residential rental projects, as defined by Section
142 (d) of the Internal Revenue Code, financed in whole or in part
through the issuance of bonds that receive allocation of a portion of
the state ceiling pursuant to Chapter 11.8 of Division 1 (commencing
with Section 8869.80) of the Government Code on or before December
31, 2003.
(2) Single-family residential projects financed in whole or in
part through the issuance of qualified mortgage revenue bonds or
qualified veterans' mortgage bonds, as defined by Section 143 of the
Internal Revenue Code, or with mortgage credit certificates under a
Qualified Mortgage Credit Certificate Program, as defined by Section
25 of the Internal Revenue Code, that receive allocation of a portion
of the state ceiling pursuant to Chapter 11.8 of Division 1
(commencing with Section 8869.80) of the Government Code on or before
December 31, 2003.
(3) Low-income housing projects that are allocated federal or
state low-income housing tax credits pursuant to Section 42 of the
Internal Revenue Code, Chapter 3.6 of Division 31 (commencing with
Section 50199.4) of the Health and Safety Code, or Section 12206,
17058, or 23610.5 of the Revenue and Taxation Code, on or before
December 31, 2003.
(e) If a statute, other than this section, or a regulation, other
than a regulation adopted pursuant to this section, or an ordinance
or a contract applies this chapter to a project, the exclusions set
forth in subdivision (d) do not apply to that project.
(f) For purposes of this section, references to the Internal
Revenue Code mean the Internal Revenue Code of 1986, as amended, and
include the corresponding predecessor sections of the Internal
Revenue Code of 1954, as amended.
(g) The amendments made to this section by either Chapter 938 of
the Statutes of 2001 or the act adding this subdivision shall not be
construed to preempt local ordinances requiring the payment of
prevailing wages on housing projects.
1720.2. For the limited purposes of Article 2 (commencing with
Section 1770) of this chapter, "public works" also means any
construction work done under private contract when all of the
following conditions exist:
(a) The construction contract is between private persons.
(b) The property subject to the construction contract is privately
owned, but upon completion of the construction work, more than 50
percent of the assignable square feet of the property is leased to
the state or a political subdivision for its use.
(c) Either of the following conditions exist:
(1) The lease agreement between the lessor and the state or
political subdivision, as lessee, was entered into prior to the
construction contract.
(2) The construction work is performed according to plans,
specifications, or criteria furnished by the state or political
subdivision, and the lease agreement between the lessor and the state
or political subdivision, as lessee, is entered into during, or upon
completion of, the construction work.
1720.3. For the limited purposes of Article 2 (commencing with
Section 1770), "public works" also means the hauling of refuse from a
public works site to an outside disposal location, with respect to
contracts involving any state agency, including the California State
University and the University of California, or any political
subdivision of the state.
1720.4. (a) This chapter shall not apply to any of the following
work:
(1) Any work performed by a volunteer. For purposes of this
section, "volunteer" means an individual who performs work for civic,
charitable, or humanitarian reasons for a public agency or
corporation qualified under Section 501(c)(3) of the Internal Revenue
Code as a tax-exempt organization, without promise, expectation, or
receipt of any compensation for work performed.
(A) An individual shall be considered a volunteer only when his or
her services are offered freely and without pressure and coercion,
direct or implied, from an employer.
(B) An individual may receive reasonable meals, lodging,
transportation, and incidental expenses or nominal nonmonetary awards
without losing volunteer status if, in the entire context of the
situation, those benefits and payments are not a substitute form of
compensation for work performed.
(C) An individual shall not be considered a volunteer if the
person is otherwise employed for compensation at any time (i) in the
construction, alteration, demolition, installation, repair, or
maintenance work on the same project, or (ii) by a contractor, other
than a corporation qualified under Section 501(c)(3) of the Internal
Revenue Code as a tax-exempt organization, that is receiving payment
to perform construction, alteration, demolition, installation,
repair, or maintenance work on the same project.
(2) Any work performed by a volunteer coordinator. For purposes of
this section, "volunteer coordinator" means an individual paid by a
corporation qualified under Section 501(c)(3) of the Internal Revenue
Code as a tax-exempt organization, to oversee or supervise
volunteers. An individual may be considered a volunteer coordinator
even if the individual performs some nonsupervisory work on a project
alongside the volunteers, so long as the individual's primary
responsibility on the project is to oversee or supervise the
volunteers rather than to perform nonsupervisory work.
(3) Any work performed by members of the California Conservation
Corps or of Community Conservation Corps certified by the California
Conservation Corps pursuant to Section 14507.5 of the Public
Resources Code.
(b) This section shall apply retroactively to otherwise covered
work concluded on or after January 1, 2002, to the extent permitted
by law.
(c) On or before January 1, 2011, the director shall submit a
written report to the Legislature that does both of the following:
(1) Describes the number and the nature of complaints received and
investigations conducted involving the use of volunteers on public
works projects subject to this chapter, that are projects as
described in Section 21190 of the Public Resources Code.
(2) Provides an estimate of each of the following as they relate
to public works projects that involve the acquisition, presentation,
or restoration of natural areas, including parks or ecological
reserves, or other public works projects that have one or more of the
purposes, as described in Section 21190 of the Public Resources
Code:
(A) The number of hours per year that volunteers work on public
works projects.
(B) The cost per year of public works projects, that are projects
as described in Section 21190 of the Public Resources Code, and the
percentage of work performed by volunteers.
(C) The types of work done by volunteers on public works projects,
that are projects as described in Section 21190 of the Public
Resources Code.
(d) The sum of one hundred thousand dollars ($100,000) is hereby
appropriated from the Environmental License Plate Fund for the
purposes of funding the report required pursuant to subdivision (c).
(e) This section shall remain in effect only until January 1,
2012, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 2012, deletes or extends
that date.
1721. "Political subdivision" includes any county, city, district,
public housing authority, or public agency of the state, and
assessment or improvement districts.
1722. "Awarding body" or "body awarding the contract" means
department, board, authority, officer or agent awarding a contract
for public work.
1722.1. For the purposes of this chapter, "contractor" and
"subcontractor" include a contractor, subcontractor, licensee,
officer, agent, or representative thereof, acting in that capacity,
when working on public works pursuant to this article and Article 2
(commencing with Section 1770).
1723. "Worker" includes laborer, worker, or mechanic.
1724. "Locality in which public work is performed" means the county
in which the public work is done in cases in which the contract is
awarded by the State, and means the limits of the political
subdivision on whose behalf the contract is awarded in other cases.
1725. "Alien" means any person who is not a born or fully
naturalized citizen of the United States.
1726. (a) The body awarding the contract for public work shall take
cognizance of violations of this chapter committed in the course of
the execution of the contract, and shall promptly report any
suspected violations to the Labor Commissioner.
(b) If the awarding body determines as a result of its own
investigation that there has been a violation of this chapter and
withholds contract payments, the procedures in Section 1771.6 shall
be followed.
(c) A contractor may bring an action in a court of competent
jurisdiction to recover from an awarding body the difference between
the wages actually paid to an employee and the wages that were
required to be paid to an employee under this chapter, any penalties
required to be paid under this chapter, and costs and attorney's fees
related to this action, if either of the following is true:
(1) The awarding body previously affirmatively represented to the
contractor in writing, in the call for bids, or otherwise, that the
work to be covered by the bid or contract was not a "public work," as
defined in this chapter.
(2) The awarding body received actual written notice from the
Department of Industrial Relations that the work to be covered by the
bid or contract is a "public work," as defined in this chapter, and
failed to disclose that information to the contractor before the bid
opening or awarding of the contract.
1727. (a) Before making payments to the contractor of money due
under a contract for public work, the awarding body shall withhold
and retain therefrom all amounts required to satisfy any civil wage
and penalty assessment issued by the Labor Commissioner under this
chapter. The amounts required to satisfy a civil wage and penalty
assessment shall not be disbursed by the awarding body until receipt
of a final order that is no longer subject to judicial review.
(b) If the awarding body has not retained sufficient money under
the contract to satisfy a civil wage and penalty assessment based on
a subcontractor's violations, the contractor shall, upon the request
of the Labor Commissioner, withhold sufficient money due the
subcontractor under the contract to satisfy the assessment and
transfer the money to the awarding body. These amounts shall not be
disbursed by the awarding body until receipt of a final order that is
no longer subject to judicial review.
1728. In cases of contracts with assessment or improvement
districts where full payment is made in the form of a single warrant,
or other evidence of full payment, after completion and acceptance
of the work, the awarding body shall accept from the contractor in
cash a sum equal to, and in lieu of, any amount required to be
withheld, retained, or forfeited under the provisions of this
section, and said awarding body shall then release the final warrant
or payment in full.
1729. It shall be lawful for any contractor to withhold from any
subcontractor under him sufficient sums to cover any penalties
withheld from him by the awarding body on account of the
subcontractor's failure to comply with the terms of this chapter, and
if payment has already been made to the subcontractor the contractor
may recover from him the amount of the penalty or forfeiture in a
suit at law.
1734. Any court collecting any fines or penalties under the
criminal provisions of this chapter or any of the labor laws
pertaining to public works shall as soon as practicable after the
receipt thereof deposit same with the county treasurer of the county
in which such court is situated. Amounts so deposited shall be paid
at least once a month by warrant of the county auditor drawn upon
requisition of the judge or clerk of said court, to the State
Treasurer for deposit in the General Fund.
1735. A contractor shall not discriminate in the employment of
persons upon public works on any basis listed in subdivision (a) of
Section 12940 of the Government Code, as those bases are defined in
Sections 12926 and 12926.1 of the Government Code, except as
otherwise provided in Section 12940 of the Government Code. Every
contractor for public works who violates this section is subject to
all the penalties imposed for a violation of this chapter.
1736. During any investigation conducted under this part, the
Division of Labor Standards Enforcement shall keep confidential the
name of any employee who reports a violation of this chapter and any
other information that may identify the employee.
1740. Notwithstanding any other provision of this chapter or any
other law of this State, except limitations imposed by the
Constitution, the legislative body of a political subdivision which
has received or is to receive a loan or grant of funds from the
Federal Government or a federal department or agency for public works
of that political subdivision, may provide in its call for bids in
connection with such public works that all bid specifications and
contracts and other procedures in connection with bids or contracts
shall be subject to modification to comply with revisions in federal
minimum wage schedules without the necessity of republication or
duplication of other formal statutory requirements.
1741. (a) If the Labor Commissioner or his or her designee
determines after an investigation that there has been a violation of
this chapter, the Labor Commissioner shall with reasonable promptness
issue a civil wage and penalty assessment to the contractor or
subcontractor or both. The assessment shall be in writing and shall
describe the nature of the violation and the amount of wages,
penalties, and forfeitures due and shall include the basis for the
assessment. The assessment shall be served not later than 180 days
after the filing of a valid notice of completion in the office of the
county recorder in each county in which the public work or some part
thereof was performed, or not later than 180 days after acceptance
of the public work, whichever occurs last. However, if the assessment
is served after the expiration of this 180-day period, but before
the expiration of an additional 180 days, and the awarding body has
not yet made full payment to the contractor, the assessment is valid
up to the amount of the funds retained. Service of the assessment
shall be completed pursuant to Section 1013 of the Code of Civil
Procedure by first-class and certified mail to the contractor,
subcontractor, and awarding body. The assessment shall advise the
contractor and subcontractor of the procedure for obtaining review of
the assessment. The Labor Commissioner shall, to the extent
practicable, ascertain the identity of any bonding company issuing a
bond that secures the payment of wages covered by the assessment and
any surety on a bond, and shall serve a copy of the assessment by
certified mail to the bonding company or surety at the same time
service is made to the contractor, subcontractor, and awarding body.
However, no bonding company or surety shall be relieved of its
responsibilities because it failed to receive notice from the Labor
Commissioner.
(b) Interest shall accrue on all due and unpaid wages at the rate
described in subdivision (b) of Section 3289 of the Civil Code. The
interest shall accrue from the date that the wages were due and
payable, as provided in Part 7 (commencing with Section 1720) of
Division 2, until the wages are paid.
(c) (1) The Labor Commissioner shall maintain a public list of the
names of each contractor and subcontractor who has been found to
have committed a willful violation of Section 1775 or to whom a final
order, which is no longer subject to judicial review, has been
issued.
(2) The list shall include the date of each assessment, the amount
of wages and penalties assessed, and the amount collected.
(3) The list shall be updated at least quarterly, and the
contractor's or subcontractor's name shall remain on that list until
the assessment is satisfied, or for a period of three years beginning
from the date of the issuance of the assessment, whichever is later.
1742. (a) An affected contractor or subcontractor may obtain review
of a civil wage and penalty assessment under this chapter by
transmitting a written request to the office of the Labor
Commissioner that appears on the assessment within 60 days after
service of the assessment. If no hearing is requested within 60 days
after service of the assessment, the assessment shall become final.
(b) Upon receipt of a timely request, a hearing shall be commenced
within 90 days before the director, who shall appoint an impartial
hearing officer possessing the qualifications of an administrative
law judge pursuant to subdivision (b) of Section 11502 of the
Government Code. The appointed hearing officer shall be an employee
of the department, but shall not be an employee of the Division of
Labor Standards Enforcement. The contractor or subcontractor shall be
provided an opportunity to review evidence to be utilized by the
Labor Commissioner at the hearing within 20 days of the receipt of
the written request for a hearing. Any evidence obtained by the Labor
Commissioner subsequent to the 20-day cutoff shall be promptly
disclosed to the contractor or subcontractor.
The contractor or subcontractor shall have the burden of proving
that the basis for the civil wage and penalty assessment is
incorrect. The assessment shall be sufficiently detailed to provide
fair notice to the contractor or subcontractor of the issues at the
hearing.
Within 45 days of the conclusion of the hearing, the director
shall issue a written decision affirming, modifying, or dismissing
the assessment. The decision of the director shall consist of a
notice of findings, findings, and an order. This decision shall be
served on all parties and the awarding body pursuant to Section 1013
of the Code of Civil Procedure by first-class mail at the last known
address of the party on file with the Labor Commissioner. Within 15
days of the issuance of the decision, the director may reconsider or
modify the decision to correct an error, except that a clerical error
may be corrected at any time.
The director shall adopt regulations setting forth procedures for
hearings under this subdivision.
(c) An affected contractor or subcontractor may obtain review of
the decision of the director by filing a petition for a writ of
mandate to the appropriate superior court pursuant to Section 1094.5
of the Code of Civil Procedure within 45 days after service of the
decision. If no petition for writ of mandate is filed within 45 days
after service of the decision, the order shall become final. If it is
claimed in a petition for writ of mandate that the findings are not
supported by the evidence, abuse of discretion is established if the
court determines that the findings are not supported by substantial
evidence in the light of the whole record.
(d) A certified copy of a final order may be filed by the Labor
Commissioner in the office of the clerk of the superior court in any
county in which the affected contractor or subcontractor has property
or has or had a place of business. The clerk, immediately upon the
filing, shall enter judgment for the state against the person
assessed in the amount shown on the certified order.
(e) A judgment entered pursuant to this section shall bear the
same rate of interest and shall have the same effect as other
judgments and shall be given the same preference allowed by law on
other judgments rendered for claims for taxes. The clerk shall not
charge for the service performed by him or her pursuant to this
section.
(f) An awarding body that has withheld funds in response to a
civil wage and penalty assessment under this chapter shall, upon
receipt of a certified copy of a final order that is no longer
subject to judicial review, promptly transmit the withheld funds, up
to the amount of the certified order, to the Labor Commissioner.
(g) This section shall provide the exclusive method for review of
a civil wage and penalty assessment by the Labor Commissioner under
this chapter or the decision of an awarding body to withhold contract
payments pursuant to Section 1771.5.
1742.1. (a) After 60 days following the service of a civil wage and
penalty assessment under Section 1741 or a notice of withholding
under subdivision (a) of Section 1771.6, the affected contractor,
subcontractor, and surety on a bond or bonds issued to secure the
payment of wages covered by the assessment or notice shall be liable
for liquidated damages in an amount equal to the wages, or portion
thereof, that still remain unpaid. If the assessment or notice
subsequently is overturned or modified after administrative or
judicial review, liquidated damages shall be payable only on the
wages found to be due and unpaid.
Additionally, if the contractor or subcontractor demonstrates to
the satisfaction of the director that he or she had substantial
grounds for appealing the assessment or notice with respect to a
portion of the unpaid wages covered by the assessment or notice, the
director may exercise his or her discretion to waive payment of the
liquidated damages with respect to that portion of the unpaid wages.
Any liquidated damages shall be distributed to the employee along
with the unpaid wages. Section 203.5 shall not apply to claims for
prevailing wages under this chapter.
(b) Notwithstanding subdivision (a), there shall be no liability
for liquidated damages if the full amount of the assessment or
notice, including penalties, has been deposited with the Department
of Industrial Relations, within 60 days following service of the
assessment or notice, for the department to hold in escrow pending
administrative and judicial review. The department shall release such
funds, plus any interest earned, at the conclusion of all
administrative and judicial review to the persons and entities who
are found to be entitled to such funds.
(c) The Labor Commissioner shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a civil wage and penalty assessment under Section 1741,
afford the contractor or subcontractor the opportunity to meet with
the Labor Commissioner or his or her designee to attempt to settle a
dispute regarding the assessment without the need for formal
proceedings. The awarding body shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a notice of withholding under subdivision (a) of Section
1771.6, afford the contractor or subcontractor the opportunity to
meet with the designee of the awarding body to attempt to settle a
dispute regarding the notice without the need for formal proceedings.
The settlement meeting may be held in person or by telephone and
shall take place before the expiration of the 60-day period for
seeking administrative review. No evidence of anything said or any
admission made for the purpose of, in the course of, or pursuant to,
the settlement meeting is admissible or subject to discovery in any
administrative or civil proceeding. No writing prepared for the
purpose of, in the course of, or pursuant to, the settlement meeting,
other than a final settlement agreement, is admissible or subject to
discovery in any administrative or civil proceeding. The assessment
or notice shall advise the contractor or subcontractor of the
opportunity to request a settlement meeting.
(d) This section shall become operative on January 1, 2007.
1743. (a) The contractor and subcontractor shall be jointly and
severally liable for all amounts due pursuant to a final order under
this chapter or a judgment thereon. The Labor Commissioner shall
first exhaust all reasonable remedies to collect the amount due from
the subcontractor before pursuing the claim against the contractor.
(b) From the amount collected, the wage claim shall be satisfied
prior to the amount being applied to penalties. If insufficient money
is recovered to pay each worker in full, the money shall be prorated
among all workers.
(c) Wages for workers who cannot be located shall be placed in the
Industrial Relations Unpaid Wage Fund and held in trust for the
workers pursuant to Section 96.7. Penalties shall be paid into the
General Fund.
(d) A final order under this chapter or a judgment thereon shall
be binding, with respect to the amount found to be due, on a bonding
company issuing a bond that secures the payment of wages and a surety
on a bond. The limitations period of any action on a payment bond
shall be tolled pending a final order that is no longer subject to
judicial review.
1720. (a) As used in this chapter, "public works" means:
(1) Construction, alteration, demolition, installation, or repair
work done under contract and paid for in whole or in part out of
public funds, except work done directly by any public utility company
pursuant to order of the Public Utilities Commission or other public
authority. For purposes of this paragraph, "construction" includes
work performed during the design and preconstruction phases of
construction including, but not limited to, inspection and land
surveying work.
(2) Work done for irrigation, utility, reclamation, and
improvement districts, and other districts of this type. "Public work"
does not include the operation of the irrigation or drainage system
of any irrigation or reclamation district, except as used in Section
1778 relating to retaining wages.
(3) Street, sewer, or other improvement work done under the
direction and supervision or by the authority of any officer or
public body of the state, or of any political subdivision or district
thereof, whether the political subdivision or district operates
under a freeholder's charter or not.
(4) The laying of carpet done under a building lease-maintenance
contract and paid for out of public funds.
(5) The laying of carpet in a public building done under contract
and paid for in whole or in part out of public funds.
(6) Public transportation demonstration projects authorized
pursuant to Section 143 of the Streets and Highways Code.
(b) For purposes of this section, "paid for in whole or in part
out of public funds" means all of the following:
(1) The payment of money or the equivalent of money by the state
or political subdivision directly to or on behalf of the public works
contractor, subcontractor, or developer.
(2) Performance of construction work by the state or political
subdivision in execution of the project.
(3) Transfer by the state or political subdivision of an asset of
value for less than fair market price.
(4) Fees, costs, rents, insurance or bond premiums, loans,
interest rates, or other obligations that would normally be required
in the execution of the contract, that are paid, reduced, charged at
less than fair market value, waived, or forgiven by the state or
political subdivision.
(5) Money loaned by the state or political subdivision that is to
be repaid on a contingent basis.
(6) Credits that are applied by the state or political subdivision
against repayment obligations to the state or political subdivision.
(c) Notwithstanding subdivision (b):
(1) Private residential projects built on private property are not
subject to the requirements of this chapter unless the projects are
built pursuant to an agreement with a state agency, redevelopment
agency, or local public housing authority.
(2) If the state or a political subdivision requires a private
developer to perform construction, alteration, demolition,
installation, or repair work on a public work of improvement as a
condition of regulatory approval of an otherwise private development
project, and the state or political subdivision contributes no more
money, or the equivalent of money, to the overall project than is
required to perform this public improvement work, and the state or
political subdivision maintains no proprietary interest in the
overall project, then only the public improvement work shall thereby
become subject to this chapter.
(3) If the state or a political subdivision reimburses a private
developer for costs that would normally be borne by the public, or
provides directly or indirectly a public subsidy to a private
development project that is de minimis in the context of the project,
an otherwise private development project shall not thereby become
subject to the requirements of this chapter.
(4) The construction or rehabilitation of affordable housing units
for low- or moderate-income persons pursuant to paragraph (5) or (7)
of subdivision (e) of Section 33334.2 of the Health and Safety Code
that are paid for solely with moneys from a Low and Moderate Income
Housing Fund established pursuant to Section 33334.3 of the Health
and Safety Code or that are paid for by a combination of private
funds and funds available pursuant to Section 33334.2 or 33334.3 of
the Health and Safety Code do not constitute a project that is paid
for in whole or in part out of public funds.
(5) "Paid for in whole or in part out of public funds" does not
include tax credits provided pursuant to Section 17053.49 or 23649 of
the Revenue and Taxation Code.
(6) Unless otherwise required by a public funding program, the
construction or rehabilitation of privately owned residential
projects is not subject to the requirements of this chapter if one or
more of the following conditions are met:
(A) The project is a self-help housing project in which no fewer
than 500 hours of construction work associated with the homes are to
be performed by the homebuyers.
(B) The project consists of rehabilitation or expansion work
associated with a facility operated on a not-for-profit basis as
temporary or transitional housing for homeless persons with a total
project cost of less than twenty-five thousand dollars ($25,000).
(C) Assistance is provided to a household as either mortgage
assistance, downpayment assistance, or for the rehabilitation of a
single-family home.
(D) The project consists of new construction, or expansion, or
rehabilitation work associated with a facility developed by a
nonprofit organization to be operated on a not-for-profit basis to
provide emergency or transitional shelter and ancillary services and
assistance to homeless adults and children. The nonprofit
organization operating the project shall provide, at no profit, not
less than 50 percent of the total project cost from nonpublic
sources, excluding real property that is transferred or leased. Total
project cost includes the value of donated labor, materials,
architectural, and engineering services.
(E) The public participation in the project that would otherwise
meet the criteria of subdivision (b) is public funding in the form of
below-market interest rate loans for a project in which occupancy of
at least 40 percent of the units is restricted for at least 20
years, by deed or regulatory agreement, to individuals or families
earning no more than 80 percent of the area median income.
(d) Notwithstanding any provision of this section to the contrary,
the following projects shall not, solely by reason of this section,
be subject to the requirements of this chapter:
(1) Qualified residential rental projects, as defined by Section
142 (d) of the Internal Revenue Code, financed in whole or in part
through the issuance of bonds that receive allocation of a portion of
the state ceiling pursuant to Chapter 11.8 of Division 1 (commencing
with Section 8869.80) of the Government Code on or before December
31, 2003.
(2) Single-family residential projects financed in whole or in
part through the issuance of qualified mortgage revenue bonds or
qualified veterans' mortgage bonds, as defined by Section 143 of the
Internal Revenue Code, or with mortgage credit certificates under a
Qualified Mortgage Credit Certificate Program, as defined by Section
25 of the Internal Revenue Code, that receive allocation of a portion
of the state ceiling pursuant to Chapter 11.8 of Division 1
(commencing with Section 8869.80) of the Government Code on or before
December 31, 2003.
(3) Low-income housing projects that are allocated federal or
state low-income housing tax credits pursuant to Section 42 of the
Internal Revenue Code, Chapter 3.6 of Division 31 (commencing with
Section 50199.4) of the Health and Safety Code, or Section 12206,
17058, or 23610.5 of the Revenue and Taxation Code, on or before
December 31, 2003.
(e) If a statute, other than this section, or a regulation, other
than a regulation adopted pursuant to this section, or an ordinance
or a contract applies this chapter to a project, the exclusions set
forth in subdivision (d) do not apply to that project.
(f) For purposes of this section, references to the Internal
Revenue Code mean the Internal Revenue Code of 1986, as amended, and
include the corresponding predecessor sections of the Internal
Revenue Code of 1954, as amended.
(g) The amendments made to this section by either Chapter 938 of
the Statutes of 2001 or the act adding this subdivision shall not be
construed to preempt local ordinances requiring the payment of
prevailing wages on housing projects.
1720.2. For the limited purposes of Article 2 (commencing with
Section 1770) of this chapter, "public works" also means any
construction work done under private contract when all of the
following conditions exist:
(a) The construction contract is between private persons.
(b) The property subject to the construction contract is privately
owned, but upon completion of the construction work, more than 50
percent of the assignable square feet of the property is leased to
the state or a political subdivision for its use.
(c) Either of the following conditions exist:
(1) The lease agreement between the lessor and the state or
political subdivision, as lessee, was entered into prior to the
construction contract.
(2) The construction work is performed according to plans,
specifications, or criteria furnished by the state or political
subdivision, and the lease agreement between the lessor and the state
or political subdivision, as lessee, is entered into during, or upon
completion of, the construction work.
1720.3. For the limited purposes of Article 2 (commencing with
Section 1770), "public works" also means the hauling of refuse from a
public works site to an outside disposal location, with respect to
contracts involving any state agency, including the California State
University and the University of California, or any political
subdivision of the state.
1720.4. (a) This chapter shall not apply to any of the following
work:
(1) Any work performed by a volunteer. For purposes of this
section, "volunteer" means an individual who performs work for civic,
charitable, or humanitarian reasons for a public agency or
corporation qualified under Section 501(c)(3) of the Internal Revenue
Code as a tax-exempt organization, without promise, expectation, or
receipt of any compensation for work performed.
(A) An individual shall be considered a volunteer only when his or
her services are offered freely and without pressure and coercion,
direct or implied, from an employer.
(B) An individual may receive reasonable meals, lodging,
transportation, and incidental expenses or nominal nonmonetary awards
without losing volunteer status if, in the entire context of the
situation, those benefits and payments are not a substitute form of
compensation for work performed.
(C) An individual shall not be considered a volunteer if the
person is otherwise employed for compensation at any time (i) in the
construction, alteration, demolition, installation, repair, or
maintenance work on the same project, or (ii) by a contractor, other
than a corporation qualified under Section 501(c)(3) of the Internal
Revenue Code as a tax-exempt organization, that is receiving payment
to perform construction, alteration, demolition, installation,
repair, or maintenance work on the same project.
(2) Any work performed by a volunteer coordinator. For purposes of
this section, "volunteer coordinator" means an individual paid by a
corporation qualified under Section 501(c)(3) of the Internal Revenue
Code as a tax-exempt organization, to oversee or supervise
volunteers. An individual may be considered a volunteer coordinator
even if the individual performs some nonsupervisory work on a project
alongside the volunteers, so long as the individual's primary
responsibility on the project is to oversee or supervise the
volunteers rather than to perform nonsupervisory work.
(3) Any work performed by members of the California Conservation
Corps or of Community Conservation Corps certified by the California
Conservation Corps pursuant to Section 14507.5 of the Public
Resources Code.
(b) This section shall apply retroactively to otherwise covered
work concluded on or after January 1, 2002, to the extent permitted
by law.
(c) On or before January 1, 2011, the director shall submit a
written report to the Legislature that does both of the following:
(1) Describes the number and the nature of complaints received and
investigations conducted involving the use of volunteers on public
works projects subject to this chapter, that are projects as
described in Section 21190 of the Public Resources Code.
(2) Provides an estimate of each of the following as they relate
to public works projects that involve the acquisition, presentation,
or restoration of natural areas, including parks or ecological
reserves, or other public works projects that have one or more of the
purposes, as described in Section 21190 of the Public Resources
Code:
(A) The number of hours per year that volunteers work on public
works projects.
(B) The cost per year of public works projects, that are projects
as described in Section 21190 of the Public Resources Code, and the
percentage of work performed by volunteers.
(C) The types of work done by volunteers on public works projects,
that are projects as described in Section 21190 of the Public
Resources Code.
(d) The sum of one hundred thousand dollars ($100,000) is hereby
appropriated from the Environmental License Plate Fund for the
purposes of funding the report required pursuant to subdivision (c).
(e) This section shall remain in effect only until January 1,
2012, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 2012, deletes or extends
that date.
1721. "Political subdivision" includes any county, city, district,
public housing authority, or public agency of the state, and
assessment or improvement districts.
1722. "Awarding body" or "body awarding the contract" means
department, board, authority, officer or agent awarding a contract
for public work.
1722.1. For the purposes of this chapter, "contractor" and
"subcontractor" include a contractor, subcontractor, licensee,
officer, agent, or representative thereof, acting in that capacity,
when working on public works pursuant to this article and Article 2
(commencing with Section 1770).
1723. "Worker" includes laborer, worker, or mechanic.
1724. "Locality in which public work is performed" means the county
in which the public work is done in cases in which the contract is
awarded by the State, and means the limits of the political
subdivision on whose behalf the contract is awarded in other cases.
1725. "Alien" means any person who is not a born or fully
naturalized citizen of the United States.
1726. (a) The body awarding the contract for public work shall take
cognizance of violations of this chapter committed in the course of
the execution of the contract, and shall promptly report any
suspected violations to the Labor Commissioner.
(b) If the awarding body determines as a result of its own
investigation that there has been a violation of this chapter and
withholds contract payments, the procedures in Section 1771.6 shall
be followed.
(c) A contractor may bring an action in a court of competent
jurisdiction to recover from an awarding body the difference between
the wages actually paid to an employee and the wages that were
required to be paid to an employee under this chapter, any penalties
required to be paid under this chapter, and costs and attorney's fees
related to this action, if either of the following is true:
(1) The awarding body previously affirmatively represented to the
contractor in writing, in the call for bids, or otherwise, that the
work to be covered by the bid or contract was not a "public work," as
defined in this chapter.
(2) The awarding body received actual written notice from the
Department of Industrial Relations that the work to be covered by the
bid or contract is a "public work," as defined in this chapter, and
failed to disclose that information to the contractor before the bid
opening or awarding of the contract.
1727. (a) Before making payments to the contractor of money due
under a contract for public work, the awarding body shall withhold
and retain therefrom all amounts required to satisfy any civil wage
and penalty assessment issued by the Labor Commissioner under this
chapter. The amounts required to satisfy a civil wage and penalty
assessment shall not be disbursed by the awarding body until receipt
of a final order that is no longer subject to judicial review.
(b) If the awarding body has not retained sufficient money under
the contract to satisfy a civil wage and penalty assessment based on
a subcontractor's violations, the contractor shall, upon the request
of the Labor Commissioner, withhold sufficient money due the
subcontractor under the contract to satisfy the assessment and
transfer the money to the awarding body. These amounts shall not be
disbursed by the awarding body until receipt of a final order that is
no longer subject to judicial review.
1728. In cases of contracts with assessment or improvement
districts where full payment is made in the form of a single warrant,
or other evidence of full payment, after completion and acceptance
of the work, the awarding body shall accept from the contractor in
cash a sum equal to, and in lieu of, any amount required to be
withheld, retained, or forfeited under the provisions of this
section, and said awarding body shall then release the final warrant
or payment in full.
1729. It shall be lawful for any contractor to withhold from any
subcontractor under him sufficient sums to cover any penalties
withheld from him by the awarding body on account of the
subcontractor's failure to comply with the terms of this chapter, and
if payment has already been made to the subcontractor the contractor
may recover from him the amount of the penalty or forfeiture in a
suit at law.
1734. Any court collecting any fines or penalties under the
criminal provisions of this chapter or any of the labor laws
pertaining to public works shall as soon as practicable after the
receipt thereof deposit same with the county treasurer of the county
in which such court is situated. Amounts so deposited shall be paid
at least once a month by warrant of the county auditor drawn upon
requisition of the judge or clerk of said court, to the State
Treasurer for deposit in the General Fund.
1735. A contractor shall not discriminate in the employment of
persons upon public works on any basis listed in subdivision (a) of
Section 12940 of the Government Code, as those bases are defined in
Sections 12926 and 12926.1 of the Government Code, except as
otherwise provided in Section 12940 of the Government Code. Every
contractor for public works who violates this section is subject to
all the penalties imposed for a violation of this chapter.
1736. During any investigation conducted under this part, the
Division of Labor Standards Enforcement shall keep confidential the
name of any employee who reports a violation of this chapter and any
other information that may identify the employee.
1740. Notwithstanding any other provision of this chapter or any
other law of this State, except limitations imposed by the
Constitution, the legislative body of a political subdivision which
has received or is to receive a loan or grant of funds from the
Federal Government or a federal department or agency for public works
of that political subdivision, may provide in its call for bids in
connection with such public works that all bid specifications and
contracts and other procedures in connection with bids or contracts
shall be subject to modification to comply with revisions in federal
minimum wage schedules without the necessity of republication or
duplication of other formal statutory requirements.
1741. (a) If the Labor Commissioner or his or her designee
determines after an investigation that there has been a violation of
this chapter, the Labor Commissioner shall with reasonable promptness
issue a civil wage and penalty assessment to the contractor or
subcontractor or both. The assessment shall be in writing and shall
describe the nature of the violation and the amount of wages,
penalties, and forfeitures due and shall include the basis for the
assessment. The assessment shall be served not later than 180 days
after the filing of a valid notice of completion in the office of the
county recorder in each county in which the public work or some part
thereof was performed, or not later than 180 days after acceptance
of the public work, whichever occurs last. However, if the assessment
is served after the expiration of this 180-day period, but before
the expiration of an additional 180 days, and the awarding body has
not yet made full payment to the contractor, the assessment is valid
up to the amount of the funds retained. Service of the assessment
shall be completed pursuant to Section 1013 of the Code of Civil
Procedure by first-class and certified mail to the contractor,
subcontractor, and awarding body. The assessment shall advise the
contractor and subcontractor of the procedure for obtaining review of
the assessment. The Labor Commissioner shall, to the extent
practicable, ascertain the identity of any bonding company issuing a
bond that secures the payment of wages covered by the assessment and
any surety on a bond, and shall serve a copy of the assessment by
certified mail to the bonding company or surety at the same time
service is made to the contractor, subcontractor, and awarding body.
However, no bonding company or surety shall be relieved of its
responsibilities because it failed to receive notice from the Labor
Commissioner.
(b) Interest shall accrue on all due and unpaid wages at the rate
described in subdivision (b) of Section 3289 of the Civil Code. The
interest shall accrue from the date that the wages were due and
payable, as provided in Part 7 (commencing with Section 1720) of
Division 2, until the wages are paid.
(c) (1) The Labor Commissioner shall maintain a public list of the
names of each contractor and subcontractor who has been found to
have committed a willful violation of Section 1775 or to whom a final
order, which is no longer subject to judicial review, has been
issued.
(2) The list shall include the date of each assessment, the amount
of wages and penalties assessed, and the amount collected.
(3) The list shall be updated at least quarterly, and the
contractor's or subcontractor's name shall remain on that list until
the assessment is satisfied, or for a period of three years beginning
from the date of the issuance of the assessment, whichever is later.
1742. (a) An affected contractor or subcontractor may obtain review
of a civil wage and penalty assessment under this chapter by
transmitting a written request to the office of the Labor
Commissioner that appears on the assessment within 60 days after
service of the assessment. If no hearing is requested within 60 days
after service of the assessment, the assessment shall become final.
(b) Upon receipt of a timely request, a hearing shall be commenced
within 90 days before the director, who shall appoint an impartial
hearing officer possessing the qualifications of an administrative
law judge pursuant to subdivision (b) of Section 11502 of the
Government Code. The appointed hearing officer shall be an employee
of the department, but shall not be an employee of the Division of
Labor Standards Enforcement. The contractor or subcontractor shall be
provided an opportunity to review evidence to be utilized by the
Labor Commissioner at the hearing within 20 days of the receipt of
the written request for a hearing. Any evidence obtained by the Labor
Commissioner subsequent to the 20-day cutoff shall be promptly
disclosed to the contractor or subcontractor.
The contractor or subcontractor shall have the burden of proving
that the basis for the civil wage and penalty assessment is
incorrect. The assessment shall be sufficiently detailed to provide
fair notice to the contractor or subcontractor of the issues at the
hearing.
Within 45 days of the conclusion of the hearing, the director
shall issue a written decision affirming, modifying, or dismissing
the assessment. The decision of the director shall consist of a
notice of findings, findings, and an order. This decision shall be
served on all parties and the awarding body pursuant to Section 1013
of the Code of Civil Procedure by first-class mail at the last known
address of the party on file with the Labor Commissioner. Within 15
days of the issuance of the decision, the director may reconsider or
modify the decision to correct an error, except that a clerical error
may be corrected at any time.
The director shall adopt regulations setting forth procedures for
hearings under this subdivision.
(c) An affected contractor or subcontractor may obtain review of
the decision of the director by filing a petition for a writ of
mandate to the appropriate superior court pursuant to Section 1094.5
of the Code of Civil Procedure within 45 days after service of the
decision. If no petition for writ of mandate is filed within 45 days
after service of the decision, the order shall become final. If it is
claimed in a petition for writ of mandate that the findings are not
supported by the evidence, abuse of discretion is established if the
court determines that the findings are not supported by substantial
evidence in the light of the whole record.
(d) A certified copy of a final order may be filed by the Labor
Commissioner in the office of the clerk of the superior court in any
county in which the affected contractor or subcontractor has property
or has or had a place of business. The clerk, immediately upon the
filing, shall enter judgment for the state against the person
assessed in the amount shown on the certified order.
(e) A judgment entered pursuant to this section shall bear the
same rate of interest and shall have the same effect as other
judgments and shall be given the same preference allowed by law on
other judgments rendered for claims for taxes. The clerk shall not
charge for the service performed by him or her pursuant to this
section.
(f) An awarding body that has withheld funds in response to a
civil wage and penalty assessment under this chapter shall, upon
receipt of a certified copy of a final order that is no longer
subject to judicial review, promptly transmit the withheld funds, up
to the amount of the certified order, to the Labor Commissioner.
(g) This section shall provide the exclusive method for review of
a civil wage and penalty assessment by the Labor Commissioner under
this chapter or the decision of an awarding body to withhold contract
payments pursuant to Section 1771.5.
1742.1. (a) After 60 days following the service of a civil wage and
penalty assessment under Section 1741 or a notice of withholding
under subdivision (a) of Section 1771.6, the affected contractor,
subcontractor, and surety on a bond or bonds issued to secure the
payment of wages covered by the assessment or notice shall be liable
for liquidated damages in an amount equal to the wages, or portion
thereof, that still remain unpaid. If the assessment or notice
subsequently is overturned or modified after administrative or
judicial review, liquidated damages shall be payable only on the
wages found to be due and unpaid.
Additionally, if the contractor or subcontractor demonstrates to
the satisfaction of the director that he or she had substantial
grounds for appealing the assessment or notice with respect to a
portion of the unpaid wages covered by the assessment or notice, the
director may exercise his or her discretion to waive payment of the
liquidated damages with respect to that portion of the unpaid wages.
Any liquidated damages shall be distributed to the employee along
with the unpaid wages. Section 203.5 shall not apply to claims for
prevailing wages under this chapter.
(b) Notwithstanding subdivision (a), there shall be no liability
for liquidated damages if the full amount of the assessment or
notice, including penalties, has been deposited with the Department
of Industrial Relations, within 60 days following service of the
assessment or notice, for the department to hold in escrow pending
administrative and judicial review. The department shall release such
funds, plus any interest earned, at the conclusion of all
administrative and judicial review to the persons and entities who
are found to be entitled to such funds.
(c) The Labor Commissioner shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a civil wage and penalty assessment under Section 1741,
afford the contractor or subcontractor the opportunity to meet with
the Labor Commissioner or his or her designee to attempt to settle a
dispute regarding the assessment without the need for formal
proceedings. The awarding body shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a notice of withholding under subdivision (a) of Section
1771.6, afford the contractor or subcontractor the opportunity to
meet with the designee of the awarding body to attempt to settle a
dispute regarding the notice without the need for formal proceedings.
The settlement meeting may be held in person or by telephone and
shall take place before the expiration of the 60-day period for
seeking administrative review. No evidence of anything said or any
admission made for the purpose of, in the course of, or pursuant to,
the settlement meeting is admissible or subject to discovery in any
administrative or civil proceeding. No writing prepared for the
purpose of, in the course of, or pursuant to, the settlement meeting,
other than a final settlement agreement, is admissible or subject to
discovery in any administrative or civil proceeding. The assessment
or notice shall advise the contractor or subcontractor of the
opportunity to request a settlement meeting.
(d) This section shall become operative on January 1, 2007.
1743. (a) The contractor and subcontractor shall be jointly and
severally liable for all amounts due pursuant to a final order under
this chapter or a judgment thereon. The Labor Commissioner shall
first exhaust all reasonable remedies to collect the amount due from
the subcontractor before pursuing the claim against the contractor.
(b) From the amount collected, the wage claim shall be satisfied
prior to the amount being applied to penalties. If insufficient money
is recovered to pay each worker in full, the money shall be prorated
among all workers.
(c) Wages for workers who cannot be located shall be placed in the
Industrial Relations Unpaid Wage Fund and held in trust for the
workers pursuant to Section 96.7. Penalties shall be paid into the
General Fund.
(d) A final order under this chapter or a judgment thereon shall
be binding, with respect to the amount found to be due, on a bonding
company issuing a bond that secures the payment of wages and a surety
on a bond. The limitations period of any action on a payment bond
shall be tolled pending a final order that is no longer subject to
judicial review.
