Public Works Compliance Monitoring Unit 1 CMU APPLICABILITY AB - - PowerPoint PPT Presentation

Public Works Compliance Monitoring Unit

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AB 436 and the new CMU regulations went live on 1/1/2012. Public Works Contracts Awarded on or after 1/1/2012 are subject to CMU requirements Contracts awarded prior to 1/1/2012 are subject to the old rules for the life of the project. CMU requirements apply to – ♦ Projects funded by any state bond with the exception of Proposition 84 ♦ Projects under 14 other statutes will require CMU ♦ Projects undertaken by an awarding body that chooses to use the CMU on all of its projects

CMU APPLICABILITY

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 Use of previously approved in house LCP  Projects covered by qualified project labor agreement  Proposition 84-funded projects: LCP required (no alternatives or exceptions)

EXCEPTIONS

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 Bid and Contract Language  Notice to the Department of Industrial Relations (PWC 100 form)  Job Site Postings  Fees to the Department  Vigilance and Cooperation; Comply with withholding orders

Awarding Body Requirements

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 Required Awarding Body Notice to DIR  On-line capability  The PWC 100 fulfills the requirement of notification from: ♦ DAS – has all the information from the DAS 13  On-line Electronic Mail Correspondence from DIR ♦ Project was successfully submitted to DIR ♦ DLSE staff will contact the Awarding Body within 10 business days

PWC 100 – Required Notification

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PWC – 100 FORM

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Job Site Posting

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 DLSE will review electronic Certified Payroll Records (eCPR) within 30 days of receipt  Confirm accuracy of payroll reports randomly  Conduct on-site visits

Summary – CMU Responsibilities

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 May verify compliance with other laws enforced by the DLSE  May prepare an Audit to reflect prevailing wage deficiencies for each underpaid worker and penalties  May issue civil assessments, withhold payments, debar contractors from public works and initiate criminal investigations

Summary CMU Responsibilities

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 Web: www.dir.ca.gov/dlse/cmu  Email: cmu@dir.ca.gov  Posters available  Local offices

Contact Us

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Division of Labor Standards Enforcement District Office 605 West Santa Ana Blvd., Bldg. 28 Room 625 Santa Ana, CA 92701 (714) 558-4910 Public Works Task Force Orange County District Attorney Office 401 Civic Center Drive West Santa Ana, CA 92701 (714) 648-3605

 Submit certified payroll records (CPRs) to the CMU and awarding body using the CMUs eCPR system – My LCM.  CPRs must be submitted at least monthly, or more frequently if required by the public works contract.  Require subcontractors working under you to submit certified payroll records (CPRs) to the CMU, the awarding body and you using the CMU’s eCPR system – My LCM.  To Enroll in My LCM go to the third party non-government website at: https://app.mylcm.com

Projects Subject to DIR Monitoring and Enforcement:

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 Increased penalties for prevailing wage and payroll record violations  Expanded list of recipients of unredacted CPRs  Potential debarment for failure to submit CPRs

Some Other Legal Changes You Should Know About… AB 551 & AB 766

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 Labor Code Section 1775: Prevailing wage penalties changed from $50 to $200 maximum per worker per day Note: All statutory minimum penalties  Increased from $10 to $40, $20 to $80 & $40 to $120  Labor Code Section 1776: Penalties for failure to submit payroll records changed from $25 to $100 per worker per day

Legal Changes: Increased Penalties

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 Labor Code Section 1777.1: If (sub)contractor fails to timely respond to request for CPRs by DLSE, DAS or Awarding Body … Step 1: Labor Commissioner “shall” notify (sub)contractor that subject to debarment if it fails to comply within 30 days Step 2: 1 to 3 year debarment unless circumstances outside of (sub)contractor’s control  Enforcement????

Legal Changes: Potential Debarment for Failure to Submit CPRs

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 Labor Code Section 1776: Upon request, Awarding Body must provide access to unredacted CPRs to:  “Agencies that are included in the Joint Enforcement Strike Force on the Underground Economy…” and  “Other law enforcement agencies investigating violations of law” Public Works Task Force Orange County District Attorney Office 401 Civic Center Drive West Santa Ana, CA 92701 (714) 648-3605

Legal Changes: Increased Access to Unredacted CPRs

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All Public Works Projects:

 Comply with all prevailing wage and other public works requirements  Keep Certified payroll records in accordance with Labor Code section 1776  Ensure that subcontractors working under you comply with these requirements

What Contractors Must Do

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CMU website: http://www.dir.ca.gov/cmu

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Home Page for MYLCM https://app.mylcm.com

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Once registered, just click the login button and it will direct users to the login screen. Your Company only should register once.

Contractor Registration Form

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You will need to select the Agency you will be working for, complete all general information, contact Information, Company Profile fields – Note: All bold texts are mandatory fields. You will receive a message “Your registration is successful” and will be logged into the MYLCM application.

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Final Registration

General Contractors: After you complete registration form send an email with

Name of your Company, Project Name, and Project Number

To us and the Compliance Monitoring Unit at:

mary.binninger@sausd.us and CMU@dir.ca.gov

The CMU will then attach your company to the project for submitting your eCPR. This process takes approximately 1-2 business days before you will see the project

• n your mylcm.com

Subcontractors: send your email to us and your contractor in which you are working under. You do not need to send to the CMU

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All contractors must register to use the MYLCM eCPR. Contractors must assign subcontractors to the project. When your firm is assigned, the contractor will receive an e-mail indicating this has taken place. The project will appear on the list of Contracts.

Registering Subcontractor(s) to Project

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A subcontractor has to be assigned to a project prior to submitting certified payrolls. To perform this function:

• 1. Select a project to which you need to assign subcontractors.
• 2. Select from the Project menu “Assign Subcontractor.” These firms will be

expected to enter weekly payrolls. Note: The prime contractor must assign first-tier subcontractors before first-tier contractors can assign their own subcontractors. If the project(s) is not listed, contact the prime to determine the status.

Assigning Subcontractors

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A new screen will appear showing a list of available subcontractors and a list of assigned contractors. Enter the contract value into the contract amount box. Save the assignment by clicking on “Submit.”

Assigning Subcontractor(s) Continued

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When contractors submit CPRs, they are automatically logged for easy agency review and retrieval. CMU may also use the log to quickly determine which, if any, contractors are behind on their submittals of CPRs.

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CMU has the ability to accept or reject any CPR whether or not the application finds them to be compliant. Once a CPR has been accepted the contractor will receive an email notifying them that the CPR has been accepted. If a CPR has been rejected the CMU will provide remarks to the contractor and an email of these comments will be sent to the contractor notifying them that this payroll has been rejected.

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MYLCM System performs each of the checks listed below to verify if a Certified Payroll Report is compliant based on the DIR rules.  If the reported basic hourly rate is less than the prevailing wage basic hourly rate, then the CPR will be marked non-compliant.  If the reported total hourly rate (standard-time basic hourly rate + supplemental benefit is less than the prevailing wage total hourly rate (prevailing wage basic hourly rate + prevailing wage fringe benefit hourly rate), then the CPR will be marked non-compliant.  If the reported overtime basic hourly rate is less than the prevailing wage overtime rate, then the CPR will be marked non-compliant.  If any hours are reported on Saturday, Sunday or holidays, then the CPR will be marked non-compliant unless it was a make-up day.  If the standard hours reported for any given day are greater than ten, then the CPR will be marked non-compliant.

What is Considered a Non-compliant Certified Payroll Report

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Manual Certified Payroll Reporting Form

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Manual Certified Payroll Certification

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http://www.leginfo.ca.gov/cgi- bin/displaycode?section=lab&group=01001-02000&file=1770-1781 Full Labor Code can be viewed at:

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Labor Code Section 1775

• 1775. (a) (1) The contractor and any subcontractor under the contractor shall, as a penalty to

the state or political subdivision on whose behalf the contract is made or awarded, forfeit not more than two hundred dollars ($200) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rates as determined by the director for the work or craft in which the worker is employed for any public work done under the contract by the contractor or, except as provided in subdivision (b), by any subcontractor under the contractor. 2) (A) The amount of the penalty shall be determined by the Labor Commissioner based on consideration of both of the following: (i) Whether the failure of the contractor or subcontractor to pay the correct rate of per diem wages was a good faith mistake and, if so, the error was promptly and voluntarily corrected when brought to the attention of the contractor or

• subcontractor. (ii) Whether the contractor or subcontractor has a prior record of failing to meet

its prevailing wage obligations.

Penalties

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Labor Code Section 1775

(B) (i) The penalty may not be less than forty dollars ($40) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate, unless the failure of the contractor or subcontractor to pay the correct rate of per diem wages was a good faith mistake and, if so, the error was promptly and voluntarily corrected when brought to the attention of the contractor or subcontractor. (ii) The penalty may not be less than eighty dollars ($80) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate, if the contractor or subcontractor has been assessed penalties within the previous three years for failing to meet its prevailing wage obligations on a separate contract, unless those penalties were subsequently withdrawn or overturned. (iii) The penalty may not be less than

• ne hundred twenty dollars ($120) for each calendar day, or portion

thereof, for each worker paid less than the prevailing wage rate, if the Labor

Commissioner determines that the violation was willful, as defined in subdivision (c) of Section 1777.1.

Penalties Continued

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Labor Code Section 1776

(h) The contractor or subcontractor has 10 days in which to comply subsequent to receipt of a written notice requesting the records enumerated in subdivision (a). In the event that the contractor

• r subcontractor fails to comply within the 10-day period, he or she shall, as a penalty to the state
• r political subdivision on whose behalf the contract is made or awarded, forfeit one

hundred dollars ($100) for each calendar day, or portion thereof, for each worker,

until strict compliance is effectuated. Upon the request of the Division of Apprenticeship Standards

• r the Division of Labor Standards Enforcement, these penalties shall be withheld

from progress payments then due. A contractor is not subject to a penalty

assessment pursuant to this section due to the failure of a subcontractor to comply with this section.

Penalties Continued

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Labor Code Section 1777.1

(c) Whenever a contractor or subcontractor performing a public works project has failed to provide a timely response to a request by the Division of Labor Standards Enforcement, the Division of Apprenticeship Standards, or the awarding body to produce certified payroll records pursuant to Section 1776, the Labor Commissioner shall notify the contractor or subcontractor that:  In addition to any other penalties provided by law, the contractor or subcontractor will be subject to

debarment under this section if the certified payroll records are not produced within 30 days after

receipt of the written notice.  If the commissioner finds that the contractor or subcontractor has failed to comply with Section 1776 by that deadline, unless the commissioner finds that the failure to comply was due to circumstances

• utside the contractor's or subcontractor's control, the contractor or subcontractor or a firm, corporation,

partnership, or association in which the contractor or subcontractor has any interest is  Ineligible for a period of not less than one year and not more than three years to do either of the following: (1) Bid on or be awarded a contract for a public works project (2) Perform work as a subcontractor on a public works project.

Penalties Continued

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Public Works Complaint

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Where Do I File A Complaint ?

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On-Line Complaint Form

38 Department of Industrial Relations: http://www.dir.ca.gov/ Compliance Monitoring Unit (Contractors): http://www.dir.ca.gov/dlse/cmu/CMU_Contractors.html CMU’s eCPR system – My LCM https://app.mylcm.com/Production/Login.aspx?ReturnUrl=%2fProduction%2fdefault.aspx Director’s General Prevailing Wage Determinations http://www.dir.ca.gov/dlsr/DPreWageDetermination.htm Division of Apprenticeship Standards http://www.dir.ca.gov/das/das.html Division of Labor Standards Enforcement (DLSE) - California Labor Code http://www.dir.ca.gov/dlse/dlseLaws.html Public Works Payroll Reporting Form http://www.dir.ca.gov/dlse/DLSEFormA-1-131.pdf

Helpful Website Addresses:

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Background Of The New SB293 Law

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 Senate Bill No. 293 (Padilla) amended Public Contract Code section 7201, with requirements regarding retention, prompt payment by general contractors, and notice on payment bond claims.  It applies to contracts entered into after January 1, 2012.  SB 293 sunsets on January 1, 2016,unless extended by the legislature.

What is SB 293?

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Law limits retention on public works projects to 5%. The current standard (not set by statute) is 10%. Retention proceeds in excess of 5% of the progress payment/contract price are prohibited except under specified conditions. (Pub. Cont. Code, § 7201.)

How Does SB 293 Affect School Districts?

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 Retention may exceed 5% where the governing body of the local public entity,

• r its designee, has approved or ratified by a majority vote during a properly

noticed and normally scheduled public hearing prior to bid that the project is substantially complex and therefore requires a higher retention amount than 5%, and includes this finding and the actual retention amount in the bid

• documents. (Pub. Contract Code, §7201(b)(4).)

Conditions To Exceed 5% Retention

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Process For Making And Substantiating Findings That A District’s Project Is “Substantially Complex”

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 General contractors must pay subcontractors within 7 days after receipt of each progress payment (Bus.& Prof. Code, § 7108.5; Pub. Cont. Code,§§ 10262 and 10262.5)  Claims against the general contractor’s payment bond cannot be made unless the subcontractors have met these requirements: a) 20-day preliminary notice is filed; b) The general contractor has made all progress payments (except for good faith disputed amounts) to the first tier subcontractor; or c) The first tier subcontractor has been terminated, and the general contractor made all progress payments to the terminated subcontractor (except for good faith disputed amounts) If all of the above requirements have been met, then your claim(s) should be made within 15 days of the recording of the Notice of Completion or 75 days following completion if no recording of the Notice of Completion. Laborers do not have to give a preliminary lien notice. We recommend you consult your legal counsel regarding SB 293.

Miscellaneous Provisions Of SB 293

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 Pay Applications  Sign in and out  Subcontractors No Contractual agreement to provide status on payment obligations  http://www.sausd.us/page/1163  Sign in handout

Closing