Alliant Consulting

Labor Compliance Program Monitoring

Labor Compliance Program

Approved: August 28, 2003

Prepared by:

Christa J. Marasco

LCP Director,

Alliant Consulting

School District

Labor Compliance Program

On this day, , the School District Board_ hereby finds that the School District has contracted with Alliant Consulting as a Third Party Consultant to initiate and enforce a Labor Compliance Program (“LCP”), pursuant to Labor Code Section 1771.7(d)(1).(2), which has been approved by the Department of Industrial Relations.

Christa J. Marasco

Labor Compliance Director

Alliant Consulting

909.322.4249

August 28, 2003

Initial Approval Date

INTRODUCTION

Alliant Consulting issues this Labor Compliance Program (LCP) manual for the purpose of identifying its policy as a 3^rd party labor compliance monitor on behalf of the School District relative to the responsibilities and procedures applicable to labor compliance provisions of the state and federally funded construction contracts. This LCP contains the labor compliance standards required by the state and federal laws, directives, as well as policies and contract provisions for School Districts within the State of California.

This program is applicable to all public works projects which are funded under the Kindergarten-University Public Education Facilities Bond Acts of 2002 or 2004 and which commence construction after April 1, 2003.

The California Labor Code Section 1770 et seq. and Education Code Section 17424 require that all contractors on public works pay their workers based on the prevailing wage rates, which are established and issued by the Department of Industrial Relations, Division of Labor Statistics and Research.

California Assembly Bill No. 1506 enacted section 1771.7 of the California Labor Code, requiring School Districts to initiate a specified LCP when undertaking construction projects.

This bill requires an awarding body that chooses to use funds from either the Kindergarten-University Public Education Facilities Bond Act of 2002 or the Kindergarten-University Public Education Facilities Bond Act of 2004 for a public works project to initiate and enforce, or contract with a 3^rd party to initiate and enforce, a Labor Compliance Program for that public works project. This bill provides that the labor compliance law applies to a public works project that commences, as provided, on or after April 1, 2003. (AB 1506)

In establishing this LCP, Alliant Consulting will act as the 3^rd party labor compliance monitor to actively initiate and enforce labor compliance on behalf of the School District that uses funds derived from either the Kindergarten – University Public Facilities bond Act of 2002 or 2004 in their construction projects. This LCP adheres to the statutory requirements as enunciated in Section 1777.5(b) of the Labor Code, requiring contractors to employ registered apprentices on public works contracts. It also adheres to California Labor Code Section 1776, which requires contractors to keep accurate payroll records of trades’ workers on all public works projects and to submit copies of certified payroll records upon request.

It is our intent to work on behalf of the School District to actively enforce and monitor the payment of prevailing wage rates by Contractors having workers on affected School District projects by routinely collecting copies of certified payroll records and reporting to the State these records demonstrating non-compliance with the payment of prevailing wage rates.

This LCP contains the labor compliance standards required by state and federal laws, regulations and directives, as well as School District policies and contract provisions, which include, but are not limited to, the following:

1.      All bid invitations and public works contracts shall contain appropriate language concerning the requirements of this chapter.

2.      A pre-job conference shall be conducted with the contractor and subcontractors to discuss federal and state labor law requirements applicable to the contract.

3.      Project contractors and subcontractors shall maintain and furnish, at a designated time, a certified copy of each weekly payroll containing a statement of compliance signed under penalty of perjury.

4.      The awarding body shall review, and, if appropriate, audit payroll records to verify compliance with this chapter.

5.      The awarding body shall withhold contract payments when payroll records are delinquent or inadequate.

6.      The awarding body shall withhold contract payments equal to the amount of underpayment and applicable penalties when, after investigation, it is established that underpayment has occurred.

Should applicable sections of the Labor Code or Title 8 of the California Code of Regulations undergo alteration, amendment, or deletion, Alliant Consulting will modify the affected portions of this program accordingly.

Questions regarding the California Labor Code, including issues relating to this LCP, should be directed to the Labor Compliance Officer (LCO) for the District, Vickie Westfall of Alliant Consulting at (909) 322-4249.

Vickie Westfall

Labor Compliance Officer

Alliant Consulting

PO Box 231

Lancaster, CA 93584

909.322.4249

I. PUBLIC WORKS SUBJECT TO PREVAILING WAGE LAWS

State prevailing wage rates apply to all public works contracts as set forth in Labor Code Sections 1720, et seq., and include, but are not limited to, such types of work performed under contract as construction, modernization, alteration, demolition, installation or repair. The Division of Labor Statistics and Research (DLSR) predetermine the appropriate prevailing wage rates for particular construction trades and crafts by county.

A. Applicable Dates for Enforcement of the LCP

B. The applicable dates for enforcement of awarding body LCP is established by Section 16425 of the California Code of Regulations. Contracts are not subject to the jurisdiction of the LCP until after the Program has received initial or final approval.

II. COMPETITIVE BIDDING ON DISTRICT PUBLIC WORKS CONTRACTS

The School District publicly advertises upcoming public works projects to be awarded according to a competitive bidding process.

All School District bid advertisements (or bid invitations) and construction contracts shall contain appropriate language concerning the requirements of the Public Works chapter of the Labor Code.

III. JOB CONFERENCE MEETING

After the School District awards the public works contract and prior to the commencement of the work, a Pre-Job Conference shall be held by the Labor Compliance Representative (LCO) from Alliant Consulting, acting on behalf of the School District with the contractor(s) and subcontractor(s). At that meeting, the LCO from Alliant Consulting will discuss the federal and state labor law requirements applicable to the contract and will provide the contractor(s) and each subcontractor with a Checklist of Labor Law Requirements (presented in Attachment A) and will discuss in detail the following checklist items:

1. The contractor’s duty to pay prevailing wages (Labor Code Section 1770, et seq.);

2. The contractor’s and subcontractor’s duty to employ registered apprentices on public works projects (Labor Code Section 1777.5);

3. The penalties for failure to pay prevailing wages failing to employ apprentices, and failing to submit complete Certified Payroll Reports, which include forfeitures and debarment (Labor Code Sections 1775, 1776, 1777.7, and 1813);

4. The requirement to maintain and submit copies of certified payroll reports on a weekly basis to the LCO from Alliant Consulting at times designated in the contract or within 10 days of request by the LCO from Alliant Consulting and penalties for failure to do so under Labor Code Section 1776 (g). This requirement includes and applies to all subcontractors performing work on School District projects even if their portion of the work is less than one half of one percent (0.5%) of the total amount of the contract;

5. The prohibition against employment discrimination (Labor Code Sections 1735 and 1777.6; the Government Code; and Title VII of the Civil Rights Act of 1964, as amended);

6. The prohibition against accepting or extracting kickbacks from employee wages (Labor Code Section 1778);

7. The prohibition against accepting fees for registering any person for public works (Labor Code Section 1779) or for filing work orders on public works (Labor Code Section 1780);

8. The requirement to list all subcontractors (Public Contract Code Section 4100, et seq.);

9. The requirement to be properly licensed and to require all subcontractors to be properly licensed, and the penalty for employing workers while unlicensed (Labor Code Section 1021 and 1021.5, and Business and Professions Code Section 7000, et seq., under California Contractors License Law);

10. The prohibition against unfair competition (Business and Professions Code Sections 17200-17208);

11. The requirement that the contractor(s) and subcontractor(s) be properly insured for Workers’ Compensation (Labor Code Section 1861);

12. The requirement that the contractor(s) abide by the Occupational Safety and Health laws and regulations that apply to the particular public works project; and

The contractor(s) and subcontractor(s) present at the meeting will be given the opportunity to ask questions of the LCO relative to any of the Labor Law Requirements Checklist. The Checklist of Labor Law Requirements will then be signed by the prime contractor’s representative, subcontractor’s representative, and the School District’s LCO from Alliant Consulting.

At the Pre-Job Conference, the LCO from Alliant Consulting will provide the contractor(s) with two (2) copies of the School District’s LCP package from Alliant Consulting which includes: a copy of the approved LCP, the checklist of Labor Law Requirements, applicable Prevailing Wage Rate Determinations, blank certified payroll report forms, fringe benefit statements, State apprenticeship requirements, and a copy of the Labor Code relating to Public Works and Public Agencies (Part 7, Chapter 1, Sections 1720-1861).

It will be the contractor’s responsibility to provide copies of the LCP package to all subcontractors and to any substituted subcontractor performing work on the School District’s project(s).

IV. RESPONSIBILITIES OF CONTRACTOR(S) AND EACH SUBCONTRACTOR

A. Certified Payroll Records Required

The contractor(s) shall maintain payrolls and “basic payroll records” during the course of the work and shall preserve them for a period of three (3) years thereafter for all tradesworkers working at the School District’s project sites. Such records shall include the name, address, and social security number of each worker, his or her classification, a general description of the work each employee performed each day, the rate of pay (including rates of contributions for, or costs assumed to provide fringe benefits), daily and weekly number of hours worked, deductions made, and actual wages paid.

1. Submission of Certified Payroll Reports

The contractor(s) shall maintain and submit all weekly certified payroll reports including those of all subcontractors to the LCO on behalf of the School District at a School District LCO-designated time, not less than monthly. The contractor(s) shall be responsible for the submittal of payroll reports of all its subcontractors. All weekly certified payroll reports shall be accompanied by a statement of compliance signed by the contractor(s) under penalty of perjury pursuant to Labor Code Section 1771.5(b)(3) and applicable regulations.

Basic payroll records may be requested by the School District or LCO at any time and shall be provided within 10 days following the receipt of the request.

2. Review of Certified Payroll Reports

Certified payroll reports shall be routinely reviewed by the Contractor for the payment of prevailing wage rates.

3. Full Accountability

The name, address and social security number of every individual, laborer or craftsperson working at the project site must appear on the payroll. The basic concept is that the employer who pays the tradesworker must report that individual on its payroll. This includes individuals working as apprentices in an apprenticeship craft. Owner-operators are to be reported by the contractor employing them; rental equipment operators are to be reported by the rental company paying the workers’ wages.

Sole owners and partners who work on a contract must also submit a certified payroll report listing the days and hours worked, and the trade classification descriptive of the work actually done. The contractor(s) shall make the records required under this section available for inspection by the LCO, an authorized representative of the School District and the Department of Industrial Relations, and shall permit such representatives to interview tradesworkers during working hours on the project site.

4. Responsibility for Subcontractor(s)

The contractor(s) shall be responsible for ensuring adherence to labor standards provisions by its subcontractor(s). Moreover, the prime contractor is responsible for Labor Code violations by its subcontractors in accordance with Labor Code Section 1775 and applicable sections of the Labor Code and California Code of Regulations.

5. Payment to Employees

Employees must be paid unconditionally, and not less often than once each week, the full amounts which are due and payable for the period covered by the particular payday. Thus, an employer must, therefore, establish a fixed workweek (i.e., Sunday through Saturday) and an established payday (such as every Friday or the preceding day should such payday fall on a holiday). On each and every payday, each worker must be paid all sums due as of the end of the preceding workweek and must be provided with an itemized wage statement.

If an individual is called a subcontractor, when, in fact, he/she is merely a journey level mechanic supplying only his/her labor, such an individual would not be deemed a bona fide subcontractor and must be reported on the payroll of the prime contractor who contracted for his or her services as a tradesworker. Moreover, any person who does not hold a valid contractor’s license cannot be a subcontractor, and anyone hired by that person is the worker or employee of the general contractor who contracted for his or her services for purposes of prevailing wage requirements, certified payroll reporting and workers’ compensation laws.

A worker’s rate for straight time hours must equal or exceed the rate specified in the contract by reference to the Prevailing Wage Rate Determinations for the class of work actually performed. Any work performed on Saturday, Sunday, and/or a holiday, or a portion thereof, must be paid the prevailing rate established for those days regardless of the fixed workweek. The hourly rate for hours worked in excess of 8 hours in a day or 40 hours in a workweek shall be premium pay. All work performed in excess of eight hours per day, 40 hours per week, on Saturday, on Sunday, and on holidays shall be paid in accordance with the applicable Prevailing Wage Determination.

B. Apprentices

Apprentices shall be permitted to work as such only when they are registered, individually, under a bona fide apprenticeship program registered with a State apprenticeship agency that is recognized by the State Division of Apprenticeship Standards. The allowable ratio of apprentices to journey persons in any craft/classification shall not be greater than the ratio permitted to the contractor as to its entire workforce under the registered program. Any worker listed on a payroll at an apprentice wage rate who is not registered shall be paid the journey level wage rate determined by the Department of Industrial Relations for the classification of the work he/she actually performed. An apprentice who is registered and has worked outside of the prescribed geographic area is not qualified to receive the apprentice rate and must be paid the journey level rate.

The contractor shall furnish written evidence of the registration (i.e., Apprenticeship Agreement or Statement of Registration) of its training program and apprentices, as well as the ratios allowed and the wage rates required to be paid there under for the area of construction, prior to using any apprentices in the contract work.

Pre-apprentice trainees, trainees in non-apprenticeable crafts, and others who are not duly registered will not be permitted on public works projects unless they are paid full prevailing wage rates as journeypersons.

Compliance with California Labor Code Section 1777.5 requires all public works contractors and subcontractors to:

1. Apply for a Certificate of Approval for the employment and training of apprentices for each craft or trade;

2. Request dispatch of apprentices and employ apprentices as available on public works projects in a ratio to journey persons as stipulated in the Apprenticeship Standards under which each Joint Apprenticeship Committee operates, but in no case shall the ratio be less than one (1) apprentice to each five (5) journey person hours, unless a Certificate of Exemption is obtained and provided to the LCO;

3. Contribute to the training fund in the amount identified in the prevailing wage rate publication for journey persons and apprentices. Where the trust fund administrators cannot accept the contributions, then payment shall be made to the California Apprenticeship Council, Post Office Box 420603, San Francisco, CA 94142; and

4. If the contractor is registered to train apprentices it should be noted that a prior approval for a separate project does not confirm approval to train on any project. The contractor/subcontractor must check with the applicable Joint Apprenticeship Committee to verify status.

V. ENFORCEMENT ACTION

A. Duties of the Third Party LCO

Alliant Consulting, a third party representative for the School District, with an approved LCP for the District, has a duty to the Director of the Department of Industrial Relations to enforce Labor Code section 1720 et seq. in a manner consistent with the practice of the Division of Labor Standards Enforcement (DLSE) and as set forth in regulations found at 8 CCR section 16000 et seq., and in accordance with Precedential Public Works Decisions issued by the Director and which are available at the Department of Industrial Relations Home Page (www.dir.ca.gov) and links to that page. The LCO from Alliant Consulting shall undertake enforcement action on behalf of the School District in furtherance of its responsibilities as follows:

1. Review Certified Payroll Records. Certified payroll records furnished by contractors and subcontractors shall be regularly and timely reviewed by the LCO to monitor payment of prevailing wages.

2. Audits/Investigations. Audits/investigations may be conducted by the LCO when deemed necessary, and shall be conducted at the request of the Labor Commissioner.

a. An audit consists of a comparison of payroll records to the best available information as to the actual hours worked and classifications of workers employed on the contract. Records should be made available to show that the audits conducted are sufficiently detailed to verify compliance with the prevailing wage requirements of the Labor Code.

b. An audit record in the form set out in Attachment B, and as provided in 8 CCR Section 16432, complies with the Labor Code requirements.

3. Withholding Contract Payments for Violations of the Requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code. The LCO for the School District shall have the School District withhold contract payments when payroll records are delinquent or inadequate or when, after an investigation, it is established that underpayment of the prevailing wage has occurred. The authority of an approved LCP to withhold contract payments is found in Labor Code section 1771.6 and is also subject to provisions contained at 8 CCR Section 16435 et seq. As explained more fully below, the LCO will first obtain approval from the Labor Commissioner of the amounts of unpaid penalty and wage money assessed by the LCO (“forfeitures”) for violations of the prevailing wage laws; thereafter, the LCO will provide notice of withholding of contract payments to the contractor and other affected parties (a subcontractor and bonding company, if applicable) as required by law. The procedures to be followed by the LCO on behalf of the School District in obtaining approval of a forfeiture from the Labor Commissioner and providing notice of withholding to the contractor and other affected parties will be consistent with the code sections and regulations cited above, and definitions included therein (see Appendix A – “Definitions” – attached hereto), and are summarized as follows:

Step No. 1 Approval of Amount of Forfeiture by the Labor

Commissioner

a. The LCO from Alliant Consulting shall request approval of the amount of a proposed forfeiture by filing a report with the Labor Commissioner which contains at least the following information:

1. The date that the public work was accepted, and the date that a Notice of Completion was recorded;

2. Any other deadline which if missed would impede collection;

3. Evidence of violation, in narrative form;

4. Evidence of the audit/investigation that has occurred;

Note: A report requesting approval of the amount of a proposed forfeiture only assessed for delinquent or inadequate payroll records pursuant to Labor Code section 1776 (g) need only refer to evidence that the contractor failed to provide certified payroll records or basic payroll records (see, section IV A. 1. above) within ten (10) days of receipt of the request, and the amount of the proposed forfeiture for delinquent or inadequate payroll records calculated at twenty-five dollars ($25) for each calendar day, or portion thereof, for each worker, until strict compliance is effectuated.

5. Evidence that the contractor and subcontractor were given the opportunity to explain why there was no violation, or whether the failure to pay the correct rate of wages was a good faith mistake and, if so, whether the error was promptly and voluntarily corrected upon being brought to the attention of the contractor and subcontractor;

6. Where the LCO for the School District seeks not only amounts of wages but also a penalty under Labor Code section 1775 as part of the forfeiture, and the contractor or subcontractor has unsuccessfully contended that the cause of the violation was a good faith mistake, a short statement should recommend a penalty amount (computed at not more than fifty dollars ($50) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rates), and reasons therefore; if the amount of wages sought involves overtime, penalties under Labor Code section 1813 should be calculated as follows: twenty-five dollars ($25) for each calendar day during which each worker was required or permitted to work more than eight hours in any one calendar day and 40 hours in any one calendar week;

7. Where the LCO for the School District seeks only wages, or a penalty under Labor Code section 1775 of less than fifty dollars ($50) per calendar day as part of the forfeiture, and the contractor has successfully contended that the cause of the violation was a good faith mistake, a short statement should recommend a penalty amount, and reasons therefore, pursuant to Labor Code section 1775; if the amount of wages sought involves overtime, penalties under Labor Code section 1813 should be calculated as follows: twenty-five dollars ($25) for each calendar day during which each worker was required or permitted to work more than eight hours in any one calendar day and 40 hours in any one calendar week;

8. Whether the contractor or subcontractor has a prior record of failing to meet its prevailing wage obligations.

9. Whether the LCO for the School District has been granted initial, extended initial or final approval.

b. The report should be served on the Labor Commissioner as soon as practicable after the violation has been discovered, and not less than thirty days before final payment, but in no event later than 320 days after the School District’s acceptance of the public work or 320 days after the filing of a valid Notice of Completion in the Office of the County Recorder, whichever occurs last.

c. A copy of the proposed forfeiture and the report shall be served on the contractor and subcontractor, if applicable, at the same time as it is sent to the Labor Commissioner. The LCO, working on behalf of the School District, may exclude from the documents served on the contractor and subcontractor copies of documents secured from the contractor or subcontractor during an audit, investigation, or meeting, if those are clearly referenced in the report. The report shall be accompanied by the Notice of Deadlines form attached hereto as Attachment C.

d. The Labor Commissioner shall affirm, reject, or modify the forfeiture in whole or in part as to penalty and/or wages due.

e. The Labor Commissioner’s determination of forfeiture is effective on one of the two following dates:

1. For programs with initial approval or an extension of initial approval pursuant to 8 CCR Section 16426, on the date the Labor Commissioner serves by first class mail, on the political subdivision and on the contractor, an endorsed copy of the proposed forfeiture, or a newly drafted forfeiture statement which sets out the amount of forfeiture approved. Service on the contractor is effective if made on the last address supplied by the contractor in the record. The Labor Commissioner’s approval, modification or disapproval of the proposed forfeiture shall be served within 30 days of receipt of the proposed forfeiture.

2. For programs with final approval, approval is effective 20 days after the requested forfeitures are served upon the Labor Commissioner, unless the Labor Commissioner serves a notice upon the parties, within that time period, that this forfeiture request is subject to further review. For such programs, a notice that approval will follow such a procedure will be included in the transmittal of the forfeiture request to the contractor. If the Labor Commissioner notifies the parties of a decision to undertake further review, the Labor Commissioner’s final approval, modification or disapproval of the proposed forfeiture shall be served within 30 days of the date of notice of further review.

Step No. 2 Notice of Withholding and Review Thereof

a. Notice of Withholding of Contract Payments

After determination of the amount of forfeiture by the Labor Commissioner, the LCO, working on behalf of the School District shall provide notice of withholding of contract payments to the contractor and subcontractor, if applicable. The notice shall be in writing and shall describe the nature of the violation and the amount of wages, penalties, and forfeitures withheld. Service of the notice shall be completed pursuant to Section 1013 of the Code of Civil Procedure by first-class and certified mail to the contractor and subcontractor, if applicable. The notice shall advise the contractor and subcontractor, if applicable, of the procedure for obtaining review of the withholding of contract payments. The LCO for the awarding body shall also serve a copy of the notice by certified mail to any bonding company issuing a bond that secures the payment of prevailing wages covered by the notice and to any surety on a bond, if their identities are known to the awarding body. A copy of the Notice of Withholding of Contract Payments (NWCP) to be utilized by the LCO working on behalf of the School District is found as Attachment D to this document.

b. Review of NWCP

1. An affected contractor or subcontractor may obtain review of a NWCP under this chapter by transmitting a written request for a review hearing to the office of the LCP that appears on the NWCP within 60 days after service of the NWCP. If no hearing is requested within 60 days after the service of the NWCP, the NWCP shall become final.

2. Within ten days following the receipt of the request for a review hearing, the LCP shall transmit to the Office of the Director-Legal Unit the request for review and copies of the Notice of Withholding of Contract Payments, any audit summary that accompanied the notice, and a proof of service or other documents showing the name and address of any bonding company or surety that secures the payment of the wages covered by the notice. A copy of the required Notice of Transmittal to be utilized by the LCO working on behalf of the School District is found as Attachment E to this document.

3. 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 LCP at the hearing within 20 days of the receipt by the LCP of the written request for a hearing. Any evidence obtained by the LCP subsequent to the 20-day cutoff shall be promptly disclosed to the contractor or subcontractor. A copy of the Notice of Opportunity to Review Evidence Pursuant to Labor Code Section 1742 (b) form is found as Attachment F to this document.

The contractor or subcontractor shall have the burden of proving that the basis for the NWCP is incorrect. The NWCP 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 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 LCP. 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 has adopted regulations setting forth procedures for hearings under this subdivision. The regulations are found as Attachment H to this document.

4. 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 a 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.

5. 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.

6. A judgment entered pursuant to this procedure 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.

7. This procedure shall provide the exclusive method for review of a decision by the LCO for the School District to withhold contract payments pursuant to Section 1771.5.

Note: A release under Civil Code section 3196 may not be posted for the release of funds being withheld for violations of the prevailing wage law.

B. Deposits of Penalties and Forfeitures Withheld

1. Where the involvement of the Labor Commissioner has been limited to a determination of the actual amount of penalty, forfeiture, or underpayment of wages and the matter has been resolved without litigation by or against the Labor Commissioner, the School District shall deposit penalties and forfeitures into its construction fund or other fund of its choice.

2. Where collection of fines, penalties, or forfeitures results from court action to which the Labor Commissioner and the School District are both parties, the fines, penalties, or forfeitures shall be divided between the General Funds of the State and the construction fund or other fund of the School District’s choice, as the court may decide.

3. All amounts recovered by suit brought by the Labor Commissioner, and to which the School District is not a party, shall be deposited in the General Fund of the State of California.

4. All wages and benefits which belong to a worker and are withheld or collected from a contractor or subcontractor, either by withholding or as a result of court action pursuant to Labor Code Section 1775, and which have not been paid to the worker or irrevocably committed on the worker’s behalf to a benefits fund, shall be deposited with the Labor Commissioner, who will deal with such wages and benefits in accordance with Labor Code Section 96.7.

VI. REPORTING OF WILLFUL VIOLATIONS TO THE LABOR COMMISSIONER

Debarment Policy

It is the policy of the School District that the public works prevailing wage requirements set forth in the California Labor Code, Sections 1720-1861, be strictly enforced. In furtherance thereof, contractors and subcontractors found to be willful violators under Section 1777.1 of the California Labor Code shall be referred to the Labor Commissioner for debarment from bidding on or otherwise being awarded any public work contract, within the state of California, for the performance of construction and/or maintenance services for the period not to exceed three (3) years in duration. The duration of the debarment period shall depend upon the nature and severity of the labor code violations and any mitigating and/or aggravating factors, which may be presented at the hearing conducted by the Labor Commissioner for such purpose.

If an investigation reveals that a willful violation of the Labor Code Section 1777.1 has occurred, the LCO will make a written report to the School District and the Labor Commissioner which shall include: (1) an audit consisting of a comparison of payroll records to the best available information as to the actual hours worked and (2) the classification of workers employed on the public works contract. Six types of willful violations are reported as follows:

A. For Failure to Comply with Prevailing Wage Rate Requirements

Failure to comply with prevailing wage rate requirements (as set forth in the Labor Code and School District contracts) is determined a willful violation whenever less than the stipulated basic hourly rate is paid to tradesworkers, or if overtime, holiday rates, fringe benefits, and/or employer payments are paid at a rate less than stipulated. The facts related to such willful violations may result in a determination that the contractor intended to defraud its employees of their wages.

B. For Falsification of Payroll Records, Misclassification of Work, and/or Failure to Accurately Report Hours of Work

Falsification of payroll records and failure to accurately report hours of work is characterized by deliberate underreporting of hours of work; underreporting the headcount; stating that the proper prevailing wage rate was paid when, in fact, it was not; clearly misclassifying the work performed by the worker; and any other deliberate and/or willful act which results in the falsification or inaccurate reporting of payroll records. Such violations are deemed to be willful violations committed with the intent to defraud.

C. For Failure to Submit Certified Payroll Reports

Refusing to comply with a request by the LCO for certified payroll reports or substantiating information and records as contained in Section IV.A.1. will be determined to be a willful violation of the Labor Code. Additionally, refusing to correct inaccuracies or omissions that have been discovered will also be determined to be willful violation of the Labor Code.

D. For Failure to Pay Fringe Benefits

Fringe benefits are defined as the amounts stipulated for employer payments or trust fund contributions and are determined to be part of the required prevailing wage rate. Failure to pay or provide fringe benefits and/or make trust fund contributions in a timely manner is equivalent to payment of less than the stipulated wage rate and shall be reported to the LCO, the School District and Labor Commissioner as a willful violation, upon completion of an investigation and audit.

E. For Failure to Pay the Correct Apprentice Rates and/or Misclassification of

Workers as Apprentices

Failure to pay the correct apprentice rate or classifying a worker as an apprentice when not properly registered is equivalent to payment of less than the stipulated wage rate and shall be reported to the LCO, the School District and Labor Commissioner as a willful violation, upon completion of an investigation and audit.

F. For the Taking of Kickbacks

Accepting or extracting kickbacks from employee wages under Labor Code Section 1778 constitutes a felony and may be prosecuted by the appropriate enforcement agency.

VII. PRIORITY DISTRIBUTION OF FORFEITED SUMS

A. Withholding of Forfeited Sums

Pursuant to Labor Code Sections 1726 and 1771.6, it shall be the policy of the School District that prior to making payment to the prime contractor of monies due under any contract for public works, the School District shall withhold and retain from the prime contractor’s account all amounts which have been forfeited pursuant to any stipulation under said contract for public works.

B. Disposition of Forfeited Sums

1. Out of any funds withheld, recovered, or both, there shall first be paid the amount due each worker notwithstanding the filing of any Stop Notice by any person pursuant to Civil Code Section 3179, et seq. Thus, all workers employed on the public works project who are paid less than the prevailing wage rate shall have PRIORITY over all Stop Notices filed against the prime contractor.

2. In the event that there are “insufficient funds” available in the prime contractor’s account to pay the total amount of prevailing wage violations and penalty amounts due, the unpaid prevailing wages shall have PRIORITY STATUS and must be paid first.

Furthermore, if insufficient funds are withheld, recovered, or both, to pay each underpaid worker in full, the money shall be prorated among all workers affected. From the amount recovered by the LCO of the School District, 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. 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 a construction fund or other fund of the School District’s choosing.

VIII. ANNUAL REPORTS

A. Annual Report on the School District Labor Compliance Program to the Director of the Department of Industrial Relations

The LCO from Alliant Consulting on behalf of the School District shall submit to the Director of the Department of Industrial Relations an Annual Report on the operation of its LCP within sixty (60) days after the close of its fiscal year, or accompany its request for an extension of initial approval, whichever comes first. Pursuant to Title 8, CCR Section 16431, the Annual Report shall contain, at the minimum, the following information:

1. Number of construction contracts using bond funds subject to the LCP that were awarded, and their total value;

2. A summary of wages due to workers resulting from failure by contractors to pay prevailing wage rates, the total amount withheld from money due to the contractors, and the total amount recovered by action in any court of competent jurisdiction;

3. A summary of penalties and forfeitures imposed and withheld, or recovered in a court of competent jurisdiction;

4. A LCP whose contract responsibilities are statewide, or which involves widely dispersed and numerous contracts, or which is required to report contract enforcement to federal authorities in a federal format, may adopt a summary reporting format to aggregate small contracts and estimate numbers and dollar values required by 1 and 2. A summary reporting format may be adopted by agreement with the Director after advance notice to interested parties, and a list of parties requesting such notice shall be kept by the Director.

Copies of the LCP’s required Annual Report submitted to the Director of the Department of Industrial Relations will be distributed to the Superintendent and School Board of the School District.