Everything You Need to Know About a Civil Wage and Penalty Assessment
In California, contractors and subcontractors need to pay prevailing wages for public projects – meaning that workers must be paid a basic hourly. This law is in place to benefit and protect these workers and ensure that government contractors and subcontractors do not use cheap labor.
California’s Prevailing Wage Law (“PWL”) has recently had several statutes added to it to increase compliance. Violating the PWL results in a Civil Wage and Penalty Assessment (CWPA), issued by the Division of Labor Standards Enforcement.
Prime contractors must pay close attention to deadlines in the Civil Wage and Penalty Assessment because they and their surety are responsible for the civil wage penalty, as well as the wages.
Navigating a Civil Wage and Penalty Assessment can be extremely complicated. Here’s everything you need to know if you’re issued with one.
Submitting a Request for Settlement
You must submit your request for settlement no later than 30 days after you are issued the CWPA. Failing to meet this deadline may mean that you cannot dispute the wages or penalties outlined in the CWPA.
Submitting a Request for Review
When requesting a review, the request needs to be submitted no later than 60 days after you are issued the CWPA. When you submit the request for review, a hearing officer will be assigned to you. Your hearing officer will perform the role of both judge and jury in your hearing.
Missing the deadline may mean that you are charged with the total amount of wages and penalties outlined in the CWPA.
When to Deposit the Full Amount of the CWPA
The total amount of wages and penalties outlined in the CWPA must be deposited within 60 days of the CWPA being issued. Labor Code section 1742.1 stipulates that failure to meet the deadline of 60 days can result in contractors and their surety being liable for liquid damages equal to the unpaid wages.
Failing to meet this deadline could mean that the contractor who is found guilty may have to pay double the amount outlined in the CWPA, plus the penalties and wages.
Records Needed to Fight a CWPA
The best way to secure the best outcome from your case is to keep all your documentation and records. As a contractor, you need to keep accurate records of your payroll and any documentation that describes workers’ wages and hours.
Keep all sign-in sheets, professional bookkeeping records of how many workers were at the site, the workers’ scope of work, and their working hours. Other documents like pay stubs or canceled checks for workers will also support your case.
Safe Harbor Provisions
If your subcontractor is accused in the CWPA and you are the prime contractor, you might be able to reduce your liability by taking advantage of “safe harbor,” however you will need to take corrective action to resolve non-payment of wages before you are issued with a CWPA.
You will also need to get your subcontractor to sign an affidavit stating that they paid prevailing wages due to all workers on the public project – do this before issuing the final payment to the subcontractor.
If you are facing a Civil Wage and Penalty assessment, contact an experienced lawyer to get the best possible outcome for your case.