Skip To Main Content

Logo Image

Logo Title

Labor Compliance




Labor Compliance Program

This program will become an intricate part of all facilities projects.  This item was approved by the Board on May 27, 2003.

What is a Labor Compliance Program?

“Labor compliance programs” are detailed programs, submitted to and approved by the Department of Industrial Relations, that are operated subject to the ongoing oversight and continued approval of DIR for the purpose of proactively enforcing and proper payment of prevailing wages to workers, the proper utilization and training of apprentices in construction operations and proper implementation of workers compensation insurance laws.

Under an approved labor compliance program, monitoring, investigation and enforcement activities, much of which was previously undertaken directly by most cases, settlement and closure of active complaints or cases for alleged labor code violations.  In some cases, where settlement is not possible, DIR will still provide a final ruling and possible imposition of penalties against violating contractors.

Implementation of a labor compliance program requires not only an approved program plan, but the establishment, training and ongoing maintenance of a trained staff to carry out its requirements.

The requirements of an active LCP are substantial and are identified within its approved plan, however, the basic statutory requirements are:

  • All bid invitations and public works contracts shall contain appropriate language concerning the requirements of California labor code and the specific labor compliance program.
  • A pre-job (pre-construction) conference shall be conducted with the contractor(s) and subcontractors to discuss federal and state labor law requirements applicable to the contract.
  • 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.
  • The awarding body (or labor compliance provider) shall review, and audit payroll records to verify compliance with this chapter.
  • The awarding body shall withhold contract payments when payroll records are delinquent or inadequate.  (When services are provided by a third-party provider, withholding will be only on the specific recommendation of the provider).
  • 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.  (Investigation, recommendation of withholding and referral of the case to DIR for final determination of underpayment, ordering of any forfeiture and levying of any penalties is by DIR).
  • Production and submittal of detailed annual reports to the Department of Industrial Relations, containing specified program-wide data on labor compliance activities, as specified within Part 7, Chapter 1 of the Labor Code.



pursuant to

ASSEMBLY BILL 1506 (Wesson)

Assembly Bill 1506 (Wesson), signed into law by Governor Davis September 25, 2002, added Section 1771.7 to the California Labor Code requiring that an awarding body that chooses to use funds derived 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, shall initiate and enforce, or contract with a third party to initiate and enforce, a labor compliance program, as described in subdivision (b) of Section 1771.5 of the California Labor Code.

AB 1506 also provides for an adjustment to the per-pupil grant funding for projects subject to its provisions, intended to contribute the State’s share of the incremental costs involved in implementing a labor compliance program.  The State Allocation Board is charged with determining the basis and amount of that adjustment by not later than July1.2003.  This additional grant funding will be retroactive for any projects already apportioned under the SFP that would be subject to the requirements of AB 1506.

Establishment and implementation of a labor compliance program is a mandatory prerequisite for the District to obtain funding through the School Facilities Program for any project that is subject to a “Notice to Proceed” of April 1, 2003 or later.