What is considered public works in California

Section 1720(a) lists eight kinds of work. The first is the one most projects fall under: "Construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds" (Labor Code 1720). The same paragraph stretches "construction" to cover design, site assessment, feasibility studies, inspection and land surveying, "regardless of whether any further construction work is conducted," and post-construction work "including, but not limited to, all cleanup work at the jobsite." Installation includes assembling and taking apart modular office systems.

The rest of the list adds work for irrigation, utility, reclamation and improvement districts; street, sewer and other improvement work done under the authority of a public body; carpet laying in public buildings or under a public building lease-maintenance contract; certain public transportation demonstration projects; California Advanced Services Fund infrastructure grants; and tree removal on a covered project. Section 1720.3 adds hauling refuse away from a public works site and, when the driver's work is "integrated into the flow process of construction," hauling paving, grading and fill materials onto it (Labor Code 1720.3).

Maintenance is covered too. Section 1771 says it "is applicable to contracts let for maintenance work," and also that it does not apply to "work carried out by a public agency with its own forces" (Labor Code 1771).

"Public funds" include federal money as well as state and local money (8 CCR 16000, quoted in the Labor Commissioner's Public Works Manual, section 2.5.1). Federally funded projects that a California awarding body controls are covered by state law; projects "awarded by and under the complete control of the federal government" are not (DIR public works FAQ). The Davis-Bacon comparison covers what happens when both laws apply.

Section 1720(c) and (d) carve out several kinds of project even when some public money is involved. The ones that come up most:

• Private homes on private land. "Private residential projects built on private property are not subject to this chapter unless the projects are built pursuant to an agreement with a state agency, a redevelopment agency, a successor agency … or a local public housing authority" (1720(c)(1)).
• Required public improvements on a private development. If a city requires a developer to build a public improvement as a condition of approval, pays no more than that work costs and holds no ownership interest in the project, "only the public improvement work" is covered (1720(c)(2)).
• De minimis subsidies. A public subsidy that is both less than $600,000 and less than 2% of total project cost doesn't make a private project a public work. For a project made up entirely of single-family homes, the test is less than 2% alone (1720(c)(3)).
• Some affordable housing and shelter projects, such as self-help housing where buyers do at least 500 hours of the construction work, and mortgage, down payment or single-family rehabilitation assistance given to a household (1720(c)(5)).

If the answer still isn't clear, an awarding body or any interested party can ask DIR's Director for a written coverage determination (DIR FAQ, Q13). Requests go to DIR's Legal Unit at pwcoverage@dir.ca.gov (public works FAQ), and past decisions since 2002 are published online.

Two DIR rules decide how you measure the amount. First, the small project figure "is for the entire contract between the Awarding Body and the Prime Contractor." A $10,000 subcontract on a $400,000 job gets no exemption. Second, "the law does not permit jobs to be parceled in order to avoid the $1,000 threshold"; if an agency knows its yearly work with one vendor will pass the threshold, that vendor must register (DIR public works FAQ).

DIR's prevailing wage FAQ adds one more case: an awarding body that runs a DIR-approved labor compliance program on every project it awards doesn't have to require prevailing wages on construction projects of $25,000 or less, or alteration, demolition, repair or maintenance projects of $15,000 or less (FAQ, Q15).

Anyone who bids on or contracts for work that requires prevailing wages is a public works contractor, including subcontractors and sole proprietors "even if they do not have employees" (DIR FAQ). To register, a contractor needs workers' compensation coverage, a CSLB license where the trade requires one, no delinquent wage or penalty assessments, and no debarment, and it can use only registered subcontractors (Contractor Registration; LC 1725.5(a)).

The Labor Commissioner also issues a stop order barring the unregistered contractor from all public works until it registers, and its workers are paid at their regular prevailing rate for up to 10 days of lost work (LC 1771.1(j)). Payment by credit card posts in under 24 hours; other methods can take up to eight weeks. You can check any contractor's status through DIR's Public Works Website Services.

The employer of each worker pays. Section 1774 says the contractor "and any subcontractor under him, shall pay not less than the specified prevailing rates of wages to all workmen employed in the execution of the contract" (LC 1774). DIR reads "in the execution of" broadly: coverage "is not necessarily limited to work performed at the construction site by those in traditional construction trades" (FAQ).

The prime contractor carries part of the risk for its subs. Under section 1775(b), a prime avoids penalties for a subcontractor's underpayment only if it didn't know of it and it did four things: put the prevailing wage sections in the subcontract, monitored the sub's certified payroll, acted to fix any underpayment it learned of (including holding back money), and got a signed affidavit of payment from the sub before final payment (LC 1775). Penalties run up to $200 per worker per day of underpayment. The floor is $40, unless the error was a good-faith mistake corrected promptly; $80 if the contractor was assessed penalties on another contract in the past three years; and $120 if the Labor Commissioner finds the violation willful.

The awarding body has its own duties: it must register the project with DIR within 30 days of award (FAQ) and report suspected violations to the Labor Commissioner (LC 1726).