August 3, 2017

Budget Trailer Bill Increased the Threshold for Contractor Registration with DIR

Article written by School Services of California, Inc.

During our School Finance and Management Conference earlier this month, we presented a slide on Senate Bill (SB) 96 (Chapter 28/2017). SB 96 was a budget trailer bill, which, among other things, made changes to the Department of Industrial Relations’ (DIR) public works contractor registration program. It has been brought to our attention that there could be some confusion on the program and the effective dates, so the following is an overview of the program and the changes made by SB 96.

In 2014, SB 854 (Chapter 28/2014) established a new public works contractor registration program to limit the performance of public works projects to eligible contractors. The program applied to all public works projects subject to prevailing wage (i.e., those with a value of $1,001 or more) in which an awarding agency entered into a contract. In addition to contractor registration, the program also required that the DIR be notified within five days of awarding a contract for a public works project through the PWC-100 system.

These requirements were burdensome for some districts and contractors. SB 96 aimed to address some of the concerns expressed by increasing the threshold at which the program applies—effectively, building in a small project exemption.

* $25,000 for new construction, alteration, installation, demolition, or repair projects
* $15,000 for maintenance

Projects below these thresholds are no longer subject to the program. Contractors working exclusively on these small projects do not have to register with the DIR or file electronic certified payroll reports, though they are still required to maintain these records and provide them upon request. Awarding agencies do not need to submit a PWC-100 for these projects. In addition, SB 96:

1. Increased the contractor registration fee from $300 to $400, and allows contractors to register for up to three years beginning in January 1, 2019.
2. Instituted penalties for both contractors and awarding bodies. For contractors, performing work without registering can cost $100 for each day of work performed up to $8,000. For awarding bodies, entering into a contract or permitting an unregistered contractor to perform work can cost $100 for each day in violation up to $10,000.

The changes implemented by SB 96 were effective July 1, 2017, so those bids submitted on or after March 1, 2015, and contracts for public work entered into on or after April 1, 2015—as noted in SB 854—are subject to these new provisions. In addition, SB 96 added language making the program applicable to any public work performed on or after January 1, 2018, regardless of when the contract for public work was executed. Additional information on the program and requirements can be found on the DIR’s website. For those who attended our School Finance and Management Conference, the slide (number 117) pertaining to this topic has been updated in order to minimize any confusion and is available for download.