New 2012 Prevailing Wage Requirements for Contractors

Contractors working on public works construction projects in California will find that they are subject to new regulations of the Division of Labor Standards Enforcement's (DSLE) Compliance Monitoring Unit, or "CMU". The CMU is a new component within the Department of Industrial Relations, Division of Labor Standards Enforcement (DSLE) created to monitor and enforce prevailing wage requirements on public works projects which receive state bond funding, and on other projects that are legally required to use CMU. The CMU began operations on January 1, 2012, following the recent adoption of AB 438 and approval of revisions to the program regulations. One of the new key requirements of CMU is that you now must electronically file your certified payroll reports (rather than submit a paper form) using a third party electronic certified payroll service - My LCM. My LCM is designed to flag violations and enable Prime Contractors and Awarding Bodies to verify, accept or reject certified payroll reports submitted by contractors.

The service must be used by all awarding bodies and contractors for projects subject to CMU monitoring and enforcement for contracts awarded on or after January 1, 2012. A link is established for electronic certified payroll at https.// The site includes step-by-step instructions on how to assign contractors, manage employee profiles and submit certified payroll reports.

Awarding bodies will be required to register projects into My LCM and make sure that all contractors are registered on its projects. Prime Contractors will also be responsible for all sub-contractors working on the public works project and will have the responsibility to ensure that they and their subcontractors are registered and trained as required to utilize the electronic payroll service.

The CMU will not only monitor specific public works projects to ensure compliance and enforcement of prevailing wage requirements, the CMU will also, (1) conduct random onsite inspections, (2) visually monitor construction activities, (3) conduct contractor and worker interviews, and (4) verify CLSB licensing and Workers Compensation insurance, among other things.

As part of your preparation for the new prevailing wage requirements, if you are a prime contractor it is always important to ensure that your Subcontract Agreement properly complies with Labor Code section 1775 in order to escape possible liability for violations of the prevailing wage statutes by your subcontractors.

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