Prevailing Wage Monitoring/Labor Compliance Program Requirements

Current Prevailing Wage Monitoring Regulatory Amendments

(Construction contracts awarded on or after June 20, 2014)

School Facility Program (SFP) regulatory amendments implementing Senate Bill 854, Chapter 28, Statutes of 2014, became effective January 1, 2015. The regulatory amendments remove the additional prevailing wage monitoring grant for projects with a public works contract awarded on or after June 20, 2014. The law repealed provisions in Labor Code Section 1771.3, which required school districts to provide payment to the Department of Industrial Relations (DIR) for prevailing wage monitoring. As a result, school districts awarding a construction contract on or after June 20, 2014 are not mandated to provide payment for DIR monitoring and enforcement of prevailing wage requirements. However, school districts are still required to provide notice within five days of the award to DIR of any public works contract. 

Former Prevailing Wage Monitoring Laws and Regulations

(Construction contracts awarded on or after January 1, 2012 AND on or before June 19, 2014)

On March 26, 2012, amended SFP regulations became effective, authorizing the State Allocation Board (SAB) to provide the Prevailing Wage Monitoring Grant for all public works projects with a construction contract awarded after January 1, 2012. This requirement applies for all state bond funding sources including Propositions 1A and 1D.

Section 1771.3 of California Labor Code required DIR to monitor and enforce compliance with applicable prevailing wage requirements for any public works project paid for in whole or in part from state bond funds.

Districts were required to notify DIR within five days of awarding a contract on any public works projects by submitting DIR Form PWC 100. A copy of the form, along with a copy of DIR's email confirmation, was submitted to Office of Public School Construction (OPSC) with the Fund Release Authorization (Form SAB 50-05). DIR provided the prevailing wage monitoring with a fee capped at one quarter of one percent of total bond proceeds. There were limited exceptions to the DIR monitoring as follows:

  • The district elected to continue to use a previously DIR-approved in-house Labor Compliance Program (LCP).
  • The district had entered into a collective bargaining agreement (or project labor agreement) that met certain conditions detailed in Labor Code section 1771.4(b)(2).

If the contract award date is prior to January 1, 2012 and the project(s) is funded from Propositions 47 or 55, the project(s) would fall under the Labor Compliance Program requirements.

Additional information regarding this new requirement is available on the Compliance Monitoring Unit (link) page of the DIR website (link).

Former Labor Compliance Program Regulations

(Construction contracts awarded on or before December 31, 2011 AND Notice to Proceed on or after April 1, 2003)

(Fund Release Authorization submittal on or after July 1, 2013)

Regulatory amendments were approved by the Office of Administrative Law clarifying the LCP written finding requirement, pursuant to Labor Code Section 1771.7(d)2(B), and provides an alternative method for districts to qualify for funding in cases where a district initiated and enforced an LCP after the construction contract was signed for the project.

All school districts that are subject to the LCP requirements would provide a written verification indicating that the district or the third party provider submitted an applicable LCP application to DIR, when submitting a Fund Release Authorization (Form SAB 50-05). The written verification would also indicate that the district or third party’s LCP is approved by DIR and has not been revoked.


Districts that contracted with a third party LCP provider or obtained DIR approval of its LCP after the construction contract was signed would be required to submit a report to OPSC and the DIR from a third party LCP provider that includes the following:


1. Verification that the applicable duties of an LCP were performed on the project.

2. Verification that the performance of the applicable LCP began within one month after commencement of the construction work.

3. A written record of the LCP’s confirmation of monthly payroll records for the project.


These districts would also provide a notice to each worker that the district has submitted the report and that they may contact OPSC and DIR concerning the accuracy of the findings. The report would not be acceptable if DIR notifies OPSC within 60 calendar days that it has determined it to be incorrect. The third party provider that completes the report could not be the same third party with whom the district has contracted to implement its LCP for the project.


The SAB approved regulatory amendments requiring the applicable districts to submit the third party LCP report to OPSC and DIR at least 60 days prior to submitting a Form SAB 50-05. Districts would acknowledge this on its written statement that indicates that it wishes to participate in a priority funding round. To allow districts sufficient time to comply, the requirement to submit the third party LCP report at least 60 days prior only applies if the Form SAB 50-05 is submitted on or after July 1, 2013.


Labor Compliance Program 

(Construction contracts awarded on or before December 31, 2011 AND Notice to Proceed on or after April 1, 2003)

(Fund Release Authorization submittal on or after July 1, 2013) 

On September 30, 2011, legislation for Assembly Bill (AB) 436 (Solorio) was approved by the Governor and the legislation became effective January 1, 2012. This bill required DIR to monitor and enforce prevailing wage requirements for every State bond-funded project, including, but not limited to, the SFP, pursuant to Labor Code section 1771.7 (AB 1506), with the following exceptions: projects that receive funds through Proposition 84 (Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006).

The SAB can increase the grant consideration of the state share of the new DIR costs.

For projects for which the initial public works construction contract was awarded before January 1, 2012, Section 1771.7 of California Labor Code requires districts to certify that a DIR approved LCP has been initiated and enforced for a project apportioned under the School Facility Program, if both of the following conditions exist:

  • The project is apportioned from either Proposition 47 or 55; and
  • The construction phase of the project commences on or after April 1, 2003, as signified by the date of the Notice to Proceed.

Additional information, including a guidebook and model LCPs, is available for viewing on the Labor Compliance (link) page on the DIR website (link).

For assistance, please contact your OPSC Project Manager (link).

Department of Industrial Relations' Approved Third Party LCP Providers (Excel) As of 11/28/2012

Policy Meetings

State Allocation Board, October 24, 2012

  • SAB Agenda (PDF) - This item is located on Action Items, beginning on stamped page 188.
  • Transcript (PDF) - The discussion of the item begins on stamped page 12.
  • Webcast (PDF) - The item was discussed from 23:41 to 34:14 in the webcast.
  • LCP Regulation Changes (PDF) - The presentation made at the December 12, 2012 Pre-SAB Meeting Forum


For assistance, please contact:


For additional questions, please contact the DIR’s website (link).