Skilled and Trained Workforce Requirements

California’s Public Contract Code, in Division 2, Part 1, Chapter 2.9, deals with skilled and trained workforce requirements. Section 2600 states that this Chapter of the PC Code applies when a public entity is required by statute or regulation to obtain an enforceable commitment that a bidder, contractor, or other entity will use a skilled and trained workforce to complete a contract or project.

A public entity may require a bidder, contractor, or other entity to use a skilled and trained workforce to complete a contract or project regardless of whether the public entity is required to do so by a statute or regulation. When the use of a skilled and trained workforce to complete a contract or project is required, the public entity is required to include in all bid documents and construction contracts a notice that the project is subject to the skilled and trained workforce requirement.

Section 2600.5 provides that the failure of a public entity to provide a notice does not excuse the public entity from the requirement to obtain an enforceable commitment that a bidder, contractor, or other entity will use a skilled and trained workforce to complete a contract or project; or that a bidder, contractor, or other entity from the obligation to use a skilled or trained workforce if such a requirement is imposed by a statute or regulation.

Section 2601 defines the following terms: “apprenticeable occupation,” “chief,” “graduate of an apprenticeship program,” “skilled and trained workforce,” and “skilled journeyperson.”

Section 2602 provides that, when a contractor, bidder, or other entity is required to provide an enforceable commitment that a skilled and trained workforce will be used to complete a contract or project, the commitment is required to be made in an enforceable agreement with the public entity or other awarding body that provides specified requirements.

In addition, if the contractor, bidder, or other entity fails to provide the monthly report required by this section, or provides a report that is incomplete, the public agency or other awarding body is required to withhold further payments until a complete report is provided.

If a public agency or other awarding body withholds amounts pursuant to this subdivision, the contractor, bidder, or other entity then is also entitled to withhold the same amount from the subcontractor until the subcontractor provides the contractor, bidder, or other entity a complete report, and the public agency or awarding body subsequently pays the contractor, bidder, or other entity the withheld payments.

If a monthly report does not demonstrate compliance with this chapter, the public agency or other awarding body is required to do specified things. Also, a monthly report provided to the public agency or other awarding body is a public record under the California Public Records Act and is open to public inspection.

Section 2603 states that, if the Labor Commissioner or his or her designee determines after an investigation that a contractor or subcontractor failed to use a skilled and trained workforce in accordance with this chapter, the contractor or subcontractor responsible for the violation will have to forfeit, as a civil penalty to the state, not more than $5,000 per month of work performed in violation of this chapter. A contractor or subcontractor that commits a second or subsequent violation within a three-year period will forfeit as a civil penalty to the state the sum of not more than $10,000 per month of work performed in violation of this chapter.

In addition, the following terms are defined: “any interest,” “contractor or subcontractor,” and “entity.” The amount of any monetary penalty may be reduced or waived by the Labor Commissioner if the amount of the penalty would be disproportionate to the severity of the violation. The Labor Commissioner is required to consider, in setting the amount of a monetary penalty, all of the specified circumstances.

(d) The Labor Commissioner or his or her designee is required to issue a civil wage and penalty assessment upon determination of penalties assessed. Review of a civil wage and penalty assessment issued under this subdivision may be requested in accordance with existing law. The determination of the Labor Commissioner as to the amount of the penalty imposed is reviewable by the Director of Industrial Relations only for an abuse of discretion.

If a subcontractor is found to have violated this chapter, the prime contractor of the project is not liable for any penalties unless the prime contractor had knowledge of the subcontractor’s failure to comply with this chapter or unless the prime contractor fails to comply with any of the specified requirements. The Labor Commissioner is required to notify the prime contractor within 15 days of the receipt by the Labor Commissioner of a complaint that a subcontractor violated this chapter.

Whenever a contractor or subcontractor is found by the Labor Commissioner to be in violation of this chapter with intent to defraud, the contractor or subcontractor or a firm, corporation, partnership, or association in which the contractor or subcontractor has any interest is ineligible for a period of not less than one year or more than three years to bid on or be awarded a contract for a public works project, or to perform work as a subcontractor on a public works project.

In addition, the Labor Commissioner is required to publish on the commissioner’s Internet Web site a list of contractors who are ineligible to bid on or be awarded a public works contract, or to perform work as a subcontractor on a public works project pursuant to this section. The list must contain specified data.

Finally, if a public entity or awarding body that is required to obtain an enforceable commitment that a skilled and trained workforce will be used to complete a contract or project receives a monthly report which does not demonstrate compliance with the skilled and trained workforce requirements, then the public entity or awarding body must forward a copy of the monthly report to the Labor Commissioner for issuance of a civil wage and penalty assessment in accordance with this section.