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Prevailing wage and subcontractors

I am an s-corp with no employees, our subcontractor has prevailing wage requirements for public works jobs, but we have no payroll ourselves and perform site inspection work only (no construction labor). Are we subject to the PW laws in CA since we have a sub that is subject? Tried the DIR and they are slow to respond.... Thanks!

1 reply

Apr 14, 2020

A California construction business won't be free from certified payroll requirements when they don't actually have employees or payroll to account for. In fact, California's Department of Industrial Relations (DIR) website provides some insight into how to comply at the DIR's Frequently Asked Questions page at Question 8. To quote that page: "Even if you are paid by salary, draw, or contract payments, you still should be able to provide the following information for any work you perform on public works projects: (a) your name, address, and SSN (or FEIN, if you have no SSN); (b) the work classification for your prevailing wage work; (c) the hourly rate for that classification; (d) the number of hours that you performed that work; and (e) the estimated amount paid to you for your labor for that work. To calculate how much you were paid for your own labor, subtract all your other expenses (including materials, pro rata share of business overhead, and payments to other workers or subcontractors) from the gross contract price. The net amount should be your labor cost, and it should be equal to or higher than the compensation required for your work classification (determined by multiplying your work hours by the applicable rates) in order to comply with prevailing wage requirements." I hope this was helpful! I don't have much personal experience in complying with California's prevailing wage regulations, but contacting one of these California construction attorneys might provide more insight.

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