ARTICLE
By Mike McManus, Director of Engineering Construction & Industry Relations - partial article published in Monday Morning Quarterback February 10, 2025 The City of San Diego Compliance Department’s Office of Labor Standards Enforcement recently presented a report to a city council committee on its efforts to enforce and monitor prevailing wage compliance on city public works projects. The report was just an informational item in front of the Budget and Government Efficiency Committee of the City Council. The committee accepted the report with little comment. The results of the report, though, are important for contractors. The report looked back on the fiscal year ending July 2024. In part, it examined 105 construction contracts. The total value of those contracts was over $821 million. As an awarding body, the city is responsible for monitoring and enforcing prevailing wage requirements on its public works projects. Under the law, the city is required to report any suspected prevailing wage violations to the Labor Commissioner or the Department of Industrial Relations (DIR). Some of the labor compliance issues the city looks for are failure to submit Certified Payroll Records, underpayment of prevailing wages, misclassification of workers, failure to make the required training fund contributions, or failure to request apprentices in the required ratios. According to city staff, the Prevailing Wage Unit (PWU) works directly with contractors and subcontractors to remedy what the city staff believes are violations. Violations not remedied by the PWU are reported to the DIR in Sacramento. The city determined that the total prevailing wages not paid were $40,631 for the year. The underpayments involved only two construction companies. In round numbers, the wage payments on all the city construction contracts collectively would be about $300 million for the year. In other words, the underpayment of wages on city public works construction projects is very rare and involves a tiny fraction of the contractors involved in building public works projects. The most penalties assessed were for noncompliance with the apprenticeship requirements. Six contractors were assessed penalties during the year. The penalties varied from $500 to $28,000. The largest penalty of $28,000 at $100 per day would equate to failing to meet the apprenticeship ratio requirements for 280 days. Violations of apprenticeship requirements are also rare. The rarest of violations noted was a failure to submit Certified Payroll Records. Only two contractors were fined. The fine is $100 per day per worker. The total fines between the contractors were $2,100, which means the missing records involved 21 workers for one day each, or some combination of workers and days that combined to 21 worker-days. This report proudly demonstrates that the construction industry does a tremendous job of complying with prevailing wage laws, out of tune with any public narratives of businesses stealing wages from employees.
By Mike McManus, Director of Engineering Construction & Industry Relations - partial article published in Monday Morning Quarterback February 10, 2025
The City of San Diego Compliance Department’s Office of Labor Standards Enforcement recently presented a report to a city council committee on its efforts to enforce and monitor prevailing wage compliance on city public works projects. The report was just an informational item in front of the Budget and Government Efficiency Committee of the City Council. The committee accepted the report with little comment. The results of the report, though, are important for contractors.
The report looked back on the fiscal year ending July 2024. In part, it examined 105 construction contracts. The total value of those contracts was over $821 million. As an awarding body, the city is responsible for monitoring and enforcing prevailing wage requirements on its public works projects. Under the law, the city is required to report any suspected prevailing wage violations to the Labor Commissioner or the Department of Industrial Relations (DIR).
Some of the labor compliance issues the city looks for are failure to submit Certified Payroll Records, underpayment of prevailing wages, misclassification of workers, failure to make the required training fund contributions, or failure to request apprentices in the required ratios. According to city staff, the Prevailing Wage Unit (PWU) works directly with contractors and subcontractors to remedy what the city staff believes are violations. Violations not remedied by the PWU are reported to the DIR in Sacramento.
The city determined that the total prevailing wages not paid were $40,631 for the year. The underpayments involved only two construction companies. In round numbers, the wage payments on all the city construction contracts collectively would be about $300 million for the year. In other words, the underpayment of wages on city public works construction projects is very rare and involves a tiny fraction of the contractors involved in building public works projects.
The most penalties assessed were for noncompliance with the apprenticeship requirements. Six contractors were assessed penalties during the year. The penalties varied from $500 to $28,000. The largest penalty of $28,000 at $100 per day would equate to failing to meet the apprenticeship ratio requirements for 280 days. Violations of apprenticeship requirements are also rare.
The rarest of violations noted was a failure to submit Certified Payroll Records. Only two contractors were fined. The fine is $100 per day per worker. The total fines between the contractors were $2,100, which means the missing records involved 21 workers for one day each, or some combination of workers and days that combined to 21 worker-days.
This report proudly demonstrates that the construction industry does a tremendous job of complying with prevailing wage laws, out of tune with any public narratives of businesses stealing wages from employees.