Winning a public works bid changes how you run payroll. California expects registered contractors, prevailing wage rates by craft and county, and certified payroll filed with the state on a regular clock. Here is a practical overview.
What counts as public works
In general, public works means construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds (California Labor Code §1720(a)(1)). “Construction” includes design and preconstruction work such as inspection and land surveying, and postconstruction cleanup. Maintenance work done under contract is covered too (Labor Code §1771).
“Public funds” is also broad. It can include below-market transfers of public assets, reduced or forgiven fees or loans, and similar subsidies (Labor Code §1720(b)), so a privately owned project may still be public works. When coverage is unclear, the Department of Industrial Relations (DIR) can issue a coverage determination (DIR Prevailing Wage FAQ), and contract questions are best taken to your attorney.
Register with DIR before you bid
Contractors and subcontractors must be registered with DIR to bid on, be listed in a bid for, or perform public work (Labor Code §1725.5). Eligibility requires workers’ compensation coverage and any required contractor’s license, among other conditions.
- Fee. DIR currently lists $400 for one fiscal year (July 1 to June 30), or $800 and $1,200 for two and three years (DIR Contractor Registration).
- Small project exemption. Registration does not apply to projects of $25,000 or less for construction, alteration, demolition, installation, or repair, or $15,000 or less for maintenance (Labor Code §1725.5(f)).
- Penalties. Bidding or working while unregistered can lead to a $2,000 penalty registration fee and, for repeat violations, disqualification for up to 12 months (Labor Code §1725.5).
The exemption covers registration only. Prevailing wage still generally applies to public works over $1,000 (Labor Code §1771). Primes should also confirm every subcontractor is registered.
Find the right prevailing wage rates
The Director of Industrial Relations sets the general prevailing rate of per diem wages for each craft, classification, or type of worker in the locality where the work is performed (Labor Code §1773). DIR issues general determinations twice a year, organized by county (DIR Prevailing Wage FAQ).
Generally, the determination in effect on the date bids are advertised applies for the life of the project. A double asterisk after an expiration date signals predetermined increases that must be paid if work continues past that date (DIR Prevailing Wage FAQ), so build them into the bid.
What a certified payroll record contains
Each contractor and subcontractor keeps a payroll record for every worker showing name, address, Social Security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid. Each record is verified under penalty of perjury (Labor Code §1776(a)).
On requests for copies:
- Who. The worker or an authorized representative, the awarding body, and the Labor Commissioner’s office (the Division of Labor Standards Enforcement). The public may request redacted copies through the awarding body or the Division (Labor Code §1776(b), (e)).
- When. A certified copy is due within 10 days after a written request (Labor Code §1776(d)).
- Penalty. Missing that window costs $100 for each calendar day, or portion of a day, for each worker until you comply (Labor Code §1776(h)). On a hypothetical crew of 12, that is $1,200 a day.
Filing electronically with the Labor Commissioner
On most projects, each contractor and subcontractor must also submit certified payroll records electronically to the Labor Commissioner (Labor Code §1771.4(a)(3)). DIR’s online system accepts payroll entered online or uploaded in its XML format, and you may need to join each project before submitting (DIR Certified Payroll Reporting; DIR Public Works Website Services).
- Frequency. At least once every 30 days while work is performed and within 30 days after the final day of work, or more often if the contract requires.
- Penalty. $100 per day, up to $5,000 per project, which can be assessed once records are 14 days past due (Labor Code §1771.4(a)(3)).
- Exceptions. An unregistered contractor on a project exempt from registration keeps its records for at least three years instead of filing (Labor Code §1771.4(a)(4)). The Labor Commissioner may also exempt certain projects of awarding bodies with long-running labor compliance programs, or under qualifying collective bargaining agreements (Labor Code §1771.4(b)).
Sending payroll to the awarding body, a prime contractor, or a union generally does not replace the DIR filing (DIR Certified Payroll FAQ).
Apprenticeship requirements in brief
On contracts of $30,000 or more, the apprenticeship rules generally apply (Labor Code §1777.5(o)). The core steps (Labor Code §1777.5(e), (g), (m)):
- Send contract award information to the applicable apprenticeship program before work begins.
- Employ apprentices at a ratio of at least one hour of apprentice work for every five hours of journeyman work, with limited exceptions.
- Make training fund contributions for apprenticeable crafts.
Apprentices are paid at DIR’s apprentice prevailing wage rates.
Federal projects: Davis-Bacon
Federal contracts over $2,000 for construction, alteration, or repair of public buildings or public works, and many federally assisted projects, fall under the Davis-Bacon and Related Acts (U.S. Department of Labor). Federal certified payroll is submitted weekly with a signed Statement of Compliance; Form WH-347 is optional, but the information it collects is required (29 CFR 5.5(a)(3)(ii); DOL Form WH-347 guidance). When both federal and California rules apply, the higher rate generally must be paid and records kept for both (California HCD Davis-Bacon training).
Bookkeeping habits that keep it clean
Certified payroll is only as reliable as the data behind it. A few habits help:
- Track time by job and classification. When a worker performs work in more than one classification, hours are generally tracked and paid at the rate for each.
- Document fringe benefit credits. Employer payments to qualifying health, pension, vacation, and training plans can be credited against the prevailing rate; any portion not paid to a plan is generally paid as wages (Labor Code §1773.1). If you pay more into plans on public jobs than on private ones, the credit generally must be annualized. A 2025 law, AB 889, revoked annualization exemptions the director granted before January 1, 2026, so it is worth rechecking how your credits are figured.
- Reconcile every pay period. Certified payroll should tie to the payroll register, and job cost labor should tie to both. Those job costs also feed your WIP schedule, so an error in one place tends to surface in another.
- Calendar the deadlines: monthly electronic filings, 10-day responses to written requests, registration renewals by July 1, and wage determination expiration dates.
How TreeStar can help
TreeStar works with contractors on payroll processing, including certified payroll for public works, along with payroll compliance, job cost accounting, and bookkeeping. We help prepare certified payroll reports from the same data used to run payroll, and you review and sign them before submission. If your certified payroll and your books have drifted apart, we are glad to take a look with you.
This article is general information, not advice for your situation. Rules change; confirm current law before acting.
