California Prevailing Wage Law Strengthened (AB 1336)

Beginning January 1, 2014 several changes to California Labor Code relating to public works and the prevailing wages took effect. These changes benefit employees by:

  • Lengthening the period in which claims can be filed
  • Increasing the penalties and damages available to employees who did not receive their proper wages
  • Improving the ability for investigators to review documents related to projects where prevailing wages allegedly were not paid properly. 

All too often employers take advantage of their employees. These changes help ensure that workers are paid what they have earned and should be paid according to the law as outlined in the California Labor Code.

Extending Time to Bring an Action for the Nonpayment of Prevailing Wages

A key change to the law in California is the extension of time during which the Labor Commissioner or his/her designee can bring an action against the contractor or sub-contractor for the non-payment of prevailing wages.  Prior to January 1, 2014, the Labor Commissioner or a joint labor-management committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) could only bring an action within 180 days of a complaint or 180 days after the acceptance of the public work, whichever occurs last.  The new law (AB 1336) extends the period from 180 days to 18 months. This is a significant change for several reasons:

  • Workers have more time to better understand if they were paid incorrectly and are less likely to be subject to intimidation tactics or retaliation by the employer.
  • Advocates for employees have more time to conduct their investigations and gather evidence and other witnesses to support the recovery of wages owed.
  • Interest and penalties assessments ensure that if the investigations take longer the recovery amount can be increased and adjusted for the amount of additional time taken to recover what was owed and not paid.

Prevailing wage claims involve considerable investigation and documentation. Giving employees extra time is a definite advantage for workers who have been harmed by fraudulent and unfair practices.

Liquidated Damages for Not Paying Prevailing Wages

In addition to the interest that can accrue on all due and unpaid wages owed from the date that the wages were due until the wages were actually paid, AB 1336 adds Liquidated Damages.
Liquidated damages may be added to the wage amount owed as a penalty to the employer for failing to pay the proper wage amount.  Liquidated damages can be equal to the amount owed in wages, which essentially doubles the wage damages that the employee can recover if a valid claim for wages is not paid or covered within 60 days of service of the complaint.

This penalty serves as an extra incentive for employers to right wrongs as soon as they come to light. It also takes some pressure off the employees to settle before an equitable resolution is reached.

Non-Redacted Payroll Records now available to Investigators

Another key provision of AB 1336 is that it provides greater access to payroll details for investigators reviewing Certified Payroll Records (CPRs) and other records of wages paid on public works projects. These investigators will now be able to review names and addresses for workers associated with payroll records for prevailing wage projects. This will serve as a deterrent for unfair practices and prevents employers from hiding behind redacted CPRs, which made it harder to identify workers on a project.

Supporting California’s Prevailing Wage

The State of California initiates many public work projects. All of these projects are subject to prevailing wage laws. Workers on these projects must be paid the approved rate for their classification.

There are many ways in which a worker may be paid an unfair wage. They could be misclassified. They could be shorted on their hours. They could be uncompensated for meals and breaks. The new California wage law (AB 1336) takes several important steps in the right direction in protecting worker rights. Read the law here.

If you have questions about prevailing wage law or have been unfairly compensated, Donahoo & Associates is here to help.

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