TIP #3

Before you play the game, learn the rules. Not knowing the rules can cause you to underbid. Read California Labor Codes 1770-1781 and 1810-1815. All the labor codes do not pertain to you; however, you need to know them. Those codes that pertain to the owner or the prime contractor tell you what they can do to hold you accountable for non-compliance with the labor code. My client had his money held for two years from the Tom Bradley International Airport project until Administration Rescue Inc. corrected the issues. That is a long time to wait to get paid.

LABOR CODE 1771.5 IS A NECESSARY CODE

Just a few highlights of the code:

• Ensure that all bid invitations and public works contracts contain appropriate language concerning the requirements of this chapter.
  The appropriate language must be included in your bid documents and contract, if you subcontract some of the work. The rules flow down to all tiers regardless of how large or small the contract amount.
• Conduct a pre-job conference with the contractor and subcontractor to discuss federal and state labor law requirements applicable to the contract. Remember the flow-down requirements. You are responsible for your sub tiers to be informed.
• Project contractors and subcontractors shall maintain and furnish at a designated time a certified copy of each weekly payroll containing a statement of compliance signed under penalty of perjury. You are responsible for your sub tiers compliance. If they are not in compliance, YOU are not in compliance. Therefore, choose your sub tiers wisely.
• The awarding body shall review and if appropriate, audit payroll records to verify compliance.
• The awarding body shall withhold contract payments when payroll records are delinquent or inadequate. You read that correctly. Your funds are affected by your subcontractor’s non-compliance. If your certified payroll is in, your subcontractor is not, your money will also be retained. You are responsible for your subcontractor’s compliance.

There is much more to the labor code. I only wanted to highlight that non-compliance affects your cash flow. The labor codes should be in your contract, and you must include them in your subcontracts. I will highlight other essential labor codes in other posts. I do not want to overwhelm you all at once. You can find the labor codes on the resource page of the website.