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Compliance FAQs – Prevailing Wages and Unions

What are the penalty levels for prevailing wage non-compliance?

Prevailing Wages have significant penalties. Any contractor or subcontractor (under the contractor) can pay as high as $200 for each calendar day, for each employee – if they paid less than the prevailing wages. If there’s a historical pattern of this, the Labor Commissioner can determine the penalty if there’s a pattern of abuse.

Which industry has the highest amount of penalties?

According the the Department of Labor, Construction has the highest amount of penalties or fines. Beyond the fines, companies can also experience a withholding of funds if their certified payroll reports are not correct. Additionally, risks include cancellation of a contract/job – and the potential of debarment – for up to 3 years.

How can I prepare if my company is investigated?

A Certified payroll investigation can many times lead to other investigations. It’s important to prepare for this. They can also look back over 2 years worth of reporting. During a prevailing wage investigation officials can also look for non-compliance with other labor laws, such as:

Family Medical Leave Act (FLSA)
Contract Work Hours and Safety Standards Act (CWHSSA)
Occupational Safety and Health Administration (OSHA)

What about union mistakes? What is the risk of doing reports manually?

The PRO Act gives additional protection to unions. It adds civil penalties for employers and creates personal liability for directors and officers of up to $100,000 for unfair labor practices. It makes an employer responsible for back pay, front pay, and other damages plus an additional amount of two times those damages in termination or other cases of “serious economic harm.”

What if I need help now?

If an employer cannot prove accurate and timely payment of prevailing wages and fringe benefits, they may face severe penalties, fines or even jail time. TradeSeal can generate accurate Certified Payroll reports with accurate class/craft names, benefit breakouts and pay rate reporting, even when union employees work on jobs. Federal, state and local Certified Payroll reports are included in HCM TradeSeal, in PDF or electronic formats. Need help right away, contact us.