5º ENSEÑANZAS PROFESIONALES

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APPENDIX 20

How to Read a Certified Payroll Report

As mentioned in Section V, not all LCPs will require the same level of “review” when dealing with the submission of CPRs by the contractors. However, every LCO should be able to read and explain a CPR when various issues arise.

It is important that each CPR state the name of the contractor, the project, and the date for the payroll week ending. Additionally, every CPR should have a Statement of

Compliance attached with an original signature. The Statement of Compliance format may vary by contractor, some being more informative than others. Regardless of the format used, each statement must include the “Words of Certification” required by 8 CCR §16401.

A copy of the DLSE Form A-1-131 can be found in Appendix 7. The following numbers correspond with the fields numbered on the form.

1. *This field should contain the name, address, and social security number of the employee. If an employee is listed in more than one box in field 1, it is possible the employee worked in more than one trade in an 8-hour day or payroll period. Pay rates are unique to each trade; more importantly, the training fees and apprenticeship requirements are also specific to each trade. Thus, each trade must be separated out regardless of whether it is the same worker in order to be in compliance. The practice of splitting the work day or week between trades for a worker is common among non- signatory contractors.

2. This has the number of withholdings/exemptions and is irrelevant. 3. *Here you will find the classification of the worker. The classification

must be listed in order for you to identify which Determination to use when comparing the reported rate of pay to prevailing wage.

4. *These are the days of the week the employee worked on the public works project (Project or Contract No. can be found in the upper right-hand corner). In some cases, work may have been performed on a Saturday or Sunday and the worker may have been entitled to a special rate. That rate can be found on the Determination for the classification listed in field 3. The “O” represents Overtime worked and the “S” represents Straight-time worked. When overtime and straight time are listed on a CPR, there should be two numbers totaling in each box of field 5 and two

corresponding “per diem rates” in field 6. If the worker performed work on a Sunday in a classification that has a special Sunday rate, you should see a third “per diem rate” that would be multiplied by the Sunday hours. 5. *This is the total hours the employee worked on the specific project for

time, overtime, Saturday, Sunday and holiday especially if that classification has varying rates of pay listed on the determination.

6. *This is the rate of pay the employee was paid per hour for the dates/days worked. If the rate of pay being reported is different than what is stated on the Determination, refer to the Fringe Benefit Statement that should have been submitted by the contractor submitting the payroll. However, the hourly rate of pay is never to be lower than the basic hourly rate of pay stated on the Determination for the said classification. If overtime was worked, then the amount reported should be no less than the basic hourly rate multiplied by 1.5 (in most cases, but always verify multiplier listed on determination) . In some cases the contractors, especially non-signatory contractors, will pay the base rate plus fringes in cash to the employee. It is very important to verify the numbers before coming to the conclusion that underpayment has occurred. When comparing a Determination rate and the amount reported in field 6, keep in mind there are many ways to calculate the correct prevailing wage rate. Below are a few examples (refer back to the determination for Laborer Group 1 (Area 2) for the following examples):

the basic hourly rate of $21.64; the total hourly rate $31.67;

total hourly rate minus the training fees $31.33;

a rate somewhere in-between the base and total hourly rate $26.18 (basic + vacation);

When overtime (2 hours) and straight time (8 hours) are reported and all fringes are paid to funds or programs $23.80 ((Basic*8 + OT*2) / 10).

When you see the exact total hourly rate verify that the training contribution deduction is listed in field 8, training column.

7. Gross Amount Earned. Two possible dollar amounts may be found here. The “This Project” column represents the hours worked on the project specified on the CPR and is calculated by multiplying the number(s) in field 5 by the number(s) in field 6. The “All Projects” column will, in most cases, include hours not relevant to the project specified on the CPR making it difficult to verify dollar amount. If a contractor is employed on more than one project for an awarding body it may be possible, if

necessary, to ensure the worker is not working more than eight hours a day or forty hours a week at the straight time rate of pay.

8. **Deductions, Contributions, and Payments. The key columns to pay attention to are the Vacation/Holiday, Health and Welfare, Pension, and Training. These are the employer payments/fringe benefits that account

reported in field 6 then dollar amounts should be found in these columns. The amounts in each column may not be the exact amounts listed on the Determination, except for the training fee, which must always be equal to or greater than what is listed on the Determination. However, when these columns are added together, they should equal the total combined amount listed on the determination. If an employer decided to pay more to the training fee then they may take a credit in any of the other payments (i.e. the stated training fee is $.25 and they pay $.50, then a credit of $.25 would be given in another area). Regardless of whether the contractor has included or deducted the training fee from the total hourly rate, an amount must be written into the training fee column to verify payment.

* These represent the required fields in Labor Code § 1776.

** Employer Payments/Fringe Benefits Statements should be filled in when the employer is paying these to an approved fund or program. The training fee amount should always be listed.

GLOSSARY Defined Terms

Affected Contractor or Subcontractor. A Contractor or Subcontractor to whom the Labor Commissioner has issued a civil wage and penalty assessment pursuant to Labor Code 1741, or to whom a District has issued a notice of the withholding of contract payments pursuant to Labor Code §1771.6, or to whom the Labor Commissioner or the Division of Apprenticeship Standard has issued a notice assessing penalties for noncompliance with payroll record obligations under Labor Code §1776.

Area of Determination. The area of determining the prevailing wage is the "locality" and/or the "nearest labor market area" as determined by the Director. In determining the area, the mobility of each craft, classification and type of work will be considered.

Assessment. A civil wage and penalty assessment issued by the Labor Commissioner or his or her designee pursuant to Labor Code §1741, and also includes a notice issued either by the Labor Commissioner or the Division of Apprenticeship Standards pursuant to Labor Code §1776. Audit. An audit consists of a comparison of payroll records to the best available information as to the actual hours worked and classifications of workers employed on the contract. An audit is sufficiently detailed when it enables the LCP, and the Labor Commissioner in reviewing

proposed penalties, to draw reasonable conclusions as to compliance with Labor Code §1720 - 1861, and to enable accurate computation of underpayment of wages to workers and of

applicable penalties and forfeitures.

Awarding Body. Any state or local government agency, department, board, commission, bureau, district, office, authority, political subdivision, regional district officer, employee, or agent awarding a contract order for public works that exercises enforcement authority under Labor Code §§1726 or 1771.5. In this Handbook, it is synonymous with District.

Bid. Any proposal submitted to a district in competitive bidding for the construction, alteration, demolition, repair, maintenance, or improvement of any structure, building, road, property, or other improvement of any kind.

CPR. Certified Payroll Report. The form that is to be maintained on a weekly basis by Contractor or Subcontractor, which shows the Name of Contractor or Subcontractor and the licensing information, the name, address, and social security number of workers, the work classification, the hours worked each day, the total hours worked in seven days, the hourly rate of pay, the gross amount earned, the deductions, contributions, and payments made on behalf of the worker, the net amount paid to the worker, and the check number for the net pay to the worker. The DLSE Form A-1-131 is the standard form used for CPRs.

Certified. The affirmation of a person with the authority to so affirm, under the penalty of perjury that the records are originals or are full, true and correct copies of the original and depict truly, fully and correctly the craft or type of work performed, hours and days worked, and the

amounts by category listed, disbursed by way of cash, check, or in whatever form or manner to each person by job classification and/or skill pursuant to a public works contract.

Chief of DAS. Chief of the Division of Apprenticeship Standards or a duly authorized representative.

Chief of DLSE/Labor Commissioner. Chief of the Division of Labor Standards Enforcement or a duly authorized representative.

Chief of DLSR. Chief of the Division of Labor Statistics and Research or a duly authorized representative.

Contractor. Contractor includes Subcontractor, licensee, officer, agent, or representative thereof, acting in that capacity, when working on public works.

Coverage. This means being subject to the requirements of Part 7, Chapter I of the Labor Code as a "public work." This includes all formal coverage determinations issued by the Director of the Department of Industrial Relations.

DAS. Division of Apprenticeship Standards.

Date of Notice or Call for Bids. The date the first notice inviting bids was published in a newspaper of general circulation or promulgated in a legally sufficient manner which results in a contract being awarded with or without competitive bidding. This may also be referred to as the Bid Advertisement Date.

Days. Days, unless otherwise specified, means calendar days.

Deliberately. Deliberately means premeditated and intentional and does not include inadvertent error.

Delinquent Payroll Records. Delinquent Payroll Records are those not submitted by the Contractor or Subcontractor on the date set in the Contract.

District. District shall refer to a K-12 School District, a Community College District, and a County Office of Education.

DLSE. Division of Labor Standards Enforcement. DLSR. Division of Labor Statistics and Research.

Director. Director of the Department of Industrial Relations or his/her duly authorized representative.

Due Diligence. Steady, attentive, and consistent review of CPRs to the extent reasonable in a particular situation. Due diligence does not mean taking all steps or actions possible. For

sufficient documentation to support its position when it submits materials to the Labor Commissioner asking for a determination and when a contractor appeals a withholding of contract payments.

Duly Authorized Representative. An employee of the Department of Industrial Relations. Effective Date. The date upon which the determinations of the Director go into effect. This date is ten (10) days after the issue date of the determination.

Employer Payments. Includes:

The rate of contribution irrevocably made by a Contractor or Subcontractor to a trustee or to a third person pursuant to a fund, plan, or program for the benefit of employees, their families and dependents, or retirees;

The rate of costs to the Contractor or Subcontractor which may be reasonably anticipated in providing benefits to employees, their families and dependents or to retirees pursuant to an enforceable commitment or agreement to carry out a financially responsible plan or program which was communicated in writing to the workers affected; and

The rate of contribution irrevocably made by the Contractor or Subcontractor for apprenticeship or other training programs authorized by Section 3071 and/or 3093 of the Labor Code.

Enforcing Agency. The Enforcing Agency is the entity which has issued an Assessment or Notice of Withholding of Contract Payments and with which a Request for Review has been filed; that is, it refers to the Labor Commissioner when review is sought from an Assessment, the District when review is sought from a Notice of Withholding of Contract Payments, and the Division of Apprenticeship Standards when review is sought from a notice issued by that agency that assesses penalties under Labor Code §1776.

Expiration Date. The date upon which the determinations of the Director are subject to change. Final Approval. Status of a District’s LCP as determined by the Director of the DIR.

Firm. A firm means, but is not limited to, any individual, corporation, partnership, limited partnership, agency, association, organization or trust operating a business in the State of California whether or not licensed or permitted to do so.

Fraud. Fraud means a suggestion, as a fact, of that which is not true, by one who does not believe it to be true; or the assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true; or the suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact; or a promise, made without any intention of performing it.

General Prevailing Rate of Per Diem Wages. Includes:

The prevailing basic straight-time hourly rate of pay; and The prevailing rate for holiday and overtime work; and

The prevailing rate of employer payments for any or all programs or benefits for employees, their families and dependents, and retirees which are of the types enumerated as follows:

Medical and hospital care, prescription drugs, dental care, vision care, diagnostic services, and other health and welfare benefits;

Retirement plan benefits;

Vacations and holidays with pay, or cash payments in lieu thereof;

Compensation for injuries or illnesses resulting from occupational activity;

Life, accidental death and dismemberment, and disability or sickness and accident insurance;

Supplemental unemployment benefits;

Thrift, security savings, supplemental trust, and beneficial trust funds otherwise designated, provided all of the money except that used for reasonable administrative expenses is returned to the employees;

Occupational health and safety research, safety training, monitoring job hazards, and the like, as specified in the applicable collective bargaining agreement;

See definition of "Employer Payments," (C);

Other bona fide benefits for employees, their families and dependents, or retirees as the Director may determine; and

Travel time and subsistence pay as provided for in Labor Code §1773.8;

The term "general prevailing rate of per diem wages" does not include any employer payments for:

Job-related expenses other than travel time and subsistence pay;

Contract administration, operation of hiring halls, grievance processing, or similar purposes except for those amounts specifically earmarked and actually used for

Union, organizational, professional or other dues except as they may be included in and withheld from the basic taxable hourly wage rate;

Industry or trade promotion; Political contributions or activities;

Any benefit for employees, their families and dependents, or retirees including any benefit enumerated above where the Contractor or Subcontractor is required by Federal, State, or local law to provide such benefit; or

Such other payments as the Director may determine to exclude.

Interested Party. When used with reference to a particular prevailing wage determination made by the Director, includes:

Any Contractor or Subcontractor, or any organization, association, or other representative of any Contractor or Subcontractor likely to bid on or to perform a contract for public work which is subject to the particular prevailing wage determinations; and/or

Any worker in the particular craft, classification, or type of work, who may be employed on a public work project subject to the particular prevailing wage determination, or any labor organization or other representative of such a person, including the recognized collective bargaining representative for the particular craft, classification, or type of work; and/or Any district or association or other representative of awarding bodies concerned with the administration of a pubic works contract or proposed contract, which is subject to the particular prevailing wage determination.

Helper. Any subjourneyman classification traditionally used to assist a journeyman. Under no circumstance may the Helper classification be used to replace statutorily required Apprentices. Identify or Give Notice of Identity. This means to state the name, job title, address and current telephone number of a person or entity.

Inadequate Payroll Records. Inadequate Payroll Records are any one of the following: A record lacking the information required by Labor Code §1776;

A record which, contains the required information but is not certified, or certified by someone not an agent of the Contractor or Subcontractor;

A record remaining uncorrected for one payroll period, after the District has given the Contractor notice of inaccuracies detected by audit or record review. Provided, however, that prompt

correction by a Contractor or Subcontractor will stop any duty to withhold if such inaccuracies do not amount to one (1) percent of the entire Certified Weekly Payroll in dollar value and do not

affect more than half the persons listed as workers employed on that Certified Weekly Payroll, as defined in Labor Code §1776 and Title 8 CCR §16401.

Intent to Defraud. Intent to defraud means the intent to deceive another person or entity and to induce such other person or entity, in reliance upon such deception, to assume, create, transfer, alter or terminate a right, obligation or power with reference to property of any kind.

Initial Approval. The status of a District’s LCP, which is given by the Director of DIR, the date of which must be noted in the District’s LCP documents.

Interim Determination. Those determinations of the Director issued between the quarterly updates.

Investigation. See Audit.

Issue Date-Issuance. The date upon which copies of the determination of the Director are deposited in the mail.

Labor Commissioner. The Labor Commissioner is the Chief of the Division of Labor

Standards Enforcement and includes his or her designee who has been authorized to carry out the Labor Commissioner’s functions under Chapter 1, Part 7 of Division 2 (commencing with

section 1720) of the Labor Code.

Labor Compliance Program (LCP). A labor compliance program initiated and enforced by a District in accordance with Labor Code §1771.5.

Labor Compliance officer (LCO). The person, firm, or third party administrator authorized by the District to enforce its LCP.

Liquidated Damages. Pursuant to Labor Code §1742.1, liquidated damages is the amount equal to the wages, or portion thereof, that remain unpaid sixty (60) days following the service of a civil wage and penalty assessment under Labor Code §1741 or a notice of withholding under Labor Code §1771.6(a)

Locality. Locality in which public work is performed means the county in which the public