Program Management Procedure. Labor Compliance

Transcription

1 LACCD Bond Program Program Management Procedure Procedure Number: PMA SOP 12.0 Revision Number: 0 Effective Date: May 1, 2015 Total Pages: 14 Controlled Document No.: SharePoint Copy 1.0 Overview On Oct 17, 2001, the Los Angeles Community College District (LACCD, or District) Board of Trustees established a Community Economic Development Program to maximize local economic benefits generated by the LACCD Bond Program. This was subsequently reaffirmed on June 25, 2003 and Jan 15, To further its commitment, on Jan 15, 2014, the Board also modified Board Rule Opportunities for Local, Small and Emerging Businesses to increase the goal to a minimum 30% participation by Local, Small, Emerging and Disabled Veteran (LSEDV) businesses in facilities contracts. District Board Rule is at More detail about the Community Economic Development Program is in Standard Operating Procedure PMA 12.0 on Purpose and Scope The purpose of this standard operating procedure (SOP) is to define the processes of the PMO Department as required by the California Labor Code Prevailing Wage Laws and the California Code of Regulations pertaining to Public Works projects. In addition to describing how the Bond Program voluntarily complies with the legislation referenced, this SOP explains how the Department supports the Program Management Office s Community Economic Development (CED) team by verifying timely payroll submissions for CED reporting. The standard operating procedure for applies to the Program Management Office (PMO) and the entire BuildLACCD team, including but not limited to the College Project Directors (CPDs) and College Project Teams (CPTs), contractors and craft employees engaged in the Bond Program, the PMO Department staff, the Community Economic Development staff, and to their respective internal reporting structures. 3.0 Acronyms, Terms and Definitions 3.1 Acronyms Refer to the Titles, Terms and Acronyms Supplemental Procedure posted on pmo.buildlaccd.org for a complete list of acronyms used in the Bond Program. Acronyms are explained with their first use in this document. Page 1 of 14

2 3.2 Terms and Definitions Prevailing Wages Labor Code 1720 defines public works that are covered by prevailing wage to include generally, construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds. All covered trade work performed under contracts over $1,000 is subject to California prevailing wage laws. Department of Industrial Relations(DIR)-Approved Program (LCP) The Department operates its DIR-approved LCP to enforce prevailing wage requirements on public works construction projects which were awarded prior to January 1, 2012 and fall under the Program according to California Labor Code 1771 et seq. Following the adoption of Senate Bill 854, the District is no longer required to have a DIRapproved LCP for projects beginning after January 1, The District will, however, continue to recognize prevailing wage violations and has elected to operate labor compliance monitoring and enforcement activities as described in this procedure. The Department serves as a resource to contractors to promote compliance with the rigorous demands of public works prevailing wage requirements. For more information, see section 5.12, Training. Department of Industrial Relations (DIR) The Department of Industrial Relations is a State of California agency established to improve working conditions for California s wage earners and to advance opportunities for profitable employment in California. Division of Apprenticeship Standards (DAS) The Division of Apprenticeship Standards is a DIR division established to administer California apprenticeship law and enforce apprenticeship standards for wages, hours, working conditions, and specific skills required for state certification as a journeyperson in an approved occupation. Division of Labor Standards and Enforcement (DLSE) The Division of Labor Standards and Enforcement is a DIR division established to administer and enforce California labor law. Page 2 of 14

3 LCPtracker LCPTracker is a Web-hosted software program designed to minimize paperwork and labor hours for public works construction project labor compliance programs. It supports online database of certified payroll records (CPR); generates audits logs with standard letters, electronic documents, attachments, and contractor correspondence features; matches information submitted by contractors to information gathered during on-site interviews; verifies job classifications are listed correctly, apprentice stages are approved, and social security numbers match; reduces errors by standardizing data and alerting users to potential problems during data entry; and contains labor compliance forms. Project Labor Agreement (PLA) The PLA refers to the District s agreement with the Los Angeles/Orange County Building and Trades Council and Southwest Regional Council of Carpenters, effective Dec 19, The PLA establishes the labor relations policies and procedures for LACCD and the contractors and craft employees engaged in the Bond Program. The PLA prevents work stoppages or slowdowns, encourages contracting with LSEDV businesses, facilitates the hiring of local and disadvantaged local workers, provides a sufficient supply of skilled craft workers, facilitates and provides a pipeline to union apprenticeship, and establishes standardized grievance/dispute resolution procedure(s) when matters arise. 4.0 Roles and Responsibilities 4.1 PMO Manager of Special Initiatives The PMO Manager of Special Initiatives oversees the Officer, who is broadly responsible for labor compliance and performs activities that are separate from but related to other Community Economic Development Program activities. The PMO Manager of Special Initiatives reports to the PMO Program Director and the PMO Deputy Program Director. 4.2 Officer The PMO Officer reports to the Community Economic Development Department Manager and is responsible for: Supervising Analysts and Labor and Community Economic Specialist to verify adherence to the policy and procedures Establishing and maintaining labor compliance monitoring procedures and training material 4.3 Analyst The PMO Analyst is responsible for: Page 3 of 14

4 Reviewing documents to verify compliance with prevailing wage and labor compliance requirements Conducting site visits, worker interviews and prevailing wage audits Coordinating with contractors, College Project Teams (CPTs) and other PMO departments to expedite resolutions to labor compliance issues 4.4 Labor and Community Economic Specialist The PMO Labor and Community Economic Specialist is responsible for: Monitoring and reporting compliance with small and disadvantaged business requirements in Federally funded contracts Reviewing documents to verify compliance with prevailing wage and labor compliance requirements Conducting site visits, worker interviews and prevailing wage audits Coordinating with contractors, College Project Teams (CPTs) and other PMO departments to expedite resolutions to labor compliance issues 4.5 Administrative Assistant The PMO Administrative Assistant is responsible for: Processing and distributing all outgoing and incoming mail Processing third-party requests Preparing files for archiving Providing general administrative assistance to the Department team 5.0 Procedures Section 5.0 addresses the broad range of labor compliance issues managed by the Labor Compliance Officer and support staff. See section 6.0 for details of the Project Labor Agreement, which is a specific and separate process Pre-Bid Meetings Pursuant to California Labor Code Section (b)(1) and California Code of Regulations Section 16421(a)(1), all bid invitations and public works contracts must contain language regarding California Labor Law and prevailing wage requirements. The Department assists the PMO Contracts Department in verifying that all applicable procurement and contract documents include the proper language pertaining to public works prevailing wage requirements. Page 4 of 14

5 For projects awarded after October 1, 2014, the District s General Conditions will require all public works contractors to use an online certified payroll system (currently LCPtracker), monitored by the Officer Post Award Pursuant to California Labor Code Section (b)(2) and California Code of Regulations Section 16421(a)(2), the Department will participate in the project s construction kick-off meeting in order to inform the contractor(s) of the obligation to comply with federal and state labor law requirements. A LC Analyst will provide the LCPtracker Account Set-up Form to the Prime Contractor and provide guidance on how to submit payroll through the online certified payroll system. Upon receipt of the completed LCPtracker Account Set-up Form from the Prime Contractor, the LC Analyst will set up the contractor s account on LCPtracker and assign contractor to the project. The Prime Contractor is responsible for adding all lower-tier subcontractors to LCPtracker, a process monitored by the officer PWC-100 Pursuant to California Labor Code Section and California Code of Regulations Section 16451(a), the Awarding Agency (i.e., the PMO on behalf of the District) is required to notify the Division of Apprenticeship Standards (DAS) and the Division of Labor Standards Enforcement (DLSE) when a public works project is awarded. When a construction contract over $1,000 is awarded, the PMO Contracts Department provides Department the required information for the project and the Department completes the following procedures as designated by the DIR: Completing the PWC 100 online form ( Providing a copy of LACCD s Project Labor Agreement (PLA) to the DLSE via , as requested 5.4 Certified Payroll Reports (CPRs) and other One-Time Filings: Reviews and Confirmations For projects not on LCPtracker, the following documents are submitted to the CPTs by the Prime Contractor, along with their pay application: the CPRs, DAS-140, Fringe Benefit Statement, Labor Law Check List and other applicable documents. The CPT is responsible for forwarding these documents to the Department for review. Page 5 of 14

6 For projects on LCPtracker, contractor(s) will upload CPRs and other one-time filings through their LACCD LCPtracker account. The Officer monitors these accounts Certified Payroll Reports Pursuant to California Labor Code Section 1776, California Code of Regulations Sections and 16401, and the District s General Conditions, contractor(s) are required to maintain accurate CPRs on a weekly basis and submit them to the PMO within 10 calendar days of a request. 1 For projects on LCPtracker, contractor(s) are required to submit payrolls within 10 days of the payroll week-ending date. Upon receiving the CPRs the Department reviews them for accuracy and completeness in accordance with the information required pursuant to Labor Code Section CPRs may be rejected if completed incorrectly and will be returned to the contractor with instruction to submit a corrected document. Each CPR must be accompanied with Words of Certification or a Statement of Compliance to certify that all information provided within a CPR is true and correct (California Labor Code Section (b)(3) and California Code of Regulations Section 16401(b) DAS-140 Pursuant to California Labor Code Section (e), prior to commencing work on a contract for public works, every contractor shall submit contract award information to an applicable apprenticeship program that can supply apprentices to the site of the public work. The proper completion of the DAS-140 form, available on the State s website and in LCPtracker, fulfills this requirement. The form is to be submitted to all applicable Apprenticeship Committees located in the area of the public works site and for all craft/trades to be used by the contractor. In addition, contractors are to submit a copy of the completed DAS-140 forms to the Department as proof of compliance Fringe Benefit Statement Pursuant to the California Code of Regulations Section 16421(a)(3), contractor(s) must complete and provide a Fringe Benefit Statement or Statement of Employer Payments 1 Older projects still using paper payroll will have a paper copy sent to the CPT, and the CPT forwards it to the PMO team. Newer projects use an online payroll reporting system monitored by the PMO team. Page 6 of 14

7 along with CPRs in order to constitute presumptive compliance with the requirement for payment of prevailing wages. Upon receipt of the Fringe Benefit Statement, the Department reviews it for accuracy, completion, and submission of benefits into an appropriate Union Trust Fund, if applicable. If incomplete or completed incorrectly, Fringe Benefit Statements will be returned to the contractor with instructions to submit a corrected document. 5.5 Discrepancy Notices The Department reviews CPRs and other documents for completeness and adherence to the California Labor Code. The assigned LC Analyst: Verifies that all one-time submittals are submitted and properly completed Performs payroll reviews to verify payment of prevailing wages, proper classification, etc. Adds findings to the project s Discrepancy Log, including issues found with one- time submittals, prevailing wage violations, discrepancies based on worker interviews, requests for payroll confirmations and status of pending audits Issues Discrepancy Notices on a monthly basis to Prime Contractor, CPT, and Labor Compliance Officer Coordinates with contractor(s) and CPT to resolve outstanding issues on the Discrepancy Notices If a contractor is not cooperative in resolving the outstanding issues on a Discrepancy Notice or disagrees with the findings, the LC Analyst may recommend: Initiating an audit for projects under the District s DIR-Approved LCP Forwarding findings to the DIR for investigation and assessment for projects without a DIR-Approved LCP Contractors will be given opportunities to mitigate issues before they are escalated to the State level. Issues may be resolved, for example, by a collection of back wages and a proof of payment, allowing the logged discrepancy to be closed out, resulting in a Restitution Notice. 5.6 Observations and Interviews Pursuant to California Code of Regulations Section 16432(d), the Department performs in-person inspections at the project in order to corroborate prevailing wage payments reported on payroll records furnished by contractor(s). Page 7 of 14

8 The Department will conduct unannounced, random site visits to verify the accuracy of payroll records. During these visits, LC Analysts will: Follow all project site safety procedures and CPT protocols Complete an observation form to record pertinent site visit information and to verify that the project site has displayed the prevailing wage determinations in accordance with California Labor Code Section Conduct worker interviews (while the worker is performing work) and complete a worker interview form Compare completed observation and interview forms against the CPRs to confirm payment of prevailing wages and adherence to the California Labor Code. If a discrepancy is found, the LC Analyst will investigate further by contacting the worker, requesting payroll confirmations, and logging findings on the Discrepancy Logs 5.7 Prevailing Wage Investigations on DIR-Approved, LCP-Applicable Projects Pursuant to California Code of Regulations Section (e), the Department is required to conduct an audit when it has determined that there was a violation of the Public Works Chapter of the Labor Code resulting in an underpayment of wages Conducting an Audit The audit is a summary of the prevailing wage deficiencies gathered for each underpaid worker and any penalties to be assessed under California Labor Code Sections 1775 and Upon receipt of a routine audit flagged by routine payroll review or receipt of a worker complaint, the Department initiates an audit and: Notifies the contractor(s) of the LCP audit pursuant to California Code of Regulations Section 16434(b) and requests payroll documents accordingly Conducts a thorough audit to determine California Labor Code and prevailing wage violations Upon completion of the audit, assesses California Labor Code 1775 and (or) 1813 penalties as applicable Per California Labor Code Section 1775, penalties may be assessed for prevailing wage violations at a rate of $200 per worker per day. California Labor Code Section 1813 penalties are an additional $25 per worker per day for overtime violations Audit Assessments Under $1,000 Page 8 of 14

9 Pursuant to California Code of Regulations Section 16436(b), if the aggregate amount of forfeitures assessed against a contractor is less than $1,000, the forfeitures shall be deemed approved by the Labor Commissioner once the documents listed in this section are served. The Department submits the following to the Labor Commissioner for review: Notice of Withholding of Contract Payments, as authorized by California Labor Code Section (a) Summary of the audit findings, as defined in California Code of Regulations Section 16432(e) Narrative identifying the Bid Advertisement Date of the contract for public work and summarizing the nature of the violation, the basis of the underpayment and the factors considered in determining the assessment of penalties, if any, under California Labor Code Section 1775 Upon serving the DIR Labor Commissioner and contractor(s) with the above documents, the Department provides the contractor(s) with an opportunity to settle and pay restitution via a Payment Instruction Letter. If the contractor(s) contest the findings, the contractor is able to invoke its rights for a Settlement Meeting or Hearing, as detailed below, in Audit Assessments Over $1,000 Pursuant to California Code of Regulations Section 16436(c), all forfeitures over $1,000 require approval by the DIR Labor Commissioner prior to issuance of a Notice of Withholding Request for Approval of Forfeiture and Penalties The Department will submit a Request for Approval of Forfeitures and Penalties to the DIR Labor Commissioner. The Request for Approval of Forfeitures and Penalties is to be requested not less than 30 days before the expiration of the Notice of Completion Statute of limitations, which is 18 months after the Notice of Completion of a project Notice of Withholding (NOW) Pursuant to California Labor Code Section 1741 and , the Department will issue a NOW within ten calendar days of the DIR Labor Commissioner approval of a Request for Approval of Forfeitures and Penalties. The Department prepares the NOW as follows: Page 9 of 14

10 The NOW must be in writing, describe the nature of the violation and the amount of wages, penalties, and forfeitures due, and include the basis for the assessment. The NOW must be accompanied by a Proof of Service pursuant to Section 1013 of the Code of Civil Procedure, delivered by first-class mail and certified mail to the Prime Contractor and affected subcontractor (if applicable). To the extent possible, a copy of the NOW must also be served on the bonding company. The NOW must advise the Prime Contractor and affected subcontractor (if applicable) of the procedure for obtaining review of the NOW. The Department provides a copy of the NOW to the PMO Legal Department for review before processing and distribution to the appropriate PMO departments. Occasionally, the DIR Labor Commissioner conducts prevailing wage investigations and issues Civil Wage and Penalty Assessments. The Department will process and distribute these assessments to the appropriate PMO Departments Contractor Right to Settlement Meeting Pursuant to California Labor Code Section (c), within 30 days of the NOW, the affected contractor(s) may make a request to settle the audit without the need for formal proceedings. The settlement meeting may be held in person or by telephone and is to take place before the 60-day period for seeking administrative review expires. Upon receipt of a request for a settlement meeting, if special circumstances exist, the Labor Compliance Department will refer the audit to the PMO Legal Department and outside panel counsel the Legal Department may assign, as applicable Request for Review (Hearing) Pursuant to California Labor Code Section 1742(a), affected contractor(s) may obtain a review by transmitting a written request to the Department. If no hearing is requested within 60 days after service of the assessment, the assessment will become final. Upon receiving a Request for Review, if special circumstances exist, the Department refers the audit to the PMO Legal Department outside panel counsel. Outside panel counsel assists the Department with the Hearing Process. 5.8 Monitoring of Projects without a DIR-Approved Program Pursuant to California Labor Code Section 1726, the District s Department shall take cognizance of California Labor Code and prevailing wage violations committed in Page 10 of 14

11 the course of the execution of the contract and report any suspected violations to the DIR Labor Commissioner. Upon finding a potential underpayment, the LC Analyst: Provides information of the potential violation to the Project Labor Agreement (PLA) Administrator for review Notifies the contractor(s) of the potential violation and requests payroll documents accordingly Upon receipt of payroll documents and verification of prevailing wage violations, creates an underpayment summary and notifies affected contractor(s) If the contractor(s) promptly corrects the underpayment and provides proof of payment, the restitutions collected will be logged and the issue closed. If the contractor(s) does not promptly correct the underpayment, the LC Analyst collects the pertinent audit documents and transmits the information to the DIR Labor Commissioner s office for further investigation. 5.8 Project Closeout Reports Closeout reports are prepared by the Department once the Project Notice of Completion is filed and the Department receives the Form 107, Final Certificate from the Prime Contractor, available in LCPtracker. The Department completes the following steps: The LC Analyst prepares Closeout Report detailing activity throughout the life of the project and provides it to the Officer for review and signature. Once signed, the LC Analyst provides it to the PMO Document Control Department and the File. 5.9 Third-Party Requests The Department frequently receives third-party requests for CPRs from the DIR, local unions, contractor(s), or as a part of a Public Records Act Request (PRAR). Thirdparty requests may include copies of certified payroll reports and various labor compliance records. District s Lead Construction Counsel notifies the Department of a CPR request or vice versa For requests referencing Labor Code 1776, the Department processes pursuant to California Code of Regulations 16402, the Department Page 11 of 14

12 provides the requestor an invoice for the total number of pages in the CPR request. Payment must be received prior to the release of documents. The Department prepares the CPRs pursuant to California Labor Code 1776(e) as follows: The worker(s) name, address, and social security number shall be obliterated for third-party requestors. If a requestor is part of a Joint Labor Management Committee, the Labor Code Requires that the Department obliterate only the worker(s) social security number(s). If a requestor is a Taft Hartley Trust fund that requests the records for the purposes of allocating contributions to participants, the Labor Code requires that the PMO Department prevent disclosure of an individual s full social security number but provide the last four digits of the number. All PRARs will be processed through the PMO Legal Department. The Department provides the redacted CPRs to the PMO Legal Department for distribution to the requestor Local Hire and Disadvantaged Worker Database Pursuant to LACCD s PLA, Article 3, 3(c), LACCD has established a Local Worker Hire Program as a component of its Community Economic Development Program. LACCD uses certified payroll reports to track this data and the Department supports the CED team with the following tasks: Verifying prompt submission of certified payroll reports and notifying contractor(s) of delinquent payrolls and(or) missing information required for the PLA Local Hire Database Entering the pertinent worker information into the PLA Local Hire Database upon receipt of CPRs 5.11 Training As part of the PMO s proactive monitoring approach, the Department provides training courses and guidance materials to assist contractors. When a contractor is awarded a project that requires the use of the District s online certified payroll system, LCPtracker, the Department will schedule a mandatory LCPtracker training session for the Prime Contractor and all lower-tier subcontractors. Page 12 of 14

13 The Department serves as a resource to contractors to promote compliance with the rigorous demands of public works prevailing wage requirements. The Department will provide a Training Class and present at the District s Small Contractor Boot Camp, with training projected to occur annually. 6.0 Records Discrepancy Log 2 Discrepancy Notice Restitution Log Attachments Number Document Title Version / Revision Date 9.0 Revision History This section records revisions to this implementing procedure. Each time the procedure is changed, the nature of the change is noted under the description, including cases where extensive revisions occur throughout the document. In cases where changes are less extensive, revision lines ( change bars ) will be added to identify places where changes are made. Comments to the SOPs and associated forms and documents are encouraged and may be sent via a change request form located on the SOP SharePoint site. See the link entitled Comments on the SOPs, Click Here on the right side of the SOPs site to access the form. Procedure revision requests are reviewed and responded to on an ongoing basis. Revision Effective Date Pages Revised Description Type of Revision (Minor/Formatting and (or) Major/Procedural Required Reading? 0 May 1, 2015 All Original Issue Initial Issue Yes 2 Excel workbook spreadsheet, kept by each analyst to track current and outstanding labor compliance issues, stored on shared PMO drive, periodically sent in pdf format to Contractors by Analyst 3 Ibid. Page 13 of 14

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