A Civil Wage and Penalty Assessment (CWPA) is issued to subcontractors, prime contractors, and their surety when a wage law is violated. CWPAs are issued by the Department of Labor Standards Enforcement (“DLSE”) and cause many problems for contractors and subcontractors. Because these cases can be complicated, there are a few FAQs you should know ahead of time.
1. When Do I Have to Submit a Request for Settlement?
You must submit a request for settlement within 30 days of the service of the CWPA. If you do not meet this window, you may not be able to contest any wages or penalties listed in your accusation.
2. When Do I Have to Submit a Request for Review?
A request for review must be submitted within 60 days of being alerted to a CWPA. Once you submit this request, you will be assigned a hearing officer, who will act as both your judge and jury in a formal hearing. Failure to meet this deadline can result in being charged with the full amount of wage and penalty violations.
Related Article: What is a Civil Wage and Penalty Assessment?
3. When Do I Need to Deposit the Full Amount of the CWPA?
It’s important to deposit the full amount of your CWPA within 60 days of receiving notice. According to Labor Code section 1742.1, after 60 days contractors and their surety can be liable for liquid damages in the amount equal to unpaid wages. This means that a contractor can be forced to pay double the amount of wages identified in their initial CWPA, on top of the wages and penalties they are found guilty of.
4. What Records Do I Need to Fight a CWPA?
Keeping accurate records is your best chance at getting an optimal outcome for your case. Contractors should keep accurate payroll records and any documents that support hours and wages, such as sign-in sheets. It’s also a good idea to have documentation showing the number of workers on a site, the scope of their work, and how many hours they typically work. Other pieces of documentation that can help your cases are pay stubs and canceled checks for individual workers.
5. Do Safe Harbor Provisions Protect Me from Penalties?
If you are the prime contractor and your subcontractor is the accused party in your CWPA, you may also be able to take advantage of the “safe harbor” provisions in the Labor Code to avoid or reduce your liability. To take advantage of this, you must do the following before you are ever issued a CWPA:
- Include a copy of the provisioning of labor code (sections 1771, 1775, 1776, 1777.5, 1813, and 1815) in the subcontract
- Review the payroll records of the specified general prevailing wages by the subcontractor to its employees
- Take corrective action immediately to resolve any wage failures of the subcontractor to its workers as soon as you are alerted
- Before issuing the final payment to a subcontractor, obtain an affidavit signed by the subcontractor stating they have paid the specified prevailing wages and any amounts due to workers on the project
Related Article: What Does a Professional License Attorney Do?
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Wage violations can cost contractors thousands of dollars in penalties.
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