Law & Business · Lesson 8 of 8

Public Works Basics: DIR Registration, Bonds, Prevailing Wage, and Certified Payroll

"Public Works Basics: DIR Registration, Bonds, Prevailing Wage, and Certified Payroll" is lesson 8 of 8 in the Law & Business Learning Hub. It opens with "Register Before You Bid, and List Your Subs" and works through 5 short steps, then a worked example you can check yourself against.

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Steps in this lesson

  1. Register Before You Bid, and List Your Subs
  2. Contract Bonds on a Public Contract
  3. Prevailing Wage Is More Than the Hourly Rate
  4. Certified Payroll Records
  5. What Underpayment and Missing Records Cost

The worked example in the course applies this lesson to a realistic job in 5 steps, from "Is the contractor eligible to list and be awarded?" through "Penalty for a delinquent payroll".

What you'll be able to do

  • Explain the main idea of "Public Works Basics: DIR Registration, Bonds, Prevailing Wage, and Certified Payroll" in plain language you can use on the exam.
  • Apply this step with confidence: "Prevailing Wage Is More Than the Hourly Rate".
  • Apply this step with confidence: "Certified Payroll Records".
  • Apply this step with confidence: "What Underpayment and Missing Records Cost".
  • Test yourself on the worked example and the quick-check quiz inside the classroom.
PUBLIC WORKS: THE NUMBERS1Register with DIR(LC 1725.5) to list or be awarded2List subs over the greater of1/2 of 1% of bid or $10,0003Payment bond 100%,performance bond 50% of bid4Pay prevailing wage(basic rate + fringe payments)5Certified payroll weekly(LC 1776), subs includedWORKED EXAMPLE: $3,600,000 BID1/2 of 1% = $3,600,000 x .005 = $18,000Greater of $18,000 or $10,000List subs over $18,000Payment bond: 100% = $3,600,000Performance bond: 50% = $1,800,0003 workers underpaid 5 days (LC 1775):3 x 5 x $200 = $3,000 maximumLate payroll, $250,000 estimate (LC 1771.5):10% = $25,000, capped at $10,000Records requested: 10 days or $100/day/workerSub-list threshold $18,000; bonds $3,600,000 and $1,800,000Prevailing wage: pay it or forfeit up to $200 per worker per daySource: 2025 Caltrans Standard Specifications, Sections 2-1.03, 2-1.10, 3-1.03, 3-1.05, 7-1.02KCC
The diagram for this lesson, exactly as it appears in the Learning Hub.

The first steps of this lesson

Step 1: Register Before You Bid, and List Your Subs

2025 Caltrans Standard Specifications, Section 2-1.03: no contractor or subcontractor may be listed on a bid proposal for a public works project unless registered with the Department of Industrial Relations (DIR) under Labor Code 1725.5, and Section 3-1.03 adds that none may be awarded a contract for public work (awarded on or after April 1, 2015) without that registration. Section 2-1.10 requires a Subcontractor List naming each subcontractor who will perform work in excess of 1/2 of 1 percent of the total bid or $10,000, whichever is greater (Public Contract Code 4100 et seq.), with its business name and location, license number, public works registration number, and the portion of work.

Step 2: Contract Bonds on a Public Contract

Section 3-1.05 of the same specifications (Public Contract Code 10221 and 10222): the successful bidder must furnish two bonds. The payment bond secures claims of laborers, workers, mechanics, and material suppliers and must equal at least 100 percent of the total bid. The performance bond guarantees faithful performance of the contract and must equal at least 50 percent of the total bid. These are project bonds, separate from the $25,000 license bond. Because mechanics liens cannot be filed against public works, the payment bond and the stop notice are how unpaid subcontractors and suppliers collect (Reference Book, Section III, Stop Notices).

The remaining 3 steps, the worked example and the quiz are in the course. This is a preview. The full lesson, with the step-by-step explanations, a worked example and a quick-check quiz, is inside the classroom.

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