Prevailing Wage Rate Law Enforcement
|Wage and Hour: Prevailing Wage|
BOLI’s enforcement goal is compliance. The bureau has a variety of enforcement tools that range from education and training to civil penalties, debarment and other sanctions. BOLI uses the appropriate sanction to fit the violation. For example, if a contractor, subcontractor or agency accidentally violates PWR law, BOLI considers the violating party’s willingness to cooperate and correct the problem when it determines an enforcement action. In such cases, BOLI may direct the agency, contractor or subcontractor to attend a training course on PWR law, and ask for a commitment of future compliance. For willful or repeated violations of the law, it is more likely that BOLI will impose civil penalties or debar a violating contractor from working on public works projects for three years. ORS 279C.860 and 279C.865; OAR 839-025-0085 and 839-025-0520
A public agency must give adequate notice to the contractor that PWR law applies to the project. Failure to treat the project as subject to PWR law may make the agency liable for unpaid wages, civil penalties or orders to ensure compliance with the law.
Unpaid Prevailing Wages
The public agency is jointly and severally liable with any contractor or subcontractor for unpaid prevailing wages and liquidated damages unless the contract documents contain a statement requiring the contractor and all subcontractors to comply with ORS 279C.840. If the contractor had notice that the project is covered by PWR law, the public agency’s liability is joint and several with any contractor or subcontractor that had notice of the requirement to comply with ORS 279C.840, for any unpaid prevailing wages. ORS 279C.855(3); OAR 839-025-0080(4)
If a public works project is subject to the Davis-Bacon Act but the public agency fails to include the state and federal prevailing rates of wage in the specifications, or fails to provide in the contract that workers on the public works must be paid not less than the higher of the applicable state or federal prevailing rate of wage, and the workers on the project are paid the lower rather than the higher prevailing wage rate, the public agency is liable to the workers for the difference between the lower and the higher rate, plus an equal amount as liquidated damages, for every hour worked. ORS 279C.855(4); OAR 839-025-0080(6)
If a contract requires a payment bond or other security and the agency fails to obtain it, the agency and the officers authorizing the contract are jointly liable with the contractor for any unpaid prevailing wages. ORS 279C.625; ORS 279C.380; ORS 279C.390
Civil Penalties for Public Agencies
BOLI may impose civil penalties of up to $5,000 per violation. Where violations are ongoing, each day may count as a separate violation. ORS 279C.865; OAR 839-025-0500 et seq.
• Failing to include or reference the applicable prevailing wage rates in the contract specifications.
• Failing to include in the contract a provision that workers shall be paid prevailing wages.
• Failing to require the contractor to pay the higher of the applicable state or federal prevailing wage rate when the project is subject to both state and federal PWR laws.
• Failing to include in the contract specifications a provision that the contractor and every subcontractor must file a public works bond with the CCB before starting work on the project.
• Awarding a contract to a debarred contractor.
• Failing to include in the contract a provision requiring the contractor to file a public works bond with the CCB before starting work on the project.
• Failing to include in the contract a provision requiring the contractor to include in every subcontract a provision requiring the contractor to file a public works bond with the CCB before starting work on the project.
• Failing to pay a PWR fee to BOLI.
• Failing to notify BOLI when a contract is awarded.
• Failing to include a copy of the disclosure of first-tier subcontractors with the Notice of Award.
• Failing to retain 25 percent of the amount the contractor earned when the contractor fails to submit certified payroll reports as required.
• Dividing a project to avoid paying the PWR.
• Circumventing PWR laws in any way.
BOLI may issue an order compelling an agency to comply with the PWR law. ORS 279C.827(1)(b)
If a contractor or subcontractor does not fulfill obligations under the PWR law, there are a number of possible consequences.
Unpaid Prevailing Wages
Any contractor or subcontractor failing to pay prevailing wages as required is liable for the amount of underpayment. ORS 279C.855(1); OAR 839-025-0080(1)
Contractors and subcontractors may also be liable for liquidated damages equal to the amount of unpaid wages. For example, if a contractor or subcontractor underpaid an employee by $1,500, the contractor, subcontractor or surety thereof is responsible for the unpaid wages plus an equal amount in liquidated damages for a total of $3,000. The liquidated damages are twice the amount of unpaid overtime wages if payroll records have been falsified. ORS 279C.855(1), ORS 279C.540(9), OAR 839-025-0080(2) and (3)
Prime Contractor Liability for the Violations of a Subcontractor
If a subcontractor fails to pay prevailing wages, any employee may file a claim against the prime contractor’s bond. The prime contractor may be responsible for any underpayment of the subcontractor’s employees. ORS 279C.855(2)
BOLI may impose civil penalties against contractors and subcontractors for any violation of the prevailing wage statutes or administrative rules, even if there was no underpayment of wages. Such violations include failing to respond to a wage survey, failing to file a public works bond with the CCB, failing to post required information at the job site or failing to file certified payroll reports. BOLI may impose penalties up to $5,000 per violation. If violations are ongoing, each day counts as a separate violation. ORS 279C.865; OAR 839-025-0500 et seq.
BOLI considers many factors when imposing civil penalties, including:
• Previous or repeated violations.
• The severity of the violations.
• The amount of underpayment of wages, if any.
• Whether the contractor or subcontractor knew, or should have known, about the violations.
• How difficult it would have been for the contractor or subcontractor to comply.
• The contractor’s/subcontractor’s response to the violations.
It is important for contractors and subcontractors to cooperate with investigations and correct any violations as quickly as possible to reduce any civil penalties that the bureau may impose.
BOLI may send warning letters to contractors and subcontractors who have violated the PWR law. BOLI imposes significantly higher penalties against contractors and subcontractors who commit violations after receiving a warning letter, up to and including assessing maximum civil penalties and debarment.
BOLI may debar a contractor or subcontractor from receiving public works contracts in Oregon for three years if it is determined that the contractor or subcontractor has intentionally failed or refused to pay the prevailing rate of wage to workers employed on a public works, if the contractor or subcontractor has intentionally failed or refused to post the rates as required, or if the contractor or subcontractor has intentionally falsified information in the certified payroll statements. BOLI may debar a subcontractor, even if the violation was not willful, if the subcontractor did not pay prevailing wages to workers and the prime contractor had to pay them.
If the contractor or subcontractor is a corporation or a limited liability company, the bureau may also personally debar the officer or agent of a debarred corporation or any member or manager of a limited liability company. Furthermore, the debarment extends to any firm, corporation, limited liability company, partnership or association in which the debarred individual has a financial interest.
BOLI maintains a list of debarred contractors, referred to as the “List of Ineligibles.” This list is included in each published rate book and is available on the BOLI website at www.oregon.gov/boli. ORS 279C.860; OAR 839-025-0085; OAR 839-025-0090