Prevailing Wage & PLA Explained: What Contractors Need to Know
Navigating prevailing wage and PLA requirements can be complex. This guide breaks down everything contractors need to know about compliance, wage determinations, and successful public works bidding.
Understanding Prevailing Wage in California
Prevailing wage is the basic hourly rate paid on public works projects to workers in specific classifications. In California, any project funded by public money over $1,000 typically requires contractors to pay prevailing wage rates as determined by the California Department of Industrial Relations (DIR).
As a DIR-registered contractor serving Anaheim, Orange, and throughout Southern California, we've successfully completed dozens of prevailing wage projects. Understanding these requirements is essential for any contractor bidding on government work.
Who Must Pay Prevailing Wage?
Prevailing wage requirements apply to:
- Public works projects: Construction, alteration, demolition, installation, or repair work performed under contract with any state or local government agency
- Maintenance work: Routine, recurring, or usual work for the preservation or protection of public facilities
- Publicly funded private projects: Some affordable housing and other projects receiving significant public funding
All contractors and subcontractors working on these projects must be registered with DIR and comply with prevailing wage requirements, regardless of contract amount.
Wage Determinations and Classifications
The DIR publishes prevailing wage determinations for each county and craft classification. For fencing contractors, relevant classifications typically include:
- Ironworker: For ornamental iron and metal fence installation
- Fence Erector: For chain link and general fencing work
- Laborer: For site preparation and support work
- Operating Engineer: For equipment operation when required
Each classification has specific wage rates that include base hourly pay plus fringe benefits. Contractors must pay the correct classification for the work being performed—misclassification can result in significant penalties.
Certified Payroll Reporting
One of the most critical compliance requirements is certified payroll reporting. Contractors must:
- Submit weekly certified payroll records to the awarding body
- Include detailed information about hours worked, wages paid, and fringe benefits provided
- Maintain accurate records for at least three years
- Post job site notices informing workers of prevailing wage rates
We use specialized software to ensure accurate tracking and reporting, reducing the risk of compliance errors that could delay payment or trigger audits.
What is a Project Labor Agreement (PLA)?
A Project Labor Agreement is a pre-hire collective bargaining agreement between contractors and labor unions for a specific construction project. PLAs establish terms and conditions of employment before work begins, including:
- Wage rates and benefits (typically prevailing wage or higher)
- Work rules and dispute resolution procedures
- No-strike/no-lockout provisions
- Hiring procedures and workforce requirements
While not all public works projects require PLAs, they're increasingly common on large-scale government construction projects, particularly those funded by federal dollars or major state initiatives.
PLA Compliance Requirements
When bidding on PLA projects, contractors must:
- Sign the PLA: Agree to all terms before starting work
- Use union labor: Hire through union hiring halls or sign workers to union membership
- Pay union benefits: Contribute to union health, pension, and training funds
- Follow work rules: Comply with union jurisdictional assignments and work practices
Our experience with PLA projects across Orange County and Los Angeles County means we understand the nuances of working within these agreements while maintaining project schedules and budgets.
Benefits of PLA Projects
Despite the additional administrative requirements, PLA projects offer several advantages:
- Skilled workforce: Access to trained, certified workers through union hiring halls
- Labor stability: No-strike provisions ensure project continuity
- Clear procedures: Established protocols for dispute resolution and work assignments
- Competitive advantage: Many contractors avoid PLA work, reducing competition
Common Compliance Pitfalls to Avoid
Based on our experience, here are the most common mistakes contractors make:
- Misclassifying workers: Using incorrect wage classifications to reduce costs
- Incomplete payroll records: Missing required information on certified payroll forms
- Late reporting: Failing to submit weekly payroll reports on time
- Inadequate job site notices: Not posting required prevailing wage information
- Subcontractor non-compliance: Failing to ensure all subs are DIR-registered and compliant
Violations can result in penalties, contract termination, and debarment from future public works projects.
Working with a Compliant Contractor
When selecting a contractor for your public works project, verify:
- Current DIR registration
- Experience with prevailing wage projects
- PLA experience if applicable
- Robust compliance systems and processes
- Strong safety record and insurance coverage
Our commercial fencing and public works division maintains full compliance with all DIR requirements and has successfully completed PLA projects for school districts, municipalities, and state agencies.
Get Expert Guidance for Your Public Works Project
Planning a public works fencing project? Our team brings the expertise, licensing, and compliance systems needed for successful project delivery. Contact us today to discuss your requirements and receive a detailed proposal.