For certain projects, California law requires specific qualifications for the building and construction workforce known as Skilled & Trained Workforce Requirements (STW). Currently, over 15 STW statutes in various state codes apply to various types of projects. Even if an STW statute or mandate does not apply, however, the Public Contract Code authorizes public entities and awarding bodies to require that bidders, contractors, and other entities use an STW.
Knowing when and how these requirements apply can be confusing, but compliance is essential. Contractors and subcontractors violating STW requirements can face civil penalties up to $10,000 per month and may also be prohibited from bidding on, being awarded, or performing work on a public works contract (debarment). All STW-covered bodies—public entities, awarding bodies, bidders, contractors, subcontractors, and others—should understand and comply with applicable requirements.
Unfortunately, no one definition of a Skilled & Trained Workforce applies to all projects, as each statute contains its own definition. The vast majority, though, use the definition in Public Contracts Code Section 2601, which specifies that an STW must meet both of the following:
1.All workers performing work in an apprenticeable occupation in the building and construction trades for which the Division of Apprenticeship Standards (“DAS”) approved an apprenticeship program before January 1, 2014, are either:
a.Apprentices registered in a DAS-approved apprenticeship program; OR
b.“Skilled journeypersons,” meaning the worker, in the applicable occupation, either (i) graduated from an in-state, DAS-approved apprenticeship program, or an out-of-state federally approved apprenticeship program, or (ii) has at least as many hours of on-the-job experience as would be required to graduate from the applicable DAS-approved apprenticeship program.
2.Satisfy the Minimum Percentage Graduation Requirements set out by law.
“Minimum Percentage Graduation Requirements” means the minimum percentage of skilled journeypersons who (i) are employed to perform work on the contract or project, (ii) by every contractor and each of its subcontractors at every tier, (iii) for the applicable occupation, and (iv) are graduates of either an in-state, DAS-approved apprenticeship program or of an out-of-state federally approved apprenticeship program. Individuals who qualify as “skilled journeypersons” based on their on-the-job experience do not count towards the Minimum Percentage Graduation Requirements.
Minimum Percentage Graduation requirements changed most recently on January 1, 2020, when they rose to 60% for apprenticeable occupations, except as follows: Minimum Percentage Graduation Requirements do not apply to teamsters. Additionally, they are fixed at 30% for acoustical installers; bricklayers; carpenters; cement masons; drywall installers or lathers; marble masons, finishers, or setters; modular furniture or systems installers; operating engineers; pile drivers; plasterers; roofers or water-proofers; stone masons; surveyors; terrazzo workers or finishers; and tile layers, setters, or finishers.
In general, Minimum Percentage Graduation Requirements are calculated by three rules. First, they must be calculated by each individual contractor and subcontractor and within each of these by each apprenticeable occupation. Second, they must be calculated on a monthly basis by the calendar month covered by the Monthly Compliance Report that must be submitted to the public entity or other awarding body by the bidder, contractor, or other entity. Finally, they must be calculated for the applicable contractor or subcontractor by either the percentage of skilled journeypersons who meet the graduation requirements or the number of hours of work performed by skilled journeypersons who meet the graduation requirements.
Certain exemptions exist to the Minimum Percentage Graduation Requirements. For example, in occupations for which the DAS had not approved an apprenticeship program before January 1, 1995, up to one half of the Minimum Graduation Requirements may be satisfied by skilled journeypersons who began working in that occupation before an applicable apprenticeship program was approved in the county where the project is located. A contractor or subcontractor may also be exempted from Minimum Percentage Graduation Requirements if they employ skilled journeypersons who perform less than 10 hours of work in total in a particular craft during the month covered by the Monthly Compliance Report (all other STW requirements still apply to the contractor). Finally, subcontractors may be exempt if their subcontract does not exceed one-half of one percent of the prime contract if they also meet certain other conditions.
Given the potentially steep penalties for violating STW requirements, bidders and contractors should ensure their thorough understanding of the applicable statutes for each project they undertake. Ghassemian Law Group has the expertise to help ensure that you are staying in compliance and avoiding unnecessary risk to your business. If you have questions, our construction law experts are here for you. To schedule your consultation, contact us here today.
This article is informational only and meant to provide guidance. It is not meant to be legal advice and it does not create an attorney-client relationship. For what to do in your specific situation, please consult with a qualified Construction Law attorney.
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