CSLB Law & Business ExamPublic WorksHard
An awarding body discovers that a subcontractor on a public works project has repeatedly failed to submit certified payroll records despite multiple requests. What action is the awarding body authorized to take under Labor Code §1771.5?
- ARequire the subcontractor to re-bid the remaining portion of the work
- BImmediately terminate the prime contractor's license
- CFile a criminal complaint against the subcontractor with the district attorney
- DWithhold contract payments due to the prime contractor until compliance is achieved
Show answer & explanationAnswer & explanation
Correct answer: D. Withhold contract payments due to the prime contractor until compliance is achieved
Under Labor Code §1771.5 and related provisions, an awarding body may withhold contract payments as a penalty and to secure compliance when a contractor or subcontractor fails to submit required certified payroll records. The awarding body has no authority to revoke a contractor's license or bring criminal charges directly.
Why the other options are wrong
- A. Re-bidding is not a remedy tied to certified payroll noncompliance.
- B. Only CSLB can suspend or revoke a contractor's license, not the awarding body.
- C. Failure to submit payroll records is a civil compliance issue, not a matter for criminal referral by the awarding body.
Withholding for Payroll Noncompliance
Awarding bodies may withhold contract payments from a contractor when certified payroll records are not properly submitted, as authorized by Labor Code §1771.5 and §1776.
- Withholding applies to the prime contractor even for subcontractor noncompliance
- Payments are released once records are properly furnished
- This is a civil enforcement tool, not license discipline
Memory trick: No payroll, no payout.