Prevailing Wage Rate Law Enforcement
 
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
 
 
Agency Liability
 
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 liable for any unpaid prevailing wages 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 include in the specifications information showing which prevailing rate of wage is higher, 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.400
 
Civil Penalties for Public Agencies
BOLI may impose civil penalties of up to $5,000 per violation.  ORS 279C.865; OAR 839-025-0500 et seq.
 
Violations include:

• Failing to include or reference the applicable prevailing wage rates in the contract specifications.
• 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 that workers shall be paid prevailing wages.
• 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.

 
Compelling Compliance
BOLI may issue an order compelling an agency to comply with the PWR law.  ORS 279C.827(1)(b)
 
 
Contractor Liability
 
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)
 
Liquidated Damages
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)
 
Civil Penalties
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.
• 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.
 
Warning Letters
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.
 
Debarment
For willfully violating the PWR law, BOLI may debar a contractor or subcontractor from receiving public contracts (except for federal contracts) in Oregon for up to three years. The bureau may also personally debar the officers of a debarred corporation.  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.  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: Ineligible Contractors.  ORS 279C.860; OAR 839-025-0085 et seq.
 
 
Prohibited Practices
 
PWR law prohibits anyone from trying to circumvent the law.  Such activity includes hiring contractors or subcontractors who are on the ineligible list or falsifying certified payroll records.  ORS 279C.840(7); OAR 839-025-0300; OAR 839-025-0340
 
Dividing Projects
Public contracting agencies must not divide a public works project into more than one project for the purpose of avoiding compliance with the PWR law.  ORS 279C.827; OAR 839-025-0310
 
BOLI considers the following factors when deciding if separate contracts actually constitute a single project:

• The physical separation of project structures;
• Whether a single public works project includes several types of improvements or structures;
• The anticipated outcome of the particular improvements or structures the agency plans to fund;
• Whether the structures or improvements are similar to one another and combine to form a single, logical entity having an overall purpose or function;
• Whether the work on the project is performed in one time period or in several phases as components of a larger entity;
• Whether a contractor or subcontractor and their employees are the same or substantially the same throughout the particular project;
• The manner in which the public agency and the contractors administer and implement the project;
• Other relevant matters as may arise in any particular case.

 
Payment of Prevailing Wage by Persons Other than Contractors or Subcontractors
The law forbids any third party to pay any portion of the prevailing wages owed.  This most often occurs in “market targeting” plans.  Exception: Government agencies may pay a portion of the prevailing wages pursuant to a bona fide worker training or retraining program.  ORS 279C.840(6); OAR 839-025-0320
 
Wage Averaging
The PWR law also bans wage averaging.  Wage averaging is lowering workers’ wages on non-PWR jobs to compensate for higher rates contractors or subcontractors pay on covered jobs.  ORS 279C.840(7); OAR 839-025-0330