Contractor Guidance During DIR Website System Failures

The DIR’s online portal for contractors to register with the DIR and submit electronic certified payroll records (“eCPR’s”) has had severely limited functionality since the launch of the new DIR eCPR system on June 24, 2024, making it impossible for contractors to either submit certified payroll online or to register or renew registration with the DIR. As members are aware, the only way to submit eCPR’s to the Labor Commissioner is through DIR Public Works Website Services. The DIR recognizes this problem and has posted the following notice on its webpage (Shown in image):

Notwithstanding the assurance by the DIR, contractors should do the following to increase the likelihood that they will fall within the safe harbor expressed by the DIR:

1. Continue to pay all prevailing wages and prepare weekly certified payroll reports (“CPR”).
    
2. Attempt to upload eCPR’s in a timely fashion and document any errors or rejection messages by printing your computer screen which includes the date and time.  

• To further document compliance efforts, keep notes of the date and time you attempted to upload the eCPR.  You can also take photos of your notes each time in order to make a record.
   
• (Note: In some instances, it is possible to upload a Draft version of the eCPR into the DIR system, which can be used as an internal placeholder for an eventual compliant final upload once the DIR system is fully functional.)

3. For each failed attempt to upload the weekly eCPR, email the DIR at publicworks@dir.ca.gov to notify them that DIR’s computer system failed to upload the reports. 
    
4. Assure your contracting partners of your continued payment of prevailing wages and substantial compliance with the statutory reporting requirements by providing via email or other method the weekly CPR (redacted to remove private information such as social security numbers and addresses) to the general contractor, project owner, and any Labor Compliance Officer, as applicable.
    
5. Ensure that all of your subcontractors and material/service providers to which the statutory prevailing wage apply are also continuing to pay prevailing wages and are attempting to substantially comply with the statutory reporting requirements by collecting and monitoring weekly CPR from each subcontractor/supplier entity. 
    
6. Once the DIR’s Public Works website becomes fully functional, upload all eCPR’s that you were previously prevented from submitting and/or finalize the eCPR’s previously submitted in Draft form only, then provide confirmation to your appropriate trade partner(s).

• Ensure that you receive final confirmations of eCPR submission of all applicable eCPR’s from your subcontractors and service/material suppliers.

For contractors who have been unable to complete their DIR registration and therefore could not even try to submit eCPR’s, follow the same guidance above for documenting registration attempts, error messages, and communications with the DIR. If you have proof that you registered previously and the registration is good past 2024, keep that handy as well. If needed, provide this documentation to the general contractor, project owner, and any Labor Compliance Officer, as applicable.

Presumably, the doctrine of impossibility, and defenses of prevention and substantial compliance, will excuse strict compliance with your statutory reporting obligations. See Civil Code § 353; People v. Lake County,  33 Cal. 487, 492 (1867) (impossibility of performance makes mandatory statutory duty directory]; County of San Diego v. Milotz, 119 Cal. App. 2d Supp. 871, 883-884 (1953) (where an act is impossible of performance, implied exceptions are recognized to mandatory requirements).

It is currently unknown whether the DIR’s website issues affect all or only some contractors attempting to submit eCPR’s. Thus, it is unclear whether the above statement by the DIR is a blanket assurance that contractors will not be penalized or will be addressed on a case-by-case basis depending on when electronic submission through the DIR website becomes available to a particular contractor.  Although the above actions may seem tedious, by creating a record that you have taken all necessary steps in good faith to meet the statutory reporting requirements but were prevented from successfully submitting CPR’s due to circumstances beyond your control, doing so will strengthen your position that any lack of compliance was solely the result of the DIR’s computer system failures.

These materials are intended to provide general information about applicable law and should not be relied upon as legal advice. Prepared for United Contractors by Michael M. Lum and A. Robert Rosin, Leonidou and Rosin Professional Corporation. The authors express their appreciation to Rich Hill and the other attorneys with the Littler Mendelson prevailing wage team for their input and assistance.

For additional assistance, contact UCON's Labor Team.