How Does the Contract Compliance Program Work?

A contract compliance program is designed to make sure that employers doing business with the local and Federal government, etc. comply with the laws and/or regulations which usually require non-discrimination and and affirmative action in employments. The entity related to these procedures is the Office of Federal Contract Compliance Programs also referred to as ‘OFCCP’ which is part the U.S. Department of Labor’s Employment Standards Administration.

According to the Labor Compliance Program and labor law requirements the contract should address the following procedures:

The Payment of Prevailing Wage Rates: This section is all about the regulations and laws relating to prevailing wage rates. Basically contractors and the subcontractors hired to complete the job are required to pay workers the wages specified on the labor code. If the project goes over the estimated amounts then it is necessary to refer to more specific sections under the same code. All information pertaining to wages should be posted for all workers to view.

Apprentices: Under this section contractors and subcontractors are required to follow the labor code section 1777.5 by hiring registered apprentices at the time to execute a public work project.

Penalties: As expected, if the contractor or subcontractor fails to comply with the laws related to prevailing wages there will be penalties. These are also applicable if the parties mentioned fail to employ registered apprentices which also includes forfeitures and debarments.

Certified Payroll Records: This section is designed to make sure that contractors and subcontractors keep accurate payroll records which should show all the details about the employees, apprentices and workers. Information such as hours worked, overtime, social securities, names and addresses are required. These documents should be certified and made available for inspection throughout business hours and submitted to to the district every week as well.

Non-discrimination in Employment: This is actually pretty obvious but required element in this type of contract. Employment discrimination is prohibited under the government, labor, public codes, etc. It is also required for employers to to keep an ‘Equal employment poster’ at the job site for applicants to see.

Kickbacks Prohibited: This is also a pretty important section of the contract, which establishes that employers are not allowed to extract ‘kickback’ or to take wages illegally from an employee wage.

Acceptance of fees prohibited: As the title implies, contractors and subcontractors are not allowed to receive ‘fees’ in order to register or filling work orders which enables a person for public work.

As you can see a contract compliance program involves several requirements which need to be fulfilled in order not to brake any laws or codes. Other equally important sections often included in such contracts include, but are not limited to: Workers Compensation Insurance, licensing, prohibition of unfair competition, OSHA regulations, subcontractor listings, etc.